When embarking on the path to a successful fundraising year, consider the wide array of giving strategies available. Using a variety of strategies can help inspire new avenues for potential funding and identify untapped donors, especially when they properly understand how the right strategy for them can strengthen the impact of their donations, deliver tax benefits and create a lasting legacy. Among the various options, we think there are four your nonprofit organization should prioritize this year.
1. Share the benefit of stock gifts
It is a good time to connect with donors about the benefits of stock gifts. Although returns are never guaranteed, the S&P 500® has had doubledigit annual returns in four of the last five years and strong positive returns in seven of the last 10 years. Most donors haven’t taken advantage of this type of gifting even though it may allow them to avoid capital gains tax and potentially benefit from the full deductibility of the stock’s market value. As individual donors still comprise the largest share of givers, appreciated stock gifts from these individuals could be the key to meeting your fundraising goals.
2. Engage with donor-advised funds
Donor-advised funds (DAFs) are increasingly popular among donors as their giving vehicle of choice. According to Giving USA 2024, DAFs attracted assets from all categories of donors in 2023.[1] Contributions reached an all-time high of $85.5 billion, and grants from DAFs totaled $52.2 billion.[2] While ongoing discussion around the regulation of DAFs is causing some concern, nonprofits that can both educate donors and ask for DAF gifts stand to reap rewards. Ensure that your donor base knows that your organization accepts DAF gifts by engaging with local DAF sponsors or even including language in your signature lines about DAFs and estate planning.
3. Educate on Qualified Charitable Distributions
Qualified Charitable Distributions (QCD) are a great solution for immediate gift needs. A QCD is an otherwise taxable distribution, made by an individual older than 70.5, that is paid directly from the IRA to a qualified charity and therefore avoids being included as income on federal tax returns. For those with required minimum distributions, the QCD can satisfy all or part of the amount required to be withdrawn. For charitable organizations recognized by the IRS as a 501(c)(3), the QCD is a significant opportunity. Be sure to confirm your organization is eligible to receive QCDs as some charities such as DAFs, private foundations and supporting organizations may not qualify. With almost 50 million individuals aged 70.5 or older living in the United States, educating eligible donors is imperative as many donors simply aren’t aware of the benefits, guidelines and process. As with DAFs, make certain that potential donors are aware your organization can accept QCDs by including in your email signature and mailings.
4. Integrate bequests into estate planning conversations
Bequests, an increasingly more common estate planning tool, build lasting sustainability and a pipeline of future gifts. According to Giving USA, 2023 saw a 4.8% increase in gifts from bequests; a trend we anticipate continuing.[3] With the stock market at elevated levels, potential donors may have increased assets to consider, making it an opportune time to connect with donors about their long-term estate planning. Bequests can be very flexible in nature — gifts can simply come from general assets of an estate, they can be a specific asset or a specific account or take the form of residual after other assets are paid. Before you enter conversations with donors, review your gift acceptance policy to ensure you can accept a potential estate gift.
Special considerations with bequests:
- Take the opportunity to remind high-net-worth donors that charitable gifts from an estate can be an excellent tool for reducing estate taxes and creating a lasting legacy.
- Estate planning discussions with top donors can create an excellent window into generational philanthropy conversations. Including families at the table when talking about the importance of the organization to the older generation will hopefully inspire giving from future generations.
- Documentation is key. It is very important if an organization identifies a potential estate gift to document it in the moment. Continue cultivating the relationship for gifts in current time, but do not forget about this gift in the future.
Additional Ideas to Help Meet your Fundraising Goals
