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Archives for June 2019

Charitable giving in 2019: How nonprofits can motivate donors to continue giving

June 21, 2019 by Nick Magone, CPA, CGMA, CFP®

For nonprofit organizations, last year’s Tax Cuts and Jobs Act is certain to impact giving levels beyond simply 2019. With less incentive to give, will donations decline and impede the important work that nonprofits like yours set out to do?

Under new regulations, the U.S. standard tax deduction has increased across the board, leading to an anticipated reduction in taxes and less need for itemization. This can have two potential impacts on giving:

  • If people have more money, they’ll give more.
  • If people can’t write off their donations, they won’t give as much.

America’s altruism is being put to the test.

Getting a pulse on your donor base
According to the Why America Gives Report, nearly half of U.S. donors planned to donate more money to charity in 2018 compared to 2017, including 74% of households with an annual income of $100-$150K, and 85% of households with $150K+.

Yet that same studied revealed that 42% would definitely/probably donate less if they knew they were getting less of a tax incentive. And 10% of Americans reported that they planned to reduce their giving, admitting that a write-off is their primary reason for donating to charity.

Strategic opportunities for nonprofits
A recent GuideStar webinar shared tips and opportunities that nonprofits can leverage to help motivate donors to maintain generous levels of giving regardless of tax incentives:

  • Focus on individuals rather than large corporations, and provide a personalized giving experience that makes them feel like a valued part of your mission.
  • Learn what pulls at their heartstrings. Donors are following their hearts, not their pocketbooks. What issues encourage them to take action?
  • Invest in tools to diversify your approach, such as online fundraising software. Donors of all generations expect you to have an online presence, making it easier for them to give.
  • Empower donors. Give them options to make monthly donations, create birthday fundraising campaigns or earmark donations for specific projects.
  • Maintain control over your online data. Online software should capture donor information, so you can use it to establish trust and build long-term relationships.

Want to attract higher-value donors? Data is the key
Marketing drives brand awareness and donations. And the more you know about your donors, the better the marketer you’ll be. How do they get their news? Do they prefer Facebook or Twitter? Do they have kids? Reach out and get better acquainted with them. Survey them. Set up one-on-one calls. Thanks to technology, new tools and AI, today’s marketers are more sophisticated than ever before, and you can use these resources to better know, target and reach your donors.

Online fundraising platform Classy offers these marketing strategies to get you started:

  • Eliminate barriers. It’s vital that your marketing and development teams work together for the success of your organization.
  • Understand donors’ communication preferences. Use marketing channels that will drive the highest response rate, not simply what’s most convenient for you.
  • Automate to help nurture donor engagement. But don’t let technology replace personal relationships. The value of one-to-one conversations will never go away.
  • Integrate your offline and online appeals. The USPS has proposed to increase the cost of first-class stamps by 10% and marketing mail (bulk rates), by 2.4%. By adding an online component to an offline campaign, you can cut costs while working to reach your goals.
  • Cultivate a network of social champions. The Why America Gives Report reveals the best way to reach social media audiences is through relatable champions of their causes. If your organization doesn’t have a social media presence, you won’t get too far this year without one.

Unlocking the value of recurring donors
Classy reports that recurring donors are over five times more valuable than one-time donors. These are people who want to see change happen and want to be a part of it. The takeaway? Don’t fear asking for more.

  • Use multiple channels for outreach. Data shows that charities are not reaching out enough. You need to treat recurring donors differently than one-time donors and communicate more frequently than a monthly transactional email.
  • Share the impact of their recurring gifts. If someone is making the decision to support a mission on a monthly basis, they want to learn about the impact of their gifts.
  • Prioritize personal relationships. These are the people supporting your cause. Even if it’s just with a subset of your recurring donor base, develop a personal relationship to help deepen their desire to give.

It’s too soon to tell how new tax regulations have influenced the generosity of your donors. Your best defense against donor attrition is a strong, coordinated offense.

Filed Under: Nonprofits

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