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Staking out your fundraising approach in the Age of Trump

“If you can’t stand the heat, get out of the kitchen.”—Harry S Truman

I could have used “The times, they are a-changing,” from Bob Dylan. However, referencing a former president seems so much more appropriate given the events occurring since Inauguration Day.

Tax-exempt organizations throughout New York State and the country are in a state of confusion with respect to the impact of federal budget cuts and, more specifically, Medicaid cost reductions. The current health care bill, passed by the House and being modified by the Senate, has an $880 billion Medicaid cut scheduled for the next 10 years.

In addition, it contains a provision that eliminates one million New York citizens from Medicaid eligibility due to a reduction from 133 percent to 100 percent of the federal poverty level for purposes of Medicaid eligibility. If that provision passes, New York will once again have approximately five million citizens eligible for Medicaid, compared to the six million that were eligible under the Affordable Care Act provisions.

The federal government is by no means limiting its cuts to the Medicaid program. NPR/public broadcasting, Planned Parenthood, Federally Qualified Health Centers and the National Institutes of Health have been targeted for reductions, and the list goes on and on.

For those of you who know me as the eternal pessimist, I do believe there is a silver living in this cloud. The key is: Will your organization recognize and take advantage of this opportunity?

What opportunity, you might say? A recent study of global wealth indicated that $30 trillion will transfer between generations over the next 15 to 20 years. Seven trillion dollars of that amount is in the United States. So, your organization must pick up where the ALS Association “Ice Bucket Challenge” left off ($115 million according to its website’s FAQ at www.alsa.org), and follow the recommendations below.

You may think that the following list of fund-raising dos and don’ts is elementary. Before you stop reading, think of this as an organizational self-assessment and, at the very least, a reaffirmation that your organization is doing all things well in the fundraising arena.

The ability to raise funds is the lifeblood of many tax-exempt organizations. As government and third-party funders continue to demand more cost efficiency from the health and human service sector, the value of successful fundraising will continue to increase. The current environment can be best described in Darwinian terms as the “survival of the fittest.” And, as we all know, true innovation can occur only when an individual does not overlook the obvious.

The variety and volume of nonprofit organization fundraising efforts has exploded in the past decade. The increase in competition for contributions is a function of two primary factors. First, government and third-party funders are trying to control their costs by limiting payments and forcing competitive change in the nonprofit sector. Second, and perhaps more importantly, the aging of baby boomers and the concentration of wealth in our country has significantly expanded the target market for fundraising initiatives. Stock markets at record highs means that there are plenty of people with appreciated stock that I am sure they would like to donate.

Whether you are a board member, fundraising executive, contributor or volunteer, you will find something useful in the information presented below when completing a self-assessment of your organization’s fundraising activities.

Memorial donation program. If you are like me and read the obituaries in the newspaper, you know all too well that memorial donations are very popular as an alternative to other expressions of sympathy. What traditionally has been the purview of health care organizations has expanded to include a broad array of nonprofit organizations. If you don’t have a memorial donation program, consider it as an alternative.

Benchmarking. Fundraising efforts and related dollars invested are difficult to assess from a traditional return-on-investment model. Obtain data for other fundraising organizations to determine whether you should be spending one dollar to make $2 or $10. Conduct an annual benchmarking assessment of all of your fundraising initiatives.

Acknowledgment of contributions. As a contributor, I greatly appreciate a timely, personal acknowledgment of my donation. Consider the most appropriate means of communication, whether phone call, letter or email. Please, never take me, the donor, for granted.

Website. If you have an organized fundraising program, your website must have a contribution/gift tab. When your site is accessed, make it very easy for me to contribute money to support your mission.

Create an endowment fund. The creation and existence of an endowment fund sends a message to your contributors that you think long term and that you have a plan for the future. If you don’t have an endowment fund, I can’t contribute to it.

Mailing lists and newsletters. Please maintain the accuracy of your mailing list. When I receive three copies of your newsletter due to inaccuracies and duplication on your part, it sends a message, and not a good one. Please use email and social media to the maximum extent possible. Use of postage stamps presents your organization as an inefficient dinosaur.

Special events. Golf tournaments, bowl-a-thons, dinners, auctions, etc. have a twofold purpose: public relations and fundraising. You must effectively budget for special events and, if possible, establish an organizational financial target for the return on time and dollars invested in special events. For example, special events should generate 2 percent of total organizational revenue and realize a profit of 50 cents for every dollar spent on the event. (Refer to benchmarking above.)

Reasons to give. Provide your target audience with all of the reasons they should give. Remember, you are in a competition for their dollars, and people respond to different prompts. Cost effectiveness, level of administrative costs and the measurable outcome of the organization’s efforts and programs are all relevant. Different points of information touch different people in different ways.

Planned giving. As mentioned above, $7 trillion will pass through estates in the United States in the next two decades. Someone other than the federal government (through estate taxes) should be looking forward to this. This opportunity could be squashed by tax reform and elimination of the estate tax. Enough said.

Technology and innovation. Use current technologies and demonstrate to contributors that one of your organizational values is to capitalize on the efficiencies that can be achieved through technology.
I will be the first to acknowledge that it is much easier to write about fundraising than to implement the above recommendations. Success cannot be achieved without a core nucleus of dedicated staff and volunteers who enjoy fundraising and are effective.

Gerald Archibald is a partner serving both of our Rochester, NY, and New York City offices.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.