The new year is not just a busy time to map out your upcoming fundraising objectives, it’s also time to start planning for tax receipts for donors' gifts made the prior year. And while best practice is to refrain from asking for a gift with the statement, this is an opportunity to thank your major, mid-level, and sustaining donors for a year of support.

The 2020 CARES Act had two important provisions for tax deductibility for donor gifts in 2020. As of legislation signed on December 28, 2020 those provisions have been extended to 2021. First, charitable contributions up to $300 in 2020 are considered an “above the line” deduction on donors’ taxes. Second, donors may now claim a charitable deduction up to 100% of their Adjusted Gross Income for cash gifts to nonprofits. There are no significant changes that should impact the compliance component of the tax statements provided to donors. However, compliance isn’t the only concern. Tax statements are a way to engage with donors and be of service to them regardless of how they file their tax return.

The strength of public media is that our supporters use and place a high value on the service stations provide. So, with that lens, strengthening that connection by practicing good stewardship is paramount.

As you finish your fall campaign and begin your calendar-year-end campaign, you’re certain to have some some new or returning $1,200 donors. These donors could become your next major gift prospects. A few easy strategies can help you identify a crop of excellent prospects for 2021.

First, make sure you’re stewarding the wonderful donors who have given you a $1,200 gift. You should have a process in place to make sure this happens without fail. If you need to establish one, these resources can help you get started. 

Prospect Research

The next step is to learn a little bit about each new donor. You don’t need to do a full prospect research report, but gathering some basic information about the donor will help you put them in context. How they made their gift can tell you quite a bit. Did they call in to make the gift during a drive? That lets you know they don’t mind phone conversations and you can feel less anxious about calling them. Did they give through a donor-advised fund (DAF)? Having a DAF likely means they value philanthropy as a part of their budget and make careful decisions about how to give. Additionally, they likely have a high giving capacity. Did they add a comment about why they gave? Donors often give us wonderful information about what they love along with their gift. Use this information to connect with the donor’s interests. Be careful not to assume too much, but gather any clues that might help you understand if they are a prospective major donor.

NOTE: The Coronavirus stimulus package that was approved on 12/28/20 extends the provision allowing individuals to claim a charitable deduction of up to 100% of their AGI into 2021 instead of ending in 2020. 

As we approach the close of this unique year, one important opportunity for your station to receive more major giving support should not be neglected. A goal of the 2020 CARES Act was to spur Americans to donate to “public charities” in light of the pandemic. For those donors with greater wealth there is a particularly beneficial provision that changes the charitable deduction maximum from 60% adjusted gross income (AGI) to 100%. 

What this means is that now the donors with the potential to give very large gifts have an extra incentive to do so. This isn’t a relevant opportunity for your membership donor but using it with your major donors and prospects could help you motivate your higher capacity donors to give before year-end and strengthen your financial bottom line for 2020.

Three ways to take advantage of this change:

Donor Advised Funds (DAF) have been in the news quite a bit recently. Since the pandemic began, the contributions to funds and the output of dollars from funds to organizations have both been breaking records. There is even a new movement spurred by philanthropists to encourage others to give more of their balances called “Half My DAF.”

Donor Advised Funds function a bit like a bank or brokerage account but the funds can only be used to support qualified nonprofit organizations. When a donor or family decides to create a DAF, they select a sponsorship organization (Vanguard, Schwab) and then transfer funds (cash, stock, etc.) into an account there. At this point they have made a tax-deductible donation to the sponsorship organization. Those funds no longer legally belong to the donor. They receive a tax letter from the sponsoring organization, which is why your organization does not send one if you are a recipient of a grant. 

From there the donor has access to make additional contributions to increase the size of their DAF account and to “recommend grants” to organizations they want to support. Typically within the sites of each sponsorship organization there are tools that help DAF account holders research organizations, review 990s, and discover organizations that connect with their philanthropic interests. 

Since the start of the pandemic, DAF sponsorship organizations have increased their communications to donors to encourage distribution of funds since the increased need among organizations is quite apparent. Reports show that many donors have chosen to be very generous with their recommended grants in the last five months. And, thanks to stock market growth, the balance of these funds are also growing.

In public media individual giving, membership is king. It’s where we’ve had the most success. In fact, we’re kind of famous among nonprofits for how good we are at getting large numbers of donors to give small amounts. And that is something to be proud of.

If you work in public media major giving, you also know that our successes in membership can sometimes affect how we think about other areas of giving. 

Perhaps you’ve experienced one or more of the following:

• Donors move into a major giving portfolio based only on a gift level instead of on a qualifying process.
• There is a significant percentage of donors in your portfolio whom you don’t know well at all.
• You don’t have a plan for each donor in your portfolio.
• Your organization does not have projects defined that can be matched to donor interests.

Nearly all public media organizations are fluent in membership. But when public media fundraisers take the tactics that made membership wildly successful and mis-apply them to major giving, it results in low major giving revenue and frustrated major giving officers.

As the country navigates the economic effects of massive unemployment, the health crisis of the coronavirus pandemic, and calls for change due to systematic inequality, the public media system continues its essential public service for audiences and donors who are affected by this complex and historic moment.

Donors have been extraordinarily generous since the beginning of the pandemic response in March and there are no signs of that slowing down. Organizations are seeing gift-club ($1000 - $5000) donors give earlier and bigger gifts than expected and we are having more substantial conversations with major gift prospects in cultivation.  

This is all wonderful news. Where we have started to let donors down is in the back-end process now that we are no longer working collaboratively in an office environment. Many organizations struggle to send timely and personal thank-you letters to donors under normal circumstances. The pressures of all these joint crises together have made that process break down even further. 

There seem to be three main reasons that this type of stewardship has stumbled. 

1. Gift officers are extra busy and all aspects of their work is harder during lockdowns.
2. It’s easy to feel stuck creatively and not know what to say.
3. We may fear the donor won’t appreciate the note.

The World Health Organization has declared COVID-19 an official pandemic and the ways in which we go about work, life, and interacting with our donors will change in the coming weeks. Now is the time to create and/or assess plans for your major giving program so that your donors feel like partners and you're positioning yourself to maintain major giving revenue. 

Here are four ways that we at Greater Public recommend you move forward.

1. Communicate Now

This time period is absolutely critical. The sooner you communicate your station plans to your donors, the more they will feel like a trusted member of your team. If your portfolio is small enough to send a personal email to each of your donors, choose that option. If you have hundreds or thousands of members in your $1,200 gift club, a group message will suffice.

What should you say? 

Many public media gift clubs suffer the problematic fate of being lumped too closely with either membership or major giving efforts. In truth, gift clubs serve as a crucial bridge connecting membership to major giving. These clubs must offer their members a distinct donor experience in order to draw them out of membership and into higher levels of giving, without overextending major gift staff who need to focus much of their efforts on highly individualized planning for each and every major gift prospect.

When you communicate with your gift club members, it will often be as a group. But your communication must feel personalized and specific, especially compared to what you send to membership. 

After you’ve planned all of the ways that you’ll thank and engage your gift club members throughout the year (communicating with them monthly, as a minimum), take some time to think through the real substance of these communications. Remember, you must consistently make a case for support to your gift club members that goes beyond the transactional to demonstrate:

As major giving programs become more important to the overall revenue picture at public media organizations, it is critical to run these programs as efficiently as possible. A key tool for many successful major giving programs is prospect research. Simply put, prospect research is a formal and organized way of determining whether or not a person is a good major gift prospect.

This kind of vetting is commonly used by hospitals and universities. Investments in prospect research aren’t as common in public media because stations tend to start their major giving programs at a lower level of giving ($1,000 or $2,500). As we in public media set our sights on higher levels of giving and conduct more relationship-based major gifts work, the benefits of prospect research become much more pronounced. Prospect research delivers the information and context that major gift officers need in order to do their job efficiently and strategically.

What Is Prospect Research?

Prospect identification and research: discovering and evaluating prospective donors and their interest, relationships, inclination to give and philanthropic capacity to inform and support an organization's fundraising strategies and outreach efforts.

- Apra (Association for Prospect Development)

Prospect research is most often thought of as a simple wealth screening tool where a company does an electronic sweep of all or part of a database and assigns a wealth score or grouping to donors. Prospect research then goes beyond wealth screening to develop a more well-rounded picture of a donor’s possible interest in an organization and in philanthropy, as well as their financial capacity for a charitable gift. Prospect research can be used to find new major giving or planned giving prospects from your current database, manage new prospects as they are discovered, sort through the volume of data you uncover, build major giving portfolios for new gift officers, and help giving officers identify the priority for donor outreach.

Every fundraiser looks hopefully to December when so many people give generously to nonprofits. In fact, over 30% of the annual gifts made happen in the month of December. There is great opportunity to connect to some of your most generous supporters by ensuring that your organization's gift-club donors ($1,000 - $5,000) are asked to renew their gifts before the end of the calendar year.

Here's a concrete (hypothetical) example of how gift-club renewals can line you up to meet your year-end goal: Say your station has a budget gap of $150,000 between your year-end goal and  your giving total as of December 1st. If you have 500 gift-club members ($1,200 entry gift), and 100 of them are due to renew their gifts in November/December, there is an opportunity to ask for $120,000 in gifts.

The difference between finishing the year on-budget or not could come down to the number of gift-club asks you make, so don’t delay. Here is a plan of action to solicit these donors and help them to be a vital part of your organization's successes in the coming year.