Holiday season is in the air, and with it comes the music, time with friends and family, and the inevitable extra few pounds from all the season’s treats. For not-for-profits, this season also brings the opportunity to raise a few extra dollars amid all the revelry. However, holiday fundraising is not as simple as just holding out a hand and expecting to receive a holiday bounty. Here are a few things for not-for-profits to think about during this time of the year.

Watching the Costs

The old adage goes, “you have to spend money to make money.” However, incurring significant fundraising costs is not always the most effective way to receive donations. Soliciting funds can be expensive and costs can quickly spiral out of control, resulting in your not-for-profit receiving less in contributions than costs incurred in a fundraising drive. During the holidays, direct mail campaigns or advertisements may also get lost in the shuffle. Additionally, these types of programs run the risk of donor fatigue, which may lead to the public tuning out these appeals.

An alternative to these campaigns is a more personalized touch. A direct appeal from a board member may get better results than a mass mailing campaign. Additionally, not-for-profits are turning to younger individuals to get involved in their organization as part of a junior board. Leveraging the energy and creativity of your younger members can allow you to reach a completely new demographic.

Sending a Message

Another option to consider is adding an educational piece or call to action to a fundraising appeal. Not only will this help to get a message out, but it may also allow your not-for-profit to categorize a portion of the costs to management activities instead of fundraising expenses. The rules for allocating these joint costs can be complex and involve evaluations of the purpose, audience and content of the message, therefore we recommend discussing this with your accounting advisor before implementation.

Taking Advantage of the Tax Law Changes

A common complaint of the new tax law is that people now have less of an incentive to donate to not-for-profits. This is due in large part to the increase in the standard deduction, meaning that people are less likely to itemize their deductions because the standard deduction will be more valuable. Since charitable contributions are only deductible when itemized, a normal contribution of a few dollars will no longer have a benefit from a tax standpoint.

However, a not-for-profit can still use this change in the law to its benefit. If there are donors that contribute every year, consider requesting instead that they make a multi-year donation today.  By making a larger one-time contribution, the donor may be able to itemize their deductions and receive a benefit from the contribution. Additionally, the not-for-profit will receive more cash up front for future programs.

For more information, contact Harry Fox at [email protected] or 312.670.744. Visit orba.com to learn more about our Not-For-Profit Group.
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