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Fundraising Basics - How to Set Goals

Often we’ve worked with clients who’ve missed their fundraising goals by substantial amounts. I typically ask how these goals were established in the first place. Not surprisingly, it usually comes down to setting goals to balance the budget.

For example, many institutions in private higher education practice tuition discounting. This is where the published price for tuition and fees is at one level, but the actual cost is discounted for most students through financial aid or scholarships. Essentially, this is usually done with unfunded aid.

Some institutions have discount rates approaching 60%. Unfortunately that causes budget shortages, and there are only a few ways to fill those gaps: fundraising, endowment or both. We had one client filling the gap almost exclusively through fundraising.

They had an annual fund goal of $4.5 million to cover the gaps caused by the discount rate. For a small school of 2,000 students, that goal was unrealistic and unsustainable. It had gotten to the point where the President had to secure several $1 million pledges just to balance the budget. Eventually they ran out of million dollar donors, which put the institution in serious financial peril.

Fundraising goals need to be both realistic and achievable, and one good way to ensure that is through strategic planning. Actually for goal setting to be effective, it will need to come from a planning process and address three important priorities:

1. Goals must address true organizational needs – We typically assess organizational needs during the planning process by reviewing a series of reports and conducting interviews and surveys with stakeholders. That process reveals to us the critical issues that need to be addressed.

In fact, often a goal is a critical issue restated as a goal. However, we also help develop strategies and action plans to achieve those goals. Additionally, we tighten up the strategies and action plans by assigning deadlines and champions. That tends to move the action forward related to the goals.

2. Goals must specify realistic increases in giving levels and sources – For example, if we increase our annual giving by 6%, we also have to decide from where that money will come. How many more donations will we need at the $1,000 or more level? Additionally, from where will those increasing donations come (board, individuals, events, etc.)?

 It’s also important to ask yourself if that level of increase is achievable. If it’s not achievable then we need to see what expenses or programs can be cut. One nonprofit arbitrarily gave the new development officer an 83% increase over a three-year period. This was way out of line during years that had national industry increases of about 4%. True, statistics vary, but 83% was totally out of line.

3. Goals must tie to specific sources and targeted amounts and involve the development officer – If your organization is considering budget increases, you’d better have more of a plan than just hoping money will come in. That’s why development planning without the development officer is crazy. Who knows best about where the money will come from? The development officer needs to be a full partner in that process.

If you’re doing realistic goal setting, then you should also have a pretty good idea up front of where that money will come from. I’ve had many cases where the CEO and CFO alone have set the fundraising goals, without any input from the development officer. Typically, those goals are based solely on need apart from any realistic assessment of capacity. As a result they’re often missed.

Next week we’ll discuss how to teach and develop volunteers to help achieve those goals.

by Len Moisan

Fundraising Basics - What Reports Do You Review?

As fundraising consultants, when we work with organizations, we ask for giving reports over 3-years. Before we can help them move forward, we need to know where they’ve been.

Specifically we’re looking for trends in areas like sources of giving, levels of giving, board giving and direct mail. When we know what the trends are, we can then help plan how to move forward. So what are some of those areas?

Sources of Giving – In this report we’re looking at who gave, how many gave in each category, and the total amounts given. The categories include:

• Board
• Foundations
• Corporations
• Other Individuals
• Events
• Other

Levels of Giving – In this report we’re also looking at the number of donors and amounts in each category, but this time we’re looking at amounts in ranges.

• $25,000 and above
• $10,000-$24,999
• $5,000-$9,999
• $2,500-$4,999
• $1,000-$2,499
• $500-$999
• $250-$499
• $100-$249
• $99 and below

Board Giving – If the people closest to the organization aren’t willing to give, it’s difficult to expect others to do the same. We’re looking to see what their board participation rate has been over the last three years. If it’s not 100% then the organization has some work to do to pull that rate up.

In addition, we also look for the average gift. Some boards have minimum expectations for giving, so we first look to make sure everyone meets the minimum. Also, there’s a possibility that a few top donors skew the average. There might be 20 board members with an average gift of $5,500. However, one of them gave $100,000 and the other 19 gave a combined $10,000. Accordingly, we calculate the average, but then we also recalculate the average without including the top two or three donors.

Direct Mail – This is the most expensive and least effective form of fundraising. In fact, many organizations have totally eliminated it. But, that’s a big mistake! First, direct mail is a source of generating ongoing support. Second, it also serves as a medium through which you inform the public. Third, if used properly it can be an effective source for donor acquisition.

When we analyze direct mail, we first want to know how much our client is raising annually and from how many mailings. After that we look at each mailing to review:

• Theme
• Number mailed
• Number of responses
• Total received
• Response rate
• Average gift
• Cost of mailing

Once that’s done, we look at the letter itself and ask several questions:

1. Does the letter have a heading/salutation with a name or does it say simply, “Dear Friend?” The latter is a sure way not to get a response.
2. Are the sentences and paragraphs short? If not, people won’t read it.
3. Does the letter make the case or is it asking just because we need the money? How you will use their money is important to the donor.
4. Is it signed by one person (not several people)? Letters with multiple signatures, make me wonder about their leadership. Who will stand up and take responsibility for writing this?
5. Is there a note in the margin or an attached posted note with a brief message from a board member? This increases response rates exponentially.
6. Does it have a clear “ask” or does it beat around the bush?
7. Does it have a P.S.? Actually, this is one of the first things people will read.

These are just four of many trends we review, but these are also the most important ones. Hopefully this will give you an idea of how to begin your planning. Next week we’ll look at how to set goals.

by Len Moisan

Fundraising Basics – Planning Continued

Last week we began this series and I focused on the benefits of planning that allow you to do the following:

• Clarify your mission, vision, core values and strategies
• Identify your critical planning issues
• Establish your priorities
• Focus your direction, decision-making and resources
• Enhance your communication and teamwork
• Increase your efficiency and effectiveness

Now today I want to cover what planning should include and what CEOs and Board members can expect from a planning process:

A review of the previous 3-year performance in specific source areas

In order to develop a realistic plan on where you’re going, it’s important first to know where you’ve been. When we help with nonprofit strategic planning, we normally review sources of funding, levels of giving, direct mail performance, donor retention, events and every other area that produces funds. We also review communication vehicles including social media, web site, marketing efforts and more because all of these are related to fundraising.

A statement of critical issues, and the creation of goals and a plan with strategies for each area

Once you review past performance, you can begin to develop a future plan. If you aren’t willing to do that kind of analysis, then you’re prone to setting unrealistic goals based solely on what you need.

For example, we worked with one institution in higher education that had not done any review at all before establishing some very unrealistic goals. In fact, the goals were created primarily by the CFO based solely on need with no input from the new Chief Development Officer. Specifically, they set a goal to raise their annual giving from $800,000 to $1,500,000 in a little less than 3 years. That’s an 87.5 % increase in a very short period of time and also at a time when giving to higher education was in decline nationally.

This also occurred at a time when the institution was moving into a capital campaign. The goal just wasn’t tied to reality and therefore, even though the Chief Development Officer made excellent progress by increasing donations, they failed to achieve the goal.

The creation of a budget to get there

Once you have a plan it should lend itself to creating a budget to fund the activities in your plan. We recommend zero-based budgeting, where you justify each line item annually. That forces people to really think about how to eliminate waste and increase productivity.

The development of a fresh statement of your case with your vision and areas of focus

The same old case tends not to excite people. When I was in higher education we had a few high net worth donors tell us that they were more interested in where we were going and what we might do than what our current needs were. Not that operational needs aren’t important, they are, but they can often be stated more specifically than the “annual fund.”

A call to action with accountability

Plans are nothing if there is not action attached to them. As I said last week, a good plan is one that prompts action, and that action increases efficiency and effectiveness. However, without people acting upon those plans, they simply represent some good ideas that we may implement one day. Also, not only should people act on those plans, but also they need to be held accountable for doing so.

Next week we will discuss more specifics on what exactly it is that we believe should be reviewed before developing your plan.

by Len Moisan

Fundraising Basics - Planning

Over the next several weeks we will be doing a series on Fundraising Basics. These blogs will be intended to help you in the overall planning and implementation of a successful development program.

As I’ve said before, the most effective form of nonprofit fundraising comes from a planning process. That’s why we believe a successful fundraising program begins with an effective planning process. Why plan? As strategic planning consultants we list at least 6 benefits that planning makes possible:

1. Planning clarifies your mission, vision, core values, goals, strategies and action plans. Defining and understanding these things is crucial for moving any organization forward. Essentially the planning process gives you a sense of where you’re headed and how you will get there.
2. Planning helps you identify your critical planning issues. When we help organizations plan, we are able to identify the critical issues through three activities. First, we conduct an internal review of several reports that we request. Second, we interview several members of the leadership team and staff. Finally, we conduct an online stakeholder survey. That allows us to zero in on the 4 to 5 critical planning issues around which we will build the planning process.
3. Planning helps establish your priorities. Every day people inside organizations finish planning processes and then put the plan on the shelf and go back to business as usual. The planning process is actually intended to help you establish some new priorities with new strategies that are achieved through action plans. That doesn’t mean that I recommend getting rid of what’s working. Yet, at the same time leaders need to examine what they’re doing and sometimes change to stay on the cutting edge. As the late Coach Wooden used to say, “Failing to plan is planning to fail.”

I worked with a large church one time that also had a very large budget. The church leadership noted that they had a stewardship responsibility for the resources that were coming in to them, and they believed they needed to do more formal planning.

We started our work, but staff members soon challenged me. In fact, several of them visited me wanting to know why they needed to plan. They argued that their membership was growing, and their offerings and budget were also growing. Therefore, in their opinion there was no need to plan. Besides, the church leadership was attempting to micromanage their daily operations.

I explained that the reason members of the leadership team were micromanaging them was in part, because they didn’t have a plan. Likewise, their budgets would likely go a lot further if they spent more time thinking about the best ways to use those funds.

4. Planning focuses your direction, decision-making and resources. Inevitably “good ideas” tend to come to the forefront after planning has concluded. However, if something has not been included in the plan, then unless it’s something urgent you don’t have to allocate resources to it.
5. Planning enhances your communication and spirit of teamwork. When you bring the team together during a planning process, it emphasizes that we are all in this together. As people learn more about what other parts of the organization are doing it also can eliminate duplication of efforts.
6. Planning helps you increase both your efficiency (doing things right) and your effectiveness (doing right things). Ultimately, every organization I’ve ever been associated with has endeavored to be effective and planning helps pave the way to get there.

Next week we’ll take a look at what the fundraising planning should include.

by Len Moisan

Leaders Understand the Common Purpose They Share with Followers

Tolstoy’s View of Purpose

In the 19^th Century, acclaimed Russian novelist Leo Tolstoy made important observations about the crucial nature of having a sense of purpose. At one point, despite the great fame and success he’d achieved, Tolstoy was despondent and empty. He concluded that his life was without purpose and meaningless, and that led him to frequent thoughts of suicide. Tolstoy searched for a purpose beyond his immediate circumstances and substantial wealth, but he found nothing. He explained, “Rational knowledge brought me to the recognition that life was meaningless and I wanted to destroy myself.” Tolstoy continued searching and eventually found his transcending purpose in faith, but getting to that point was a painful struggle that almost destroyed him.

Organizational Purpose

The same thing often happens inside organizations. People sometimes lose or never understand the common purpose upon which the organization was founded. A sense of common purpose helps organizations sustain themselves as they fight through difficult times. That’s true of businesses, schools, churches or nonprofit organizations. Without that sense of purpose the organization diminishes into a series of repeated tasks that are seldom challenged. If there’s a vision at all, it’s not necessarily a shared one. Yet, a shared vision is directly related to the leader’s task of creating sense of common purpose. Unfortunately, organizations lacking vision and a sense of common purpose, lend themselves more to power wielding than leading and internal competition than teamwork.

Leader’s Must Create Shared Vision

However, commitment to vision and common purpose doesn’t mean commitment to the “Old way of doing things.” In fact, the Harvard Business Review noted that one of the reasons for organizational failure is “active inertia.” Said differently, it’s a rigid commitment to the status quo that replaces fresh thinking that led to success in the first place. It certainly is vital for leaders to create a shared vision and nurture a general understanding of their shared common purpose. However, it’s also the leader’s job to empower and encourage people to achieve those things with fresh creativity. As fundraising consultants, we advise clients to share their vision and common purpose with donors and volunteers.

Five Core Practices of Great Leaders

Essentially, through their practices leaders actually become catalysts that enable others to act. Not surprisingly, in The Leadership Challenge, James Kouzes and Barry Posner found that very thing in their research on leadership behavior, “When leaders are at their personal best there are five core practices common to all: they Model the Way, Inspire a Shared Vision, Challenge the Process, Enable Others to Act, and they Encourage the Heart.”

However, as I explained in a recent blog, a strong sense of purpose stimulated by those behaviors occurs more in a culture of covenants rather than contracts.

Purpose is Critical to Survival 

Likewise, Victor Frankl found that having a sense of purpose was crucial to his survival. In Man’s Search for Meaning, he describes how his sense of purpose sustained him in his three-year struggle in Nazi prison camps. He noted that in the midst of such dehumanizing captivity, that sense of purpose allowed him and other prisoners to transcend their immediate circumstances. Frankl explains that Nietzche captured the essence of his point when he said, “He who has a why (a purpose) to live for, can bear with any how.” In a chilling account, Frankl described the fate of prisoners who lost their sense of purpose. “Woe to him who saw no more sense in his life, no aim, no purpose, and therefore no point in carrying on. He was soon lost.”

The same is true of any organization. Once people lose a sense of common purpose, it’s only a matter of time before the organization diminishes. It’s the leader’s job to make sure that doesn’t happen, and it’s something we’ll discuss further in next week’s blog.

by Len Moisan

Leadership is a Covenant, Not a Contract

In previous blogs I introduced leadership as a covenant. Some folks struggle with that concept because today we tend to make covenants and contracts synonymous and they’re not.

Webster’s defines a contract as “a binding agreement between two or more people to do something, one formally set forth in writing and enforceable by law.” Legal experts tell me that contracts involve an offer, acceptance, performance, a promise to pay (consideration) for performance and a period by which performance is completed. What I find interesting is that the same dictionary defines a covenant similarly, “a binding and solemn agreement to do or not do something, a compact, agreement, a formal, sealed contract.”

What is the Difference?

I believe the definitions are similar because we’ve lost the language of covenant in our society. There are lots of reasons for this, but suffice it to say that covenants are quite different than contracts just as leading is quite different than forcing compliance. Covenants are far more complex and interpersonally demanding than contracts, but they also promise far more benefits and rewards.

By these differences, I’m not suggesting that contracts are inherently bad. On the contrary, contracts are an integral part of every day life. However, considering our frequent use of contracts, it’s important to understand their limitations, particularly related to leadership. First, they encourage people to negotiate terms based on their own self-interest. Consequently, as contracts are executed, parties tend to evaluate relationships based on the performance of the people around them. Second, if someone’s self-interest is not being served, then that constitutes justification for either breaking or renegotiating the contract. Finally, relationships defined solely by contractual terms can and often do breed mistrust and commitment only to self.

The Importance of Good Faith

Yet, none of that defines leadership. In fact, most lawyers freely admit that to make a contract work, requires an underlying basis of “good faith.” That “good faith” is how leaders move beyond mundane contractual obligations and actually begin to lead others in powerful ways. Unfortunately, many organizational heads (notice I didn’t say leaders) miss this. They live in contractual cultures that commodify and mistrust people rather than empower them.

Conversely, covenant cultures assume good faith and trust towards individuals. This does not suggest that leaders need to be naïve about relationships. Certainly, at times there will be individuals who operate in bad faith, and it will be necessary to deal with those “bad faith” people appropriately. That said, it’s important to understand that just because a few people operate inappropriately, does not justify leaders mistrusting everyone.

Dealing in good faith actually requires trust, which is usually initiated and earned by leaders, as they empower people (not control them) to do their jobs. However, for relationships to work and be productive, eventually everyone must embrace trust. There simply cannot be good faith in a culture lacking trust. Consider marriages in which partners don’t trust each other. It sets up anger, frustration, jealousy and eventually breakups. We understand those dangers in marriage, but many people lack that same understanding inside organizations.

Covenants are Relationally Binding

That’s why effective leadership involves more than meeting contractual obligations. While contracts are binding legally, covenants are binding relationally. Research demonstrates that people are best led relationally. That’s because contracts deal with law and covenants deal with the character, values, and mutual goals of the people involved. I believe the failure to differentiate between the two concepts contributes heavily to our leadership crisis.

Again covenants can actually be far more relationally demanding, but they’re also far more flexible, powerful and rewarding than contracts. They’re also necessary for maximizing potential, a topic we’ll discuss in future blogs.  As fundraising consultants, we counsel our clients to the extent possible to build covenants with volunteers and donors.

by Len Moisan

This Year My Resolution Is...

On a recent search regarding New Years resolutions, I found multiple suggestions for starting the year off right. These included:

• The Ultimate List of New Years Resolutions
• 25 Goals for 2018
• 42 Tips to Get Skinny, and many more.

In fact, my search revealed 24 million sites. No doubt, people are optimistic and resolved to make changes in their lives during the coming year.

Making Resolutions vs. Keeping Them

Yet, the problem isn’t with making resolutions; it’s with keeping them. According to Nielson analytics, in 2015 losing weight was tops among resolutions. Yet, only 64% continued to pursue that goal a month later and 46% after 6 months. Ultimately, only 14% of adults actually achieved their resolutions.

Unfortunately, the same is true with most resolutions. Simply stated, achieving them often involves delayed gratification and we don’t want to deprive ourselves of anything.

According to Psychology Today there are also other reasons. For example, psychologist Tom Pychyl argues that resolutions are cultural procrastinations. People want to reinvent themselves, but they’re slow to change bad habits that cause failure.

Peter Herman also notes that people set unrealistic goals inconsistent with their internal view of themselves. When that happens not only do they fail, but also the failure damages their self-concept.

Finally, through MRIs, neuro-scientists discovered that habits come from thinking patterns that create neural pathways. Those pathways become defaults for behavioral decisions. Changing behavior requires creating new pathways that come from new thinking.

Accordingly, in 2018, I propose that we consider changing bad habits, setting achievable goals and creating new pathways, by embracing some new thinking:

Listening to One Another

A recent poll revealed, 70% of Americans think political incivility has reached “crisis” levels. The pollsters noted that many Americans avoid controversies, fearing they’ll be perceived as uncivil. Most (86%) have been victims of incivility, and 74% believe manners and behavior have declined.

The late Chuck Colson said that people who can’t restrain their baser instincts and operate with civility, aren’t capable of self-government. “Without virtue, a society can be ruled only by fear, a truth that tyrants understand all too well.”

Accordingly, civil self-government means that we must be willing to listen to voices that may not agree with ours. That really is the essence of civil discourse (something that seems to be lacking lately).

Respecting One Another

What happened at Berkley and Charlottesville was not civil discourse. In our democracy being “on the winning side” is important, but equally important is how we treat one another in the process, regardless of our views.

It’s much easier to outshout or outmuscle the opposition, but where does that lead us, to tyranny? Chaos from conflict exists in any relationship including those in organizations. Yet, the secret to prosperity and health is not avoiding chaos, but working through it in thoughtful and civil ways. However, that requires showing respect for both people and disparate views.

Loving One Another

Well, why love someone who embraces an opposing position? That’s really the point. Listening and respecting one another sometimes leads to better decisions because we better understand the other person. When we work through the chaos together, we may even find friends on the other side.

The Apostle Paul said it well in 1 Corinthians 13, “If I speak in the tongues of men and of angels but do not have love, I have become a noisy gong or a clanging cymbal. If I give away everything and give up my body that I may be burned but do not have love, I gain nothing.”

Have a Happy New Year and please try to listen, respect and love one another more! You may be surprised at what you’ll find!

by Len Moisan

A Simple Message for a Complex Time

This last year has been full of surprises and some craziness. For example, so far this year we’ve had a shocking election, a total eclipse, a riot at Berkley (what else is new), the UK vote supporting Brexit, a truck that rammed cyclists and pedestrians in New York, a horror in LasVegas where 58 people were killed and 515 injured from a shooting. If that wasn’t enough, there have been multiple sexual harassment charges from Tinseltown to Washington DC, the Dow Jones Average has reached nearly 50 new highs and The University of Alabama lost a football game. Wow!

I could go on and on, but suffice it to say that this year has been nothing short of fast moving and wild. So how does one find peace in this near bedlam? I recommend ignoring the news and celebrating the season. Certainly that’s what our family is planning to do. In fact, it is something to which we look forward all year. We slow down and enjoy each other’s company along with that of close friends.

I remember when I was a kid growing up in the inner city of Chicago. I used to shovel snow to earn money for Christmas. As people I knew passed me at work, I would wish them a merry Christmas. The closer to Christmas it got, the less discriminating I was and the more enthusiastic my greetings became. I would greet just about everyone I saw with a hearty “Merry Christmas.” And I usually got a “Merry Christmas” and a smile right back from them.

People just seemed to be in friendlier moods back then. We were certainly less politically correct, but I think we were also happier. I was less concerned about myself when I passed on my greeting, and more concerned about spreading the joy of the season! I thought it was what Jesus would want me to do!

I had a conversation about this with Gary, a Jewish friend of mine, and I asked him if he was offended when people wished him a Merry Christmas. He answered that he was not offended in the least, and then he went on to explain why.

Gary said that he knew that Christmas was one of the most sacred celebrations in all of Christendom. He knew also that the people who said, “Merry Christmas” were in fact, wishing him the best of the season. He had observed that Christmas was a time of giving, and joy and peace. So the Christmas well-wishers were actually wishing him good things and not harmful or offensive things.

I must say that Gary had a rather clear understanding of why people wish each other a Merry Christmas, and I hope you do too. Please know that when I wish you a Merry Christmas it’s a good thing not bad, and in a friendly way I hope to make you smile. So to Gary and all of my other readers out there, I wish you a Merry and peaceful Christmas and a healthful and prosperous New Year! Enjoy the season. My next blog won’t come out until early January. Until then, thanks for reading and enjoy this blessed and glorious season!

by Len Moisan

Why America is Great

America Great Because She is Good

When Alexis de Tocqueville first came here, he observed a young democracy that he both admired and wrote about in Democracy in America. He allegedly said:

“Not until I went into the churches of America and heard her pulpits aflame with righteousness did I understand the secret of her genius and power.  America is great because she is good, and if America ever ceases to be good, she will cease to be great.”

Unfortunately, there’s little evidence attributing this to Tocqueville. Still, Eric Metaxas finds irony here because the quote captures Tocqueville’s argument.  He calls it a “brilliant summation” of his work. “ [Tocqueville] saw clearly that it was the ‘goodness’ of America’s people that made America work. “

Regardless of who said it, the statement is packed with truth, particularly in light of Mr. Trump’s campaign to, “Make America Great Again.” But are we looking in all the wrong places to bolster “American exceptionalism?” In fact, maybe America has been great because of its Christian heritage, a heritage that the courts, schools and municipalities hope to expunge from the public square.

Is America Still Good?

Recent headlines call the “goodness” of America into question. Chicago’s homicide rate continues at a horrendous pace (631 this year). Then in one night a deranged lunatic killed 58 people and wounded 489 in a mass shooting in Las Vegas.

However, in light of recent sexual scandals among Hollywood, media and congressional elites, Chicago and Las Vegas are passing memories. New revelations of misconduct appear daily. NBC’s Matt Lauer’s is only the latest story. Should that surprise us? Not really, particularly in light of the late Hugh Hefner’s influence on sexual liberation and freedom of expression, which became euphemisms for his pornographic view of life.

As a child growing up in Catholic schools, I learned to be honorable and respectful towards women. Not that I was always a pillar of virtue. Yet, when I pushed the limits, I was ashamed. I knew my behavior was inappropriate and the rest of society agreed.

However, today those Christian voices have diminished. In fact, trashing Christian teaching has become politically correct, and as a result there is virtually no shame. The decline is something that’s applauded by the same press that wonders what went wrong.

Still A Lot of Good 

Yet, despite all of the noise, there are still good people doing good things in America. Consider that tens of thousands volunteered and donated to fundraising efforts to help hurricane victims in Texas and Florida. NFL great, JJ Watt raised over $37 million alone for hurricane relief. Beyond that there are fundraising campaigns to fund free schools, food banks, homeless shelters and much more.

Now not everyone agrees with America’s benevolence. In fact, recently I read articles that list America substantially lower than other countries for generosity. This includes Indonesia, Myanmar, Kenya and more. I’m not sure what justifies their assertions, but that just isn’t the case. No disrespect intended, but according to a CAF study, those countries aren’t even ranked in the top ten in monetary giving. Clearly giving in America is exceptional.

Statistics on Giving

Last year Americans gave $390.05 billion, or 1.44 % of their GDP. That’s nearly twice what the next closest country gave. In fact, consider this ranking of giving as a % of GDP:

1. USA…………………….1.44%
2. New Zealand……….0.79%
3. Canada………………..0.77%
4. UK………………………0.54%

Additionally, the US provides aid to 96% of all countries, which now exceeds $50 billion annually. Simply stated, American generosity is unparalleled anywhere. But why is that?

The answer goes back to the quote, “America is great because she is good.” I believe that goodness comes from America’s Christian heritage. Oh there are some who debate that concept vigorously, but the more we depart from that heritage the less goodness we’ll see.

by Len Moisan

Year-End Giving With a New Twist

Each year around this time the literature is replete with articles about year-end giving. Clearly, November and December are the best months for philanthropy.

Research Supports Year-end Giving

A study by Nonprofit Insiders Network found that 28% of the organizations polled reported that they raise between 26% and 50% of their total annual income from year-end asks alone. Similarly, a Charity Navigator study revealed that 31% of online annual giving occurred in December. Finally, a study of high net worth individuals found that 42.7% indicate that they tend to give more around the holidays while 44.4% report giving about the same.

The case is clear for year-end giving, and most organizations solicit it through direct mail. In fact, as fundraising consultants, we advise our clients to begin year-end requests in early November and then follow it up with a Season’s Greeting post card in December that includes a subtle reminder. We also recommend using brief handwritten Post-it note messages by board members and other volunteers to enhance the response rate.

A Solid Vehicle for Year–end Giving

There are other ways to enhance the November mailing, but the point of this article is to encourage year-end giving and introduce you to another vehicle for that.

To that end, I thought I’d spend a few minutes talking about a relatively new vehicle in nonprofit fundraising, the IRA Charitable Rollover, approved in December of 2015. It’s actually been around since 2006, but it has been provisional.

For taxpayers over the age of 70 ½, Congress made permanent the provision allowing individuals to contribute up to $100,000 per year, through an (IRA) distribution given directly to a charity. Of course, one key benefit of the direct charitable contribution from your IRA is that the distribution counts towards your Required Minimum Distribution.

Of course, for stocks, properties or any other assets within the IRA that are given this way there are no capital gains taxes that have to be paid. If donors do choose this vehicle, they must tell their fund manager to transfer funds directly to the charity and name them as donor. If the gift is intended for a particular area the manager should also specify that.

Organizations Have Benefitted Already

Some organizations are well aware of this provision and have clearly taken advantage of it. For example, between 2006 and 2013, the University of Michigan actively promoted the IRA Charitable Rollover and yielded $19.8 million from 790 donors. They contributed anywhere from a few hundred dollars to the maximum of $100,000.

What I found interesting is that most nonprofits either don’t understand the charitable IRA distribution, or if they do understand their understanding is limited. Therefore, the IRA Charitable Rollover is thrown into the “planned giving” bucket and pretty much ignored.

My advice is to pull this back out of the bucket and study it, so you have a working understanding of the concept. Why do that? No doubt, this way of giving is one of the best and most powerful vehicles to emerge in philanthropy in quite a long time. Everyone clearly benefits including the donor and the nonprofit.

For Senior Giving It’s the Best Vehicle

Sure, this doesn’t apply to everyone, but for seniors who are planning to make a gift to a charity, this is by far the best way to do it. If you’re the head of a nonprofit or chief development officer, I suggest that you do everything you can to inform your donor base regarding the IRA Charitable Rollover. No doubt it will prove beneficial to you not only by increasing donations at year’s end, but also throughout the year as you seek to advance your mission.

by Len Moisan