The New Tax Bill vs Wall Street:
The Winner Is….
Perhaps because the April tax deadline is looming, I’ve been asked several times recently about the impact the 2018 tax bill will have on philanthropy.*
Specifically, since nearly 30 million Americans’ standard deduction is doubling, will they continue to give?
Locally, the answer is a resounding Yes for the first quarter!
- In February, a local art museum raised an all-time high with remarkable results from both the auction and “fund the need.”
- One of my clients grossed 80% year-over-year during their annual event, also in February, by adding a “fund the need,” which attracted new gifts across multiple giving levels.
- Another client, focused on serving the homeless, won’t host their event until May, and, already, early responses to sponsorships and ticket sales indicate stronger 2018 results!
Events aren’t the only place where the mood to give is strong despite the aforementioned concern about the new tax bill.
One of my non-profit clients confirmed over 60% of their major gifts during a recent capital campaign feasibility phase. Now, during the actual commitment time, the results are outstanding.
Solely in my capacity as a fundraiser of 18 years and now as a consultant, I believe that Wall Street has a greater impact than the Tax Bill on fundraising. And, frankly, we can’t do anything about either of those forces.
However, real results are often within our sway:
- Laser focus on your geographic market.
- Steward your current donors.
- Grow new gifts by connecting via your board member and faithful supporters to their friends and associates.
- Focus on your quantifiable outcomes and share testimonials from people you serve.
- Finally, control expenses while maintaining quality. Ultimately, the net impacts your mission!
I clearly remember a frantic phone call around 2008 from a board member: “What are we going to do?” she sincerely asked. “People are walking out of banks in New York City. Everyone’s in the street.”
We talked. She called me “Pollyanna,” an apropos name for those of us engaged in fundraising! During that challenging time, we stuck to the basics, and, finally, the market turned.
Now, we have the “new” tax bill. Here’s my advice: Encourage your board and donors with facts from your organization instead of allowing the national media to drive their perspective!
When the subject comes up, I respond, “I haven’t heard anyone say, ‘I would have given more…but, you know, that darn new tax bill changed things.’” And, so far, none of my clients has reported such a conversation.
Also, share with your board and friends that according to a full assessment from the Association of Fundraising Professionals (summarized below), the new tax bill could result in greater opportunities for giving to non-profits such as:
- An increase in giving of appreciated investments, such as shares of appreciated stock.
- An increase in contributions from Individual Retirement Accounts (IRAs). (Donors age 70½ or older can contribute up to $100,000 of IRA assets and have the gift count toward their annual required distribution and removed from their taxable income.)
- An increase in funding from corporations that benefit from a lower corporate tax rate.
- Larger donations from wealthier donors who can continue to take the traditional charitable deduction.
Ultimately, each donor’s unique situation means we will experience uber generosity from some and a slowdown from others. But hasn’t that always been true?
To help you maintain and grow your fundraising, I’ve posted past blogs from Miracle Strategies here. I believe you’ll find this real-life advice helpful. To ensure this information goes directly to your board and donors, invite them to sign up for the email newsletter!
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*Today’s post is based on experience and opinion. I am not qualified or trained to provide tax or investment advice. This blog is meant solely to encourage and enlighten and help you raise more money!