Category Archives: Recession Strategies

We may soon find out exactly how much the tax deduction for charitable giving prompts people to donate to nonprofits, if President Obama’s proposed jobs bill goes through. As explained in Lisa Chiu’s September 12 article in the Chronicle of Philanthropy, the charitable deduction is just one of the many itemized deductions that would be limited to a 28% writeoff in the higher-income brackets.

For an impassioned (to put it mildly) discussion of the pros and cons of limiting this deduction, see the “Tax the Rich More? Or Less?” article by Jan Masaoka in Blue Avocado and the comments that follow. The crux of the debate seems to be between those who believe that tax deductions either aren’t or shouldn’t be a major motivation for giving among the wealthy, and those who think that it is — and that, with all the struggles nonprofits are already going through, picking on this deduction could just make matters worse.

I put myself in the latter camp, largely because of the following statistic, as covered in my December 2010 blog post: More than 20% of all charitable giving for the ENTIRE YEAR occurs on December 30th and 31st.

Maybe the tax deduction isn’t the main motivation for giving, but the deadline clearly gives potential donors a major nudge. Without that deadline, I’m betting (as a seasoned procrastinator) that all those good intentions will be put off month by month by month.

These are tough times for libraries, businesses, and donors, but the Rockridge DVD Project has come up with some creative solutions that unite all three.

The library was offered a chance to buy, at low cost, the inventory of a DVD rental store that was closing. With a loan from the library, the newly formed DVD Project did so — but then needed to pay the loan back, by an October deadline. The group started soliciting neighborhood donations, through means such as publicity in local publications and setting up an information table in the library.

I confess, I was initially skeptical about the importance of this project. After all, I like books, and questioned whether the library should turn into a DVD rental outfit.

But after talking to a volunteer at their table, I understood the brilliance of their strategy: DVDs bring people into the library — people who then tend to check out books, as well. When library circulation goes up, city funding goes up, and it becomes easier to advocate against, say, library closures (which Oakland has been threatening a lot lately).

It’s more than a fundraising effort, it’s a strategy for library advocacy. The urgency of the upcoming deadline is also a fine way to raise the library’s profile. And if the effort raises questions (like mine) about the ultimate purpose of libraries, all the better — the end conclusion can only be that they’re incredibly important community resources.

A friend of mine recently mentioned that his father, after reading yet another set of headlines about the Dow taking a nosedive, declared that he was going to change his will to remove each and every gift to charity.

It wasn’t so much that the father worried that there would be no money left for his kids but that, looking ahead into the future, he wondered for how long the stormy economy would damage his children’s  financial security.

I haven’t seen any reports of whether this is a trend. But uncertainty is certainly driving a lot of economic decisions these days.

That, and the knowledge that people can change their wills at any time, create added challenges for any nonprofit’s legacy or planned giving program.

What can you do in response? I would advise:

• Don’t let up on your messaging about your group’s importance in fulfilling your donor’s fundamental interests, and your group’s ability to help them create a lasting legacy.
• Never take legacy donors for granted. Find ways to celebrate their commitment and keep them advised about how other legacy gifts are being put to meaningful use.
• Sign up for a planned giving seminar that will update you on the latest estate tax rules, so that you’ll understand when your donors might have a continued financial interest in reducing their estate through charitable giving.

And of course, batten down the hatches for the ride ahead.

Since I cover both fundraising and real estate matters at Nolo, I can’t help but notice how often the two intersect.

This week, for example, my local neighborhood newspaper’s real estate section contains a front-page article about the Grubb Company’s recent donation of $5,000 to a local arts center.  DJ Grubb is quoted as saying, “From a personal perspective, I can’t wait to enjoy and participate in upcoming events. From a realtor’s perspective, it represents the spirit and ingenuity of the community . . . .”

On page 5 of the very same section, McGuire Real Estate’s home ads are accompanied by an announcement of its “1st Annual Neighborhood Garage Sale,” to benefit local schools. For every local homeowner who registers to hold a garage sale on September 17, McGuire will make a donation to the schools.

And agents at Pacific Union routinely donate part of their commission to a “Community Fund,” which makes annual awards to local nonprofits.

The pattern here looks pretty clear: Real estate companies have an interest in maintaining the vibrancy of the communities in which they operate, given that it helps them sell houses. And by helping local nonprofits, the get positive press coverage, or can at least draw attention to their own advertising.

Sure, they might have altruistic motives as well, but when it comes to business donations to charity, that altruism almost always gets exercised in a way that simultaneously benefits the business.

So, if you haven’t been watching which local real estate agents are interested in partnering with nonprofits, perhaps now is the time to open your local real estate section.

Or, get proactive. Even without making a cash donation, there are ways that local real estate companies may be able to pitch in with your nonprofit’s efforts — perhaps by lending their offices for a phone-a-thon or event, or suggesting properties for your next fundraising home-and-garden tour.

Spending a summer’s day in the park seeing the San Francisco Mime Troupe, picnicking, and seeing which old friends you run into: It’s a Bay Area tradition.

No, the Mime Troupe is not silent, as in pantomime — it’s campy political comedy, with rousing music to boot. (To quote their website, “We mean ‘mime’ in the ancient sense: to mimic.”)

The question every year (other than, should I buy a T-shirt or just make a straight donation?) is, what topic will have the politically savvy Bay Area audiences laughing, crying, and clapping along — without saying, “Didn’t we see this last year?” That’s no mean feat, given that they’re in their 52nd season. (Though I still wish they had an excuse to bring back their Dick Cheney character.)

The answer this year: Nonprofits’ desperation for funds, and the pushed-to-the wall question of whether to accept funding from dubious corporate sources. It’s sort of a play within a play, as a scrappy political theatre group faces imminent closure and the temptation of corporate funding from the mysterious (and more than a little pushy) Mrs. Haverlock.

To say any more would be require a spoiler alert, so I’ll just send you to the Mime Troupe’s website for reviews and the performance schedule.

Fundraising is harder for every group out there, but small, mostly volunteer-led groups face particular challenges — and have come up with unique ways to overcome those challenges. Hear from parents, event planners, and other volunteers who contributed to Ilona Bray’s recent book, The Volunteer’s Guide to Fundraising, in this newly released podcast (from the CD-ROM that comes with the book), “Fundraising in a Down Economy.”