From the Mountain top

Well, the beauty of fall consumed me in my free time (fall photos below!) With ski season fast approaching, my dear readers, would you accept a blog every other month? 

October's focus is: Board Policies and Procedures.

Happy Halloween! 🎃 🎃 🎃 🎃

I love skeletons and you should too. Especially when it comes to your nonprofit. The skeleton of your nonprofit is your board policies. No one sees your nonprofit’s bones,  🦴 but if you have not built them to be strong, your nonprofit will collapse into a heaping mess. 

“We’re going to save the whales/children/trees! Let’s get to work! Time’s a wasting! They need us!”

Before an organization gets neck-deep into solving someone else’s problems, they should solve their own. Get professional and legal help to write your board and operational policies. With this strong structural backbone, an organization will avoid a host of unnecessary complications and risks.

Believe it or not, I’ve seen organizations commit to contracts for a project the board does not understand, has no knowledge of the resources for the money they need, and has no leadership in sight for the project they have promised donors and community members they will deliver. It’s crazy to witness, and I’ve listened to it time and time again. No corporation would run their decision-making this way and I do not want you to run your nonprofit this way either.

Below is a short list of guidelines for your policies:

Guidelines for Effective Oversight:

1.     Set Clear Approval Thresholds: Establish specific thresholds for different types of expenses. For example, routine expenses below a certain amount may not require board approval, while higher amounts or unbudgeted expenses may need additional scrutiny.

2.     Assign Roles and Responsibilities: Clearly define the roles of staff, the board chair, and the treasurer in the approval process. Ensure that staff know when they need to seek approval and from whom.

3.     Document and Communicate Procedures: Ensure that all policies and procedures are well-documented and communicated to all relevant parties. This includes creating a policy manual that staff and board members can reference.

4.     Use a Tiered Approval Process: For large projects, break the project into smaller projects or stages. Use a tiered approval process that involves multiple layers of oversight and keeps the board informed. This reduces the risk of errors and enhances accountability.

5.     Leverage Technology: Utilize financial and project management software and automated workflows to streamline approval processes and maintain accurate records. Technology can help ensure compliance with policies, reduce errors, and enhance transparency.

Key Policies Every Board should have written down, adopted and reviewed at least every two years.

• Gift Acceptance Policies

• Financial Policies

• Board Terms and Election Procedures

• Board member responsibilities in Succession Planning for future board members and leaders

• Voting Procedures and Approval Processes

• Going into Executive Session

I will leave you with one recommendation for a policy that often gets forgotten until confronted with the situation (and this is no time to make a policy.)

Staff being voted to the Board

Staff brings a great deal of knowledge that your board, understandably does not want to lose when a productive, highly valued employee decides to retire. If the relationship is still a positive one, why not vote this person straight to the board? In my experience there are a few good reasons why not to vote this person immediately to the board and a way to easily transition to avoid the difficult situations:

Why a recently retired staff member should not immediately be elected to the board.

1.     The board needs to wean themselves off of treating and depending upon this staff members in their current role. An immediate jump into a board role would not give the staff member enough separation from their employee roles and their responsibilities could easily become blurred.

2.     The staff member needs time to separate themselves from their past responsibilities and understand their new role. They are no longer employed by the board to work at the board’s directive. Each board member has the autonomous role to serve as a fiduciary and to protect the nonprofit and its donors for a healthy financial future.

3.     And finally, in the case of “passion projects,” a staff member may have trouble letting go if still strongly tied to their day-to-day role. Example: Say the staff member has shepherded a project and strengthened it over years of hard work. They may have become emotionally invested in the improvements they oversaw. The project has seen success, and time and place for the project have evolved. A competitive and less costly solution may arise, or the population needing the nonprofit’s solution has declined. This is when the board needs to make the unbiased examination of the project’s new reality and its current and future impact on the advancement of the overall mission. A person’s past role in a passion project should not play in the decision.

A better alternative: Approve a policy that requires all staff members to retire for 12 months before being formally elected to a board position. The staff member may serve in an unofficial advisory fashion, and they may even volunteer for a committee to remain informed. The policy should state that for one year after retiring, employees may not have board voting privileges or leadership roles of the board or committees. 

BONUS! The benefit of this method is that the remaining board members (and staff) must rise to the occasion and take on responsibilities in the vacuum of this wonderfully productive staff member. And this is a great exercise in succession planning for your organization to survive the inevitable transition of future leaders. 

If you and your board are running a project without policies in place you are taking an enormous risk. There are many, many resources out there to get you started. I’ve included a short list of my favorites below.

·       Boardsource

·       Roberts Rules of Order

·       National Council of Nonprofits

I hope this helped you. Please feel free to print or forward this blog to your team, or your board committee.

As with all my recommendations, review these tools to make sure they are right for you and get the necessary approvals from your board and leadership before implementing!

I am here to help you! Reach out to me by email to schedule a conversation! cjohnson@cjpadvisors.com

-Courtney

Your biggest advocate 

There was no July newsletter due to so much going on! AH, Summer! 😁

August's focus is: The data story hiding behind your donors.

July was a very big month for me. There was a camping trip that included tickets to the always excellent Tedeschi Trucks band in Grand Junction; a backpacking trip with 3 other bad-ass women where we quietly watched a ginormous bear stroll through wildflowers as the sun set over Gold Basin. The next day we climbed 2500 ft to summit the Oh-Be-Joyful” Pass near Crested Butte. There were a few long bike rides, and a couple of fun books including a darling true story about the Marlboro man adopting a baby elephant. Most importantly, I onboarded two fantastic new clients:

Ah-Haa (https://ahhaa.org/) is a phenomenally well-run arts organization in Telluride, Colorado, that focuses on community engagement and arts education. It is also home to the American Bookbinding Academy, one of the three top book-binding centers in the world! Who knew? I have the pleasure of advising their outstanding Executive Director, Marty Wolleson, and excellent Chair of the Board, Beth McLaughlin, on best practices for their entire board to take their fundraising to the next level. We are discussing the art of cultivation and will be seeing how far we can take a new organizational structure for cultivating and retaining existing donors, while systematically developing new relationships in the evolving Telluride community. If you ever visit Telluride, I highly encourage a visit inside the welcoming doors of Ah-Haa. The classes range from pottery to culinary and the facility is fabulous!

My second client to onboard is a major milestone for me. I’m now serving as the Development Advocate for Habitat for Humanity, Roaring Fork Valley (https://habitatroaringfork.org/). This truly impactful organization is run by a team of great people – Gail Schwartz, President; Kristen Wilmes, Executive Director and Danielle Howard, Chair of Board. I also get the opportunity to learn from the legendary Alex Yajko, local fundraiser extraordinaire. Being able to contribute to Habitat’s local mission is a dream-come-true for me. Habitat Humanity International does such beautiful work to help good, hard-working families, attain homeownership. Their tag line – “We give a hand-up, not a hand-out,” rings so true. This philanthropy is a gift to all of us.

It is my opinion that we have never needed Habitat’s work so much, in my lifetime, as we do now. The index for unaffordability of food and shelter is reaching record levels; the data I’m learning now on how where one lives, the distance they have to travel daily to work, and the cost to provide basic care and safe living to our families, has staggering ramifications on our community’s mental and physical health. Specifically, I will be working to advance funding for an innovative project: HFH RF’s Modular Production and Education Facility. It’s an ambitious, deeply needed solution that only someone as visionary as Gail Schwartz could pull off – I am certain we will rally the community around this great solution to create affordable housing on the Western Slope!

Today’s newsletter covers a topic that I will be presenting to both of my dear clients above:

The data story hiding behind your donors.

Generating this data will require adopting a few new practices and some discipline. I am going to share the basics of what I will be teaching in today’s newsletter.

If you implement these changes and these practices, I guarantee – yes, I do GUARANTEE your organization will begin to reach new levels of improved fundraising. Why? Because you will become informed about what you are doing well, and what is not working regarding your fundraising efforts. You will maximize efficiency.

Ready? Let’s go.

Two of the most important metrics to track are:

Donor Retention Rate (DRR)

Donor Lifetime Value (LTV)

Calculating your annual DRR is extremely valuable, since it tells you:

·      If you are failing to convince donors to support your mission over time.

·      If you have earned commitment from a donor toward the mission.

·      Donors who give again often give more.

·      The marketing required to convince a first-time donor to give is far more expensive than the marketing required to retain a donor.

Calculating your LTV for each donor is time-consuming but worthwhile because of the data it provides.

·      How much you should project to spend on marketing to retain each donor.

·      Projections for annual giving over time (as long as cultivation is part of the strategic plan.)

·      Feasibility of larger scale projects that require ambitious fundraising.

By adopting the following calculations as part of your regular reporting, you and your board will be making informed decisions based on data.

Donor Retention Rate: You calculate this very important number by dividing the # of donors last year who gave again this year, by the total number of donors who gave last year. (The only way you will have this year-to-year data is if you spend an exorbitant amount of time inputting this informatin into Excel or, your organization ahs invested in a useful CRM software. Most of these software can generate DRR reports with a few clicks. Here's how: 

The # of donors last year who gave again, this year

Total # of donors last year

For example, say you had 580 donors last year. Last year, 225 of those donors who gave last year, also gave again this year. This would be your formula:

225

580

= 

.38 is your retention rate rate.

This means you are losing 62% of your donors every year. Sadly, this is typical of the nonprofit industry.

Donor Lifetime Value = this is the financial value ascribed to a donor file in terms of anticipated average giving and expected average years of actual giving. (from the online AFP Fundraising Dictionary (2003))

Step one: Break out your donors according to Giving levels. It is more accurate calculate LTV by using a “Total # of donors” within a specific Giving Level.

Example of your data about donors in the $5,000 - $10,000 giving range.

• You have 7 donors in this range.

• Total # of donations for these 7 donors is 15 donations

• Find the inputs for each calculation of each donor.

  LTV = 

[(Lifespan x Ave donation amount) 

X  

(Total # of donations / Total # of donors)]

Step two: Use the following formula:

o   Donor A has been giving for 3 years

o   Average donation over this giving lifespan is $5500.

LTV =  

[(3 x 5500) x (15 / 7)] 

= 

(16,500) x(2)]

 = 

Donor A’s LTV is $33,000

What Donor Lifetime Value information tells you:

1. Over five years, you can estimate what would be a reasonable annual marketing and cultivation investment to retain this donor.

2. With the potential to raise $33,000 from this donor (if well-cultivated) this donor is valuable!

3. You will only retain this donor and earn their value with suitable cultivation.

              Helpful tip:

            There is a free tool available from Fundraising Report Card, that allows you to calculate your LTV for each donor much faster.

-        You need to have a CRM software with all your donor information available to download in CSV file.

-        You need to register for free, with Fundraising Report Card (https://app.fundraisingreportcard.com/register)

I hope this helped you. Please feel free to print or forward this blog to your development team, or your development board committee.

As with all my recommendations, review these tools to make sure they are right for you and get the necessary approvals from your board and leadership before implementing!

I am here to help you!

-Courtney

Your biggest advocate 

Tools to help your Board Members become top fundraisers!

In my first newsletter I encouraged even small nonprofits to move away from focusing so exclusively on gifts from cash and educate themselves about tools and techniques to receive donor gifts from assets of wealth.

Recently, during discussions with clients, I’ve realized that this recommendation is difficult for many small nonprofit cultures to put into action. There is an intermediary philosophical step that could improve your progress to gifts from assets. I call this philosophy, “Collaborative Curiosity.”

We want the best for our friends.

We have courageous, kind and thoughtful discussions to help each other resolve challenges.

This sums up the philosophy and fundamental approach of a Collaboratively Curious conversation between two people who are supporters of the nonprofit.

I’ve found this approach to be a valued litmus test for accountability; a bellwether for financial stability; a discoverable sensibility during board recruitment and staffing interviews.

Collaborative Curiosity is at the core of my trainings for helping board members and nonprofit leaders become more successful, and I believe the practice of Collaborative Curiosity is essential to interrupting the unsustainable “Treading Water,” philosophy. Below I am going to attempt to share with you, dear reader, the essence of my philosophical approach.

TWO OPPOSING PHILOSOPHIES

“Treading Water” vs “Collaborative Curiosity”

Have you ever had to tread water for a long time? It’s exhausting. You can only hold up one person – yourself. Sometimes, the person is so frantic, they don’t realize a solution is nearby.

“Treading Water" 🌊🌊🌊🌊🌊🌊🌊🌊😩

Here’s the typical “Treading Water,” nonprofit mind-set that undermines so many organizations with missions to house the poor and underpaid, educate and protect our children, rescue abused animals, and expand our hearts and souls with the arts (just to name a few):

·      “Not-for-profit” means every cent of our fundraising goes to the current year’s programming; future investment is not part of our planning.

·      We accept the premise of overworked, underpaid staff who sacrifice financial health and security for the mission.

·      Funding programs with donors’ dollars is acceptable, but funding operations (staff) is not fundamental to the mission.

·      Gifts from cash are easy to understand. We are frightened and afraid to make a mistake with a gift from a more complicated asset, so we do not talk about them.

·      Receiving gifts with donor instructions is way too much to manage.

·      We are terrified of not knowing the answer to a donor’s question.

If this sounds harsh and your backbone has tensed up, then please dear reader, please stay with me.  Too many nonprofits are doing important but unsustainable work guided by the “Treading Water,” philosophy.

“Collaborative Curiosity" 💁🪨🏊🪵🧑‍🏫🐬👍

Now imagine you are in the water with curiosity guiding you instead of fear of the water. You duck below and discover that only five feet away is a nice rock to stand on. A person nearby, spies a floating log and brings it over for both of you to share. A third person befriends a dolphin who lets you all hold on as it swims all of you safely to shore. Sound improbable? As long as you are splashing wildly churning up water that blinds you, any other solutions are hidden.

Here is the ambitious and rare culture and philosophy of a sustainable nonprofit guided by Collaborative Curiosity:

• We understand that “Not-for-profit,” means building a reserve is both strategic and helps sustain the mission.

• We inform our donors that 100% of our staff and operations are essential and retaining them is valuable and stabilizing to our mission.

• We fund staff’s time to conduct data collection so we can transparently self-report on our own successes and learned lessons to our community of clients and donors.

• We empower our board to be active advocates of the mission in our community.

• We actively improve our own knowledge to give our donors tools to make smart financial gifts.

• We actively engage financial advisors as partners for smart charitable giving.

• Staff and board members are not afraid to reply to a donor’s question, “That is a good question! At the moment, I don’t know the answer, but I’ll get the answer for you within a week.” And we do.

Why is a Collaborative Curiosity philosophy so rare, and why does it sound so out of grasp? Because Collaborative Curiosity requires investment from your entire organization, especially your board leadership.

One of the most essential activities that results from a Collaborative Curiosity philosophy is purposeful conversations between your board members, and your donors.😱

It is interesting to me that this is also the activity that strikes fear in most board members.

“What would I say?” the board member asks.

Imagine, the board member and the donor both share enough of a passion to support the same nonprofit. Why would they not find common ground in a conversation? I promise, there is much to be gained in these donor/board member conversations. The key is, approaching with them with a Collaborative Curiosity philosophy.

Below are a few tools to help your board members feel more comfortable with this philosophy and the crucial activity of them having conversations with your donors. Feel free to print them out or share this blog with your entire board!

Three words I use to describe the Collaboratively Curious conversation:

Open-Minded.

The relaxing way to engage a stranger.

Authentic.

The best way to keep the conversation going, and to increase trust in one another.

Ongoing.

Most importantly, this board member will continue the relationship,

 on behalf of the nonprofit and the donor.

10 Reasons for a Board Member to call a donor:

1. To put into action, their fiduciary duty to the nonprofit.

2. So the board member can introduce themselves.

3. To personally thank them for their first gift.

4. To personally thank them for their repeat gift.

5. To learn why the donor made their gift.

6. To provide an update on a project the donor supported.

7. To ask the donor to save-the-date on a soon-to-be announced event.

8. To help the hard-working staff reach and retain more donors.

9. To ask if the donor has any friends who might also want to know about the nonprofit. Could they make an introduction?

10. To ask if they are satisfied with the way the nonprofit communicates with them. (Emails? Newsletter? Do they feel appreciated?)

10 Rules of Thumb for a “Collaboratively Curious” conversation.

1. Staff or a key volunteer should prepare and keep updated, a “Tool Kit” for the board members making calls. (See below.)

2. I always recommend that someone on staff with access to donor information prepares a donor profile for the board member to have in advance of the call.

3. No donor should be assigned to receive the same call from two board members. Therefore, this needs to be organized by staff in advance.

4. During the call, the board member should take notes.

5. A primary objective should be appreciation. If the donor does not have time for a call, at least they can hear a genuine, “Thank you,” was the reason for the call and be asked to chat at a future date.

6. Following the call, the board member should report the results to their staff point-of-contact.

7. The staff point-of-contact records this information in the donor file, for future reference.

8. The staff point-of-contact helps the board member schedule a follow-up with the donor at an agreed upon future date.

9. When it is time for the donor follow-up call, the staff point-of-contact contacts the board member with a respectful reminder.

10. The staff point-of-contact also provides any updated material in the “Tool Kit” to the board member and the cycle begins again!

The “Tool Kit”: Empowering the Board Member to make the call.

The board member should be given a “Tool Kit”, prepared by staff or a key volunteer team, to have in front of them during their call with a donor.

Here is my suggested list to have at hand:

A.       Donor Profile:

• The donor’s name.

• The name of any of the donor’s family members, known (especially partner.)

• The donor’s gift history. Or, at least, the board member should know if the donor has given repeat gifts

• Did the donor give at a specific honorary level?

• Did the donor give a gift restricted to a specific purpose or program? Then, the donor's interest should be the focus of the call.

B.       Organizational Information:

• Two minute “Elevator Pitch” or summary statement that describes what the organization does.

• Statement that describes the need the organization is fulfilling. (Note: Not how they are fulfilling the need – what the need is, itself.)

• List of programs and services provided with correct names.

• List of customers and clients.

• Data points on achievements, effectiveness, outcomes, especially as pertains to a donor's gift, if it was restricted to a specific program.

• A story or testimonial

C.      Organizational Financial details:

• Earned income, vs donations from individuals, corporations and businesses, and grants, as described in percentage of total budget.

• UBI (Unrelated business income)

• Sponsorship opportunities

• List of sponsors

• Summary of strategic plan

I hope this helped you. Please feel free to print or forward this blog to your development team, or your development board committee.

As with all my recommendations, review these tools to make sure they are right for you and get the necessary approvals from your board and leadership before implementing!

I am here to help you!

-Courtney

Your biggest advocate 

Hello beautiful philanthropy world!

I’m on my way to Los Angeles, after two great weeks in Austin, Texas. Purpose for all this fun? Time with family and friends, plus a couple of exciting philanthropy meetings. I begin this newsletter with a couple of tips for nonprofits and fundraisers, ending with advice for well-intentioned donors who might be feeling the weight of the world on their shoulders. 

Let's talk Asses and Pachyderms 🐘 🫏

How will the 2024 United States presidential election season affect nonprofit fundraising? You might think the noise of a presidential race would drown out your nonprofit’s pleas for support. Studies show that election years are a great time to fundraise. 🥳 🇺🇲 US donors open their wallets wider during election cycles, especially politically active millennials.

Findings from the Blackbaud Institute, CCS Fundraising, reveal that in most election years, donors give more to their philanthropies of choice. It was also revealed that a particular group of donors gave more than any of the other group in the studies. Who was this generous-minded group of donors? 

• Politically-minded and politically active donors between the ages of 25 and 34. 

• Giving was highest to charities with missions close to hot-button election issues.

• This was true for charities whose issues aligned with either positive or negative political ideology of the winning candidate.

Election year fundraising tips: 

• Begin making phone calls and meeting with your donors now.

• Target new millennial donors to grow your donor base! They are itching to make a difference and many suddenly have some level of income for the first time in their lives.

• Keep tabs on global and local events—they can sway generosity.

• And most importantly, be genuine in your “Ask.” Enough with the weatherman-like urgency.

Nonprofit Website Tip of the Month: 

Please prominently and regularly display your nonprofit EIN number on your website!

The EIN number is the “Employer Identification Number” assigned by the IRS at the time of the charity's approval of formation. Think of it as your charity’s social security number. Providing it to donors makes it much easier for them to verify you are a legitimate charity and the number is often required for many financial transactions.

These days, donors can easily make large online donations when the mood strikes them by electronically transferring gifts from stock, a Donor Advised Fund, an IRA or a Qualified Charitable Distribution to their charity of choice. They can make these sizable gifts only if they have the correct EIN number for your charitable organization. 

Statistically speaking, gifts from these sources are 

many times larger 

than gifts from cash.

Actions to take immediately, and correctly display your EIN number:

• On your DONATE page

• Wherever you list your contact information

• On all printable materials and collateral that asks for donations.

From the Mountaintop - A Donor’s Focus Statement

This month I am visiting my mother in Texas. She received 25 appeals within the first two days of my visit. Was it a floodgate triggered by some special event? Nope. She said this is constant. 

She received three book marks, nickels, dimes, a silver fifty cent piece and three crisp dollar bills, a promise of a “free” copy of the Episcopal Church’s Musician’s Handbook, and offers of high quality insulated tote bags from Ocean Conservancy. And the calendars, oh my, the calendars. In this day of cell phones, Really??  Admittedly the one urging “Save the donkeys,” was very cute. 

Besides being a staggering waste of paper and postage, messages were hopelessly repetitious. For all you donors out there feeling bludgeoned by this paper-mill pursuit of your dollars, I’m sharing the tips I shared with my own mother.

First, Aggressively Reduce this Mess

Take the time to get yourself removed from these nonprofit mailing lists. It takes a little effort but is probably worthwhile: 

1. Send an index card in the return envelope with a, “Please remove me from your mailing address.” Include your mailing address you want removed and be sure to affix enough postage to the return envelope.

2. Email the charity with a request to “Please remove me from your mailing and email address.”  Include your mailing address and email address. 

3. Scan the return form letter and look for an “Opt-out” option of all communications. Check that box and return that form!

4. Sign up for the United States Postal Service (USPS) Do Not Mail List, which allows you to register your name and address to stop receiving mail from charities and other organizations. You can register online or by phone.

Second, take time to create your “Donor’s Focus”

We often read the charity’s Mission Statement before we decide to make a donation. I challenge donors to write their own mission statement by creating a “Donor’s Focus” statement. (I have a work sheet for this exercise. See my email at the bottom of this newsletter if you would like me to send it to you.)

Why should you bother to create your own statement of Donor Focus? Well, I have a secret to tell you…

You cannot solve every problem.

Sorry if that distresses you, but it's the truth.

You are one human being.

Not even MacKenzie Scott can solve all the world’s problems.

Neither can you, so give yourself a break.

There has always been the conflict between helping as many as possible, versus helping a few, generously and deeply. This is why defining your focus is so important. The fact is, we fundraisers and nonprofit experts attend classes and conferences just to figure out how to convince you to open your wallet. Knowing this, it is your job to get and stay focused. This is not cold and insensitive. This is what I call staying true to you and becoming a more effective donor. 💰💰💰💰💰

Exercises for Creating Your “Donor’s Focus” Statement.

1. Narrow your Lane. Pretend someone asks you, “If you could change one thing in the world, what would it be?” How would you answer? Explore your answers, then refine these ideas over the next few days and weeks.

   • Would you target your support locally, regionally or globally?

   • Would you focus on humans, animals, the environment or something else?

   • Write down your answers. Don’t criticize yourself. Keep writing. 

   • Who, what, and why do you want to help in this way?

   • What would you like the result of your support to be?

Take a week or a month to deeply explore your responses to this question.

2. Draft your Donor's Focus Statement. Now that you have done all this writing, take another week or two to distill all this work into a sentence or two. The goal is to end up with your clarifying statement of Donor’s Focus. It might take you a few times. Keep working. Read it out loud to yourself. Put it down for a day and then read it out loud the next morning. How does it sound? Keep working.

When you think you are close, read your Donor’s Focus to a close friend. Ask them, did they understand your goal? It is fine if the goal is not achievable in your lifetime. That is up to you. But is your goal well-defined? Once you feel satisfied, move on to step 3.

3. Research the charities working within your Donor’s Focus

Before you give a single gift, make a list of charities whose missions and accomplishments align with what you have discovered about yourself, during your exercise to Narrow Your Lane.

Once you have found a short list of charities that align with your goals, think about what you might accomplish with each of those charities if you were to begin your own long-term giving campaign.

• What are you capable of giving this year? $25 a year? $100 a year? $2,500 a year?

• Now, think about that gift every year for 10 years. 20 years. Based on what you can learn from their website, what kind of change could you make possible for them over this amount of time? 

You are one human being.

And now, you are beginning to realize the change you could affect in one small but very meaningful way.

You could make a small and real change happen with your Donor’s Focus.

4. Decide the one-to-three charities you want to focus on. 

• Put a calendar reminder on your phone or whatever calendar you use, to make your gift again, annually.

• Retain the communications you receive from these charities. 

• Over the next year, think about how they communicated with you. Did they answer your questions (did you reach out to them with questions?)

• Did they quickly thank you for your gift? It is important to evaluate nonprofits. I’ll talk about evaluation in future newsletters.

I have served as a director at three nonprofit organizations. I can verifiably say, if I had a donor reach out to me to tell me how they wanted to receive their communications, and ask me a question they hoped I could answer, trust me, I would be grateful. I would listen and I would answer this donor. And, if I had a donor give me $25 for 10 years, I would take that donor over another donor who gave me one donation of $500. 

I LOVE long-term relationships. 🥰🥰

Because long-term relationships are mutual and have the chance to grow with one another. This goes for philanthropy as well. 🌍💝🌎🫶🌏💗

Final take away.

If you take up the “Donor’s Focus” challenge and a charity asks you for a donation, you have full right to say, “Thank you for doing what you do to make the world a better place. I applaud you for your efforts and appreciate you telling me about your services. That is not my focus of my own charitable giving, but I will keep it in mind to tell a few friends about you.”

If you are a donor who received this email from your charity of choice, congratulations! 

I have created a “Donor’s Focus” worksheet and would be happy to send directly to you. (No charge; it is something I did for my mother.) I won't keep you on my email list unless you request. For the “Donor’s Focus” worksheet or any more questions I can be reached at cjohnson@cjpadvisors.com. 

As with all my recommendations, review these tools to make sure they are right for you and get the necessary approvals from your board and leadership before implementing!

Keep making the world wonderful!

-Courtney

Your biggest advocate 

April 2, 2024

Good morning Roaring Fork Valley and nonprofits beyond!

It is April 2, 2024, and this is my first newsletter.

It is a beautiful morning. Why?

• The sun is rising.

•  I am going to enjoy a hike this morning.

•  I met nonprofit leaders yesterday who inspired me yet again.

The Roaring Fork Valley and Colorado are abundant in nonprofits; by some counts, there are more than 300 nonprofits between Aspen and Grand Junction.

Is this a good thing? Are there too many? I don’t think there are too many nonprofits – there is plenty of important work to go around for all the charities and I am regularly astonished at the great work being done! 

However, I do think there are too many nonprofits that could make even bigger impact. Why? Because their fundraising is inefficient, and inefficient fundraising results in lower impact.

My observations have shown me that many nonprofits here still focus their fundraising from two sources:

1.        Cash

2.        Grants from government entities

Few nonprofits fundraise with a focus on the individual donors’ point of view! It’s as if charities are scared of talking to people! Are you?

What is the donor’s point of view?

Give them metrics to understand how their donation will make impact.

Then – and this is the kicker – report back to the individual donor with metrics, how their donation did make impact!

Stay up-to-date and inform donors about financial vehicles are strategically beneficial to them and the charity for making gifts.

Cash is not king. Only 8% of our country’s wealth is tied up in cash. And yet, almost every single charity here in the RFV has their website donation page focused only on cash gifts via online credit card payments. I’ve done my research and its frightening. Big gifts are being missed!

More than 90% of wealth in the United States is tied up in assets such as land, our homes, stocks, bonds, crypto, IRAs and other assets.

Help your donors! 

If you do not clarify in your charity’s literature and website that you can receive these gifts from assets, and provide them details about how your donors can make these gifts, your charity will not receive gifts from wealth.

Why would a donor want to give from their wealth? 

When their assets gain in value, the gains can be wonderful to the holder, and they can also be a burden.

Why a burden? 

Because capital gain is taxable according to the tax rate of the individual.

But it’s complex. Why should a charity dip its toes into explaining stuff about taxes to wealthy people? Shouldn’t wealthy people know these things?

Yes, they should. But many times they don’t.

Wealth is a mindset. Some people who have capacity still do not think of themselves as wealthy and so they do not think in terms of giving their hard-earned wealth away. As well, financial advisors are not paid to help their clients think in charitable terms; their goal is to preserve and increase the wealth of their client's estate. If the client doesn’t mention, “Hey, I’d also like to be charitable with my wealth planning,” then the financial planner might not be motivated to mix charity into the planning. But from the estate owner’s perspective, this could be unfortunate because sometimes being charitable could benefit both them and the estate owner's heirs. (More on this in later newsletters.)

Okay, so how would talking about gifts from assets really benefit my charity?

You probably know that a charity does not pay tax on capital gains.

So, here is an example for you:

If the donor gave the charity an asset such as stock or crypto that increased in value, the donor would pay no capital gains and get a deduction for the value of that gift. Great!

But it gets better...the donor could turn around and use the cash they would have used to make the donation, to buy back the stock that they gifted to the charity, only at a higher base point, erasing their original capital gains. Because the asset was gifted to the charity and the charity was the one selling the asset, the donor was not involved in a wash-sale and can buy back their stock.

Hmmmm. Starting to get my point?

This is just one jewel of a tool that charities should get used to talking about with their donors. Each month, in my newsletter, I plan on featuring a gift-giving vehicle that I feel could benefit donors and nonprofits.

The United States has the most complex tax system in the world. But these complex rules allow a donor’s gift to be both be charitable and reduce the tax bill burden. If you dive into the details, some of these rules are not so complex. No other country facilitates giving the way the USA does. We should work to understand the tools this system offers us.

Note: I do not benefit from any of the tools I recommend on my website. I have learned about them and feel they could help nonprofits do a better job for their donors and their missions. It is up to you to review these tools and make an informed decision.

Tools I like that I think you should learn about.

These are widgets you can add to your website to allow donors to give stocks and gifts from Donor Advised Funds, straight to your charity’s accounts.

Stock Donator

Donate Stock

DAFWidget

These are suites of tools that you can add to your website to allow donors to do everything from write their own will, to making planned gifts to a charity, to making quicker-turnaround gifts with assets that have capital gains.

FreeWill (Smart Giving Suite and Planned Giving Suite)

Giving Docs

As with all my recommendations, review these tools to make sure they are right for you and get the necessary approvals from your board and leadership before implementing!

Keep making the world wonderful!

-Courtney

Your biggest advocate