Educate Donors (to Help Your Nonprofit) at Tax Time

Lori Halley 13 April 2010 0 comments

I’ve been looking into ways for a small nonprofit to leverage the up-coming income tax deadlines to remind donors of the tax advantages of charitable donations – great timing, just when they’re kicking themselves for not having more deductions to claim – and have come across a few truly practical fundraising resources for community-based organizations.

One real gem is Effective Fundraising for Nonprofits: Real-World Strategies That Work by Ilona Bray. (If you don’t already have a copy, you can check it out via the free Google Books preview.) And one section in particular, entitled “What Donors Gain Materially,” caught my eye. This section deals with tax deductions for various kinds of elegible donations. It reminds me of a helpful fact sheet that one local nonprofit sent out, a few years back, tucked in with its regular monthly newsletter.

That fact sheet contained pretty much the same information you’d find on the tax department’s website, sure, but it was right there – convenient, delivered to hand (or email) for easy reference, with no hunting around. Even more appreciated, much like Bray's book, the fact sheet was set out in simple, easy-to-understand language instead of “lawyer speak.”

You could see at a glance the tax advantages of various types of charitable giving, from one-off donations to bequests, to donations of goods and services. Concrete examples, beyond cash donations, covered a wide range of ways to give, too, from the ingredients for a casserole taken to a church fundraising supper, to stocks or other investment assets on which the donor might otherwise have to pay for capital gains – something for every type of donor!

Could your nonprofit do something similar, in your e-newsletter or in a direct mail piece?

Whatever people don’t fully understand, they tend to avoid  – bungee jumpers, gamblers, and Formula One drivers aside – in order to minimize the perceived risk. That’s why education is such a powerful tool for lowering resistance to action.

Real-life examples (preferably with real-life numbers attached) can go a long way to demystify the whole business of charitable deductions, from the donor’s perspective. That’s one more barrier to giving that you can take steps to remove, simply by serving your members and supporters with information they can actually use.

Effective Fundraising for Nonprofits is aimed at an American audience, of course, so if your nonprofit is outside the US, you will have to adjust the specifics to match the tax laws in your own jurisdiction. And although it’s a recent book – published in 2008 – it’s best to double-check that your information is up-to-date, as the rules can change from one year to the next.

If there’s a professional financial advisor among your senior members or on your board, or a tax lawyer in your back pocket, do sit down with him or her to get clear on the legal details – then share that new clarity with your donors and prospective donors, while their minds are already turned to those income tax forms!

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Lori Halley [Engaging Apricot] Lori Halley [Engaging Apricot]

Posted by Lori Halley [Engaging Apricot]

Published Tuesday, 13 April 2010 at 9:09 AM

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