Soon nonprofit CFOs will be in the thick of what is, for many donors, the most benevolent time of year. December sees 33% of all online donations, according to Network for Good. On average, donor gifts are 80% larger in December versus the rest of the year, and fully 22% of annual giving happens in the last two days of the year.
Ready to start 2020 ahead by ending 2019 strong? Here are five ways to make the most of giving season.
Giving via social networks is significant, reports Network for Good. But supporter loyalty is highest for nonprofits that build strong relationships with their donors and drive giving through their own websites.
“Mission focus matters,” says Cheryl Gipson, a nonprofit industry expert with NetSuite. “Retention of supporters acquired through generic giving pages is 67% lower than for donors who give via mission-branded giving pages.”
And, our recent Connecting Dollars to Outcomes survey of more than 350 nonprofit decision-makers shows 70% of all revenue comes from individual donations.
Your website should help visitors understand that a long-term relationship is the best way to foster mission success, says Gipson. Ensure that your site encourages donors to transition into partners by becoming sustainers.
“For example, World Vision asks its site visitors to help build an online experience where mission, education, learning and monetary support comprise a seamless whole,” she says.
One way to stand out during giving season is to share financial metrics. This demonstrates to current and potential supporters that your organization is serious about transparency and stewardship. As we discuss in our survey, how nonprofit executives evaluate mission effectiveness — whether they’re measuring outcomes to determine the efficiency of their programs and whether they correlate mission data to financial metrics to understand their “dollars-to-outcomes” stance — is important to serious supporters.
“’Dollars to outcomes’ means being able to report on the source and use of funds accurately,” says Gipson. “However, the volume of end-of-year online giving can raise reporting challenges.”
Before large inflows of online donations in a compressed timespan throw off your reports, prepare. Tighten up your gift-entry process. Have your finance and fundraising coordinators sit down and map out campaign and fund structures, so that when donations come in, both the accounting and fundraising systems are using the same segmentation codes. Donor reports can be way off target simply because the campaign, appeal and fund codes have not been set up properly.
And if you need help handling donation volume, recruit a seasonal volunteer through one of the many in-kind and corporate programs.
Every dollar you don’t spend on goods, services and marketing is a dollar more toward your mission.
“Take advantage of the free ad spend offered by Google for Nonprofits,” says Stacy Caprio, founder of Chicago-based online marketing firm Accelerated Growth Marketing. “Through their program you can get $10,000 or more a month in free ad spend to advertise your non-profit to the world.”
Google also provides tools to help nonprofits build ad campaigns that can raise their search rankings, as well as free G-Suite Basic, a YouTube program and donation tools. Microsoft recently rolled out new offerings, including the Digital Skills Center for Nonprofits, a bundle of training courses and content to help nonprofits successfully use technology. Lots of large companies offer free donation tools, employee expertise and education. Reach out to corporations with offices in your town or county.
And it’s not just big tech companies looking to help. Apps abound, from AllGoodWork, which matches nonprofits with unused workspaces in corporate offices, to VolunteerMatch, for finding people interested in helping out.
Need help finding highly skilled volunteers, or have expertise to contribute? Check out TapRoot. Looking for goods from companies like 3M, Crayola or Office Depot? NAEIR connects big-name manufacturers looking to donate items with nonprofits that can put them to good use.
It takes an investment of time to sort through options, but the return could be substantial. Gipson notes, though, that in-kind donations must be accounted for in terms of program or operating budget. They also introduce some complexity for accounting, such as determining the fair value of gifts in kind and any potential restrictions based on your sector.
Four more free-money sources:
Volunteer Grants: JP Morgan matches employees’ volunteered time beginning at 15 hours, up to $3,000. See more grant leaders.
Community Grants: Companies often set aside funding for nonprofits doing good work in their communities. See Fundly’s list.
Foundation Grants: Every week the Center for Nonprofit Excellence publishes three grant opportunities, often involving foundations you might not know about. See this week’s list.
Government Grants: Your one-stop shop for grants managed by HHS is Grants.gov. Check it out.
The 2017 Tax Cuts and Jobs Act made some fairly substantial changes in how contributions are treated, and an increase in the 2019 standard deduction — to $12,200 for individuals, up from $12,000, and $24,400 for married couples filing jointly, up from $24,000 — means the number of households that itemize, and thus may receive a larger deduction pegged to more charitable giving, could drop even further.
In 2018, about 16 million households itemized, down from about 37 million in 2017, according to the Urban-Brookings Tax Policy Center.
Erin Cox, who spent 20 years at education non-profits Jumpstart and uAspire and is now chief strategy officer for wiseHER, a platform offering on-demand, expert advice as well as entrepreneurial grants for women, advises nonprofits to take a page from political campaigns and seek micro-donations. These small, often repeating, gifts are appealing to millennials and Gen Z, says Cox.
And they add up. The CrowdWise social fundraising data report for nonprofits shows that donations via mobile devices make up over 79% of the traffic and 62% of the donations to GoFundMe campaigns. Millennials and Gen X make up nearly half of donors, with an additional 11% representing Gen Z. These donors like to give online and in smaller, but more frequent, increments.
Nonprofit leaders must ensure their organizations can accept donations the way Gen Z likes to make them: In bite-size chunks, online, without interacting with — or, worse, talking to — a human being.
On the other end of the age spectrum, this year the most tax-efficient way for many older donors to give has shifted to QCDs (qualified charitable distributions) from IRAs, says Patrick Schmitt, co-CEO at FreeWill, which specializes in planned giving.
“But the process is fiddly,” says Schmitt, with specific reporting requirements and tax implications. Nonprofits that provide the correct forms and can answer questions will be more likely to receive these donations.
“Invest in ways to make it easy for donors to give to you,” he says. An FAQ page with links to IRS rules is a differentiator.
And he advises nonprofits to ask all donors about planned giving, not just large benefactors.
“Research shows that if people sign up to donate to you in a will, they give more while they are alive,” he says.
“One of the main rules in fundraising is that people give to people,” says wiseHER’s Cox. “They are motivated by the mission, sure. But what usually gets them over the hump to support an organization is some sort of connection with a person.”
One way to foster those connections is to have the executive team, board members, even program beneficiaries call volunteers and donors, in addition to sending the standard letter. For Gen Z donors, think about a clever text message. The key is personal outreach to express gratitude.
“When was the last time someone called you and thanked you for doing something, without asking for anything — just saying, ‘That donation meant a lot to me’?” she says.
This is especially important for donations that come in through a board member. A call enables you as a nonprofit principal to become an integral part of that relationship in a positive way.
“They'll remember that show of gratitude because it stands out,” she says. “It just doesn't happen that much anymore.”
Other giving season advice from Cox’s 20 years in the nonprofit sector:
And finally, rather than the typical retrospective end-of-year newsletter that everyone sends out, look ahead. Talk about what you have on the docket for 2020 and how you plan to take your mission to the next level.
“Few nonprofits take this opportunity to outline a tangible initiative and get donors primed to give,” she says. “Tell me what's coming up next year. Tell me why I should be excited. Tell me why I should give now so I can help catapult you forward.”
In September, the Chronical of Philanthropy reported on five of the largest foundations that not only pledged to fund, through grants, nonprofit operating costs, including higher pay for employees, but vowed to "destigmatize" overhead expenses. That’s still a fairly radical notion despite more than 4,734,000 views of Dan Pallotta’s landmark TED Talk, “The way we think about charity is dead wrong,” where the founder of the Charitable Defense Council enumerates the many problems with the question: "What percentage of my donation goes to the cause versus overhead?"
Our survey makes the need for more operational investment clear. For example, when we asked nonprofit CFOs what keeps them up at night, staff turnover landed at No. 2 on the worry parade. A tight market for talent isn’t helping.
“We’re undergoing a sea change in how supporters and nonprofits think about mission and mission impact,” says Gipson. “The good news is that you can take baby steps in educating supporters on your mission and overhead, complementing your end-of-year giving initiatives.”
She points to Candid a, leading nonprofit capacity-building organization that is now offering a Seal of Transparency.
“You provide context for the IRS information already in your organization's GuideStar Nonprofit Profile and give potential supporters clearer insight into your mission spending and impact,” says Gipson. “The best part? It's completely free and can be added to your webpage and marketing campaigns.”
Lorna Garey is executive editor of Brainyard. She was formerly editor in chief of Channel Partners and Channel Futures and content director, digital, of InformationWeek. Got thoughts on this story or want to contribute to Brainyard? Drop Lorna a line.