Posted September 1st, 2013

Making the Most of Fourth Quarter Fundraising

The importance of year-end contributions is well documented in studies by the Association of Fundraising Professionals, Charity Navigator, the Bank of America Study of High Net Worth Philanthropy and others. In fact, some surveys indicate that it is not unusual for charities to receive 40 percent or more of their annual contributions during the final six weeks of the year.

The year-end giving season is normally thought of as the three-month window of October, November and December. Many organizations begin seeing a surge in giving in November, but December is by far the strongest fundraising month for most nonprofits.

For instance, Network for Good, a tool to facilitate online donations, has reported that 30 percent of the annual gifts they administer occur in December. In fact, 10 percent of the online gifts they process take place in the final two days of the year!

Timing matters

While outright gifts of cash and online contributions may be relatively easy to process, other types of gifts can require more lead time. For example, even though gifts of securities can often be completed electronically in one business day, in some cases you should still be prepared to interact with donors and their advisors for several weeks until the gift is complete. This is especially true if the securities gift involves mutual funds. If a donor is considering a gift of real estate or a charitable trust, the process may require an even longer transaction lead time depending on the circumstances of each case.

Not all trusts and similar planned gifts necessarily require weeks to prepare. Gift annuities and gifts from donor advised funds can normally be completed in a tight time frame. The same is true of charitable IRA distributions if you are prepared to supply the donor with the information necessary to complete the transfer.

Larger gifts are often a result of a donor’s year-end tax planning in consultation with his or her advisor during the last few days, weeks or months of the year. Since timing may be of the essence, make plans now to ensure that you are prepared for the challenges and opportunities presented during fourth quarter fundraising.

Consider current events

If your plan for this year is basically the same as last year’s, carefully consider what worked, what did not and what adjustments might need to be made given current circumstances. For example, if last year’s plan did not include a promotion of the charitable IRA because the provision had expired, update this year’s plan to reflect the current status of the charitable IRA provision that remains in effect through the remainder of this year. You should also be prepared to help donors execute this type of gift and supply them with additional information.

Also, do not overlook the fact that the economy has continued to recover. Non-cash contributions of securities are reportedly on the rebound, according to IRS reports. Remember that changes made by the American Taxpayer Relief Act enacted earlier this year actually increase the tax savings for charitable gifts of cash and appreciated property by higher-income taxpayers. Also keep in mind that proposals by the administration and Congress could possibly reduce those incentives as part of future tax law changes.

Plan now

Begin planning now to make the most of year-end philanthropy. Which donors should be visited, called, mailed or emailed? Which communication method is best for each group of donors?

In addition to communication channels, consider what messages may be most effective for various donor segments. For example, you might consider:

  • A special mailing to your top donors above a certain dollar range. Include information such as Sharpe’s Your Guide to Effective Giving in 2013 to assist them with all of their year-end planning.
  •  A targeted mailing of Giving Securities to prior donors of stock and those who are known to be executives in publicly traded companies.
  • An early fall promotion on the charitable IRA to regular donors over 70½.
  •  A concise information piece enclosed with a regularly planned appeal this fall.
  • Selecting a manageable group to contact in person, by telephone or via other media for a December giving reminder. The plans you make now and execute later in the year may have a meaningful impact on your calendar-year gift totals. Multiple targeted approaches should be part of this year’s plan.

Contact us at info@sharpenet.com or 901-680-5300 if we can assist you in developing a year-end giving strategy.

The publisher of Give & Take is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Give & Take may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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