No one really knows that will happen with the new tax bill, though I suspect it represents another blow to the slowly shrinking middle class (read this excellent Washington Post article for the specifics). I doubt it will make an immediate difference right away for our fundraising efforts in 2018. The economy remains quite strong, wealthy people continue to get wealthier, and Americas tend to be generous when asked. So, for most of our organizations, it should be full speed ahead, focusing now more than ever on relationship fundraising, stewardship (call everyone who gave a gift over the holidays. Everyone.) and making a compelling case about the impact of donor’s generosity. Do good work. Take care of your donors, who will support you as they are able.
2018 is also the year we can finally stop giving our donors tax advice. With the new tax bill, the gist is that, for most people in the middle class, itemizing deductions to non-profits won’t be feasible. Their standard deduction will be higher, and the tax deductibility won’t be an benefit or a liability. Philanthropic prognosticators claim that this will cost our non-profits Many Billions of gifts, which assumes that a tax deduction is a meaningful incentive to charitable giving, when study after study have proven that it is not. Regardless, it is the law now, and nothing to be done about except to vote next November.
And yet this week I received 25 emails from various non-profits reminding me that December 31 was the deadline to receive a tax deduction for 2017, but only if I gave before midnight. And so I ask, “How do you know that about my tax situation?” and “Why is this any of your business about my taxes?” and finally, “Let me get off your damn list. I wish I hadn’t given that memorial gift in my neighbor’s dad’s name three years ago.”
I happen to own a small business, and so my tax situation is more complex that most. It is also my own concern, and no one’s else, particularly yours, you Fundraising Superstar. And so is the case for everyone. Lots of middle class folks don’t need a tax deduction, but they do want to help their neighbors, support their communities, and feel good about their lives. We can help.
I am going to now let you in on the Biggest Secret About People with Some Money. Don’t tell anyone. It’s that they Know Their Money. It is as simple as that. Wealthy folks know about money. How to make it, invest it, and how to keep it away from the IRS. They don’t need your advice, I promise. There are countless ways to preserve wealth and limit a tax burden. Giving way your money is so far down that list in terms of return of investment that it doesn’t really matter.
Donors don’t need your tax advice. They need your prompt and accurate thanks, your partnership in showing the results of good work, for you to keep your promises, and for your courage to show them opportunity. That’s the work of a fundraiser. Let the tax guys and the politicians sort the taxes.
Of those 25 year-end emails I got around New Year’s, I responded to exactly one, from a personal friend. We are in midst of record cold right now in my city with ten days plus of Arctic weather, right at the holidays when staff resources are spread thin. Of all the folks impacted by this very dangerous weather, families with children are the most vulnerable to homelessness. A friend pointed out that only one organization in my city helps families with children get off the street in emergency cold. And so that’s who I supported. That’s the Case, the Reason, the Opportunity.
Suggesting that your organization is somehow a resource for tax advice is hubris at best, and possibly dangerous. What if you are wrong in your claim that my gift is deductible? What makes you the expert my a donor’s situation? Why claim otherwise?
So let’s stop emphasizing tax deductibility. Let’s fundraise instead. Happy 2018.
You are so absolutely right about the potential impact of the tax bill on charitable giving. I gave the exact same advice to a client right before Christmas. I think the prognosticators exacerbated the problem.
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