Reaching Out to 2018 Donors
January is a great time to reach out to your donors and provide information on their total annual giving for 2018. This is different than the acknowledgement letter you sent after receiving the gift. And, most importantly, it’s another opportunity to have contact with your donors.
Although not all your donors will need to provide proof of their annual giving, major donors will want information showing their total contribution. It’s good practice to include all donors as it’s an opportunity to include another appeal. You should send this letter by January 31 each year.
This type stewardship is frequently something many nonprofits forgot or neglect to do. If you organization isn’t doing this, you should try to include this stewardship activity in your fundraising plan for 2019. We can help review and revise your fundraising plan to make sure it includes activities such as this.
I always use the January tax-information letter as a “soft ask.” A soft ask is an implicit appeal for a contribution and can be in many different forms.
Navigating the Soft Ask
My favorite (and the easiest, I think) is a donor return envelope. This is an envelope addressed to your organization with an oversized flap printed with information for the donor to complete and return with their gift. It should include the option to give by credit card and information about how to give online.
Sometimes, I’ve included the envelope and haven’t mentioned it in the letter; other times, I’ve included a P.S. “We’ve enclosed an envelope for your convenience if you’d like to make another gift today.”
There are other ways to include a soft ask with the information you send to donors. If you are doing this via email instead of a mailed letter, you could include links to your website and your “Donate Now” button. I would include links to the IRS and other sites with more information about the tax law changes.
You could also develop a marketing piece to show the positive tax benefits of increased donations. It’s a good idea to help the donor see which size give could get them to the increased itemization amount. I suggest this strategy for your donors who have been giving several thousand dollars a year.
For your major donors—people giving $10,000 or more—this might be an opportunity for a face-to-face meeting. You could do this one-on-one, or you could have an event for a group of major donors and bring in a tax accountant or other expert as a speaker.
All these activities should carry the implicit message of how a larger gift will benefit the donor.
Considering Tax Consequences
My caution is to make sure all your communication—electronic, written, or face-to-face—is information and not tax advice. Leave that to the tax experts!
This article, reprinted in the Valdosta Daily Times, gives additional information and some good scenarios of how the new law may impact giving. https://www.valdostadailytimes.com/news/business/new-tax-law-means-your-year-end-charitable-contributions-are/article_8b04a949-048f-5c7a-b6fc-a2e16dddd529.html
Use your tax letter to donors to share information about the benefits of donating property to your organization. Planting the seeds for donations of property is another “soft ask”. This information raises awareness so when your donors encounter a situation where they have property to dispose of, they may think of your organization.
The IRS has additional information on property donations here: https://www.irs.gov/charities-non-profits/contributors/tax-information-on-donated-property
This January letter is a good time to remind your donors of the significant changes to itemized deductions for 2018 taxes. The ceiling for itemized deductions (including charitable donations) increased to $24,000 for a married couple. Remind people of the changes and direct them to the IRS or other sites for additional information. As people learn more about the increases, it may lead them to increase their giving to meet the new threshold.
Balance Small Business has an article with more information at https://www.thebalancesmb.com/tax-deductions-for-charitable-donations-2501942.