Days before Christmas, Congress passed a massive $1.7 trillion funding bill. Americans of all political persuasions shared a collective sigh of relief at avoiding another government shutdown. But the rushed deal to fund the government left many important provisions on the table—such as leaving nonprofits out in the cold by failing to extend a tax rule on charitable gifts.
We can always count on D.C. for unpredictable decisions, throwing roadblocks before organizations dedicated to helping others. Still, this latest situation makes it clearer than ever that nonprofits should focus on building stronger communities rather than rely on the federal government (or even state and local governments) to inspire Americans to make charitable gifts.
DonorSearch helps nonprofits of all types achieve this goal. Before discussing how, let’s look at what happened with the recent omnibus bill. The Chronicle of Philanthropy explains how a provision beneficial to nonprofits was part of its original wording, but later cut during bitter political fighting.
The specific item in question would extend for another year taxpayers’ ability to write off up to $300 in charitable gifts yearly who don’t itemize deductions. The omnibus was also a chance to expand the number of gifts written off annually to $4,000. Unfortunately, the “extender” was cut, along with multiple extenders of interest to the for-profit economy.
The fact that big business is involved means there’s hope for the nonprofit provision to spring back to life, according to an expert who spoke to the Chronicle. Sandra Swirski, founder of Integer, a lobbying firm representing the Philanthropy Roundtable, explains, “All is not lost. We are still coupled with those business extenders. And there is tremendous pressure, not just from nonprofits but from the business community, to get those extenders passed.”
Even so, it’d be unwise for nonprofits to wait for Washington to come to its senses. Instead, the latest tax provision issue should be seen as a symptom of a larger challenge—an overreliance on transactional giving. DonorSearch Vice President Nathan Chappell discusses the pressing issue in the recent book he co-authored, The Generosity Crisis.
As Chappell explains, “Transactional relationships with donors keep things at the surface level. The concern that tax law changes may impact donor behavior is quite real—but it betrays the fact these donors aren’t truly always connected to a nonprofit. Their donation is just another box to check off before the end of the year.”
This problem extends to other forms of transactional giving, like requests for donations at registers. While such campaigns have been quite successful for some nonprofits, consumers are now inundated with requests at the same time prices at the grocery store and at restaurants are exploding due to inflation. So what’s the answer to the transactional blues? Building real connections with tomorrow donors, especially members of your community who might not even be on your radar today.
Returning to the Generosity Crisis, Chappell and his co-authors describe the opposite of transactional giving: Radical Connection. This concept can be summarized as a deeply held emotional bond between a donor and the causes they support. Far from being a box to check off before filing taxes or donating change at the register, Radical Connection forms strong bonds with those who believe in your mission.
In case after case, DonorSearch finds that nonprofits around the country often already have Radical Connection with members of their community. It’s just that they aren’t harnessing the incredible power of these relationships. Yet. Uncovering these connections and strengthening your organization’s bonds with others takes work—but it’s even harder without a proper data foundation.
Possessing the right data and understanding what it means is where DonorSearch shines. We unlock the power of information nonprofits already gather from donors and prospects—often stored away in little-used corners. By combining this crucial info with other databases and applying our advanced AI computing and algorithmic analysis, answers to important questions emerge.
Here are just a few vital queries:
- Who in our community is most engaged with our mission?
- What drives engagement?
- What hurts it?
- Who are those donors who will move our mission forward in the future?
Building Radical Connection is especially critical to answering that all-important final question. For as DonorSearch Executive Vice President and Co-Owner Sarah TeDesco explains, “Nonprofits that follow the legacy approach of focusing on wealth data or applying their energies to a purely transactional giving model are at risk of external factors like legal changes. More importantly, they aren’t necessarily working closely with the most engaged members of their community. They also aren’t actively strengthening engagement with others that care about their organization’s success. Nonprofits that instead place the emphasis on building engagement find it quickly pays off via increased donations and a wealth of new prospects to engage with moving forward.”
To learn how you too, can lessen the headache of IRS changes by building Radical Connection to deeply engaged community members, contact DonorSearch for a demo today. Also, if you’re an experienced non-profit professional interested in helping new nonprofits achieve future successes, please consider a career with DonorSearch.