Practical Advice for Modern Fundraisers

I always worry during December about year-end donations. I can't help it my fundraising minds is completely aware that more gifts are made between Thanksgiving and New Years Eve.  This is the giving season for two reasons it is tradition to make gifts to non-profits just like we give gifts to our friends and family and for tax reasons.  The first reason still holds true. Some people give because they care about your cause.  The tax reason isn't as true anymore.  In case you didn't get the memo the New Tax Reform law doubled the personal tax exemption.  What does that mean well if someone made a gift to lower their taxable income they may not need to make that gift anymore.

Research estimates that 13.1 billion or 4.6% will be lost to charities the year because of the new tax law and most of that will "not" show up in the next few weeks.  If you are curious about how this might affect your organization one way to estimate how much of your 2017 donations were "tax" dollars. Run a report that compares the date of a check with the day that it was processed.  Now, this assumes that you leave your books open past 12/31 to let the mail catchup.  If you keep the organization's books open until mid-January for checks dated by 12/31 you can simply add up the gifts that came in during that period.  I call this the "tax period."  

This number will give you an estimate of what might not come in. It might be a pretty big number.  For one organization I know it the number was over 50k.  The scary part is that you will not know what donations will come in until you close your books for 2018 if you are on a calendar year fiscal year.  If you are lucky enough to have a June 30 or some other end date for your fiscal year you have time to try and renew those gifts. 

I have been telling anyone who would listen especially my Executive Director, Director of FInance and board that we might not make our goal because of the change in the tax law.  If you are in this position, I hope you have been telling everyone as well. Of course, we may be surprised, and the gifts will come - but I doubt it.

 

Do you use video?  How successful have you been?  Here are some examples of successful videos from Nonprofit Tech for Good.

What do you think of "Giving Tuesday?" 

Segmentation is all the rage!  

Segmentation. That should be your new mantra.  Many of us have long done simple segmentation things like First Time Donor, Lapsed Donor, Recent Donors.  But shouldn't we look deeper?  Recently, I used a service to model and segment our data.  The modeling is something I have always been a little circumspect about, but I knew it works for Acquisition. So we gave it a try. Segmentation. That should be your new mantra.  Many of us have long done simple segmentation things like First Time Donor, Lapsed Donor, Recent Donors.  But shouldn't we look deeper?  Recently, I used a service to model and segment our data.  The modeling is something I have always been a little circumspect about, but I knew it works for Acquisition. So we gave it a try. 


Our database had nearly 200,000 gifts (not counting event gifts) that had come in over the last ten years.  So we took that data and looked for patterns. We compared our gift data with that of tons of other non-profits. I wasn't sure what we would get but I thought it was worth the investment. It did actually cost that much considering the number of gifts involved.


We provided the data analysis company with a record id and the complete giving history for that id. What we got was very interesting.  I was about to do our next Major Donor mailing so I tried the segmentation/modeling for that mailing.  Usually, I would mail about 100 renewals in this mailing.  The modeling identified another 200 people who were good targets for major gifts.  By the way, a major gift for this mailing is $1,000.  

 

After culling out a some of the donors we mailed to about 150 donors asking them to make what they consider a "substantial gift." The reply envelope for the mailing started with $500 so that will give the donor and idea of what we are asking.

 

The piece we mailed was a traditional three sheet piece. Two-page letter and an info sheet about the programs mentioned in the letter.


So what happened?  Well, next month we will look at the results of the mailing.  Stay tuned.

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