Tax Bill Strategies for Nonprofit Organizations

Since passage of the largest tax overhaul in 30 years, we have been fielding emails, calls and queries every day. From individuals and corporations to nonprofits and grantees, all are looking for clarity on how the bill will impact their giving. As your partner and resource in philanthropy, we want to share some insights and ideas on how you can best to adapt your strategy to the many changes the bill contains in two posts. In this post, we’ll discuss strategies for nonprofits to adapt to donor’s changing priorities in light of changes to charitable deductions.
In the midst of year-end meetings, mailings and holidays we can appreciate the added stress of trying to understand and address the latest changes to tax law. Before January 1, you maybe even benefitted from the changes – finding that annual donors increased their year-end giving, the number of stock transfers (and their value) increased, and your average gift size, too.
If you experienced a boom at your organization, kudos. On the other side, looking ahead to 2018 charities are facing an estimated decrease in annual giving to the tune of 4 – 6%. Does your nonprofit have what it takes to survive and deliver its mission on 4 – 6% less? Let that number serve as a clarion call, and consider the following actions:
Review. What are your team’s priorities? What themes guide your work with donors? Growing your number of donors vs. growing your relationships with donors? Giving days vs. giving over years? Changes to federal income taxes will impact how, when and how much many of your donors give. While those are personal decisions with factors beyond your control, you can invest your time strategically. Stewarding current donors will yield larger and longer-term return on investment. So take the time to develop relationships with annual donors; to ask major donors what they want to accomplish; to artfully acknowledge and recognize the contributions your supporters make.
Renew. It’s always wise to prioritize planned giving – but with changes to itemized deductions, many of your donors will be shifting their approach and timeline for giving. Planned gifts are an opportunity for your donors to support your mission in a lasting way. Your donors care about the work you do, which is why they donate to begin with. Inviting them to contribute to the long-term viability of your organization is less awkward than you might imagine, and won’t trigger timely tax concerns. If you want to learn more about how and why to invest in planned giving, you can also see our full blog post on the subject.
Reinvigorate. How do you convey the value of your work to your network of donors, volunteers, and followers? How do you demonstrate the impact of your work, while recognizing your donors gifts are what make that possible? Stories can be your greatest asset to standing out and galvanizing support in a more competitive climate. Can be, if your messages are focused and donor-centric. Broadcasting what you do is less important than why you do it – and underlying what and why is how, and that is where your supporters come in. Demonstrate that donors and volunteers are the heroes of your story by highlighting what they make possible. As much as you see donors as the conduit to your work, they see your organization as the conduit to their altruism. Appeal to that sense of contribution and participation, more than pitching or proclaiming “give to us because we are great!” Reinvigorating the stories you tell will in turn deepen engagement with folks who are already in your orbit, and draw them into conversation about what comes next.
We’re here for you. Community foundations staff are here and happy to speak with you about any of these strategies. We are also available to speak with your board members about the importance of being both flexible and steady amidst tax changes.
If you want to read more, we found these helpful:
Tax Policy Center: 21 Million Taxpayers Will Stop Taking the Charitable Deduction
Chronicle of Philanthropy: Talking to Donors about the Tax Law
Joan Garry: How Nonprofits Should React to the New Tax Law
Veritus Group: Priorities for Major Gift Officers
Clairification: New Tax Law - How Worried Should Your Nonprofit Be?

Russell James: How the New 2018 Tax Law Makes Planned Giving More Powerful


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