Get Two FREE Offers to Mark My Return

I’m back!

It’s been several months since I’ve written a blog post. I’ve been tending to some health issues during that time. I’ll explain more in a moment. First, I want to mark the occasion of my return to blogging with two special, FREE offers for you:

“On Giving” – Skystone Partners Webcast:

I invite you to join me for my conversation with Elizabeth Kohler Knuppel, CEO of Skystone Partners, as part of her FREE “On Giving” webcast series. We’ll discuss planned giving trends as well as what’s changed and what’s stayed the same over time, particularly in this pandemic era. We’ll also discuss the vital but often overlooked role that people of color and women play in successful planned giving. During the live program, you’ll have an opportunity to ask questions.

Join us on Tuesday, March 8, 2022, at 12:00 pm (EST). For more information and to register for FREE, click here now.

If you can’t attend the live webcast, don’t worry. You’ll still be able to watch the program on the Skystone Partners YouTube Channel along with other past episodes.

You can find my award-winning book, Donor-Centered Planned Gift Marketing, in paperback or Kindle by visiting Amazon.

Philanthropic Trends for 2022 that Nonprofits Should Know:

Recently, I had a conversation with Mary Jane Bobyock, CFA, Managing Director, Nonprofit Advisory Team, Institutional Group at SEI. We looked at the likely philanthropic trends that nonprofits will see in 2022. You can read the full article for FREE by clicking here.

We looked at several questions including:

Suggested Gift Annuity Maximum Rates Announced by ACGA

The American Council on Gift Annuities has announced suggested maximum rates for Charitable Gift Annuities. The ACGA Board approved the new rate tables at its meeting on April 26, 2021. The new rates remain unchanged from the existing rates. ACGA issued the following statement:

As part of a continuous monitoring process, the ACGA Board held a meeting on April 26, 2021, and reviewed the current assumptions inherent in our gift annuity suggested maximum rate schedules. While interest rates have moved slightly higher so far this year, they have not moved enough to warrant an upward revision to the ACGA’s return assumption, and therefore, the Board decided to not change the suggested maximum payout rates. The Board continues to monitor market and economic conditions and will make changes as conditions warrant.

Generally speaking, the ACGA’s suggested maximum rates are designed to produce a target gift for charity at the conclusion of the contract equal to 50% of the funds contributed for the annuity. The rates are further predicated on the following:

• An annuitant mortality assumption equal to a 50/50 blended of male and female mortality under the 2012 Individual Annuity Reserving Table (the 2012 IAR)
• A gross investment return expectation of 3.75% (which is down from the previous return assumption of 4.25%) per year on the charity’s gift annuity funds
• An expense assumption of 1% per year.

The rate schedule published on the website became effective on July 1, 2020. For more detailed information about gift annuity rates and the assumptions that underlie them, a revised copy of the full paper on the ACGA rates effective July 1, 2020, is now available in an electronic format free of charge to logged-in ACGA members here.”

As LACGP Conference Nears, Enter to Win FREE Virtual Access

It’s almost here! From May 25 to 27, you have an opportunity to learn about planned giving from a diverse group of leading experts. Even better, I’m giving you the chance to become one of three lucky people to win FREE virtual access to:

Los Angeles Council of Gift Planners — Western Regional Planned Giving Conference

“Meeting the Moment: Philanthropy’s Role in Healing”

May 25-27, 2021 (Pacific Time)

Presenting Sponsor: The Stelter Company

Click here to see the list of expert presenters.

Click here to see the conference schedule.

Click here to register ($375 for members, $425 for non-members).

To enter for a chance to win FREE online access to the conference, simply comment below or subscribe to my blog site. (Note: Residents of California are not eligible.) I will notify winners by email by the close of Wednesday, May 19.

I’m honored to be among the conference speakers. Here is information about my session:

Get ready to celebrate. You could win FREE conference access.

PLANNED GIFT DONORS ARE NOT WHO YOU THINK THEY ARE

Thursday, May 27, 2021, 9:15 – 10:30 AM (PDT)

DESCRIPTION: If you look at a typical nonprofit website, flip through a charity newsletter, or read newspaper reports, you might come away thinking that it is wealthy white men who make planned gifts. You would not be wrong, but you would be missing the full picture. So, who does engage in planned giving? Researchers have begun to address the question. Together, we will explore the true diversity that exists among planned gift donors. We will also review the images and words that inspire people to make planned gift commitments. Following this session, you will have a better understanding of who gives as well as immediately actionable, easy to implement, low-cost steps you can take to enhance the results of your planned giving program.

I hope you will join me and my fellow presenters for what will be a meaningful conference to help nonprofit organizations secure the resources they need now more than ever. As LACGP says:

Shocking Fundraising Behavior from Nonprofits Captures Media Attention

Nonprofit hospitals across the country have made disturbing news headlines recently. Sadly, while medical staff continue to provide heroic patient care, many of the recent news stories deal with unethical fundraising behavior that puts all nonprofits at risk. Consider these two items:

• Hospitals across the country have given major donors special, early access to the COVID-19 vaccine.
• In a story unrelated to the coronavirus, one hospital fundraising office has offered medical staff bonuses for referring “Grateful Patient” prospects.

While those news items involve healthcare organizations, all charities should be concerned. Let me explain. When some nonprofits behave badly, it reflects on the entire nonprofit sector with the potential to erode public trust and, therefore, support. There is ample research, as well as anecdotal evidence, that reveals that the fundraising efforts of virtuous charities can be harmed by the unethical behavior of unrelated nonprofit organizations.

Let’s look more closely at what has occurred recently:

MAJOR DONORS GIVEN EARLY ACCESS TO VACCINE

Initial excitement over the release of COVID-19 vaccines has given way to frustration as only 18 percent of the US population has received the first dose with confusing sign-up procedures and long lines greeting many people.

“But one group has gotten a head start in receiving the coveted shots: people who’ve donated money to hospitals distributing the vaccine,” according to a report in MarketWatch.

Ethical_Decision_Making_Article.28164930 AFP statement major donor vaccinations Feb 2021 final AFP Statement Grateful Patient Fundraising March 2021 final

According to reports, hospitals across the nation have been giving favorable treatment to major donors including Storment Vail Health (Kansas), Overlake Medical Center (Washington), Hunterdon Medical Center (New Jersey), MaineGeneral Health (Maine), and Garnet Health (New York).

Authorities in New York have launched a probe into Garnet’s actions to determine if any laws were broken. While evaluating whether or not laws were broken, it is important for us to also consider whether the actions of Garnet and other hospitals are ethical or unethical.

“As we see numerous reports of line jumping and favoritism, any situation that could lead to distrust in the fairness of the vaccine allocation process needs to be proactively managed. Redeploying staff to help with vaccination is reasonable, but care should have been taken to avoid [MaineGeneral Health] fundraising staff connecting with prior donors on this,” Holly Fernandez Lynch, an ethics professor at the University of Pennsylvania’s Perelman School of Medicine, told the Bangor Daily News.

The Bangor Daily News added, “Medical ethicists said there were many good reasons for MaineGeneral and other hospitals to test processes before opening wider clinics, but even well-intended efforts involving philanthropy staff and donors can be seen negatively.”

Medical ethicists weren’t the only ones to weigh-in on the situation. The Association of Fundraising Professionals, the largest community of charities and fundraisers in the world, has released the following statement from President and CEO Mike Geiger, MBA, CPA:

The idea of hospital systems, or any charity, ignoring protocols, guidance or restrictions—regardless of origin—and offering certain donors and board members the opportunity to ‘skip the line’ and receive vaccinations ahead of their scheduled time is antithetical to the values of philanthropy and ethical fundraising….[emphasis added]

Offering vaccinations to major donors, and not to populations with the greatest need … destroys public trust—to say nothing of the possible impact on constituents of the charity who don’t receive the appropriate vaccinations or medical attention in time.…

AFP, and the 26,000 members in our community around the world who represent nearly every charitable cause imaginable, condemn this activity in the strongest manner possible. It is unethical and inequitable, and we call on all health systems and all providers of vaccinations to deliver this service in a manner that is fair and equitable for the people they serve and consistent with procedures developed by the Centers for Disease Control and all applicable levels of government.”

Some hospitals around the country have behaved unethically, violated the law, or both. However, even those who may have a legitimate explanation for their actions and who have done nothing wrong may still be giving the appearance of having done something unethical involving their interactions with major donors. That’s still a big problem. As the AFP Code of Ethical Standards states clearly:

Are You Annoying Your Donors Without Even Knowing It?

If you’re annoying your donors, it could be hurting your fundraising efforts. The challenge is that you might not even know you’re annoying them. Let me give you a personal example.

One of my favorite charities, for well over a decade, has been annoying me lately. I don’t remember when it started, perhaps a year or so ago. For some time, I couldn’t even articulate why I was annoyed. Then, several weeks ago, I received a letter that made me immediately understand the reason for my irritation. Even better, the letter immediately made me feel better by making me feel closer to the organization.

The charity is the Philadelphia Children’s Alliance. The organization brings justice and healing to the survivors of child sex abuse. I have the utmost respect for the staff and the volunteers, including the board. They do heroic work helping children and their families cope successfully with a heinous crime. I’ve written about them here a number of times. I’ve shared insights from the PCA staff about child sex abuse. I’ve also shared their remarkable fundraising successes.

As a former PCA board member, I have remained a passionate supporter of the organization. Because PCA’s mission is so important to me, I have continued my support even when I became mildly annoyed with them. However, if other donors felt similarly annoyed, would they continue to give and, if so, how likely would they be to increase their support? The answer from psychology researchers reveals that it could be a big problem.

Let me tell you what was bothering me and how PCA was able to quickly and easily overcome it.

I had grown accustomed to receiving generic communications from PCA. I received the same cultivation messages and appeals as everyone else was sent. So, I was surprised one day not long ago when I received a hand-addressed, monarch-sized envelope. Inside (because of course I opened it) was a handwritten letter from someone with whom I served on the board.

While the letter was sent in December, I did not receive it until well into January thanks to problems at the US Post Office. Nevertheless, I appreciated the good wishes for happy holidays. I also appreciated that the letter went on to let me know that PCA’s spring fundraising event would take place either in-person, virtually, or as a hybrid. My former colleague, now the event co-chair, mentioned the date of the upcoming fundraiser and told me that more details would be forthcoming. He went on to say that he hoped to see me at the event. However, he did not make a specific ask and, therefore, did not include a response envelope. His communication was simply a cultivation piece designed to make me feel like an insider.

Yes, I appreciated the personal touch of this particular cultivation mailing. However, what I appreciated the most about the letter was that it acknowledged that I am an alumnus of the PCA board.

Bells went off in my head! I finally understood why I had been growing annoyed with PCA. Recent communications from PCA did not acknowledge my identity. I had been addressed just like every other donor. My former board service was rarely acknowledged, which made the handwritten letter particularly special to me.

By acknowledging my identity, PCA showed me they know who I am. They respect my prior service. They appreciate my support, not just my money. They rekindled the feelings I once had as a volunteer leader.

Should this matter? You might think it should not. Was I being childish or self-centered to be annoyed that PCA had not been acknowledging my identity? You might think I am. But, and I say this with full respect, your opinion doesn’t matter in this case. It’s MY feelings that determine which charities I support and how much I give them. As I learned by taking the certificate course Philanthropic Psychology, taught by the Institute for Sustainable Philanthropy, there is plenty of scientific research to back me up on this.

One reason most charitable organizations experience shamefully high donor-attrition rates is that they do not acknowledge the individual identities of donors. Let me give you a quick, simple example of what I mean.

When a donor contributes a $100 to your charity, do you thank her for her generous gift? Or, do you thank her for being a kind, caring person who made a gift. The former message describes the gift. The latter message describes the person. It’s a simple messaging shift that can have a massive effect.

In PCA’s case, an individual donor might identify as a Philadelphian, a parent, someone who cares about justice, someone who cares about children, etc. More generically, a PCA donor might identify as being kind, thoughtful, caring, concerned, angry, etc. In my case, one part of my identity as it relates to PCA is former board member. The key for you as a fundraising professional is to understand how your donors think of themselves. You can learn this through conversations with them, surveys, or their responses to appeals.

Here are four tips:

How Can You “Vaccinate” Your Nonprofit for Good Financial Health?

It’s no secret that the coronavirus pandemic has caused death and economic destruction around the world. The nonprofit sector has not been immune from the ravages of COVID-19.

While some charities have held their own when it comes to fundraising, or have even managed an uptick, others have experienced a downturn. If the economy doesn’t fully recover, and quickly, all organizations may find fundraising more difficult in the months and years ahead. With a corresponding drop in earned income, the financial health of charities is in danger.

Richard Radcliffe is the Founder of Radcliffe Consulting based in the UK. He recently wrote a passionate article explaining how charities can ensure their financial health and security in the years ahead. Because he is kind and cares deeply about the wellbeing of the third sector, Richard has given me permission to share his wisdom with you:

 

Legacies are the “vaccine” for good, long-term financial health for your nonprofit organization.

Legacies are a security blanket, a treasure trove to dip into to GROW or to protect your charity in times of emergency.

Individual giving does not build reserves.

Trusts and Foundations give for projects.

Statutory funding is project or service-based.

Corporate funds are largely restricted or for dual interest.

What is there NOT to like about legacies? The answer is simple: It is wanting money NOW – rather like a baby screaming to be fed NOW.

Mahatma Gandhi said, “The future depends on what you do today.” But legacies are not gained today or tomorrow. And bad leaders only think of today whilst in their seats of power.

Investing in legacies is like dieting: “Great idea but let’s leave it for another day.” And then a pandemic hits and all hell breaks out. Furloughed staff, redundancies, reduction in services.

Good leaders are visionaries who plan to fulfill their charity’s vision and mission AFTER their own lifetime as leaders.

What You Need to Know that You Might Have Missed

During the year-end holiday period, I usually find it a good time to reflect back on the previous 12 months and think ahead to the new year. With the wild ride that has been 2020, I’m enjoying the moment to catch my breath. I hope you’re able to do the same.

As I look back over 2020, I thought I would take a bit of time to share with you some items you might have missed during your busy, crazy year.

My Top Blog Posts:

First, because I recognize that you can’t read everything that crosses your desk, I’ve put together a list of my top ten most-read posts published in 2020, in case you’ve missed any of them:

Legacy Fundraising: The Best of Times or the Worst of Times?

How will Coronavirus Affect Your Fundraising Efforts?

What Can You Learn from “The Naked Philanthropist”?

New Charitable Giving Incentives in CARES Act

Listen to The Whiny Donor and Raise More Money

Coronavirus: 20 Survival Tips for You and Your Charity

10 Fundraising Strategies for Complex & Major Gifts During COVID-19

Is the AFP International Conference in Jeopardy?

Warning Signs You Need to Know About

Amy Coney Barrett Knows Something You Need to Know

Now, I want to give you a list of five of my older posts that remained popular in 2020:

Can a Nonprofit Return a Donor’s Gift?

Can You Spot a Child Molester? Discover the Warning Signs

Here is One Word You Should Stop Using

Get More Repeat Gifts: The Rule of 7 Thank Yous

We All We Got. We All We Need.

I invite you to read any posts that might interest you by clicking on the title above. You can also search this blog by topic using the site’s search function (either in the right column or below).

Blog Site Recognition:

Over the years, I’ve been honored to have my blog recognized by respected peers. I’m pleased that, among the thousands of nonprofit and fundraising sites, my blog continues to be ranked as a “Top 75 Fundraising Blog” – Feedspot, “Top Fundraising Blogs 2020” – Garecht Fundraising Associates, “Best Fundraising Blogs for 2020” – Future Fundraising Now.

To make sure you don’t miss any of my future posts, please take a moment to subscribe to this site for free in the designated spot in the column to the right (or, on mobile platforms, below). You can subscribe with peace of mind knowing that I will respect your privacy. As a special bonus for you as a new subscriber, I’ll send you a link to a free e-book from philanthropy researcher Russell James, JD, PhD, CFP^®.

Special Projects:

In 2020, I was honored to have the opportunity to participate in four special projects:

White Paper with Dr. Russell James: “Legacy Fundraising: The Best of Times or the Worst of Times?” (FREE)

Article for SEI Knowledge Center: “Charitable Giving 2020: COVID-19 and Politics Make a Play” (FREE)

White Paper with Rogaré: “Ethics of Legacy Fundraising During Emergencies” (FREE)

Article for the Association of Fundraising Professionals: “A Flight Attendant’s Advice Leads to Soaring Personal Success” (members only)

Best-selling Book — Donor-Centered Planned Gift Marketing:

This year was also another good year for my book, Donor-Centered Planned Gift Marketing. The book continues to be a highly-rated Amazon bestseller. Winner of the AFP/Skystone Partners Prize for Research in Fundraising and Philanthropy and listed on the official CFRE International Resource Reading List, it continues to be a relevant resource for fundraisers who want to start or grow a successful planned giving program.

A LinkedIn Discussion Group for You:

Should Charity Begin in the Office with Employee Giving?

Should employees donate to the nonprofit organization they work for? Should they be asked, or even required, to give? Should employees never be asked to give?

Over the decades, I’ve had a number of clients ask me about the issue of employee giving. Over the years, my feelings about employee giving have flip-flopped any number of times. On the one hand, I’ve considered it a good idea to express one’s support for the organization before asking someone else to give. On the other hand, I’ve also recognized that nonprofit employees are frequently paid far less than they should be and often work many uncompensated overtime hours.

It’s a complicated issue.

Fortunately, there is now a new e-book that closely explores the subject of employee giving. Employee Giving: Does Charity Begin in the Office? is a free e-book by Ephraim Gopin, founder of 1832 Communications, an agency helping nonprofits raise more money through strategic and smart marketing and communications.

As part of the e-book project, Ephraim conducted a survey of nonprofit employees and consultants so he could explore all sides of a very contentious and complicated topic. The result is an e-book that will help you learn about:

• Employee giving: The case for yes, the case for no, and why it’s complicated
• Attitudes about Board and C-level giving
• How employees working overtime affects giving
• Can employee giving help when asking donors to give
• And much more!

Learn from the survey data and over 30 sector experts. Whether you’re in the “oh hell no!” or the “let employees enjoy being a donor!” camp, this e-book will open your eyes to both sides of the issue. Reading the e-book might just change your mind. You can download your free copy by clicking here.

The topic of nonprofit employee giving doesn’t get much attention. So, I was intrigued when I saw Ephraim had written his e-book. Recently, I had the opportunity to ask him a few questions related to the project. Here’s what he had to say:

 

What workplace ask have you experienced that stuck with you, good or bad?

Here’s how I open my introduction to the e-book: “The honest truth? I never gave. Even when I was a CEO.”

No one ever asked me and I never asked my employees when I was CEO. (It could be cultural as where I live it is definitely not the norm to ask employees to donate.) For me it would have been double-dipping: “I give way more hours to the organization than what’s stipulated in my contract. Now you also want to take a portion of my salary check away?!”

In the survey, I asked how much overtime (unpaid time) employees work in an average month. 41 percent of survey respondents said they work 11+ hours of overtime each month. That’s A LOT!

So, you’re overworked and underpaid, certainly in comparison to the for-profit sector. How would you feel if, now, you also are being asked to donate back to the organization that “steals” your precious few off-hours of family and friends time? There’s a reason why people are very vocal about their opposition to employee-giving programs.

At the same time, the e-book includes a few stories of internal-giving programs done right. No pressure, employees can decide not to give and it won’t be held against them in any way.

As a consultant, I have given back to some of my clients. The truth is that while preparing the e-book, vendor fundraising did come up and I added it as a topic for thought.

However, if I were an employee, would I also be a donor to that organization? Tough one for me to answer.

Why did you decide to write the e-book?

As many things do nowadays, it all started with a tweet. I was curious to hear from my followers whether they donate/d to the nonprofit they work/ed for. My assumption was they did not.

Why would I assume that? Many nonprofit workers are underpaid, overworked and underappreciated. The thought of these employees also being givers — forced or not — never even crossed my mind.

Yet, the responses to my tweet surprised me: Most of the respondents were in fact donors to the charity they worked for! Obviously, it’s a big world out there and there are many nonprofiteers who did not answer my original tweet.

That’s how the ball got rolling. A year after that initial tweet I published a survey that aimed to measure attitudes related to employee giving and numerous issues surrounding it. My goal was to use the survey data as a backdrop to an e-book on the topic.

Post survey, I conducted almost 60 follow-up interviews via phone or video chat. Every single person I spoke to had very concrete opinions about the topic. Should employees be asked to donate? Plenty of NO! and plenty of YES! to go around.

Why write the e-book? It is a complicated topic I was interested in exploring and learning more about. Besides a blog post here and there, no one has really looked into it to understand why employees should or should not be asked. I feel my e-book can bring the discussion to nonprofit leaders who can make wiser and more informed decisions when considering an employee-giving program.

What do you hope to accomplish with the e-book?

Listen to The Whiny Donor and Raise More Money

If you want to raise more money, you need to listen to your donors. Unfortunately, many of your donors do not feel comfortable giving you feedback about your fundraising appeals. Or, if they do feel comfortable, they won’t put in the time and effort to tell you what they think.

Fortunately, The Whiny Donor can help you. “The Whiny Donor” is the name of a Twitter account belonging to a woman who, along with her husband, is a significant donor and who has served on a number of nonprofit boards. Whiny is passionately committed to the philanthropy world making her a fantastic resource for fundraising professionals.

“The Whiny Donor”

Whiny lovingly tweets about charity issues, especially what works and what does not when it comes to fundraising. She provides meaningful, often actionable, insights from the perspective of the donor that she is. She’ll give you feedback that your organization’s donors won’t. Also, she’ll answer questions you would never dare to ask your own donors.

Recently, Whiny and her husband went through the year-end appeals that have inundated them. Then, she shared her thoughts in a valuable Twitter thread. With her kind, thoughtful permission, I’m going to share her helpful insights with you now.

Despite the name of her Twitter account, Whiny seldom whines. Instead, she provides insightful critiques, positive and negative. Here are 10 insights about some year-end appeals she has received recently:

COVID-19 Pandemic: Fundraisers should not be afraid to honestly tell prospective donors about the challenges their organization faces. Whiny says, “A couple of the appeals make a very clear case for their need for funds during the pandemic, and we are increasing our donations to them over last year’s amount. I am actually dumbfounded by appeal letters that DON’T mention anything about being affected by the pandemic. Where have you been all year?”

Mission: When a nonprofit organization has a well-articulated mission that is meaningful to donors, missteps will more readily be excused. For example, Whiny says, “There’s one local cultural nonprofit that always sends a reply form  with no appeal letter at all, and I’m so offended by that, I want to cut them off, but my husband insists that we continue to support them.” Whiny had this reaction to another appeal, “We keep donating to them, but I never read the very long, small-print, no-margin, weird-font appeal letter from a small local nonprofit. I simply don’t have the fortitude to tackle it.” Just be aware that, for most organizations, a clear, powerful mission will work best when paired with a well-crafted appeal, particularly one that is easy to read.

Fake Deadlines: Many charities like to use artificial deadlines for giving as a way to create a sense of urgency, especially at year-end. However, donors tend to care little about your deadlines and more about when they want to give. As Whiny says, “I don’t know how long it’s been sitting unopened in my stack of appeals, but one letter mentions a deadline of December 4, which seems weirdly arbitrary. I think they’ll still accept my gift, though. Don’t you?” I suspect they will. So, what’s the point of the fake deadline? Arbitrary deadlines just come off as hucksterism. When a fake deadline is impractical, it can become downright annoying. As Whiny has observed, “Another one I’m just opening, and it says ‘Nov 30 deadline!’ right on the envelope. But the postmark is November 23! C’mon!”

Postage: Unless you’ve tested a postage-paid response envelope versus one requiring a donor to affix a stamp, you should opt for a postage-paid response envelope as your default. You’ll likely get a better response rate. When requiring the donor to affix a stamp, avoid being condescending in the envelope’s postage box. For example, Whiny doesn’t like statements like “Place Stamp Here” or “Postage Stamp Required.” Whiny says, “I do know how to mail an envelope, you know.” A postage-box statement she likes is “Thank You for Your Support.”

Gift-Amount Suggestions: It’s almost always a good idea to suggest how much you would like a prospect to contribute. If you’re asking a past donor, the amount you seek should be related to what the donor has given in the past. In other words, don’t ask a $5,000 donor for $25; conversely, don’t ask a $25 donor for $5,000. When presenting a gift chain, make it legitimate. “The four choices on this gift chain are $250, $260, $265 and $275, which has got to be the narrowest range I’ve ever seen. They had the good sense to add a ‘Surprise Us!’ box, just in case I want to bust loose,” says Whiny. Generally, your gift-chain amounts should vary by more than $5 or $10.

Here’s What You Need to Know about Charitable Giving, 2020-21

This year has been one of great uncertainty and change for everyone, including those of us in the nonprofit sector. As 2020 comes to a close, and we’re poised to begin a new year, I had the opportunity to answer a number of questions from Mary Jane Bobyock, CFA, Managing Director of the Nonprofit Advisory Team, Institutional Group at SEI Institutions. Bobyock says:

One particular area that’s been different in 2020 is how nonprofits raise money. … Michael Rosen graciously answers my questions about the future of fundraising, the latest trends and considerations for fundraising post COVID-19 for 2020 and beyond.”

One of Babyock’s questions concerned Donor Advised Funds:

Donor Advised Funds (DAFs) have been steadily increasing as an effective fundraising vehicle but what are your thoughts about ways DAFs could change?”

My response is that DAFs will continue to play a growing role in the nonprofit world.

We will continue to see record in-flows and out-flows involving DAFs. While traditional DAFs have required the contribution of thousands of dollars to create an account, we are now seeing the rising popularity of micro-DAFs that allow even small donors to establish giving accounts with no minimum contribution required for creation. This means, in addition to the increase in money flowing through DAFs, we are seeing an increase in the number of individuals who have created a DAF account.

The CARES Act, adopted by the federal government this year in response to the coronavirus pandemic, provides a number of tax incentives for charitable giving that will expire at the end of 2020. Not only will this encourage more donations directly to charitable organizations, it will likely encourage greater in-flows into DAF accounts.

Given the DAF trends, charities should let donors know they accept DAF gifts. For example, an organization might highlight a DAF supporter in a newsletter. Also, the organization’s website should remind donors that they can recommend a contribution through their DAF. While charities will provide a hard-credit for gifts to a DAF’s sponsoring organization, a soft-credit should be made to the individual recommending the gift. You should also thank that person. Later, when appealing to that individual, the charity should remind him that he can recommend another DAF gift.

Another way to encourage supporters to recommend a DAF donation to your organization is to include a DAF widget on your website. The free DAFwidget from MarketSmart makes it easy for individuals to support your organization through their DAF. As MarketSmart says:

You already make it easy for supporters to make donations online using their credit cards, so why not do the same for those with donor-advised funds? DAFwidget makes it simple and convenient to find theirs among over 900 funds in our system.”

When you visit the SEI Knowledge Center, you can read the full article containing my answers to the following questions nonprofit leaders are asking: