Will the Election be Good or Bad for #Fundraising?

[Publisher’s Note: This is not a political or partisan post. Instead, this post will explore the affects the recent presidential election is likely to have on fundraising and philanthropy in the short-term and beyond. As always, civil and on-topic comments are encouraged, whether or not you agree with the points covered in the post. However, overtly political or partisan comments will not be published nor will the rants of internet trolls.]

 

Donald J. Trump appears to have secured enough electoral votes to become the USA’s 45th president. His election will become official when the Electoral College votes on Dec. 19, 2016.

After a bruising, though not unprecedented, election cycle, the nation remains deeply divided and emotionally raw. What does this mean for fundraising and philanthropy?

Impact of Election Donations on Charitable Giving:

At the 2016 Association of Fundraising Professionals International Fundraising Conference, research from Blackbaud was presented that looked at the impact of political giving on charitable donations in the 2012 election cycle.

Chuck Longfield, Senior Vice President and Chief Scientist at Blackbaud, observes:

Fundraisers have long debated whether or not political fundraising affects charitable giving and, for decades, important fundraising decisions in election years have been based largely on the conventional belief of a fixed giving pie. The study’s overall assertion is that political giving during the 2012 election did not, in fact, suppress charitable giving. Donors to political campaigns continued their support of charitable causes.”

According to the study, donors who gave to federal political campaigns in 2012 gave 0.9 percent more to charitable organizations in 2012 compared to 2011. By contrast, donors who did not give to political campaigns reduced their giving to charities in 2012 by 2.1 percent. These data findings held true across all sub-sectors as well as the demographic segments of age range, household income, and head of household gender.

The research only provides us with a snapshot. It is not predictive. More research will need to be done to identify whether or not the results will be consistent over multiple election cycles. However, based on the analysis of the 2012 campaign cycle, we certainly have room to be cautiously optimistic about 2016.

Year-End Giving:

If history is an indicator, the 2016 election will have little or no impact on overall year-end philanthropy, according to Patrick Rooney, Ph.D., Associate Dean for Academic Affairs and Research at the Indiana University Lilly Family School of Philanthropy.

voting-by-becky-mccray-via-flickrAt times, elections have had an effect on the giving of some individuals. For example, in 2008 when Barack Obama was elected, some major donors feared that he would secure a 28 percent cap on tax deductions.

Out of fear that the cost of giving would, in effect, be going up in 2009, some of these individuals front-loaded their 2009 philanthropic support to 2008 year-end. Nevertheless, the impact on overall giving was modest.

While Trump has promised major tax reform, it’s doubtful that donors will expect significant changes to the tax code to be enacted and go into effect in 2017. Therefore, it’s equally doubtful that major donors will shift 2017 giving into 2016.

Given that the 2016 election was unusual in many ways, it is certainly possible that year-end giving will deviate from the historical norm. For example, the stock market reached a record level following the election. If stock values continue to grow, we could see an increase in year-end gifts of appreciated securities. However, regarding overall philanthropy, I think the smart bet is on history.

Giving to Individual Charities:

It is very likely that certain individual charities will see an uptick in donations as a result of the election outcome.

Many years ago, Richard Viguerie, a pioneer of conservative direct response fundraising and Chairman of ConservativeHQ.com, said that people would rather fight against something than for something. We’ve seen it before; we’re seeing it now.

For example, when Obama was elected, the National Rifle Association received significantly more contributions as some feared that the new president would impose more stringent gun control measures.

Now, Kari Paul, of MarketWatch, reports:

A number of charitable organizations are seeing an unprecedented rise in donations following the elections on Tuesday. The Sierra Club said by the end of the day on Friday it had added more monthly donors in the three days since the election than it had in all of 2015.”

Paul also reported that Planned Parenthood, the NAACP, and the ACLU also experienced a significant uptick in philanthropic support. For example, in just the five days following the election, the ACLU raised over $7 million from 120,000 donors.

In other words, it’s safe to assume that some left-of-center charities will find it easier to raise money and will raise significantly more money because of Trump’s victory. Conversely, some right-of-center charities may find it more challenging to raise money now that Republicans will be solidly in-charge of all three branches of the federal government.

Big Charities v. Small Charities:

While large charities, such as those I’ve already mentioned, will likely benefit from the current political environment, it’s unclear what the impact will be for small organizations. It is possible that large organizations, with their vastly larger budgets and staff resources along with greater brand identities, will siphon donations away from smaller organizations with similar missions.

In other words, while some large left-of-center charities will experience philanthropic growth, smaller left-of-center charities might not find it as easy to raise more money.

Long-term Effect:

Beyond the short-term, the effect of the Trump Administration on the nonprofit sector will be a result of his policies on the budget and the economy. If, under a Trump Administration, the government significantly cuts funding of charities (e.g., Planned Parenthood), this could significantly affect certain charities.

Meanwhile, the broader nonprofit sector will benefit if personal income and the economy grow because philanthropy will also grow. Historically, overall philanthropy has equaled about two percent of Gross Domestic Product. However, if Trump’s policies have the opposite impact, philanthropy will likely suffer. Trump’s tax plan could also have a significant impact on giving, so it will be important to watch what he actually proposes.

Impact on Government Grants and Contracts:

Because government grants and contracts are not philanthropic contributions, I’ve chosen not to address the issue in this blog post. Nevertheless, it’s a legitimate concern that charities should have as the government is likely to seek budget cuts, some politically motivated while some are not.

What Can Charities Do?

1.  Stop whining. Whining inspires no one. I’m not talking about the election outcome. I’m talking about an appeal that goes something like, “We haven’t made our goal yet. So, please give help us reach our goal before the end of the year.” Instead, keep the focus on your beneficiaries and your donors.

2.  Establish a great case for support of a solid mission. People want to know that their donations will make a difference; they want to know how your organization will use their contributions. So, tell them!

3.  Build strong relationships with donors. Good grief, donor retention rates in the USA still stink! If donors are important to your organization, make sure they feel important.

4.  Ask for support. The organizations that will suffer the most in the coming weeks are those who throttle back their fundraising efforts. If you want more donations, ask for them. If you want donors to upgrade their support, ask them. If you want more planned gifts, ask for them.

5.  Get to know the other side. Diversity and inclusiveness means we need to be open to all, not just those who agree with us. I’m blessed to have a truly diverse group of friends and colleagues, and my life is richer because of it. If you don’t know a Clinton voter, or if you don’t know a Trump voter, find one and talk with him or her over a cup of coffee. Why? Because your organization’s supporters have voted for both candidates. I guarantee you that even Planned Parenthood has donors who voted for Trump. As fundraisers, we need to understand the fears, concerns, interests, and passions of all of our donors if we’re going to be successful when it comes to seeking their support.

Other blogs and professional publications contain additional insights and useful tips. So, be sure to check out some of those. I invite you to share your favorites below.

So, what do you think the future will look like for fundraising and philanthropy? What is your organization experiencing?

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

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