It’s the second week of February. According to U.S. News and World Report, if you’re like most people, you’ve probably already failed at 80% of your New Year’s resolutions.
I love this time of year for this reason. When we start to struggle with our cliché or unrealistic resolutions, we get the chance to have tough conversations with ourselves about our personal and professional lives. For high-impact fundraisers in higher education, the beginning of 2019 is a chance for radical honesty. In this time of uncertainty for higher education, why are we doing this work? Who are we doing it for? And how do we best do it?
Picture your smartest, most business-savvy prospect or donor, the one who asks challenging questions. Now, generate a list of the toughest questions they could ask about your endowment. You know those questions you hope prospects won’t ask you because you’re not sure how to answer them? Those are the questions a high-impact fundraiser wants to take on.
If you haven’t already, make this the year you study and understand the real ins and outs of how the financial side of major gifts are handled at your institution. As a starting point, here are examples of tough questions potential donors have asked:
1)“In reviewing your stewardship reports, it looks like the investment returns on the endowment have been around 6% the past 5 years. I easily earn more than that on my own investments. Not to be critical, but why should I give you the funds to invest instead of gifts out of my own funds over time?”
2) “It looks like you have a lot of people on your fundraising staff. Who pays for all that expense? Are my gift fees used for this?”
3) “Actually, I want all of my money to go toward the mission I’m supporting, so how do we eliminate those fees?”
4) “How do you measure return on investment of your fundraising activities and can you send me an analysis?”
5) “How much information have you gathered about me? Can I see my file?”
6) “How long will you be my contact with the development office? It seems like I’ve had three or four reps over the past five years? What is going on with that?”
7) “I saw in a press release that the foundation raised 100 million last year. Why do you need my money?”
8) “The dean of the engineering department asked me to fund his latest program. Are they committed to seeing this program through?”
9) “What specific steps have you taken to increase diversity?”
We encourage you to take these questions back to your department and brainstorm responses together.
2 – When it comes to the new tax law changes, don’t be a bump on a log.
You’ve probably already read up on the tax law changes, but does your department have a forecast for how these changes might impact giving? What is the strategy for how to handle that impact? Have you received training related to the tax law changes?
Our research shows that the recent increase in the standard deduction for federal income tax purposes generally does not affect wealthy donors, and they now can deduct charitable contributions up to 60% of adjusted gross income each year (30% for appreciated securities). This assumes that those donors have enough taxable income to absorb the deduction, so timing considerations may affect the period over which a donor offers to actually pay and fulfill a large commitment. This is especially true if the gift follows an event that generates a large taxable gain, such as the sale of a property or business. The increase in the estate and gift tax exemption beginning in 2018 likely will have a significant impact on major and transformative gifts.
Donors who are motivated by the tax advantages of giving may now have less of an incentive, at least when it comes to their federal taxes.
Tackling the impacts of the tax law changes head-on is especially important for departmental leaders. As Jason Lee explains in his recent AFP article, “There is often a need to provide a bit of an interpretation […] when it comes to the implications of tax policy (for instance, the potential negative consequence of charitable giving as a result of expanding the standard deduction).”
We believe a high-impact practice is to have answers before questions are even asked. The more knowledgeable fundraisers are, the more prospects and donors will see those fundraisers as truly looking out for their best interests.
>Quick tip: Tax law is an issue we’ll be following closely in 2019. Sign-up for our monthly newsletter and never miss a post.
3 – Resolve to stop trying to be all things for all people.
I know, at least for me, it is easy to fill my day with tasks (especially easy tasks) and feel productive. But that doesn’t mean what I’m doing is high impact. In advancement, it’s so important to understand the difference between activities and results. If high-impact fundraisers design and use a strategy, they may have better success and more opportunities for growth.
Institutions find it increasingly difficult to demonstrate their relevance in the lives of alumni. As opposed to trying to “boil the ocean,” we believe fundraisers should focus their strategy on those who want to be involved and have the capacity to give, including:
*Alumni who had an especially meaningful or transformative experience at your institution.
*Supporters who didn’t attend your school but can get behind your mission.
*Parents and grandparents who see their child or grandchild having a meaningful and transformative experience at your institution.
>Quick tip: Stay tuned later this spring for our research initiative on how to engage and cultivate parent and grandparent donors. Join our free Research Consortium for priority access to the full report.
We believe good data is one of the best ways to identify the right people to focus on. But data cannot replace the trust and rapport that grows through on-the-ground interactions and relationship building. Watch the video below to find out how we combine data with a team of local experts to help you identify AND cultivate top prospects in regions, including those you didn’t know you have.
4 – Finally, high-impact fundraisers remember what philanthropy is about: access.
In advancement, you’re trying to find a very specific type of person. You’re looking for someone who has the capacity to give AND is passionate about the institution. For many fundraisers, they’re cultivating (or trying to cultivate) donors in the top 1%. Let’s be honest–most major gifts now come from a shrinking number of donors.
But don’t let that cause you to lose track of the point: institutions raise money to help more students get a better education.
We centered this in our company mission so we don’t forget the reason for the work: we mobilize the latent and vast philanthropic power of regional alumni so every student will have access to opportunities.
>Quick tip: Make a weekly commitment to gathering and amplifying student stories and successes (and not just for institutional promotion). Attend new on-campus student events this semester. Set aside time each month to ask deans and faculty members to grab coffee (especially deans and faculty you don’t yet know very well). Invite them to tell you about their students.
Contact us for a free, personalized consultation on how we can help you serve your students!