In the age of the Internet there’s a free template, instructional, and how-to video for just about everything under the sun. And, for many things, from great recipes, to exercise guides, to Ikea furniture blueprints (why is there always one extra piece left over?!), this is fantastic. Sometimes it’s even hard to remember what life was like before we had access to information on just about everything at our fingertips.
There are still some things that, despite being free and appearing easy to do, are better done by a trained professional. For instance, let’s say I wanted to redo my bathroom, but have extremely limited working knowledge of how to reconfigure the plumbing to make sure it’s functional within the new design of the room. I could certainly click through step-by-step instructions on Reddit or watch a smattering of YouTube videos, but I’m still not an expert. If I tried to DIY the plumbing in my new bathroom, it would certainly take me much longer than an expert and without a doubt the finished product would be of a lesser quality. There’s also a good chance I would invest all this time and energy in the project, and still mess up, and end up having to hire a professional contractor to fix my mistakes.
Some things are just better left to the professionals. In regard to your nonprofit’s policies and procedures, this is where an experienced attorney comes in.
As a nonprofit leader, you’ve specialized in a multitude of different aspects while working toward achieving your organization’s mission. But, when it comes the super important policies and procedures, you need to have in place for top of the line legal compliance, it’s best to outsource to a legal expert. You could try the DIY way by finding free templates online and trying to muddle through the process. But, if legal issues arise and your policies are called into question you’re then going to have to call in the specialized professional to help keep the bathroom from flooding (metaphorical reference to my hypothetical plumbing mishap). If written poorly, policies could provide little to no guidance because they were too vague, not applicable to your organization, or contrasting with federal/state/local laws. An attorney can help you put all the pieces of the compliance puzzle together into an image that’s valuable.
Avoid the time, energy, and monetary costs of DIY, and opt for quality policies and procedures that are written specifically for your nonprofit by an experienced attorney in nonprofit law. Need a little more information to convince the board, the boss, or yourself? Here are three practical reasons why you should work with a professional to draft your tax-exempt organization’s policies and procedures:
Save Time
Time is a common thread amongst the majority of nonprofits I’m lucky enough to work with. There’s never enough time. When it comes to initiatives like writing a full set of beneficial policies and procedures unique to your organization, it costs time! And that is time away from all the other change-making that could be happening. Without a doubt, most nonprofits are also short on administrative help. When you hire an attorney well-versed in nonprofit law it’s a double win when it comes to time—your time isn’t wasted or misused and you get to reap the benefits of a subject matter expert’s time.
My 10 for 990 special for nonprofits includes 10 policies asked about of Form 990 for a flat rate of $990. Sure, it’s an investment. But, less than $1,000 is worthwhile in exchange for policies that limit potential abuse, protect against vulnerabilities, and prevent activities that go beyond permitted nonprofit activities. Adopting internal and external policies can only help in the case that your tax-exempt organization is ever audited by the IRS.
Receive Dedicated Attention & Advice
Just like I tell my estate planning clients, there is no one-size-fits-all when it comes to the important documents that will be the blueprint to your legacy. The same goes for nonprofits.
Each nonprofit is unique and accordingly your internal and external guidelines will want to reflect this. For instance, a non-operating private foundation will likely need a different set of documents than a public charity. With a dedicated nonprofit attorney working on your policies, you get unparalleled and individualized service. This type of dedicated service and attention to detail will further save you from wasting resources on forms and other legal documents that aren’t useful or beneficial to the organization. Ultimately, working with a nonprofit attorney will mean counsel that sets your nonprofit up for success, unhampered by compliance issues.
The benefits of investing in a qualified attorney to craft your important policies are numerous; the right attorney will put your organization’s best interests first, saving you resources in the long run.
Given my experience, mission, and passion for helping Iowa nonprofits, I would love the chance to fill the role of topical expert for your organization. Learn more about the 10 For 990 policy special and don’t hesitate to contact me via email (Gordon@gordonfischerlawfirm.com) or on my cell (515-371-6077).
https://www.gordonfischerlawfirm.com/wp-content/uploads/2018/02/rawpixel-com-558596-unsplash.jpg39835515Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2018-02-27 15:38:052020-05-18 11:28:55Reasons to Enlist an Attorney to Write your Nonprofit's Policies
I write a lot about individuals conducting charitable giving and the various options to do so while living as well as through estate planning means. But, what if you own or run a business and want to make charitable gifts on behalf of the business?
Donations on behalf of a business can be an excellent way to build goodwill, trust, and foster positive public relations. Plus, donations of assets like cash and property can also mean substantial benefits when it comes to filing business taxes.
The good news from the IRS (how often do you hear that?!) is that any business can make contributions to qualified charitable organizations. The caveat is that there are limits on these deductions, and the contributions may only be deductible to the individual owners, not to the business. How the business is categorized is what determines how charitable contributions are deducted and which tax return they are deducted from.
Corporations vs. Sole Proprietorship
Corporation
Some types of businesses, such as corporations, can deduct allowable charitable contributions directly on their business tax returns. This makes more sense when you consider that the corporation is a separate entity from the owners.
A corporation which files its own tax return can deduct charitable gifts up to 10 percent of its taxable income and is entitled to carryover unused deductions for up to five years.
For a corporation, taxable income for this purpose is calculated without the following:
If you are a sole proprietor, charitable donations can also be tax-savvy, but there are differences from filing as a corporation. Your business taxes are filed on Schedule C of your personal Form 1040 and because of this set-up, your business cannot make separate charitable contributions because the only way individuals can deduct these contributions is on Schedule A. Additionally, you must itemize deductionsto take them.
This advice also rings true for a single-member limited liability company (LLC), since this category of business files taxes as a sole proprietor.
What qualifies as a donation?
The IRS specifies that both cash and non-cash contributions from businesses are deductible, as well as expenses related to volunteering.
Cash is self-explanatory, and non-cash donations could be property, goods, and inventory. In terms of volunteering, the time and lost wages are not deductible, but volunteer-related expenses for a qualifying charity event or service project are. This includes the travel costs (like gas and mileage) along with any donated supplies.
What does not qualify as a donation?
Say you run Corporation Smile and your employees are given time off to volunteer with the causes of their choice. Could this time volunteered be considered a charitable contribution? In short, no. As stated above, the value of time volunteered on the ground or, say, on a nonprofit’s board of directors does not qualify. Additionally, many times business-based donations are committed in exchange for something of value. Be it a product or service, the tax-deductible amount is the donation’s value minus the value of the good/service exchanged. (Read my primer on the term “quid pro quo” for more on this concept.)
Qualifying Organizations
In order to claim the charitable donation deduction, the donee organization must be recognized by the IRS as 501(c)(3) nonprofit. This important distinction is what enables these organizations to receive tax-exempt donations. Beware that gifts and donations to political candidates, parties, or associated organizations are not recognized by the IRS as tax-deductible. The same goes for donations to a specific individual. Be smart and practice due diligence in determining which organizations are qualified by asking to see a charity’s IRS determination letter and/or search for qualifying organizations by using the IRS’ Exempt Organizations Select Check tool.
Record Keeping for the Win
If you own or manage a business you know all too well how important bookkeeping is, especially come tax time. Record retention for charitable contributions is no different. What documentation required depends upon the amount and type of contributions. (Although, my general advice is to keep more paperwork than needed in regard to contributions.)
Donations valued at less than $250– Retain a receipt issued by the accepting charity. If for some reason you don’t have this, a credit card, bank record, or canceled check will suffice.
Donations valued at more than $250– Obtain an official gift receipt from the accepting nonprofit.
Non-cash donations valued at $250 or less– Taxpayers must receive and keep a letter or other type of written communication in the form of a gift receipt from the charitable organization showing: organization’s name, date and location of the contribution, and a reasonably detailed description of the property donated. The gift receipt for a non-cash donation may or may not include a cash value. If not, the donor will need to see that it is appropriately assessed for fair value.
Non-cash donations valued at greater than $250– The gift acknowledgment from the nonprofit must meet the same requirements for contributions of property valued at less than $250, but must also meet several additional requirements. The written acknowledgment must state whether the qualified organization gave any goods or services in exchange for contribution, and include a description and good-faith estimate of the value of any goods and services given.
So, to summarize, the following details should be retained:
Name and address of the donee organization;
Date and location of the contribution;
Reasonably detailed description of the property;
Fair market value (FMV) of the property at the time of the contribution and FMV was determined (if the property was appraised, the taxpayer should keep a copy of the signed appraisal);
Cost or basis of the property, if the taxpayer must reduce its FMV by appreciation—these records should include the amount of the reduction and how it was calculated;
Total amount the taxpayer is claiming as a deduction for the tax year as a result of the contribution; and
Terms and/or conditions attached to the contribution.
Non-cash donation valued at more than $500 and less than $5,000– Taxpayers must fill out IRS Form 8283 when filing taxes. Taxpayers must have the acknowledgment and written records described above, as well as additional information needed including: how the property was acquired (purchase, gift, inheritance, etc.) and the date the property was obtained by the taxpayer.
Non-cash donation worth more than $5,000– In addition to the requirements listed for the smaller donation amounts, you also must obtain a qualified appraisal of the goods and have the qualified appraiser sign Section B of Form 8283. (Qualified appraisal and qualified appraiser are both vague terms with specific meanings to the IRS. Read more about the specifics of these definitions here.)
The charitable deduction for business can result in significant tax savings, just be certain you do so in the right way to maximize the savings. The nuances of corporate/business giving can be complicated and confusing and every business has a unique situation, so be sure to contact the appropriate professional advisors for specific advice. Questions? Comments? I’d love to discuss further; contact me via email or by phone (515-371-6077).
https://www.gordonfischerlawfirm.com/wp-content/uploads/2018/02/g-crescoli-365898-unsplash.jpg26674000Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2018-02-26 16:49:312020-05-18 11:28:55Taking Care of Business: Charitable Giving, Taxes, and Substantiation
In pretty much any industry—finance, business, health care, marketing, etc.—you can and should always be learning. For me, continuous learning often translates into better advice for my clients, especially on trends and new technologies within my main areas of service. One of my favorite ways to do this is to attend webinars presented by subject matter experts. Recently I attended one such presentation, hosted by NonProfit PRO, entitled “Effectively Managing a Monthly Giving Program That Exceeds the Thousand-Sustainer Mark.”
This subject is super interesting and important for nonprofit leaders, but nonprofit leaders are notoriously busy, so I took notes for you! Read on for the four main takeaways for managing a monthly giving (or monthly sustainer) program. The information presented was directed toward large giving programs, but much of it applies to any giving program, regardless of number of donors or nonprofit size.
Background
Monthly giving (or sustainer) programs can be the lifeblood of nonprofit organizations. These types of programs enlist, encourage, and facilitate regular donors—think automatic monthly or quarterly charitable donations. They are a definite best practice within the fundraising mix as they provide predictable funding and more engaged donors at a high retention rate. These types of programs also produce higher average annual gifts and can be mission critical for net revenue. Needless to say, monthly giving programs are extremely valuable and should be managed accordingly.
Be Dedicated to Donor Care
Your monthly donors are valuable and are going to be who help sustain the organization’s operations and key programs. Take care of prospective donors as if they are donors already. What does this mean?
Start at the beginning of “the funnel” and walk through the entire process of what joining your organization looks and feels like. Be honest about your sign-up process and review any barriers to entry. Your nonprofit is likely going to spend more money to bring regular donors into the fold, but the value of an invested sustainer is immense in the long-term. Make it just as easy to sign-up to be a donor, as it is to be a part of something—a movement, an initiative, a solution.
Taking care of your donors means paying attention to intentions. For instance, a donor might accidentally create two accounts, or a donor may make a large gift they intended to be a one-time donation, but registered it as monthly. The organization’s staff need to be available, organized, and equipped to facilitate requests to change whatever was set-up initially. If a donation situation seems strange or you have immediate questions, be proactive and contact the donor. Donors will feel the best about continuous giving if they’re able to donate exactly as they intended.
Taking care of donors means being prepared to be excellent communicators. If you’re running a donor drive or launching a new campaign, expect an increased number of calls, emails, and even social media messages from prospective donors. First of all, make contact information easily accessible. Equip all staffers that may have contact with prospective donors with FAQs, and other information they may need, including flexible phone and email scripts, so that messaging is clear and conducive to the campaign and overall mission.
Taking care of donors means that they need to feel engaged and part of the team from the get-go. This can look different at every organization, but common examples include a progression of on-boarding “welcome emails,” gift acknowledgement/thank you letters, and branded content they can share on social media.
Deliver a Personalized Experience
Collect data from your donors across all platforms and use it to deliver as much of a personalized experience as possible, with targeted messaging via social media and e-newsletters, direct mail, and engaging phone calls. One idea from the presentation was to follow up with donors with an update on the topic that encouraged them to become a donor in the first place. For example, let’s say Jill Donor joined as a monthly donor as a result of a specific campaign featuring the story of a little boy who would directly benefit from increased giving to the nonprofit. It would be smart to target Jill Donor with an update on that same little boy a few months later, and illustrate how her donation made a difference and will continue to do so.
This is, of course, easier said than done, especially for nonprofits that source donors from multiple platforms. To that point, you’ll want all your data systems “speaking” to one another, regardless of which specific systems your organization operates with. If your systems are not centralized or properly organized, it could be detrimental. For example, you wouldn’t want to accidentally send an automated “lapse in giving” letter to an individual who has been one of your regular, steady donors of two years.
This advice goes not just for your information technology systems, but also personnel systems. Staffers involved with donor care should be able to view all available information on a single donor in a single centralized contact file.
Pay Attention to Trends & Analytics
On its front, donor management may not seem like a data-centric field. Yet, data plays an extremely important role in gaining insights into the state of your sustainer programs. Define your key performance indicators (KPIs) and create reports and graphs that make it easy for other organization stakeholders to view trends over time. The webinar experts suggested the following main KPIs:
Attrition: Who is falling off and when? This should provide some information to the bigger question: “Why are sustainer accounts declining at all?” (Hopefully you don’t have to ask this question at all, but if you do, you want to plug in the numbers for who, when, and why.)
Credit card updates: This KPI refers to credit card updater systems that automatically edit donor credit card information when the card expires or otherwise. It should measure if the credit card update service/system employed is working effectively. How many cards could not be accurately updated?
Chargebacks: How many and for what amount did chargebacks to credit cards occur? Negative trends here could indicate a flawed process that requires updates.
Reactivation: How many donors reactivated after previously cancelling a regular donation?
Deactivation: How many donors canceled from the sustainer program?
Average monthly gift: How much are donor gifts averaging?
Online sign-ups: How many people are registering as repeat donors and where are they coming from—social media, e-newsletter, search engine, directly from the website, direct mail (send recipients to a shortened and tagged URL that will indicate how many people came from each letter campaign.) etc.?
Cost to acquire: What’s the average spend in exchange for donor acquisition?
Ability to track all or some of these will likely depend on the size and capacity of your organization. If your nonprofit is small just focus on a couple main KPIs for donor management. Use your historical KPI data to set goals and expectations for coming periods.
Know When You’re Getting Paid
The webinar speakers used this phrase “know when you’re getting paid,” to discuss the important topic of billing capabilities.
One subject discussed were the differences and advantages of different billing options. If possible, offer your donors a variety of options for billing, so it’s tailored to their intent. But, not every organization will be able to offer a selection, so you choose between the merits of monthly/fixed-day (billing on the same day of each month, regardless of when the donor initially registered) and anniversary (each invoice is the same day of the month the donor registered).
Credit card payments are typically one of the easiest ways for donors to register, but know that the average nonprofit will see 15 to 30 percent of all credit cards payments declined due to failure to renew. That means that either a donor didn’t update their billing info, or a credit card updater system you pay for failed to update automatically. If possible, keep track of what cards are about to expire and then reach out to the donor directly. This is a good time to reconnect with the donor, discuss initiatives, and explain how an increase in giving could further along the mission.
Be sure to offer the ability to accept as many different types of payments as possible. To that point, and to surpass the many complications credit cards can present, the webinar leaders also recommended exploring options for ACH (Automated Clearing House Network) payments. ACH, as you may already know, is a network that facilitates electronic money transfers. ACH payments can be as fast as a wire transfer and the banking info required doesn’t tend to change or expire like credit cards do. However, ACH payments are subject to strict policies, so just be sure to adhere to the rules and regulations if you’re going to offer this option.
Finally, know when you’re going to actually have access to donated funds and at what amounts. This impacts cash flow and budget development and execution.
Don’t Delay Effective Management
Successful fundraising can and should involve sustainer giving programs, as they can be incredibly successful and rewarding for both the organization and donor alike. But, if you don’t implement effective donor-centric tactics as well as data organization and analysis from day one, you are at risk of losing your sustainers before you even start.
In addition to the four main points, I would also like to add that that having sound, quality policies and procedures in place can make all the difference for effective management, let alone legal compliance. I’m offering a deal for 10 important policies asked about on Form 990. Policies like a gift acceptance policy fit in as an important piece of the fundraising puzzle.
Questions? Thoughts? Advice from your own experience with monthly sustainer programs? Comment below or reach out via email or by phone (515-371-6077).
https://www.gordonfischerlawfirm.com/wp-content/uploads/2018/02/estee-janssens-396876-unsplash.jpg20002992Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2018-02-25 17:39:292020-05-18 11:28:554 Tips for Effectively Managing a Monthly Giving Program
Reasons to Enlist an Attorney to Write your Nonprofit’s Policies
NonprofitsIn the age of the Internet there’s a free template, instructional, and how-to video for just about everything under the sun. And, for many things, from great recipes, to exercise guides, to Ikea furniture blueprints (why is there always one extra piece left over?!), this is fantastic. Sometimes it’s even hard to remember what life was like before we had access to information on just about everything at our fingertips.
There are still some things that, despite being free and appearing easy to do, are better done by a trained professional. For instance, let’s say I wanted to redo my bathroom, but have extremely limited working knowledge of how to reconfigure the plumbing to make sure it’s functional within the new design of the room. I could certainly click through step-by-step instructions on Reddit or watch a smattering of YouTube videos, but I’m still not an expert. If I tried to DIY the plumbing in my new bathroom, it would certainly take me much longer than an expert and without a doubt the finished product would be of a lesser quality. There’s also a good chance I would invest all this time and energy in the project, and still mess up, and end up having to hire a professional contractor to fix my mistakes.
Some things are just better left to the professionals. In regard to your nonprofit’s policies and procedures, this is where an experienced attorney comes in.
As a nonprofit leader, you’ve specialized in a multitude of different aspects while working toward achieving your organization’s mission. But, when it comes the super important policies and procedures, you need to have in place for top of the line legal compliance, it’s best to outsource to a legal expert. You could try the DIY way by finding free templates online and trying to muddle through the process. But, if legal issues arise and your policies are called into question you’re then going to have to call in the specialized professional to help keep the bathroom from flooding (metaphorical reference to my hypothetical plumbing mishap). If written poorly, policies could provide little to no guidance because they were too vague, not applicable to your organization, or contrasting with federal/state/local laws. An attorney can help you put all the pieces of the compliance puzzle together into an image that’s valuable.
Avoid the time, energy, and monetary costs of DIY, and opt for quality policies and procedures that are written specifically for your nonprofit by an experienced attorney in nonprofit law. Need a little more information to convince the board, the boss, or yourself? Here are three practical reasons why you should work with a professional to draft your tax-exempt organization’s policies and procedures:
Save Time
Time is a common thread amongst the majority of nonprofits I’m lucky enough to work with. There’s never enough time. When it comes to initiatives like writing a full set of beneficial policies and procedures unique to your organization, it costs time! And that is time away from all the other change-making that could be happening. Without a doubt, most nonprofits are also short on administrative help. When you hire an attorney well-versed in nonprofit law it’s a double win when it comes to time—your time isn’t wasted or misused and you get to reap the benefits of a subject matter expert’s time.
https://www.gordonfischerlawfirm.com/nonprofits-form-990-due-date/
Save Money
My 10 for 990 special for nonprofits includes 10 policies asked about of Form 990 for a flat rate of $990. Sure, it’s an investment. But, less than $1,000 is worthwhile in exchange for policies that limit potential abuse, protect against vulnerabilities, and prevent activities that go beyond permitted nonprofit activities. Adopting internal and external policies can only help in the case that your tax-exempt organization is ever audited by the IRS.
Receive Dedicated Attention & Advice
Just like I tell my estate planning clients, there is no one-size-fits-all when it comes to the important documents that will be the blueprint to your legacy. The same goes for nonprofits.
Each nonprofit is unique and accordingly your internal and external guidelines will want to reflect this. For instance, a non-operating private foundation will likely need a different set of documents than a public charity. With a dedicated nonprofit attorney working on your policies, you get unparalleled and individualized service. This type of dedicated service and attention to detail will further save you from wasting resources on forms and other legal documents that aren’t useful or beneficial to the organization. Ultimately, working with a nonprofit attorney will mean counsel that sets your nonprofit up for success, unhampered by compliance issues.
The benefits of investing in a qualified attorney to craft your important policies are numerous; the right attorney will put your organization’s best interests first, saving you resources in the long run.
Given my experience, mission, and passion for helping Iowa nonprofits, I would love the chance to fill the role of topical expert for your organization. Learn more about the 10 For 990 policy special and don’t hesitate to contact me via email (Gordon@gordonfischerlawfirm.com) or on my cell (515-371-6077).
Taking Care of Business: Charitable Giving, Taxes, and Substantiation
Charitable Giving, Taxes & FinanceI write a lot about individuals conducting charitable giving and the various options to do so while living as well as through estate planning means. But, what if you own or run a business and want to make charitable gifts on behalf of the business?
Donations on behalf of a business can be an excellent way to build goodwill, trust, and foster positive public relations. Plus, donations of assets like cash and property can also mean substantial benefits when it comes to filing business taxes.
The good news from the IRS (how often do you hear that?!) is that any business can make contributions to qualified charitable organizations. The caveat is that there are limits on these deductions, and the contributions may only be deductible to the individual owners, not to the business. How the business is categorized is what determines how charitable contributions are deducted and which tax return they are deducted from.
Corporations vs. Sole Proprietorship
Corporation
Some types of businesses, such as corporations, can deduct allowable charitable contributions directly on their business tax returns. This makes more sense when you consider that the corporation is a separate entity from the owners.
A corporation which files its own tax return can deduct charitable gifts up to 10 percent of its taxable income and is entitled to carryover unused deductions for up to five years.
For a corporation, taxable income for this purpose is calculated without the following:
Sole Proprietorship
If you are a sole proprietor, charitable donations can also be tax-savvy, but there are differences from filing as a corporation. Your business taxes are filed on Schedule C of your personal Form 1040 and because of this set-up, your business cannot make separate charitable contributions because the only way individuals can deduct these contributions is on Schedule A. Additionally, you must itemize deductions to take them.
This advice also rings true for a single-member limited liability company (LLC), since this category of business files taxes as a sole proprietor.
What qualifies as a donation?
The IRS specifies that both cash and non-cash contributions from businesses are deductible, as well as expenses related to volunteering.
Cash is self-explanatory, and non-cash donations could be property, goods, and inventory. In terms of volunteering, the time and lost wages are not deductible, but volunteer-related expenses for a qualifying charity event or service project are. This includes the travel costs (like gas and mileage) along with any donated supplies.
What does not qualify as a donation?
Say you run Corporation Smile and your employees are given time off to volunteer with the causes of their choice. Could this time volunteered be considered a charitable contribution? In short, no. As stated above, the value of time volunteered on the ground or, say, on a nonprofit’s board of directors does not qualify. Additionally, many times business-based donations are committed in exchange for something of value. Be it a product or service, the tax-deductible amount is the donation’s value minus the value of the good/service exchanged. (Read my primer on the term “quid pro quo” for more on this concept.)
Qualifying Organizations
In order to claim the charitable donation deduction, the donee organization must be recognized by the IRS as 501(c)(3) nonprofit. This important distinction is what enables these organizations to receive tax-exempt donations. Beware that gifts and donations to political candidates, parties, or associated organizations are not recognized by the IRS as tax-deductible. The same goes for donations to a specific individual. Be smart and practice due diligence in determining which organizations are qualified by asking to see a charity’s IRS determination letter and/or search for qualifying organizations by using the IRS’ Exempt Organizations Select Check tool.
Record Keeping for the Win
If you own or manage a business you know all too well how important bookkeeping is, especially come tax time. Record retention for charitable contributions is no different. What documentation required depends upon the amount and type of contributions. (Although, my general advice is to keep more paperwork than needed in regard to contributions.)
So, to summarize, the following details should be retained:
The charitable deduction for business can result in significant tax savings, just be certain you do so in the right way to maximize the savings. The nuances of corporate/business giving can be complicated and confusing and every business has a unique situation, so be sure to contact the appropriate professional advisors for specific advice. Questions? Comments? I’d love to discuss further; contact me via email or by phone (515-371-6077).
4 Tips for Effectively Managing a Monthly Giving Program
NonprofitsIn pretty much any industry—finance, business, health care, marketing, etc.—you can and should always be learning. For me, continuous learning often translates into better advice for my clients, especially on trends and new technologies within my main areas of service. One of my favorite ways to do this is to attend webinars presented by subject matter experts. Recently I attended one such presentation, hosted by NonProfit PRO, entitled “Effectively Managing a Monthly Giving Program That Exceeds the Thousand-Sustainer Mark.”
This subject is super interesting and important for nonprofit leaders, but nonprofit leaders are notoriously busy, so I took notes for you! Read on for the four main takeaways for managing a monthly giving (or monthly sustainer) program. The information presented was directed toward large giving programs, but much of it applies to any giving program, regardless of number of donors or nonprofit size.
Background
Monthly giving (or sustainer) programs can be the lifeblood of nonprofit organizations. These types of programs enlist, encourage, and facilitate regular donors—think automatic monthly or quarterly charitable donations. They are a definite best practice within the fundraising mix as they provide predictable funding and more engaged donors at a high retention rate. These types of programs also produce higher average annual gifts and can be mission critical for net revenue. Needless to say, monthly giving programs are extremely valuable and should be managed accordingly.
Be Dedicated to Donor Care
Your monthly donors are valuable and are going to be who help sustain the organization’s operations and key programs. Take care of prospective donors as if they are donors already. What does this mean?
Start at the beginning of “the funnel” and walk through the entire process of what joining your organization looks and feels like. Be honest about your sign-up process and review any barriers to entry. Your nonprofit is likely going to spend more money to bring regular donors into the fold, but the value of an invested sustainer is immense in the long-term. Make it just as easy to sign-up to be a donor, as it is to be a part of something—a movement, an initiative, a solution.
Taking care of your donors means paying attention to intentions. For instance, a donor might accidentally create two accounts, or a donor may make a large gift they intended to be a one-time donation, but registered it as monthly. The organization’s staff need to be available, organized, and equipped to facilitate requests to change whatever was set-up initially. If a donation situation seems strange or you have immediate questions, be proactive and contact the donor. Donors will feel the best about continuous giving if they’re able to donate exactly as they intended.
Taking care of donors means being prepared to be excellent communicators. If you’re running a donor drive or launching a new campaign, expect an increased number of calls, emails, and even social media messages from prospective donors. First of all, make contact information easily accessible. Equip all staffers that may have contact with prospective donors with FAQs, and other information they may need, including flexible phone and email scripts, so that messaging is clear and conducive to the campaign and overall mission.
Taking care of donors means that they need to feel engaged and part of the team from the get-go. This can look different at every organization, but common examples include a progression of on-boarding “welcome emails,” gift acknowledgement/thank you letters, and branded content they can share on social media.
Deliver a Personalized Experience
Collect data from your donors across all platforms and use it to deliver as much of a personalized experience as possible, with targeted messaging via social media and e-newsletters, direct mail, and engaging phone calls. One idea from the presentation was to follow up with donors with an update on the topic that encouraged them to become a donor in the first place. For example, let’s say Jill Donor joined as a monthly donor as a result of a specific campaign featuring the story of a little boy who would directly benefit from increased giving to the nonprofit. It would be smart to target Jill Donor with an update on that same little boy a few months later, and illustrate how her donation made a difference and will continue to do so.
This advice goes not just for your information technology systems, but also personnel systems. Staffers involved with donor care should be able to view all available information on a single donor in a single centralized contact file.
Pay Attention to Trends & Analytics
On its front, donor management may not seem like a data-centric field. Yet, data plays an extremely important role in gaining insights into the state of your sustainer programs. Define your key performance indicators (KPIs) and create reports and graphs that make it easy for other organization stakeholders to view trends over time. The webinar experts suggested the following main KPIs:
Ability to track all or some of these will likely depend on the size and capacity of your organization. If your nonprofit is small just focus on a couple main KPIs for donor management. Use your historical KPI data to set goals and expectations for coming periods.
Know When You’re Getting Paid
The webinar speakers used this phrase “know when you’re getting paid,” to discuss the important topic of billing capabilities.
One subject discussed were the differences and advantages of different billing options. If possible, offer your donors a variety of options for billing, so it’s tailored to their intent. But, not every organization will be able to offer a selection, so you choose between the merits of monthly/fixed-day (billing on the same day of each month, regardless of when the donor initially registered) and anniversary (each invoice is the same day of the month the donor registered).
Credit card payments are typically one of the easiest ways for donors to register, but know that the average nonprofit will see 15 to 30 percent of all credit cards payments declined due to failure to renew. That means that either a donor didn’t update their billing info, or a credit card updater system you pay for failed to update automatically. If possible, keep track of what cards are about to expire and then reach out to the donor directly. This is a good time to reconnect with the donor, discuss initiatives, and explain how an increase in giving could further along the mission.
Be sure to offer the ability to accept as many different types of payments as possible. To that point, and to surpass the many complications credit cards can present, the webinar leaders also recommended exploring options for ACH (Automated Clearing House Network) payments. ACH, as you may already know, is a network that facilitates electronic money transfers. ACH payments can be as fast as a wire transfer and the banking info required doesn’t tend to change or expire like credit cards do. However, ACH payments are subject to strict policies, so just be sure to adhere to the rules and regulations if you’re going to offer this option.
Finally, know when you’re going to actually have access to donated funds and at what amounts. This impacts cash flow and budget development and execution.
Don’t Delay Effective Management
Successful fundraising can and should involve sustainer giving programs, as they can be incredibly successful and rewarding for both the organization and donor alike. But, if you don’t implement effective donor-centric tactics as well as data organization and analysis from day one, you are at risk of losing your sustainers before you even start.
https://www.gordonfischerlawfirm.com/nonprofit-policy-special-10-form-990/
In addition to the four main points, I would also like to add that that having sound, quality policies and procedures in place can make all the difference for effective management, let alone legal compliance. I’m offering a deal for 10 important policies asked about on Form 990. Policies like a gift acceptance policy fit in as an important piece of the fundraising puzzle.
Questions? Thoughts? Advice from your own experience with monthly sustainer programs? Comment below or reach out via email or by phone (515-371-6077).