by Barbara Barron | Posted September 30th, 2020

In the world of advancement, there are plenty of truisms and myths. Some are accurate — “People give because they are asked.” Or, said in the converse, “If you don’t ask, you won’t receive a gift.”

Some are wrong — “People give because they are looking for a tax deduction.”

Nope. Not true.

Giving is rarely about taxes. In fact, even during years when most tax benefits have been drastically reduced or even eliminated, the giving goes on. Something like 95% of Americans give charitably — somewhere. Historically, religious and educational organizations have topped the list. But people give to everything from animal rights to performing arts to social services. It’s a beautiful thing. In good times and bad, people give. We give to causes that touch our hearts.

(Small digression: I recently saw the stats on a crowdsource campaign for Breonna Taylor: Goal was $500k. So far, it has raised over $6 million from 205,000+ donors. Wow!) [Here’s the link if you haven’t given already.]

My point is that we give because we are inspired by inspiring missions. We give because we want to help make life better for other people. We give because we – in particular we Americans – have a philanthropic streak. Regardless of what you might think in our cynical times, statistically speaking, we are actually charitable people.

Kinda nice, right? Especially right now.

That said, in this time of COVID, there are some new and important elements of the stimulus package that directly affect the tax code and may positively impact charitable giving. And while perfect strangers are not suddenly going to send big checks to our schools, it is important to be sure our donors know how these changes may affect them.

It is part of our responsibility as advancement pros and stewards of donors’ gifts to be educated about how they work. It is also our responsibly to be sure we are communicating the details fluently to our community.

So, what are the basics? The first one is targeted to our largest donors. Our giving leaders.

The previous 60% adjusted gross income limit for individual charitable contributions has been suspended for 2020.

That means that the limit that allowed someone to give up to 60% of one’s adjusted gross income as a charitable deduction no longer exists. No matter how much they give.

So, for donors in this calendar year (2020), all cash contributions are now fully deductible. That might make a real difference for some and perhaps make it appealing for donors to give even more this calendar year.

The second change affects everyone but especially more modest donors. Perhaps younger alumni.

A tax filer who does not itemize their deductions – which is a lot of people – can now take a one-time deduction of up to $300 for cash gifts made to charitable organizations.

The provision is intended only for the year 2020; but in the text of the bill, it reads “taxable years beginning in 2020 …” and since it doesn’t include a sunset date, it is conceivable that it might extend beyond 2020. We don’t know that, but it is possible. Strike while this iron is hot.

Important to note that both deductions are only for gifts of cash made in the calendar year 2020. This does not cover other types of gifts or contributions made by donor-advised funds or private foundations.

So larger donors will realize a greater benefit and might be interested in making a larger gift.

Smaller donors, maybe some first-timers, will be able to deduct the cash gift up to $300 even if they don’t itemize.

Good news in this tough moment, all around. 

What can and should we do about all this? I believe it is our responsibility to fully understand these changes and what they can mean for our schools. That means:

• We ought to read the literature. 

• Talk it through with our school’s CFO so our offices are aligned. (Start by forwarding this article to them.)

• Look for ways to share the information with our giving community. Pop it up on the website. Include it in the newsletter.

• Be sure our Board and other volunteers and ambassadors in our school who talk with families about giving are fully versed.

Most of us are not financial experts and we must always remind our donors to check with their personal financial advisors to understand the implications of any gift. But it is our role to make people aware of the possibilities that lie in this moment.

In the end, this will never be the reason people give. Like I said at the top of this article, people will give because they believe in our mission. They care about our teachers. They love our community.

But let’s not take for granted the value of helpful information in an uncertain and scary time. By understanding it and sharing it clearly, you are showing your donors that you are on it. You are a trusted advisor. One more reason to have confidence in your fine organization.

Thank you for all you’re doing.  Let’s stay in contact.

More articles:

• 
  How Can You Set Yourself Up So That Next Fall is a Huge Success?
• 
  Metrics That Matter vs. Metrics That Don’t
• 
  What is Your Brand?
• 
  Success Story #2
• 
  The Steps We Skip
• 
  What if Fundraising Was Really about Creating Donor Joy?

The post How Do the Recent Tax Changes Impact Giving? appeared first on Barbara Barron.

by Barbara Barron | Posted October 10th, 2018

Once upon a time, I was hired to build a major gifts program to reduce debt and build cash reserves.

Exciting, right?

I remember conferring with some professional friends at a conference shortly after I started. “Good luck, Barbara!” one of them said. “That’s what I’d call unsexy money.”

Funny. And kinda true. Building the cash reserves for a school is not the most tantalizing program out there. It’ll always be far sexier to ask for something concrete, right? Something tangible. Like a new state-of-the-art pool. Heck, even refurbishing the seats in the auditorium gives our donors a way to see their gifts at work.

I admit that, at first, I was a little unsure how to proceed. And everyone’s negative reaction didn’t help! And then, well… something changed.

Our development committee had one of those really generative meetings. The kind you prepare for, and hope for and, well, rarely have.

Together, we realized we had to think about this program and its “pitch” very differently. So we flipped the script.

We began to talk about this program as a way to ensure the school’s financial sustainability not only for this generation but for several generations. And we realized we needed to keep this small, selective. Not a public campaign. This major gifts program, by definition, was going to approach the very few families who were already crazy generous. The ones who had the capacity to dig deep and make a transformative gift.

Guess what? We did it. We raised nearly $5 million.

And now, looking back, I believe it was that meeting of the minds where we set the terms and dictated our own internal strategy that paved the way for our success.

I’m sure my genius collaborators won’t mind if I share what we came up with. It all comes down to three simple strategies that all work in tandem.

Strategy #1: Push for urgency

That’s a good looking pool, isn’t it?

See, if I was raising money for a new pool, that’s exactly the kind of picture I would use to help illustrate how essential it is that our school have a pool just like this one. And I might pair it with a deadline like: “We have the coach lined up! We can have a competitive swim team this year! And your child can be on it!”

But how can you have the same sense of urgency for something like debt?

It’s talking about the things that you won’t have until the debt and the reserves are handled. Tangible things. Real things. Things that the donor wants the school to have, but simply aren’t possible until we get through the current campaign.

The thing that must be done first, before you can even think about the fun stuff down the road.

This creates that vital sense of urgency. You’ve set the terms and now it’s a matter of whether and how they can pitch in.

Strategy #2: Make every contribution feel permanent

Wow! What a snazzy looking auditorium. (We can’t wait to get through this debt relief campaign so we can start talking about that… right?)

You’ll notice I’m pushing very hard on the idea of the tangible. The permanent.

That’s because we all know that the process of giving is so much more rewarding for our donors when they can see, or experience, the results of their gifts. This is just basic human psychology, here. And it plays perfectly into my point.

Putting money towards a cash reserve may seem like dropping coins into a sea of coins. Your job is to show how it’s actually the opposite. Gifts made today expand as time goes by. They make future dreams come true. Even dreams not yet dreamed!

Instead of talking about adding to a “reserve”, we talked about future generations. Real resources like faculty salaries, tuition assistance, programs, facilities. That’s the beautiful thing about a cash reserve: it is future money. It’s for the kids, but it’s also for the grandkids and the great-grandkids.

See how appealing today’s gift now becomes, when it’s put in this new context? Who wouldn’t want to provide a wonderful education for kids who aren’t even born yet?

Strategy #3: Choose your words carefully

You already choose your words carefully every day, don’t you? There’s no reason why you should act any differently here. Here’s the point: we should never not tell people what we’re raising money for. We all know there’s no space in our profession for being duplicitous or manipulative. We’re truth tellers. And stewards of our donors’ gifts.

It takes a bit of thoughtful wordsmithing to find and tell the story that helps the donor see a future that’s stronger and better than the one you are currently facing. And, here’s the key: tell it without creating a toxic sense of doom or despair. (Challenging but not impossible.)

Wrap it in what’s already working, and what wants to be even better. Showcase moments in the classroom or science lab or sound studio where students and their teachers are on fire! “Don’t you want this to continue? Of course, you do! Well, we can only ensure that it will with cash reserves. It’s as permanent as permanent gets.”

At the end of the day, your donors want to give. They want to help! They just need our assistance in making sure that their gift is going towards the real, the important, the valuable.

And when that new tennis court comes in, you better invite them out to a match, right? After all, they helped make it a reality.

My name is Barbara Barron, and I’m writing this blog to share advice on a profession that I adore.

I’ve been working in the field of Independent School Advancement for nearly 20 years. In that time, I’ve had the pleasure of creating and implementing successful Strategic Fundraising Plans for so many incredible schools. I’ve had the privilege of seeing real growth at Watkinson, Cheshire Academy, Drew School, Crystal Springs, Sage Ridge and others. (Maybe we’ve met!)

Nothing makes me happier than seeing a struggling school start to thrive. My hope is that you’re here to make a positive change as well. I hope my advice can be a part of that change.

Shoot me an e-mail if you want to swap tips, or share your voice here.

Let’s do this, together.

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