Tips to Prepare Tax Statements for 2020

Membership, Major Giving, calendar year-end, tax statements

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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.

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Discovering Major Gift Prospects Amongst Year-End Donors

donor cultivation and stewardship, Major Giving, calendar year-end

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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.

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Finding Focus for 2020 Year-End Fundraising

Membership, calendar year-end, COVID

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2020 has certainly been a year of challenges and unpredictability. We can’t predict the precise turns that year-end fundraising may take, but we can focus on a few things to do really well. Then, if challenges arise in the final weeks of 2020, we’ll be better prepared to pivot. Here’s what you can focus on knocking out of the park:

Safety First 

COVID numbers are rising sharply, and lockdowns and restrictions similar to what we experienced in the spring are beginning to happen state by state. It’s important to put the safety of your team first and expect you will be doing and on-air fundraising remotely if you aren’t planning for that already. Getting distance logistics in place now will position you to take on any additional fundraising challenges that arise in the new year.

Use Unifying Messages 

Your public service - be that news or music - is as important as it has ever been to your listeners. As audiences have hunkered down at home or continued essential work during this time, public media has provided essential information and comfort. Yes, listening patterns have shifted. But the connection is strong. Stay donor-centered in your messaging, and focus on what they have made possible. We’ve crafted some scripts with the message, “we’re all in this together” to help you get started and frame your pitches.

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Leveraging The CARES Act for Corporate Sponsorship

Corporate Support, calendar year-end, COVID-19

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Prospecting new sponsorship leads during this time is a challenging proposition. But the resulting necessity (and freedom) to think outside the box can also be a silver lining. Several stations report doing just that as they successfully prospect and secure sponsorships from new nonprofit or social-service-oriented clients. The prospecting they are doing is from a source that might not seem obvious: The CARES Act. 

Signed into law back in March, 2020, The CARES Act was designed to provide fast and direct economic assistance for American workers and families and small businesses, and to preserve jobs for American industries. Recipients in your area likely include many small businesses and a good number of nonprofits. For-profit businesses -- which presumably have marketing and other traditional business functions already built in -- may be more likely to spend their assistance right away. But that may not necessarily be the case with many nonprofits. Indeed, especially when it comes to social-service oriented nonprofits, many received an influx of cash and still have money to spend by the end of the calendar year.

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Using the CARES Act to Your Best Advantage for Year-End Giving

Major Giving, calendar year-end, COVID-19

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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:

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Increase Year-End Giving With a High-Performance #GivingTuesday

#GivingTuesday, calendar year-end

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Data and recommendations provided by Jamie McDonald, advisor to #GivingTuesday and founder of Generosity Inc.

Since its inception in 2012, #GivingTuesday has grown to be one of the largest one-day generosity movements in the world. It’s now one of only three days during the year when donors actively look for a nonprofit they can support. The other two days are December 30 and 31. Of course the rest of the year, we’re going after donors to support us. 

There’s also evidence that simply participating in #GivingTuesday boosts year-end giving overall. Fundraisers used to be concerned that this post-Thanksgiving event displaced dollars from donors’ year-end gifts, simply moving them earlier in the year. But #GivingTuesday data shows that using the event to launch year-end giving leads to greater fundraising success during the month of December.

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Station Results From Our Calendar-Year-End Fundraising Survey

Membership, calendar year-end

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The last quarter of the calendar year (October-December) is a critical fundraising period for stations. With fall drives and year-end giving occurring in these months, the fundraising outcomes are important to the overall success of your program regardless of whether this period coincides with the end of a station’s fiscal year.

Last year, we began hearing a mix of optimism and concern from our members about quarter four of 2018. So we decided to survey stations to learn how 2018 came out, and preview plans for 2019.

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What Are You Going to Get Great at in 2019?

Corporate Support, calendar year-end

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It’s the time of year for annual planning.  Whether you’re a sales manager or a corporate support rep, having a plan is the most important thing you can do for yourself and your team. What seems clear in today’s media environment is that we can’t enter any year with a business-as-usual approach.

I’ve had many conversations lately with Greater Public members who have shared news of unexpected attrition of longstanding accounts deciding to cut back or leave public media for now. We can’t take anything or anyone for granted. An annual plan needs to take an honest look at possibilities for growth in the face of a possible 25-35% attrition.

As a sales manager, new initiatives are a good place to start. What are you going to pursue? I’m sure the list of options is long, but it’s important to focus on just one or two things that will bring the most value to the station and your team.  

Create my operating plan for corporate support >>

My first year as a sales manager I was so energized and excited. I was going to change the world! I had a list of six or seven major initiatives to tackle. When I put them into my annual plan, my boss - the now famous Kirk Nelson - warned me that I was taking on WAY TOO MUCH! He forced me to prioritize by making me write out all the steps and a timeline for each thing I wanted to take on. That was an eye-opening experience that I have never forgotten.  

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Make This the Year to Beat for Year-End Major Giving

Major Giving, calendar year-end

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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.

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Preparing 2018 Tax Statements Under New Tax Law

Membership, General Management, calendar year-end, tax statements, tax law

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Sending gift receipts to donors is an end-of-year obligation for all stations. Embedded in this task is also the tremendous opportunity to thank your major, mid-level, and sustaining donors for a year of support.

Of course, there’s been a significant change to tax law since you last mailed your year-end statements. However, the Tax Cuts and Jobs Act of 2017 made no significant changes that should impact the compliance component of the tax statements provided to donors.

Compliance isn’t the only concern. We haven’t been able to predict how changes in the standard deduction requirements will affect overall charitable giving. Tax experts and fundraisers alike are watching this unfold. Therefore, it’s even more critical to communicate to donors that they are public radio’s largest and most important source of funding. This message is important year-round, but should be the foundation of your 2018 year-end communication with donors.

As you prepare your 2018 year-end correspondence, here’s what to keep in mind.

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