It’s Not Too Late to Think about Year-End Giving

No, the headline does not contain a typo. It’s not too late to think about your 2015 year-end giving. It’s also not too early to begin planning for your 2016 year-end appeal strategy. Let me tell you why.

Only about one-third of tax filers itemize on their tax returns. Therefore, year-end giving for tax avoidance is simply not that important to the majority of donors. Furthermore, survey after survey indicates that tax avoidance is a very low motivating factor for most donors. So, why put a tremendous amount of energy and resources into doing a year-end fundraising campaign? Here are some of the rationales:

Herd Mentality. The fourth quarter of the calendar year is a busy time for charity appeals. The largest number of direct mail appeals is sent at that time. For phone fundraising, it is also the busiest time of year. So, since everyone else is doing it, fundraisers think they should be out there, too. #GivingTuesday helps perpetuate this mentality.

Heaping Pile of Mail by Charles Williams via FlickrIt’s the Right Time. For some charities, doing a year-end campaign around the holidays is appropriate given the mission and/or history of the organization. Consider The Salvation Army and its red-kettle campaign, or the Toy-for-Tots effort geared to providing holiday presents for children. For other organizations, donors are simply accustomed to seeing and responding to a year-end appeal.

Year-End is a Time of Giving. With Hanukah and Christmas falling at year-end, there is certainly a giving spirit leading into the end of the year. Charities hope to piggyback on that giving spirit.

Charities Simply Must Appeal at Year-End. This relates to the first two reasons above. Fundraisers think they have to do a year-end appeal because it’s the thing to do or because the organization has always done one. Without giving it much thought, fundraisers conclude that a year-end appeal is simply something that is best practice.

Despite the conventional wisdom, doing a year-end appeal might actually short-change your organization. There might be a more effective way for you to raise money.

I’ve worked with charities that have tested a year-end appeal against a beginning-of-the-year campaign. Many of these charities found they could raise far more money in January and February instead of at year-end.

Why did those charities raise more money at the beginning of the year rather than at the end of it?

Interestingly, the reasons can be found when taking a closer look at the reasons I’ve outlined for year-end giving:

Herd Mentality. With so many charities competing for limited resources at year-end, it’s difficult for any single charity to standout. In January and February, when far fewer appeals are made, the competition for donors is far less. That means it’s easier for a nonprofit organization to capture a donor’s attention at the beginning of the year rather than at the end of it.

It’s the Right Time. For some charities, doing a holiday-oriented appeal is entirely appropriate. However, if your charity has no particular reason for making a holiday appeal, why do one? You’ll be at a competitive disadvantage to those charities that do have a good reason for making a year-end appeal.

Since the majority of tax filers do not itemize and the majority of donors are not motivated by tax avoidance, there’s really not much of a tax reason for making a year-end appeal.

Also, most donors are bottom-of-the-checkbook givers. In other words, people pay their monthly bills and then, based on what is leftover, make decisions about what to do with their remaining disposable income. They may choose to save it, buy a gift for a loved one, go to a basketball game, or give to a charity.

At year-end, there’s a great deal of competition for those limited funds. However, each month, that reservoir of disposable income is replenished. At the beginning of the year, you have an opportunity to tap into that reservoir with less competition. When people give, they donate what they can afford at that moment. Making an appeal when they have greater means to give makes a great deal of sense. By the way, this is one reason why monthly-giving programs are a great idea.

Year-End is a Time of Giving. Year-end is certainly a time of giving. That just means more competition for your appeal. Not only will your appeal compete with legitimate holiday appeals, you’ll be competing for limited resources, much of which will go toward holiday gift giving to loved ones, as well as travel and entertainment.

Charities Simply Must Appeal at Year-End. Doing anything because it’s the way it’s always been done is really stupid. You should periodically test the timing of your appeals to determine what will work best for your organization. A year-end appeal might make the most sense for you. Or, it might not. The fact is you have no way of knowing for sure unless you do a test.

It’s not quite too late to send a beginning-of-the-year appeal. It’s certainly not too late to incorporate a timing test into your 2016-17 fundraising plan. The results might lead you to abandon your year-end appeal and replace it with a beginning-of-the-year appeal. Or, the results might suggest that you should do appeals at both times. A timing test could show you the path to easily raising more money.

That’s what Michael Rosen says… What do you say?

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