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How will the 2017 tax law impact nonprofit fundraising?

by: Allison Sanka on

The largest piece of tax reform since the Reagan administration has been passed and signed by the President. The real impacts from the new tax law changes have yet to be seen, but all of us in the nonprofit world will be watching carefully as the impact on nonprofit fundraising initiatives unfolds. Meanwhile, some initial concerns are being addressed.

According to an article in The Nonprofit Times, the Association Fundraising Professionals believes there will be a huge decline in cash gifts. The hypothesis is that because of the increase in the standard deduction, fewer taxpayers will itemize on their returns. Because so many depend on those deductions on their itemized tax returns, without that tax benefit fewer people will give cash gifts to nonprofits. 

"The Association Fundraising Professionals is anticipating a reduction in itemizers of about 30 million on account of the standard deduction increase. About 82 percent of individual giving comes from itemizers, per Giving USA estimates, equating to an annual loss in giving of between $12 billion and $20 billion." [read more]

Those are some big numbers to ponder. 

The face of donors is changing. Many believe the motivation to give is not enough to suppress the projected 4.5% drop in annual giving next year. According to The Washington Post:

"[The] decline is expected to be concentrated among gifts from the middle of the income scale. The richest Americans will mostly keep their ability to take the tax break. That could create new winners and losers in philanthropy. Nonprofits have long noticed that the wealthy are more likely to cut big checks to support museums and universities, while smaller donors tend to give to social-service agencies and religious organizations. Charities fear that this shift could change how the public views donating and alter the priorities of nonprofits." [read more]

Doom and gloom aside, what's the opportunity for planned giving? Plenty, actually. Middle and lower income loyal donors may now be the perfect audience for planned gifts. They may have given in the past but those annual gifts may drop off, while the wealthy will still likely benefit from itemization.

It's more important than ever to kick your PG program into high gear with a solid, awareness-building marketing program. Building your planned giving program will not only bring in some additional funds now and in the years to come, but also it will help ensure the long-term health of your organization. Money needs to come in from as many avenues as possible, and the best time to market your PG program is now.


Cast a Wider Net

by: Jeffrey Stein on



When our clients tell us about realized gifts that came in response to our marketing efforts, I temper their praise by reminding them we have little to do with their mission and their donors philanthropy. We're just helping to bring the two parties together. 

Last evening, a client called to let us know they closed $275,000 in gift annuities today. One was for $250,000 from a donor with lifetime giving of $7,200. 

That's right; a guy who graduated more than 60 years ago and who averaged $120 in giving per year funded a $250,000 gift. Why? He has no heirs, he's getting little-to-no return on his savings, and he figured this was his way to make his major gift. What inspired him do it now? He received our personalized CGA illustration in the mail.

The full analysis is incomplete, but it's pretty clear this donor was way off the organization's planned giving radar. And had he not been included in the highly targeted, personalized direct marketing effort, he may never have stepped forward. 

This organization has a mature annuity program and they've had success in the past. However, they struggled with developing and deploying consistent and compelling marketing communications. Their previous efforts were a combination of ads and postcards produced in-house and drab, generic and cheaply produced mailers and brochures from the industry's subject matter experts, but not marketing experts.

Your best prospects may be outside your typical target radius. Adding to your target list of a well-crafted, thoughtfully designed planned mailing or marketing initiative will likely pay for itself with just one additional planned gift.

We helped this planned giving team to expand their campaign, casting a wider net, and now their pipeline has never been as full. Yet another example of what's possible for forward-thinking organizations when they leave the marketing to marketing experts.

Want a team of marketing experts to help fill your call list with qualified leads? Give us a call at 484-680-7600 or contact us today.

Best regards,

Jeff Stein

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