In the nonprofit world there are the haves (think Harvard, Yale, and the Metropolitan Museum of Art) and the have-nots (that’s everyone else). It’s the charitable version of the 1% and the 99%.
The 99% of nonprofits have big-time challenges in deciding how to use their limited time and resources for raising money. There is a tendency for small nonprofits to spread themselves out over lots of well-intentioned but ineffective initiatives – running golf tournaments that return very little on the dollar (if you truly account for all the staff time involved), or writing press releases that nobody ever reads, or appearing on community television shows that nobody ever watches. It’s hard for nonprofits to figure out where to concentrate their efforts.
Here are four simple steps small nonprofits can take in anticipation of what you hope will be a rush of end-of-year donations. Completing these actions are prerequisites to competing – in your small way – with the 1%. None of these steps will take more than two or three hours, and none of them costs more than a few dollars, but they have the potential to provide immediate and long-lasting returns. They are not a substitute for meeting with donors and building relationships – but they do help translate those relationships into gifts.
1) Establish a brokerage account for receiving and selling securities.
Smart (and well-to-do) donors like to make their larger gifts by donating appreciated stock. Why? Because it’s the most inexpensive way to make a donation.
Say someone bought stock for $1,000 and has seen it grow to $10,000. That person can give the stock to a nonprofit, get a $10,000 tax deduction, never have to pay a capital gains tax (because the gain gets passed to the nonprofit, which is tax exempt), and never have to reach for a checkbook. Meanwhile the donor is chuckling and thinking: “Ha! And it only cost me $1,000 way back when!” Appreciated stock is the perfect asset for charitable giving.
But it only works if the nonprofit has a brokerage account. You don’t want to have a donor call on the last week of the year to talk about a stock gift and not have a way to receive it. So set up an account now with a local financial advisor, who will get you a DTC number – this is the electronic address to which your donor’s broker can direct the stock gift. Yes, you’ll be annoyed at the fees from your broker for the eventual sale of the donated stock. But without an account, you won’t ever get the stock at all. Set it up. Now.
2) Create a “Donate Now” button on your website – and put it on your home page.
A surprising number of nonprofits don’t have a button on their website for making an on-line gift, or if they do, it’s buried deep within the site. You don’t want to look overly aggressive, you say – it’s not your culture. You want to speak to your mission, rather than to your fundraising. All of which is fine, if you don’t mind people going to your website on December 31, screaming in frustration, and making their gift to another organization instead.
Most on-line donation services that cater to nonprofit donations take a fee – but they do provide an important service, so don’t work yourself up over the cost.
Do take a few minutes to structure the “landing page” so that it looks somewhat like the rest of your site.
Finally, you’ll be given a chance to create gift categories for donors. If you pick small dollar amounts — $25, $50, $75, $100 – that’s exactly what you’ll receive. Start with a dollar amount at the high end of what your donors typically donate, and then work your way down to $50 or so.
3) Put bequest information on your site.
Your donors may be revising their wills tomorrow. Or next week. Or next month. They may not want you to know that they’re including your organization in their estate plans. (According to one study, about 80% of charitable bequests come as surprises to the recipients.) The donors or their lawyers will be going to your site to find information about how to designate a bequest. You should absolutely have that information on your site, with your official name and address. The language there is usually something on the order of:
“I hereby bequeath __________________ (dollar amount or percentage of my estate or residual of my estate after other bequests) to Good Cause, Incorporated, a not-for-profit corporation with its principal place of business at 1 Happy Lane, Anywhere, TN 12345.”
The bequest information doesn’t have to be terribly technical. It simply has to be accurate. And it has to be there.
4) Give staff contact information for donations.
Seems simple, yes? Obvious? So please do it. And better yet, add a photo of the contact person. You want to invite people to call with questions. If you make it too hard for the donor to find someone to talk with, the gift will go elsewhere. Or it won’t go at all.
Copyright Alan Cantor 2012. All rights reserved.