The new tax law, which effectively blocks millions of donors from itemizing charitable deductions, has nonprofits reeling. Many organizations made a major push at the end of 2017 to get donations in before the legislation took effect. Now they’re looking for new strategies to ensure that they survive—and thrive—in this new landscape.
The Massachusetts Nonprofit Network estimates that the tax code changes could cost organizations in Massachusetts alone more than half a billion dollars a year in donations. But the picture doesn’t need to be that dire. Nonprofits have more to offer than tax deductions; the key is to communicate value in such a compelling way that tax write-offs become a minor consideration.
The Message: Speak to What Matters
With competition for donors’ attention (and dollars) higher than ever, nonprofits need to focus their efforts on creating a strong core message. Stating the problem is not enough. Donors increasingly want information on how their money will be used to address the problem, along with evidence that the organization’s approach is effective. Following are strategies to help you craft messages that will move supporters to take action.
Focus on your value. Recently we’ve seen an upsurge in solicitations that talk a lot about internal issues—e.g., the organization’s political, social, or financial difficulties. This approach may resonate with die-hard supporters, but most donors are far less interested in your situation than in who you’re helping, how you’re doing it, and why it matters.
Talk about solutions, not just problems. Many organizations are stuck in a cycle of saying, essentially, “The sky is falling; send me money!” Channeling outrage into action can be a useful fundraising tactic, but donors are tiring of the constant negative drumbeat. If you tag a campaign to a particular policy or action you think is harmful, be sure to tell donors how you plan to counter it. In other words, let your supporters know what you’re doing to hold the sky up.
Show positive outcomes. In addition to telling donors your planned actions, be sure to tout your past successes. This means tracking your quantitative and qualitative impact, something you should do consistently. Whether it’s the story of a single homeless person who is no longer on the streets or a chart showing the hundreds or thousands of lives you’ve bettered (or, ideally, both), your ability to demonstrate impact tells donors that their money will be well spent.
Offer something tangible. Organizations have long sweetened the deal for donors by offering gifts, from tote bags to raffle tickets. The retail value of gifts must be subtracted from the donated amount in itemizing deductions, but with the new tax law this limitation matters less.
Even better than a tchotchke is a gift that actually furthers the cause. Some organizations have begun to take advantage of this opportunity in creative ways. The Southern Poverty Law Center sends supporters The Intelligence Report, a quarterly publication that tracks hate crimes and measures to counter them. People for the American Way offers donors a Congressional directory to let them contact lawmakers with their concerns.
The Delivery: Make Strategic Choices
As we noted, the end of 2017 saw a frenzy of communication activity as organizations sought to get ahead of the tax change, which added to their usual holiday/end-of-year surge. The extra noise has made it more difficult for organizations to be heard. To stand out in a way that will attract—and sustain—donor attention, the delivery of your messaging can be nearly as important as the message itself.
Time your communication for maximum impact. In addition to responding quickly to current events, being strategic about timing means taking care not to alienate donors by overloading them with requests. The conventional wisdom is that you can never reach out too often, but the people saying this tend to be in the direct mail business.
Donor fatigue can absolutely affect fundraising, as those seeking aid for a second or third natural disaster in a short period have found. Political action groups that began hammering supporters with emails during election season (sometimes sending several messages a day) have learned that while some may respond, many will tune out—and more than a few will unsubscribe.
Inform donors in between asking for money. That said, frequent communication can be helpful if you’re doing more than just demanding money. Providing a steady stream of information about how you’re putting your resources to good use will encourage donors to respond. More specifically, it’s helpful to close the loop on what you did with the money raised from your last request before making the next one. This strategy can help you not only improve donor retention but also increase your donation retention—that is, year-over-year figures for the total amount raised from your donor base.
Match your medium to your audience. Although older and end-of-year donors still often prefer paper mail, email marketing as a donation tool has grown exponentially for a reason. Communication platforms like MailChimp and Constant Contact have made it easy for nonprofits to solicit donations and for supporters to respond by donating online. Email solicitations also let you send an immediate “thank you,” offering the opportunity not only to make donors feel appreciated but also to give them specific information about how their donation will be used. If you aren’t taking advantage of this medium, now is the time to start.