Simply Survive or Truly Thrive? – Part 1: Aim for the Heart
Updated: Jul 31, 2018
The first in a three-part series on how organizations can move past “survival” and become thriving organizations in an era of changes and challenges to the nonprofit landscape.
With concerns rising about the impact of new tax laws on charitable giving in the coming years, how can nonprofit agencies hope to survive?
Before we begin to unpack this issue, let’s all take a deep breath and relax. While some analysis offers ominous forecasts about the effect of tax changes on nonprofit fundraising, it is safe to say that no one is completely certain yet what the impact will be on charitable giving. First of all, other changes to federal tax law affecting mortgage interest, as well as state and local taxes, will determine who may benefit from the standard deduction, and doubling the estate tax threshold could also factor into giving decisions. On the other hand, increasing allowable charitable deductions from fifty percent to sixty percent of Adjusted Gross Income and removal of the “Pease limitation” could both have a positive impact on giving. Having stated all of that, please understand that I am not an accountant or tax expert*. I do, however, consider myself to have some expertise in the field of nonprofit fundraising, so let me focus on that for a few minutes.
Though it is possible that tax reform will cause some to reconsider charitable giving, many of the negative predictions assume that people are historically motivated to be philanthropic because of the tax breaks they enjoy if they itemize their deductions. How true is that? Again, no one really knows.
With all of this uncertainty and varying expert opinions floating around, how can nonprofit organizations plan, and what should they be doing to prepare for what is currently a vague uncertainty? My advice is the same under the current circumstances as it would be if there had been no change to the tax laws, and it can be summed up in four words: Aim for the heart.
What does that mean? It means that nonprofit leaders need to understand and focus on what truly drives charitable giving. You cannot engage people’s intellect without also engaging their emotions. It means that your nonprofit organization will continue to thrive, continue to retain and add committed donors if you focus on relationships.
The art of fundraising is all about relationships – the relationship between your donors and your mission. The relationship between your donors and the people served through your programs. The relationship between your donor and you. Too many nonprofits focus on “The Ask,” turning their fundraising efforts into a transactional process, and spending little or no time focusing on cultivation and stewardship of the relationships with people who are already invested, or have the capacity and potential interest to invest, in their organizations.
Building relationships is a shared responsibility between development staff, executive leadership, and the board of directors. In fact, it shouldn’t stop there. It should be part of ongoing training for every member of your team, and central to the culture of your organization, that every staff member and volunteer be actively engaged in building relationships on behalf of the organization. Relationship building requires spending time with people, but it is arguably the best time you will spend connected to your organization’s mission. And when you spend time with donors and prospects, focus on listening more than talking. Resist the temptation to monopolize the conversation by telling them all about your organization. Yes, you want to educate and update your constituents, but don’t make that the primary focus of your interactions. Instead, find out first what matters to them. Ask. Listen. Repeat. A wise person once said, “People won’t care how much you know until they know how much you care.” It’s often subliminal, but true: If your relationships with your donors and prospects do not demonstrate that you care about them, will they believe, in their heart of hearts, that you care about the things your mission proclaims?
Yes, there will be ramifications due to the tax law changes. Donors who have tended to give out of obligation, or simply to reap a tax benefit from charitable giving may reduce their donations, and some donors will undoubtedly reconsider their giving priorities in the months and years ahead. Will your organization be one of their priorities? Tax laws aside, nonprofits that operate based on transactional processes will not survive in the years to come. Those that focus on relationships will always rise to the top.
Aim for the heart.
Next Week – Part 2: Be Relevant