It’s Not About the Taxes

tax documents on the table
Photo by Nataliya Vaitkevich on Pexels.com

With tax season upon us, our thoughts (and probably a board meeting fundraising topic or two) turn to deductible charitable donations.

Do donors take advantage of tax benefits? Yes, some do.

Do donors give for tax reasons? No, most don’t.

This distinction is important and should shape how you ask and how you thank donors.

Start with how you ask:

Don’t lead with “we are a 501C3 organization…” Only accountants care about your tax status. When you talk about your organization, lead with how you change the world.

  • “We save lives…”
  • “We create jobs…”
  • “We make the world a more beautiful place…”
  • Insert your organization’s mission here…” (If your mission statement mentions your tax status, put that at the top of your priority list to revise.)

From your website to social media posts to fundraising letters, look for anyplace you use “tax deductible” and substitute “world changing” for a more impactful appeal. Most people give money because they are asked, not because of how it impacts their taxes.

Continue when you say thanks*:

The IRS has specific requirements donation acknowledgments. However, there are no rules saying you have to use only that language – that’s the minimum required. Go beyond that with a sincere expression of how much the donation means and how it will change lives. Don’t be boring, this acknowledgement is the first building block to your next ask. Your nonprofit is doing important work – you’re making our community a better place to live! Show the donor that their gift matters in doing just that.

  • Tell a story.
  • Share a photo.
  • Share the joy you felt when the gift was received.

Taxes are an inevitable part of our lives and certainly a consideration in our work. However, they must be kept in perspective when we communicate with our donors and remember that we are inviting people to help us change the world, not help them with their taxes.

*This blog post should not be considered legal advice, so please speak to an attorney/CPA to make sure that your communications meet the legal requirements set forth by the IRS.

4 Steps to Repair a Donor Relationship

Image: FreeDigitalPhotos.net
Image: FreeDigitalPhotos.net

Not every repaired donor relationship leads to a 5-figure gift but I know of at least one that did. A colleague listened to the concerns of the donor and worked within the organization to correct the problem. In an effort to reengage this donor, the fundraiser took her to lunch and was presented with a 5-figure gift. How did that happen?

Let’s look at the steps involved in repairing this relationship:

  1. Keeping communication lines open: this can be as simple as continuing to send them stewardship reports, newsletters and other communications. Make sure that you mail often enough to keep their address current. Also, check with people throughout your organization to see who knows an unhappy donor and might be able to help you figure out why.
  2. Listening to their concerns: many times an unhappy donor needs an opportunity to express their feelings to the organization. Listening without becoming defensive is challenging but worth the restraint. Something obviously has gone wrong. Listen with an open mind and find out where the breakdown has happened.
  3. Admitting to mistakes and apologizing: we are not perfect nor are our organizations. Admit the mistake without throwing anyone under the proverbial bus and apologize. Determine if an apology needs to come from someone else in your organization and facilitate that if necessary.
  4. Correcting the mistakes: this can take some time and may seem like a waste of time when there are goals to meet but don’t skip this step. In the case I heard about recently, the correction took months of coordination because it involved several parts of the organization. The development officer forged ahead – never knowing it would result in a gift – because it was the right thing to do. He knew that it was important to the donor.

The final step – and it’s really more of an ongoing process than a step – is to continue to communicate with the donor. There may never be an opportunity to ask for a gift again but you never know…for my friend, he didn’t have to ask. The donor was so pleased that the situation had been corrected that she made an additional gift without being asked.

Originally posted on the Nonprofit Leadership Center of Tampa Bay blog.