Posts tagged ‘Russell James’

May 22, 2018

New Research Proves Cash Is Not King in Fundraising

If you want to raise significantly more money for your nonprofit organization, you need to diversify the types of gifts you seek from individuals. That’s what successful charities do to raise significantly more money each passing year. Conversely, relying solely on cash contributions will likely stunt your organization’s growth.

Those are the key conclusions of a newly released study by Prof. Russell James III, JD, PhD, CFP®, philanthropy researcher at Texas Tech University. The study examined more than one million filings with the Internal Revenue Service by nonprofit organizations.

The following chart reveals that, from 2010 to 2015, nonprofits that consistently received gifts of stocks or bonds grew their contributions six times faster than those receiving only cash:

James’ study found the results are not limited to just those years. When looking at three-year rolling averages, organizations consistently receiving non-cash gifts grew much more quickly than those receiving only cash contributions. The study identified the same general growth pattern regardless of the starting size of the charity or the type of charitable organization.

James observes:

Beyond simple opinions or war stories, the previous results conclusively demonstrate that organizations raising non-cash gifts experience dramatically greater growth in total contributions, both contemporaneously and over the long term. Why? This is likely due in part to the effects of mental framing.

First, it is important to understand that wealth is not held in cash. Census bureau estimates suggest that only about 3% of household wealth is held in cash and checking accounts. When fundraisers ask for cash, they are asking from the ‘small bucket.’ This makes a psychological difference because it changes the reference point for the gift. The same gift may seem ridiculously large when compared to other checkbook purchases (elective expenditures from spendable income), but quite small when compared with total wealth (other non-cash assets). Donors who have never made a gift from assets may simply never have considered giving from wealth rather than giving from spare income. This is particularly important considering findings from experimental research demonstrating that people are much more willing to make charitable donations from irregular, unearned rewards (such as might occur with an appreciated asset) than from regular work earnings.

[Second,] gifts of appreciated assets are also cheaper than gifts of cash because the donor avoids capital gains taxes. This special benefit is particularly important under the new tax law, because it applies to all donors, even non-itemizers who can’t use charitable deductions.”

Intuitively, most fundraising professionals have already known what the James study now proves. So, if fundraisers know they should be seeking cash AND non-cash gifts, why do so many ask for only cash or merely make a feeble attempt to get non-cash donations?

James answers:

read more »

Advertisements
April 9, 2018

8 Simple Tips to Boost Planned Giving Results

Planned Giving is a vital source of contributions for the nonprofit sector. Organizations that do not have a gift-planning program envy those that do. Those that do have a planned-giving program want even better results.

It’s no wonder.

Bequest giving amounted to eight percent of all charitable donations in 2016 (Giving USA). That’s just counting people who included a charity in their Will. It does not include people who gave through Beneficiary Designation, Charitable Gift Annuity, Stock, Appreciated Personal Property, or other planned-giving vehicles.

While planned giving can certainly present challenges, there are many simple things you can do to create or enhance your organization’s gift-planning efforts:

1.  Focus Your Efforts

You likely do not have the time or budget to reach-out personally to every one of your organization’s supporters to seek a planned gift. Instead, you need to focus on the highest priority prospects, those most likely to make a planned gift.

So, who are your best planned-giving prospects?

The answer to that question will depend on what type of planned gift you are seeking. For example, if you want more people to include your charity in their Will, arguably the most common form of planned giving, you’ll want to consider two key factors:

First, people who are childless are far more likely to include a charity in their Will, according to philanthropy researcher Russell James, JD, PhD, CFP®. However, just because someone is more likely to make a Charitable Bequest commitment to a charity does not mean they will be willing to commit to your charity.

Second, loyal supporters of your organization are the people most likely to make a planned gift to your specific organization, according to UK-based philanthropy researcher Claire Routley, PhD. Your loyal supporters are people who donate frequently, regardless of gift amount. Loyal supporters are also people who volunteer. People who donate cash and volunteer are nearly twice as likely to make a gift through their Will compared to individuals who do only one or the other, James’ has discovered.

When seeking other types of planned gifts, you’ll want to take into account other factors. For example, if you want people to contribute from their IRA, you’ll want to appeal to people over the age of 70.5, the age of eligibility for such giving. If you want folks to donate appreciated Stock, you’ll broaden your audience because the majority of Americans own Stock.

read more »

March 27, 2018

4 Easy Fixes that Will Supercharge Your Online Fundraising

Online fundraising brings in a significant and growing amount of support for nonprofit organizations. The Blackbaud Institute’s recently released Charitable Giving Report: How Fundraising Performed in 2017 reveals that 7.6 percent of overall fundraising revenue, excluding grants, was raised online in 2017 representing a new record high.

While the nonprofit sector’s online fundraising performance is noteworthy, the results can be much better. Many things go into a successful online fundraising effort. However, some professionals have found that they can supercharge online charitable giving by making some easy fixes.

Here are just four ways you can enhance your “Donate” button or tab to get vastly superior results:

1.  Express a Value Proposition

Online for Life, now known as the Human Coalition, looked at how a donate tab’s value proposition affects giving. This pro-life organization already had a donate tab that read “Save a Baby,” which became the control in a test to find a better tab label. The organization test a new tab reading “Save a Child” and another stating “Give.”

The results, reported by NextAfter, uncovered a less effective and a more effective approach. The “Give” tab resulted in 30.5 percent less revenue while the “Save a Child” tab resulted in increased revenue of 62.2 percent compared to the control.

NextAfter believes, “This simple change reminded donors of the long-term impact of their gift. We want to save a baby from abortion because of who they will become over time.” In other words, the organization took its value proposition and made the impact more long term. Asking people to “Give” is abstract while asking them to “Save a Child” is concrete.

Building a better button or tab that tells donors the impact their gift will have, rather than simply asking them to give, can raise substantially more money.

2.  Find and Emphasize the Right Call to Action

Jews for Jesus already had a successful online fundraising effort. People could click the “Donate” tab on the navigation bar at the top of each website page. Nevertheless, the organization tested different options to find an even more effective approach.

The control was the existing design with a “Donate” tab. The test involved adding a donation button in the upper right corner of the website header appearing on multiple pages, not just the Home page. One button read “Make my Gift” while the other read “Donate Today!” The buttons were placed in addition to the existing tab.

The “Make my Gift” button resulted in a 306.1 percent increase in total revenue, according to NextAfter.

NextAfter found that the “Donate Today!” button ended up decreasing the amount of traffic being driven to the donation page by 9.6 percent. The group speculates that “by putting the call to action in the context of the donor ‘Make my Gift’ instead of a command ‘Donate Today!,’ the donors were able to align better [to the requested] action and were more likely to click.”

As the Jews for Jesus learned, it’s important to find the right call to action. It’s also important to effectively emphasize that call to action.

3.  Make Finding the Donate Button or Tab Easy

The Dallas Theological Seminary had a “Donate” tab on the navigation bar at the top of its web page. To encourage more contributions, the Seminary tested highlighting the tab in purple, the organization’s signature color. The Seminary also tested a purple highlighted tab reading “Support DTS.”

NextAfter discovered that the purple-highlighted “Donate” tab was the most effective, generating 2,682.3 percent more revenue!

While both of the purple tabs were able to increase revenue significantly, NextAfter believes “the ‘Donate’ tab provided the additional clarity necessary to increase not only traffic to the page but also the subsequent donor conversion. We need to make it easy for donors to find the path we want them to take by being both clear in the messaging and visually emphasizing the path we want them to take.”

Make it easy for website visitors to support your organization by using a prominent, static donate button that can be easily found on every page. The best location for the button is in the upper right-hand corner of the page header. David Hartstein, at Wired Impact, suggests:

read more »

March 21, 2018

15 Things You Might Not Know about Planned Giving

There’s a lot about planned giving that’s worth knowing and that can help you raise more money. Fortunately, it’s not necessarily all complicated.

Yes, vast differences exist from one planned giving program to the next. Some nonprofit organizations invest heavily in planned giving with dedicated staff and marketing. Other charities invest little and have development generalists talk with donors about gift planning from time-to-time. Despite the differences from one organization to another, there are a large number of points in common.

To help you be a more successful fundraising professional, I want to share 15 insights about planned giving:

1.  Almost everyone has the ability to make a planned gift. A common myth about planned giving is that it is just for rich people. However, that’s not the case. For example, anyone who owns a retirement account, a life insurance policy, appreciated stock, or a home can be a planned gift donor. As H. Gerry Lenfest, the mega-philanthropist, wrote in the Foreword to Donor-Centered Planned Gift Marketing,  “Planned gifts are the major gifts of the middle class.”

2.  The average age of someone who makes their first charitable bequest commitment is 40-50. Another misconception about planned giving is that it is something that old people engage in. While that’s true for certain planned gifts (e.g., gifts from an IRA, or gifts to set up a non-deferred Charitable Gift Annuity), donors of any age can create a charitable provision in their Will or set-up a Beneficiary Designation.

3.  High-income women are more likely than men to use complex gift planning tools. High-income women (those with an annual household income of $150,000 or more) are more likely than high-income men to seek expert financial advice. They are also more likely to establish Donor-Advised Funds or Charitable Remainder Trusts. So, do not ignore female prospects. Instead, be prepared to talk with high-income women about sophisticated giving options.

4.  Using a challenge grant for a planned gift appeal can create urgency leading to action. Research shows that people tend to avoid conversations or decisions involving their own demise. One way to shift the focus of the planned giving conversation from death is to use a challenge grant to encourage prospects to think about making a planned gift commitment so that the organization receives an extra benefit. A challenge grant also creates a sense of urgency that gives donors a reason to act now rather than further delay making a planned gift decision.

read more »

January 30, 2018

Russell James: Three for the Price of FREE!

One of the nation’s leading philanthropy researchers provides us with helpful insights about the new tax code and its impact on charitable giving. He also offers valuable information about planned giving.

Russell James, JD, PhD, CFP® articles, books, and videos will benefit any fundraising professional. Here are just three that will be a big benefit to you:

1. A Donor’s Guide to the 2018 Tax Law (video)

In just nine-and-a-half minutes, James explains how key provisions of the new tax code can benefit donors. With his insights, you’ll be in a better position to inspire more donations and larger gifts to your nonprofit organization. Simple illustrations and great examples will help you easily grasp the concepts.

Do you know?: Just one of the things you’ll learn from the video is that donors can contribute appreciated stock to avoid capital gains tax. Even non-itemizers can benefit from this. While this provision of the tax code remains unaltered, what has changed is that the new code makes this provision even more valuable for donors. James explains how in the free video:

2.Visual Planned Giving: An Introduction to the Law & Taxation of Charitable Gift Planning (e-book, updated January 2018)

I’m honored that James has allowed me to offer you a free copy of his 433-page e-book Visual Planned Giving: An Introduction to the Law & Taxation of Charitable Gift Planning. James designed the newly updated book for fundraisers and financial advisors seeking to expand their knowledge about charitable gift planning. This introductory book addresses all of the major topics in planned giving law and taxation in an accessible way.

Do you know?: Wealth is not held in cash. It’s held in assets. James has found that only one percent of financial assets are held in cash! So, if you want larger donations, you need to talk with supporters about making a planned gift from non-cash assets (e.g., stocks, personal property, real estate, retirement accounts, life insurance, etc.).

If you want to learn more about planned giving or help a colleague gain a fundamental understanding, you can download your free copy of Visual Planned Giving by clicking here.

read more »

January 19, 2018

Charitable Giving Threatened by Drop In Volunteerism

On Monday, the USA celebrated Martin Luther King, Jr. Day as a national day of service. From April 15 to 21, the nation will mark National Volunteer Week. Clearly, Americans value volunteerism.

Unfortunately, the volunteerism rate has been steadily declining for years. This trend has disturbing implications for philanthropy.

In 2003, the US Bureau of Labor Statistics reported that 28.8 percent of Americans volunteered. By 2015, that rate had steadily fallen to 24.9 percent. This is a huge problem for the nonprofit sector for a number of reasons:

Volunteers Provide a Valuable Resource. Volunteers do a great deal of work that might not be done otherwise. 62.6 million Americans volunteered 7.8 billion hours. Independent Sector reports that a volunteer hour is worth $24.14, over $180 billion of total estimated value. Sadly, with volunteerism on the decline, charities are forced to provide fewer services or incur greater labor costs.

Volunteers Serve as Ambassadors. In addition to being a valuable labor resource, volunteers are also fantastic ambassadors for an organization. The typical volunteer serves only one or two organizations, according to the US Bureau of Labor Statistics. When volunteers share their experiences, they also talk with friends, family, and professional colleagues about your organization and its mission. This could lead to additional volunteer and philanthropic support. With a drop in volunteerism, there are now fewer ambassadors for charities, which will inevitably lead to less future support.

Volunteers are More Likely to Donate. Volunteers are twice as likely as non-volunteers to make a charitable contribution, according to the Corporation for National and Community Service. Even planned giving is affected by volunteerism. As I’ve reported previously, researcher Russell James, JD, PhD, CFP states in his book, American Charitable Bequest Demographics (1992-2012):

Among those with [estate] planning documents, those who both volunteer and give ($500+) are dramatically more likely to plan a charitable estate gift than those who only volunteer or only give ($500+). Those who only volunteer, plan charitable estate gifts at approximately the same rate as those who only give.”

Those who only volunteer or only donate ($500+) are more than twice as likely to make a legacy gift than those who do neither. [For a free electronic copy of James’ book, subscribe to this blog site in the right-hand column. You’ll receive an email confirmation of your subscription that will contain a link to the book.]

With a decline in volunteerism, we can expect fewer people to make current and planned gifts. This is already happening according to an analysis by The Chronicle of Philanthropy.

There are many likely reasons for the decline in volunteerism including:

read more »

January 12, 2018

Hang-on to the Holiday Spirit with FREE Gifts and Resources to Raise More Money!

For most of us, whether we observe Hanukkah, Christmas, or just the New Year, the holiday season is an uplifting time full of joy. However, the same cannot always be said of the post-holiday period, according to Linda Walter, LCSW. Her article in Psychology Today cites many reasons for the post-holiday blahs, for some, even depression.

As an antidote for the after-holiday letdown, I want to share several free resources with you that just might help you keep the holiday spirit going while also helping you raise more money in 2018.

The Donor-Advised Fund Widget. For starters, let me tell you about the Donor-Advised Fund Widget created and offered free-of-charge by the generous folks at MarketSmart. This useful, free gift will help you continue to celebrate the season and raise more money for your nonprofit organization.

When it comes to fundraising, a general rule is: Make it easy for people to give your organization money. You probably already do this in a number of ways. For example, your organization probably allows donors to place gifts on their credit card, mail a check in a business reply envelope you supply, give online, or contribute when they buy products (e.g., Amazon Smile).

So, why not also make it easy for someone to recommend a donation from his or her DAF account?

Rather than viewing DAFs as enemies that divert vitally needed funds away from charities, nonprofit organizations should view DAFs as a great fundraising opportunity. Unfortunately, the problem is that nonprofits have not made it easy for people to donate from their DAF accounts…until now.

Greg Warner, Founder and CEO of MarketSmart, says:

Amazon is successful primarily because they make it easy to buy stuff. Similarly, if nonprofits just made it easy to transfer DAF money, the bottleneck would get un-clogged. But no one was stepping up. So I did!”

The DAF Widget goes on your organization’s website. Your donors with DAF accounts then can easily find their account management company from a comprehensive list of over 800 service providers. Then, they simply click to go directly to their DAF management company’s website where they can enter the relevant information to make a donation recommendation for your organization. To see the widget live, visit the Navy-Marine Corps Relief Society website by clicking here.

DAFs are an increasingly valuable source of donations for charities. Consider the following market-wide insights from The National Philanthropic Trust 2017 Donor-Advised Fund Report:

  2012 2016
Number of DAF Accounts 204,704 284,965
Total Assets in DAF Accounts $44.71 billion $85,15 billion
Grants from DAF Accounts $8.5 billion $15.75 billion
Ave. DAF Asset Size $218,413 $298,809

To put the above figures into context, non-corporate private foundations gave $45.15 billion to charities in 2016. By contrast, donations made from DAFs totaled $15.75 billion that same year, equating to roughly one-third (34.8 percent) of the estimated amount granted by non-corporate private foundations.

In other words, DAF donations represent a significant and growing source of gifts for nonprofit organizations. However, to get your share, you need to make it easy for people to recommend donations from their DAF accounts. That’s why MarketSmart created the free DAF Widget.

You can learn more about the DAF Widget and claim yours by clicking here.

There is just one catch, if you want to call it that. The DAF Widget is in its Beta Edition. So, MarketSmart is looking for feedback, either directly or through comments below. Then, Greg promises to invest more time and money to make the DAF Widget even better. So, if you use the DAF Widget, please let us know how you think it could be made easier to use and more effective.

Here are seven additional resources for you to help get 2018 off to a great start:

read more »

February 7, 2017

Get a FREE Book for Nonprofits by a Noted Researcher

Do you like getting something for free? I do, especially when it can help me be more successful.

Now, thanks to Russell James, JD, PhD, CFP, the Texas Tech University professor and philanthropy researcher, you can download a free, 427 page book that will become an important reference source in your fundraising library.

Whether you call it planned giving, gift planning, legacy planning, philanthropic planning, charitable estate planning, charitable gift planning, or something else, the subject is complex. However, it does not have to be overwhelmingly confusing.

visual-planned-giving-2017-coverTo help you, James has put together the book Visual Planned Giving: Introduction to the Law & Taxation of Charitable Gift Planning, newly revised and updated for 2017. Designed for fundraisers and financial advisors seeking to expand their knowledge about charitable gift planning, this introductory book addresses all of the major topics in planned giving law and taxation.

The gift planning topics you’ll learn about include elements of a gift, documentation requirements, valuation rules, income limitations, bargain sales, charitable gift annuities, charitable remainder trusts, charitable lead trusts, life insurance, retirement assets, private foundations, and donor advised funds. Over 1,000 full-color illustrations and images will guide you through complex concepts in a visual and intuitive way. James makes planned giving accessible and pain-free for the busy professional.

read more »

October 28, 2016

Get a Free Halloween Treat for Fundraisers

If you’re like most fundraising professionals, you’re not optimally asking donors to include your nonprofit organization in their will.

You’re probably not driving as much traffic to your planned giving webpage as you could.

You’re also probably less successful at closing Charitable Gift Annuities than you could be.

lone-ranger-and-silver-via-melocuentas-flickr

The Lone Ranger and Silver.

I know. You decided to read this post to discover how you can get a free Halloween treat. Instead, you’re probably starting to feel tricked. But, fear not! Russell James, JD, PhD, CFP, the Texas Tech University professor and philanthropy researcher, along with the good folks at MarketSmart, are riding in to save the day.

Last summer, James conducted a webinar hosted by MarketSmart. During his presentation, James unveiled his latest, powerful research findings along with research insights from others. You can learn more about the webinar and get some great tips by clicking here.

Now, for your treat, MarketSmart has distilled James’ webinar into a free, 22-page e-book that will help you raise millions of dollars more. For example, here’s just one simple, yet valuable tip:

When you want to engage people in a conversation about Charitable Gift Annuities, what is the best way to describe this giving vehicle to make folks want to learn more?

James tested five phrases. Among the 2,550 respondents, he discovered the percentage interested in learning more:

read more »

July 28, 2016

Do You Know that “Planned Giving” is Bad for #Fundraising?

That’s right. “Planned Giving” is bad for nonprofit fundraising.

For years, I’ve been writing and talking about the problems with the term “Planned Giving.” Now, new research underscores what I’ve been advising: You should stop using the term!

Sometime ago, The Stelter Company conducted a survey that I cite in my book, Donor-Centered Planned Gift Marketing. Stelter found only 37 percent of Americans over the age of 30 have a familiarity with the term “Planned Giving.” We have no way of knowing what percentage of those claiming familiarity really, in fact, know what the term truly means.

Other terms have become increasingly popular as substitutes for “Planned Giving.” However, none has yet to gain sufficient traction to overtake the use of “Planned Giving.” Consider the results from simple Google searches I conducted for this post:

  • Planned Giving — 14.8 million results
  • Philanthropic Planning — 11.1 million results
  • Gift Planning — 5.7 million results
  • Legacy Giving — 2.1 million results

What we know is that the general public has little understanding of the term “Planned Giving” although it appears to be the best term we have. Unfortunately, popular does not mean effective.

William Shatner in The Grim Reaper by Tom Simpson via FlickrWhile “Planned Giving” is a reasonable, inside-the-development-office catch-all term to describe, well, planned giving, it’s not a particularly good marketing term. That’s according to the findings of philanthropy researcher Russell James, JD, PhD, CFP.

James conducted a study to answer this vitally important marketing question: “What is the best ‘front door’ phrase to make people want to read more Planned Giving information?”

Think of it this way: Will a “Planned Giving” button at your website encourage visitors to click through to learn more or is there a more effective term?

To be a successful term, James believes two objectives must be met:

  1. Individuals have to be interested in finding out more.
  2. Individuals have to expect to see Planned Giving information (i.e., no “bait and switch”).

To find the strongest marketing term, James asked people to imagine they were viewing the website of a charity representing a cause that is important in their lives. In addition to a “Donate Now” button, the following buttons appear on the website:

  • Gift Planning
  • Planned Giving
  • Giving Now & Later
  • Other Ways to Give
  • Other Ways to Give Smarter
  • Other Ways to Give Cheaper, Easier, and Smarter

James asked participants to rate their level of interest in clicking on the button to read the corresponding information. In a follow-up, James asked study participants what kind of information they would expect to see when clicking the buttons mentioned above.

The winning term is:

read more »

%d bloggers like this: