It’s Showtime for Annual Giving​

Tomorrow is Giving Tuesday, and the first day of the busiest giving month of the year. Dress rehearsal is finished, the opening acts are done, and you’re on stage live for a month, closing gifts. Welcome to Week 48!

Your time this week is best invested in enhancing the solicitations you have planned. December is when your warm, personal touch goes the farthest because individuals – and many small businesses – are determining what they have available to give to charity. Add notes, make calls, and ask others to do the same.

Who should be at the top of your list? Renewals, of course, and within that pool, start with the people who have the greatest lifetime giving to your organization. Keep that inner circle feeling sure that they are appreciated.

You already know how to tell your story to engage your donors, so as you plan your talking points, I want to give you something extra — tax tips to keep in your back pocket and pull out when you see an opportunity to encourage a donor to make a gift decision. While tax incentives don’t drive people’s emotional impetus to make charitable gifts, it is worth understanding who is most likely to enjoy a tax advantage from giving so you can weave tax benefits into your conversation with certain people.

Schedule A filers generally receive a tax break for giving more to charity. Who might be in that group?

• Single or Married Filing Separately taxpayers – they only have to clear $12,400 in deductions to make a Schedule A worth filing
• Workers paying high local income taxes that count toward their SALT deduction (State And Local Taxes are generally capped at $10,000)
• Homeowners with a mortgage, especially if they bought or refinanced in 2020
• Owners of a first or second home with local property taxes (counts toward SALT)
• Filers paying down student debt can deduct up to $2,500 on qualified loans
• Work-from-home folks who incurred significant home office expenses in 2020

What about people taking the standard deduction? Married filers with one home are often better off choosing the $24,800 deduction, so you can mention that 2020 rules allow an above-the-line adjustment to income of up to $300 for charitable contributions. You can share that helpful tip to your donors who are likely to give in that range to your organization.

Be aware that the CARES Act for coronavirus relief could mean reduced giving this year from some of your older donors. As part of CARES, the IRS waived Required Minimum Distributions (RMDs) for 2020, so your donors who are over 70.5 years of age with IRAs and similar retirement plans don’t have a tax incentive to give in order to satisfy their RMD. Ask for their support, but if they normally make their charitable gifts from assets in their qualified plans, be prepared to be gracious if there is a dip in their giving this year.

You can share tips more broadly if you like. It’s my opinion that tax tips cool off a warm solicitation, so offer that information in a sidebar on your e-newsletter and in social media posts rather than a mission-focused ask.

Have a great week and a happy Giving Tuesday!

Should You Drive Year-End Giving With A Draft Donor List?

Week 47 is a short one, so this week’s task is considering rather than producing. Today’s image is a dreamy view of some woods, which is a good setting for thinking things over.

One way to push lapsed donors to give when the deadline is looming is to send them a draft of your donor honor roll, year to date. This gambit has to fit with the culture of your particular organization, so use your One Hour to consider this option and decide if you want to use it.

When is this tactic effective? If:

• Donors recognize one another’s names
• They are somewhat competitive, and
• They enjoy seeing their names listed.

Whether you list donors by dollar ranges or alphabetically in one big list is another choice to make. In my experience with a variety of organizational cultures, I would advise against this if you have a critical mass of anonymous donors and/or historically your organization has not publicly listed its supporters. That can indicate that your donors value their privacy and like to see themselves as humble, egalitarian, or modest. If you are considering this tactic, definitely talk it over first with a handful of people who represent your donor population.

Sharing a draft donor listing was effective in a hospital setting where the medical staff had its own donor section. It worked like this:

A month before the fiscal year closed, a memo went to the entire medical staff. It was intentionally impersonal, without dynamic information, so everyone received the same thing. The message was “please check to see that your name is listed correctly” and the list of those who had given year to date, other than any who were anonymous, was enclosed. People who thought they had already given called the office and had a conversation with a kind and cheerful staff member who told them when they had last sent a gift, so the donors renewed in order to appear on the final list.

If this is right for you, it is simple to generate and will help to bring in both renewals and first-time gifts from people who are influenced by seeing their friends and colleagues giving. The two things to make sure you get right are:

Taking care to omit listing anonymous donors, and

Properly preparing the person who will be responding to phone calls and emails.

Donors who reach out to have a conversation are creating an opportunity for you to build the relationships you have with them; ensure that they are handled with sensitivity and respect.

Launch Your Soft Ask​

At Week 45, it is time to put the finishing touches on your soft ask, in whatever form you have chosen, so it is ready to drop next week. The soft ask reminds people about the good work that you do without making a direct request for financial support. You do want to include an option that makes giving super easy – a link if you’re digital, or a reply envelope for hard copy.

In my experience, this element of your Q4 solicitation series does not generate a big response on its own, but it drives higher renewal rates for your big year-end appeal. It is important to evaluate the year-over-year yield from your annual appeal series as a whole; otherwise you may find yourself arguing with someone who thinks you should only send a December appeal because that reliably yields more gifts that earlier solicitations. Get out in front of this argument by embracing your appeal as a series that keeps your organization top-of-mind with your donors.

One thing that is easy about your soft ask is that you can send it to everybody. You won’t need to take time to segment your house list; capture all your active names and addresses and you are ready to go. Whether you are sending a classic annual report, a capsule version, or a simple update message, put your finishing touches on that now, so it can drop next week.

What’s the ideal soft ask format?

It depends on your audience. For a donor population full of people with strong accounting skills, a copy of your financial statements will make sense. For everyone one else, create a capsule version of your financials with your interpretation of what they mean. Pie charts of revenue and expenses are easy to understand, and you can group a longer list of budget categories into general buckets for this purpose. Express your expenses in terms that show how they are critical to your core work. This will protect your agency against people who make unhelpful arguments about cutting “overhead.” You rely on a level of infrastructure, process, and compliance to be successful, so select descriptors that honor your expenses as investments in your mission.

Alternatives to sending financials now:

The most important thing you can do now is prepare your message so it’s timely. If this is not the time for you to send a message about your organization’s financial information, select a topic that you know is important to your donors. Resist the urge to report data, and push yourself to see through your donors’ eyes. Here are some approaches to get you started:

• Share a brief client story
• Follow up on a program beneficiary whom you introduced to your donors before
• Spotlight an excellent volunteer or staff member
• Illustrate a success story about how you continued to deliver services under COVID-19 restrictions
• Preview a program or event coming in a few months
• Ask for feedback through a brief survey

You have a lot of leeway with a soft ask. Only two elements are critical: it must be sent timely, and must not read like another solicitation. If you have the luxury of creating personal messages, that warms up your communication, but this doesn’t have to be a dynamic piece – keep it simple, sincere, and donor-centric.