Posts tagged ‘Russell James’

October 27, 2020

So, Wake Me Up When It’s All Over

There’s a line in the well-known Avicci song that goes, “So, wake me up when it’s all over.” It nicely sums up my feelings about 2020. It’s been a stressful year for us all in so many ways. Yet, despite the strain, I keep seeing articles and webinars full of unfounded optimism, particularly as they relate to fundraising in the post-COVID-19 world. Here are just a small number of the titles I’ve come across:

  • Rebooting and Managing After COVID-19
  • How to Keep Your Donors Once the Crisis Ends
  • Fundraising Predictions for After COVID-19
  • Fundraising Post-COVID-19
  • How Nonprofits Should Approach Grant Makers Post-Covid-19
  • After the Pandemic Fundraising

So, when is this post-COVID-19 time supposed to arrive?

No one knows. However, we do know it’s not going to arrive anytime soon. As I write this, the USA, and much of the world, is experiencing a coronavirus pandemic resurgence following efforts to reopen economies. We still don’t have a vaccine. While there might be a viable vaccine by the end of this year, experts say broad distribution will not be possible until probably the middle of 2021, at best. In the meantime, we still do not have solid, reliable therapeutics to treat the disease.

Even once people are vaccinated and the pandemic is brought under control, economists tell us it will take months, if not years, for the economy to recover. The Federal Reserve says that the jobless rate will remain elevated through 2022. The Congressional Budget Office believes it will take two years for the economy to recover to a pre-pandemic level. Even once things do return to “normal,” we do not know what that new normal will look like. For example, “about 2 in 5 Americans in a nationwide Bankrate survey from May, for instance, said they expect to shop less at traditional in-person retailers.”

While it will take time for the overall economy to recover, it will also take time for individuals to recover from financial as well as other physical and mental health issues made worse during the pandemic. For example, the percentage of individuals experiencing depression doubled even during the early months of the pandemic, according to the US Census Bureau.

So, if the lovely post-COVID-19 world is not going to arrive anytime soon, what should you really be focusing on over the next several months or longer? Here are just a handful of ideas:

September 18, 2020

Should You Forget about Planned Giving as 2020 Closes?

Garvin Maffett, EdD, a strategic consultant in the nonprofit sector, recently asked the members of the CFRE International Network on LinkedIn:

What’s on the horizon for Gift Planning during this uncertain time in our economy?”

It’s a good question, and I thank Maffett for starting a needed discussion. Some fundraising professionals have wondered whether they should rollback planned gift marketing during the pandemic, or whether they should boldly engage in more robust charitable gift planning efforts.

My simple answer is this: You should definitely NOT forget about planned giving as 2020 draws to a close. While the economic future is definitely uncertain, now is a fantastic time for charitable gift planning. Let me explain.

The stock market, while volatile, continues on an upward trajectory. Most Americans own stock. Many of those who own stock have seen appreciation this year. This means there is a great opportunity for you to secure gifts of appreciated stock for your organization.

Motivated by the coronavirus pandemic, many more people have chosen to write a Will. With more people making end-of-life plans, there is an opportunity to encourage them to include a gift to your charity in their Wills.

As the COVID-19 pandemic has people contemplating their own mortality, life insurance sales have increased. This presents you with an opportunity to encourage beneficiary designations for your nonprofit.

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July 28, 2020

You Do Not Want to Miss This

I want to let you know about a great opportunity.

Every summer, the Association of Fundraising Professionals Greater Tampa Bay Chapter and the Charitable Gift Planners of Tampa Bay join forces to host a planned giving symposium. Unfortunately, due to the COVID-19 pandemic, this year’s in-person conference on August 18 is being replaced with an online symposium. While this is disappointing for the good people of the Tampa Bay region, it’s great news for fundraisers around the world who will now be able to participate in the program.

Philanthropy researcher Dr. Russell N. James III, JD, CFP® and I are honored to be the featured presenters for the conference. Here are the details:

2020 VIRTUAL PLANNED GIVING SYMPOSIUM ~ THE ART AND SCIENCE OF PLANNED GIVING

TUESDAY, AUGUST 18, 2020

9:00 AM – 11:30 AM (EDT)

SESSION 1: Legacy Fundraising — The Best of Times or the Worst of Times?

PRESENTER: Michael J. Rosen

Pandemic. Protests. Riots, Looting. Unemployment. Recession. Those are some of the words that we can use to describe much of 2020. So, considering this chaotic environment, can you seek legacy gifts now or should you wait? Rosen, a consultant and author, will share the research-based risks and opportunities. He’ll examine a real world case of what not to do. In addition, he’ll provide useful, easy to implement tips on what you can do to help reach your planned giving objectives even during challenging times.

SESSION 2: Using Storytelling in Legacy Fundraising — New Findings, Ancient Origins and Practical Tips

PRESENTER: Russell N. James III, JD, PhD, CFP®

Connecting with the donor’s life story in the right way can be a powerful trigger for legacy giving. But, how do we do that? Professor James shows how understanding the ancient origins and the latest research findings leads to simple, effective, practical techniques that anyone can use to more effectively encourage gifts in wills.

SESSION 3: An Open Conversation with the Planned Giving Experts James and Rosen

In an informal conversation, James and Rosen will answer your questions about planned giving. This interactive session gives you the opportunity to ask the experts for insights and tips to help you enhance your gift planning efforts.

FEE: For members of AFP-GTBC or CGP-TB, the symposium fee is $10. For all others, the fee is $15.

REGISTRATION: For more information and to register, you can go to the AFP-GTBC website or the CGP-TB website.

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April 28, 2020

Warning Signs You Need to Know About

While the nonprofit sector continues to raise massive amounts of money, danger lies ahead for fundraising professionals as the coronavirus health crisis leads us further into an economic calamity.

As the COVID-19 pandemic gained traction, individuals, corporations, and foundations have responded with robust giving. For example, individual giving revenue through direct mail, processed by Merkle RMG, has increased 5.8 percent year-over-year even while the volume of donations dropped by 15.5 percent, according to Merkle RMG’s Impact Report, COVID-19: How the Coronavirus Pandemic is Impacting Direct Mail Fundraising (transactions through April 19, 2020).

The initial philanthropic response to the pandemic is not surprising for those who have experienced major challenges in the past. Giving lags changes in economic conditions. For instance, during the Great Recession (2007-09), we also saw a similar philanthropic pattern with revenue initially increasing while the number of donors declined. The following graph from Target Analytics, a Blackbaud company, illustrates the point:

Now, let me just mention that no one has a crystal ball or time machine. Therefore, no one, including me, can precisely predict what will happen and when it will happen. Nevertheless, we do know that during past crises, we saw that charitable giving fell after an initial surge.

The overall economy has a profound effect on philanthropic giving. We know that overall philanthropy correlates with Gross Domestic Product at the rate of about two percent. Furthermore, historical data shows that individual giving correlates with personal income at the rate of roughly two percent. In other words, when the economy is strong, giving will be strong; when the economy falters, giving will slow.

Because the coronavirus pandemic has caused a major global economic disruption, we can anticipate that this will eventually have a negative effect on philanthropic giving. Consider these warning signs:

As corporations see profits eroded, as foundations see investments decimated, as individuals see personal income slashed, charitable giving will likely decrease. However, there are some mitigating factors in play:

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April 14, 2020

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

The following guest blog post is from philanthropy researcher Russell N. James III, JD, PhD, CFP®. He originally posted it on LinkedIn, and I’m reposting it here with Russell’s kind permission. I’m reposting the piece because of the enormous importance of the subject and the valuable information it contains.

Engaging donors in planned-giving conversations is still possible during the coronavirus pandemic. Last week, Russell and I shared our FREE whitepaper “Legacy Giving: The Best of Times or the Worst of Times?” Now, I want to share Russell’s 10 charitable planning strategies you should keep in mind when seeking complex and major gifts during these challenging times:

 

The market went down. A lot. The economy is temporarily frozen. Unemployment may increase dramatically. In the past, all of these things have been bad for charitable giving. We can’t control that. So, what can we control? What strategies make sense for fundraising, in particular for complex and major gifts?

Here are ten charitable planning concepts to keep in mind.

1.    Crisis is the time to show support

A social/friendship/family relationship encourages sharing. A transactional/market/exchange relationship does not. We see this in fundraising experiments where family language (simple words and stories) consistently outperforms formal language (technical words and contract language). One of the defining moments that identifies a friendship relationship, rather than a transactional relationship, is during a crisis.

In our personal lives, we know this. When you might be in trouble, a good friend is one who reaches out to help. A friend visits you in the hospital. A friend comes to the funeral with you. A friend listens whenever trouble strikes. In time of crisis, reaching out with concern, help, or even a relevant gift reinforces this social/friendship/family type of relationship.

Ideally, the first contact with donors in a time such as this should begin with concern. Are you OK? Do you need anything? Can we help? Later, we can return to the typical donor-charity dynamic. (If you represent a cause related to public health or COVID-related assistance, that return may happen more quickly.) But, first we want to show friendship-like support during a time of crisis.

2.    The first giving conversations should be with DAF-holders

Requests made to donors with funded Donor Advised Funds will be successful earlier than requests made to others. During times of downturn and uncertainty, people are more likely to hold tightly to their wealth. This drives down charitable giving. But distributing funds already in a DAF doesn’t affect personal financial security.

During the last major economic downturn, many private foundations temporarily increased their distributions to help soften the blow for their grantees. The same reasoning can apply to individual donors who have already funded their DAFs. Due to tax planning strategies, many may have placed multiple years’ worth of future expected donations into a DAF. Given the current crisis, it makes sense to consider this as a time to empty those accounts earlier than originally planned.

3.    One-time special requests work, but be careful with a crisis

In fundraising experiments, people are more willing to donate in response to a special, one-time need than for ongoing needs. An appeal for one-time needs that arise as a result of the current turbulence may be particularly effective. In experiments, people respond more to appeals during a time of crisis. We are all sharing this experience together. We can work together to help overcome the effects of this hit.

However, it is important in such appeals to identify the crisis as a crisis for beneficiaries or for the cause, but not an organizational crisis. Projecting organizational instability might help get the $50 gift today, but it will come at the cost of the major donation later down the road. Major philanthropic investments don’t go to unstable organizations.

4.    Use planned gifts as your “Plan B”

During times of downturn and uncertainty, people are more likely to hold tightly to their wealth. Planned giving opportunities can help “lean into” this uncertainty.

Estate gifts take place only after the donor no longer needs the money personally. They can also be revocable. They can be a percentage of the estate, and thus can vary in size with financial ups and downs. These percentage gifts are actually much better for charities because they usually end up being much larger. (Fixed dollar gifts tend not to get updated for inflation.)

Irrevocable planned gifts can also help with financial uncertainty. These typically give the donor lifetime income or lifetime use of the donated property. Thus, the gift can be made while still protecting the financial security of the donor.

If a donor needs to back away from a commitment or feels that a future ask is too daunting, consider planned gifts as a “Plan B”. A response to such a refusal might include revocable or irrevocable planned gift options.

I certainly understand your concerns. I know others in your same situation who have decided to move their commitment into an estate gift instead. This provides flexibility with no upfront cost. There are even ways to do it that provide tax benefits. Would you be interested in learning more about these options?”

[This is followed by discussion of: 1) Gift in a will. 2) Beneficiary designation on an IRA/401(k), avoiding income taxes that heirs would otherwise have to pay. 3) Retained life estate, creating an immediate income tax deduction, discussed below.]

I certainly understand your concerns. I know others like you who have decided instead to make a gift that gives them lifetime income. With interest rates being so low and the market being so volatile, many people like the fixed payments coming from a charitable gift annuity. Would you like to learn more about this?”

5.    A charitable gift annuity as a two-stage gift

For those representing stable institutions offering Charitable Gift Annuities (CGAs), this may become a particularly attractive gift. A CGA usually trades a gift for annual lifetime payments to the donor (or donor and spouse). During times of uncertainty, the guarantee of fixed payments from a stable institution can be attractive. Following the last dramatic drop in the market in 2008, some large, stable organizations reported receiving exceptionally large CGAs. These very large gifts would normally have been structured as a Charitable Remainder Trust. But during extreme volatility, donors instead preferred the certainty and stability of payments guaranteed by the organization rather than payments tied to investment returns.

A charitable gift annuity can sometimes be presented as a two-stage alternative when uncertainty prevents a normal gift from being made.

I certainly understand your concerns. Another donor like you was in your same situation and she decided to protect against all this volatility by making the gift in two stages. First, she made a gift that gave her annual payments for life. If things go downhill, she has that income. But, if everything turns around and she ends up not needing the extra money, then she can donate those future payments as a second gift.”

Section II: Wonky Charitable Tax Planning Opportunities

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April 10, 2020

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

Over the past couple of weeks, social media, the blogosphere, and countless webinars have pondered the question: Is this the best or worst of times for legacy fundraising? Unfortunately, despite the high volume of opinions circulating, a view grounded in science has yet to emerge. So, philanthropy researcher Russell N. James III, JD, PhD, CFP® and I teamed up to prepare a special white paper for you that analyzes the current legacy-giving environment and reveals to you a path forward that we base on fact rather than emotional whim.

This blog post provides you with the full paper, nearly 5,000 words, with all of its insights and tips. In addition, you can download the PDF version for FREE. You may want to share the white paper PDF with your CEO, CFO, and board leadership.

Because of the unusual length of this post, I won’t offer any additional introductory comments other than to say that Russell and I are available for speaking engagements, training sessions, consultation, and interviews to address this and other relevant subjects. For more information, please contact me.

Now, here is the complete white paper:

 

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

Russell N. James III, JD, PhD, CFP® and Michael J. Rosen

The death media currently inundate us with panic-inducing news. Ubiquitous reports about the spreading coronavirus (COVID-19) pandemic. Daily death tolls. Images of people in masks or complete hazmat suits. Talk of overwhelmed hospitals. News of quarantined regions and nations.

What should a legacy fundraiser do in the midst of a societal crisis? Stop communicating altogether? Make a last-minute push to get into a donor’s Will before it’s too late? Something in between? All of the above?

To get some guidance, it helps to start with a bit of social-science theory, a look at recent financial history, and early empirical data.

Social-Science Theory

We start with social-science theory because it’s actually quite useful to first understand what we know about how people react to reminders of death.

An entire field of experimental psychology focuses on this very topic. Scientists call it Terror Management Theory. This field has produced many hundreds of experimental results. Therefore, we know quite a lot about what happens when you remind people that they are going to die.

There are many technical books and papers on the subject. Google Scholar lists 12,500 of them. Here’s a quick summary. Death is a problem. People use two solutions:  1) ignore the problem, or 2) live on after death. Allow us to explain.

The Two Defenses to Death Reminders

People respond to death reminders with two stages of defense. The first stage (proximal) defense is avoidance. Avoidance comes from a desire to suppress the reminder. This suppression can be expressed in many ways. For example, it might involve physically moving away from the reminder (e.g., avoiding strolling past a hospital or cemetery when taking a walk). It might involve denigrating a mortality reminder’s validity or personal applicability (e.g., it can’t happen to me). It might be dismissing the subject with humor (e.g., the film Death at a Funeral).

The second stage (distal) defense is pursuit of symbolic immortality or lasting social impact. When avoidance doesn’t work, then we must somehow deal with our own earthly impermanence. We deal with this by latching on to those things that will remain after we are gone. In other words, I may disappear, but some part of my identity – my family, my values, my in-group, my people, my story, my causes – will remain.

People don’t treat personal death reminders in the same way they treat other pieces of objective information. In legacy fundraising, it has always been important to understand this. These two underlying defensive responses help to explain how people will respond.

Death Just Got Way More Offensive

In experiments, personal death reminders ramp up avoidance responses. The more death reminders, the more avoidance people will exhibit. Right now, COVID-19 news engulfs our audiences in personal death reminders. For many people, this will make any death-related communications aversive.

(Interestingly, people will gladly read the latest news headlines as a means of pursuing avoidance. People hunger for details on how to avoid the death risk. They will support strong action that promises the same. Others may even pursue avoidance by putting unwarranted faith in untested treatments or unproven protocols.)

In addition to people living in an environment that stimulates greater levels of death avoidance, current conditions cause individuals to feel less of an emotional sense of wellbeing.

Dr. Jen Shang, a philanthropic psychologist and co-founder of the Institute for Sustainable Philanthropy, among other social scientists, believes that wellbeing involves three essential characteristics:

  • autonomy – a sense of control
  • connectedness – the quantity and quality of relationships
  • competence – effectiveness

The more autonomous, connected, and competent people feel, the greater sense of personal wellbeing they will feel. Conversely, when people feel those qualities eroding, they will feel a decline in wellbeing.

In addition to the physical health risks associated with the novel coronavirus pandemic, people are experiencing psychological stress. Many individuals feel that current events are overwhelming them, knocking them out of their routines, and causing them to lose control of their professional and personal lives. With the uncertainty of the near-term, it’s not surprising that people would feel they have lost a great deal of control over their lives.

As the pandemic leads government officials to suggest or order people to stay at home, practice social distancing, and limit even essential activities such as grocery shopping, people are losing their sense of connection to other people including neighbors, extended family members, friends, colleagues, and more.

During the coronavirus pandemic, people are grappling with their feeling of competency when facing new conditions. Many have set-up a home workspace for the first time. Others are learning new technologies to communicate more effectively with others.

People want to have a sense of wellbeing. The more autonomy, connectedness, and competency they feel, the better they will feel. Generally, people will seek to engage in behaviors that enhance their sense of wellbeing. Furthermore, they will appreciate individuals and organizations that help them obtain greater wellbeing.

So, what does all of this mean for legacy fundraising (i.e., a key type of planned giving)? To begin, it means the following:

  1. Legacy fundraising communications that “lead with death” need to be shelved.

Many fundraising professionals are accustomed to being direct. Being blunt. Making the ask. Making it early and often. That may be fine for some types of fundraising. While this type of approach was often less than ideal for legacy fundraising prior to the pandemic, this is even more true right now. This is not the time to lead with death. In normal times, this will create some pushback. In these times, expect it to create massive pushback.

Yes, you should absolutely communicate with your organization’s supporters. Moreover, those communications should be about delivering value to the donor. Through your outreach, you should strive to enhance each individual donor’s sense of wellbeing.

  1. Now is the time to be “top of mind.”

Most people tend to put off estate planning in normal times. For example, in the U.S., most adults over 50 have no Will or Trust documents. From what we know about avoidance, such delay is no surprise. But, from a massive longitudinal study in the U.S., we also know when those plans are made and changed. The typical triggers for planning fall into one of two camps, family structure changes or “death becomes real.” Family structure changes include marriage, divorce, birth of first child, birth of a first grandchild, and widowhood. “Death becomes real” includes diagnosis of cancer, heart disease, stroke, moving to a nursing home, or actually approaching death (measured retrospectively).

Right now, many people are living the “death becomes real” experience. Consequently, there is a major upsurge in Will document completions – particularly online. Some sites are reporting greater than 100 percent week-over-week increases in completed documents.1 The Remember a Charity website, which promotes legacy giving for the U.K. charity sector, has experienced twice as many people visiting its “Making A Will” page as would do so normally.2

As “death becomes real,” people are also increasingly expressing interest in life insurance.3 One online life insurance agency saw the most ever monthly applications and sales in March 2020 as the coronavirus pandemic gained traction. Another online life insurance agency saw an increase in applications of more than 50 percent since February.

We know from experimental research that the charitable component of an estate plan is, for many people, highly fluid. In one experiment with British solicitors (lawyers), simply asking the question, “Would you like to leave any money to charity?” more than doubled the share of people including charitable gifts in their Will documents. Even small alterations in the wording used to describe such gifts results in dramatic changes in both charitable intentions and actual document contents.

For a charity, being “top of mind” at the moment in which people are actually planning is absolutely critical. More people are planning right now than in any normal time. Clearly, this is the ideal time for your charity to be communicating about gifts in Wills and even beneficiary designations. However, the language of how you communicate is most critical.

When viewed through the social scientist’s lens of individual wellbeing, the enhanced interest in estate planning is not surprising. Drafting a Will or purchasing a life insurance policy is a way for someone to feel a sense of autonomy or control over the current situation. Through these actions, they can enhance the feeling of attachment from relationships with those they love as they make plans to take care of these people. When successfully achieving their estate planning objectives, including supporting values and causes that have been important in their lives, individuals will feel an elevated sense of competency. In other words, a major reason we now see a spike in interest in Wills and life insurance is that it gives people an enhanced sense of wellbeing.

If communications from charities also enhance a donor’s sense of wellbeing, organizations may find that their donors will have greater interest in supporting them with a commitment in a Will or through a life insurance beneficiary designation. In other words, helping a donor feel better may ultimately benefit the charity.

The Best of Times, the Worst of Times

Is this the best time or the worst time to be communicating about legacy gifts? Actually, it is both.

People are planning like never before because they seek to take care of their families, usually the first priority of those doing estate planning even in the best of times. The challenge for charities is that we need to be at the top of their minds when people are ready to make their plans. It’s definitely the best time for legacy fundraising. Furthermore, by engaging people, fundraisers have an opportunity, like never before, to perform a real service by helping donors enhance their feeling of wellbeing.

On the other hand, talking about legacy planning can be offensive like never before. People are emotionally-poised to lash out strongly against such death reminders. Take one step in that direction and the risk-averse herd animal known as your executive director will be ready to end your career. It can very-well seem like the worst time for legacy fundraising, particularly when done the wrong way.

We’re not talking about opposing camps. Instead, individual donors are experiencing both of these paradoxical orientations to one degree or another.

The Direct Route is Closed. Now What?

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December 27, 2019

Here are Some Things You Might Have Missed

As 2019 comes to a close, we have a chance to catch our breath and reflect on the previous 12 months. So, I thought I would take a bit of time to share with you some items you might have missed during your busy year. In addition, because some readers have asked about my ongoing battle with cancer, I also want to take this opportunity to update you on my personal situation.

Top 100: Charity Industry Influencers:

One news item in 2019 that might not have caught your attention was the publication of Onalytica’s list of “Top 100: Charity Industry Influencers.” The Onalytica algorithm ranked me number 16 in the world! I found that exciting and, frankly, just a bit scary. I’ll have to be even more careful about what I say. 🙂

Top Blog Posts:

Because I recognize that you can’t read everything that crosses your desk, I’ve put together a list of my top ten most-popular posts published in 2019 in case you’ve missed any of them:

I Told You So: Charitable Giving is Up!

How to Stop Offending Your Women Donors

High Fundraiser Turnover Rate Remains a Problem

Are Donors Abandoning You, Or Are You Abandoning Them?

Do You Want to Know the Latest, Greatest Fundraising Idea?

Do Not Fall for Newsweek’s Fake News!

3 Reasons Why Your Year-End Fundraising Will Fail

Who are Your Best Planned Giving Prospects?

Know When to Stop Asking for Money

Inspired by Lady Gaga: 10 Ways to be a Fundraising Genius

Here’s a list of five of my older posts that remained popular in 2019:

Here is One Word You Should Stop Using

Can You Spot a Child Molester? Discover the Warning Signs

Can a Nonprofit Return a Donor’s Gift?

5 Things Never to Do in Your Phone Fundraising Calls

Impact of Nonprofit Sector: More Than Most People Think

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 Blog” – Garecht Fundraising Associates, and “10 Fundraising Blogs You’ll Love” – Stelter.

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®.

Articles in AFP’s Magazine, Advancing Philanthropy:

In 2019, I was pleased to have three of my articles published in Advancing Philanthropy, the official magazine of the Association of Fundraising Professionals:

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June 20, 2019

I Told You So: Charitable Giving is Up!

Most charity pundits, mainstream media, and press serving the nonprofit sector got it wrong. Sadly, none of them is admitting their mistake, and many are continuing to advance a false narrative. However, I always told you the truth, and I’ll continue to do so.

I’ve often encouraged you not to overuse statistics in your appeals. But, we can all certainly benefit from reading lots of illuminating statistics.

In 2017 and 2018, most pundits and the media were convinced that the Tax Cut and Jobs Act would result in up to a $21 billion decrease in philanthropic giving. In January 2018, I joined a tiny group of professionals who predicted the decrease in giving would be far less than that and giving might actually increase. This was not a guess on our part, but a well-educated expectation based on research, experience, and observation.

Now, with the release of Giving USA 2019, we know who was correct.

Overall, philanthropic giving in constant dollars INCREASED by $2.97 billion (0.7 percent) between 2017 and 2018, and now stands at $427.71 billion, the highest level of all time. Relative to Gross Domestic Product, giving remained at 2.1 percent, which is greater than the 40-year average of 2.0 percent.

Despite the generally good news, the philanthropy scene is not entirely positive. When adjusting for inflation, giving in 2018 did decline by 1.7 percent, though that was much less than the doom and gloom estimates. Furthermore, giving by individuals as a share of overall philanthropy accounted for 68 percent; this is the first time since at least 1954 that it has fallen below 70 percent. In 2018, individual giving fell by 1.1 percent in constant dollars.

While the new tax code likely had an effect on charitable giving, we need to be careful not to overstate its impact. A number of factors have influenced giving:

New Tax Code. All or part of the decline in individual giving in 2018 could be due to donors taking action in advance of the tax law change. We saw this in 1986 when there was a spike in charitable giving in advance of the Reagan tax cuts in 1987.

In 2017, many donors likely front-loaded their philanthropic giving since they would no longer be able to deduct gifts beginning in 2018. In addition, many donors chose to bundle their philanthropy by contributing to Donor-Advised Funds at record levels in 2017. Together, these two factors might explain the 1.1 percent decrease in individual giving in 2018 compared to a 5.7 percent increase in 2017. If not for the new tax rules going into effect in 2018, some of those 2017 donations might have been made in 2018 instead.

The tax code might also affect giving in other ways that we just don’t see clearly at this point. Just as we had to wait until 1988 to see giving normalize following the Reagan tax cuts, we may need to wait another year or two to understand the full effect of the current tax code.

Decline in the Number of Donors. Since 2001, the percentage of US households contributing to charity has fallen steadily from a high of 67.63 percent to 55.51 percent in 2014, according to data from the Indiana University Lilly Family School of Philanthropy’s Philanthropy Panel Study. In other words, the new tax code is not responsible for a sudden decline in the number of donors. This trend has been going on for years.

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April 29, 2019

Update: Get a Free Webinar, Magazine Article, Poll Results

I want to update you about three posts I recently published. In addition, for National Child Abuse Prevention Month, I wish to draw your attention to one of my older posts that will help you keep the children you love safe.

Free Webinar:

Did you miss it? Recently, I presented a webinar for SEI Investments Management Corporation: “Investing in Your Future: Practical Strategies for Growing Your Planned Giving Program.” If you missed the program or wish you could share it with colleagues, I have some good news for you. The webinar is now available for free download by clicking here.

In just 30 minutes, you’ll learn:

  • 8 reasons you should be a planned giving “opportunist”
  • Why you should invest more in planned giving instead of current giving
  • 5 Tips to boost your planned giving results immediately

In addition to the webinar itself, you’ll also be able to download additional resource materials including a list of 20 factoids about planned giving, a planned giving potential calculator, an executive summary of recent research findings from Dr. Russell James’ report “Cash is Not King in Fundraising,” and a digital copy of Dr. James’ book Visual Planned Giving: An Introduction to the Law & Taxation of Charitable Gift Planning.

Advancing Philanthropy Article:

Have you read my recent article published in Advancing Philanthropy, the Association of Fundraising Professionals magazine? “To Sir/Madam, With Love” shares stories from a number of fundraisers about their favorite teachers. Great teachers:

  • help us develop broad skills such as critical thinking,
  • help us develop specific skills such as how to write an effective appeal letter,
  • inspire us,
  • encourage us,
  • move us to think beyond ourselves and better understand others,
  • open our minds to lifelong learning,
  • motivate us to giveback by sharing our own knowledge.

After downloading the free article by clicking here, check-out my recent post that will give you tips that will help you find excellent teachers who can help you enhance your skills and inspire you: “Are You Really Just a Fundraising Amateur?”

Poll Results — Presidential Candidate Philanthropy:

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March 27, 2019

Who are Your Best Planned Giving Prospects?

Almost everyone has the capacity to make a planned gift. Consider just these four facts:

  • Among those ages 65 and older, 78 percent own their home (US Census)
  • Most Americans own stock in one form or another (Gallup)
  • Inflation-adjusted median household net worth grew 16 percent from 2013-16 (US Federal Reserve)
  • 69 percent of Americans expect to leave an inheritance (Stelter)

The fact that most Americans have the ability to make a planned gift presents both a great opportunity and a profound challenge for fundraising professionals. With limited staff and budget resources, it is essential to focus legacy giving marketing where it will do the most good. So, who are the best planned giving prospects?

You can visualize the answer to that question as an equation:

Ability + Propensity + Social Capital = GIFT

Your best planned giving prospects will have the means with which to make a planned gift, ideally a sizeable one. However, just because they have the ability does not mean they will take the action you desire. A number of factors influence a prospect’s propensity for giving. Some of those factors might be related to the organization seeking a gift while other factors might have nothing to do with the organization. Finally, we need to consider a prospect’s level of social capital, their degree of engagement with the community and the organization. Someone who scores high in each category is more likely to make a planned gift than someone who scores low.

A simpler way to identify strong planned giving prospects is to recognize that “the most dominant factor in predicting charitable estate planning was not wealth, income, education, or even current giving or volunteering. By far, the dominant predictor of charitable estate planning was the absence of children,” according to philanthropy researcher Russell James, JD, PhD, CFP®. In other words, people who do not have children are far more likely to make a charitable planned gift than those who have children.

However, while the absence of children tells us who is generally more likely to make a planned gift, it does not tell us whether your organization will be the recipient of such a gift. The leading factor that will determine whether someone will make a planned gift to your organization is their level of loyalty, according to legacy researcher Claire Routely, PhD.

As you attempt to determine a prospect’s level of loyalty to your organization, you’ll want to consider a number of factors including:

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