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[ASK AN EXPERT] How To Accept Real Estate Gifts If You’ve Never Done So Before

Posted on 4 August 2023 by Guest Author

Posted in Fund Development

Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity. Today’s question comes from a nonprofit employee who wants advice on how to accept a real estate gift for the first time:

Dear Charity Clairity,

We have a board member who wants to donate a gift of real estate. My boss wants me to “make it happen.” We’ve never done this before. I’m worried about getting in over my head and exposing the charity to risk. Help!

— Want to Say No

Dear Want to Say No,

There are two principles at play here, and you’re wise to recognize them:

The value of being donor-centric, and
The value of conducting due diligence to protect your charity and the donor.

Your boss is concerned with making your board member happy. This is laudable, and I would never suggest saying “no” to a board member or other donor without exploring your options. Gifts of real estate can be a definite win/win, with your charity reaping financial rewards and the donor accomplishing personal, financial, and tax-planning objectives.

Whether or not this is a gift you can “make happen” depends on a number of variables. Since this is a “hot” prospect, my best advice is to seek out someone experienced to help you with this particular gift. It’s well worth developing a relationship with an expert you can call on, especially for complex gifts that require some finesse. The amount you pay will still be much less than the amount you’ll receive. So “we can’t afford this” is nonsensical. Options include:

Find a local attorney experienced in nonprofit charitable gift planning. If you have a local law firm that specializes in nonprofit law, this is a place to start. If not, contact estate planning and real estate firms to see if they handle this type of transaction.
Find a national attorney experienced in nonprofit charitable gift planning. If you can’t find someone local, there are a range of law firms with this specialty. Search the internet or get recommendations from other charities you respect. If these practitioners are not able to help you directly, they may be able to recommend someone who will. Maybe even someone local about who you were unaware!
Find a local community foundation willing to take on the work for a small fee. If you are faith-based, this is something your local Jewish Community Federation or Archdiocese may be willing to help with as well.
Find a donor advised fund manager that accepts real estate gifts (most of the big ones, e.g., National Philanthropic Trust, Schwab, Vanguard, Fidelity, do). Then suggest to the donor they may want to set up a DAF and recommend all or a portion of the real estate’s appraised fair market value on the contribution date be directed to your charity.

Moving forward, here are some steps to take to put in place a plan – with guidelines – to accept non-cash gifts.

Develop a gift acceptance policy. One of the best templates out there is one developed by Kathleen Miree. Borrow it, adapt it for your organization, and run it by the appropriate board committee and/or subcommittee(s) (e.g., Finance, Investment, Development, Endowment). Once approved, the guidelines should be forwarded to the full board to vote on their acceptance. Such a policy is a godsend for staff because you can now say “I’m sorry, our policy prohibits us from accepting gifts of property sitting on toxic waste sites.” Or “I’m sorry, our policy prohibits us from accepting gifts of encumbered property.”
Put together an expert advisory committee. Include professionals who specialize in charitable gift planning, law, accounting, and real estate. Besides giving you individuals to call on for complex gifts, you can also run the question of whether to move forward with any particular transaction by your entire committee – removing the onus of responsibility from just you or your boss.

I once had a boss exactly like yours, and together we wanted to ultimately become the most welcoming place on the planet when it came to accepting non-cash assets. I also knew I needed help. So, I began by talking to some of my local fundraising colleagues experienced with planned giving. I started with someone who worked at a nearby university, where they happened to have a complete real estate division. I learned all about environmental impact reports, title insurance, carrying costs, and more, and was able to report back to my boss so we all knew what was involved. Simultaneously, I hired a nonprofit attorney to help guide me through the gift acceptance process.

We definitely said no to some gifts, like the abandoned gas station sitting on a toxic waste lot. But we also said yes!

Once you’ve got your team together, you’ll find the process pretty straightforward. It’s definitely a lot of work, but the rewards justify the investment.

Maybe a decade hence you’ll be happy to say “Yes, let’s look into this! We do this all the time.”

— Charity Clairity

Please use a pseudonym, like “Want to Say No” did, if you prefer to be anonymous.

The post [ASK AN EXPERT] How To Accept Real Estate Gifts If You’ve Never Done So Before appeared first on Bloomerang.

This article originally appeared in Bloomerang. See the original article here.

Q&A: Fundraising Best Practices When Connecting With Diverse Audiences

Posted on 3 August 2023 by Guest Author

Posted in Fund Development

It’s important for nonprofit leaders to learn how to incorporate fair and good fundraising best practices when connecting with diverse audiences.

In this webinar follow-up, Kristal Frazier answers your pressing questions on DEI donor best practices.

Question: I am preparing to take on a leadership role in DEI for a large organization. We have a committee standing to assist me, however, because DEI is ever evolving, we spend a lot of time discussing the changes and our work hasn’t been fully realized by all. Any advice on how I can help balance the scales, between discussion and action?

Answer: Creating a timeline with deadlines can be an excellent strategy for achieving DEI goals. To ensure everyone is on the same page, it’s important to consider adding specific details to the timeline, such as tasks and milestones to be completed. Additionally, assigning team members to oversee each task can help emphasize the importance of accountability and ensure the timeline is followed. Lastly, having a timeline meeting will convey the importance of sticking to deadlines and having a backup plan in case its needed.

Question: Should we be striving to achieve diversity among our individual donor pool? Or should we be approaching DEI more from the programmatic, operational, and cultural efforts; Aka, the impact that we’re making on DEI versus focusing on sourcing money from a diverse group of individuals?

Answer: The approach your organization should take depends entirely on its goals. If you’re looking to advance your DEI initiatives through your current events, programs, and clients, then a programmatic approach would be the right choice. On the other hand, if your aim is to segment your donor base and create a strategy to connect with potential donors who may have a connection to your existing donor base, then that’s the route you should take. Either way, achieving these goals will take significant time and effort, and it’s a decision that should be made by your team, organization, and advisory committee. Best of luck!

Question: How can we add NTEE codes on the IRS file or Candid?

Answer: To add NTEE codes to your organization’s profile on Candid, you will need to claim and update your organization’s profile on the Candid website. Once you have claimed your profile, you can edit the profile information, including the NTEE codes. To add NTEE codes, navigate to the “NTEE Code” section of your organization’s profile and select the appropriate codes that represent your organization’s mission and activities.

Keep in mind that the NTEE code system is periodically updated, so it’s important to review and update your organization’s codes to ensure they accurately reflect your mission and activities.

Question: My organization has made strides with DEI internally – training for the staff and relatively diverse hiring, but leadership is very hesitant to discuss DEI with our fairly conservative donor base and actively avoids it. How can I talk about the importance of sharing this value?

Answer: Your organization has taken some positive steps toward promoting DEI internally, which is great to hear. However, if DEI is one of your organization’s priorities, it should be shared with donors. One way to approach this might be to highlight the benefits of promoting DEI, such as attracting new donors who share your values and creating a more inclusive community. Ultimately, the decision of how to communicate this message will be made by leadership, but it’s important to make sure that your organization’s priorities are being effectively communicated to all donors.

Question: My organization is debating having a booth at a large community pride event but some staff are worried that it’s not what we should be spending money on. Our organization is focused on supporting BIPOC girls, and some of them are non binary, but some staff feel that supporting pride or getting too involved could feel like mission creep. Would love to know what you think about this?

Answer: The definition of mission creep is when a nonprofit organization deviates from its mission and participates in programs or activities that do not align with its purpose. Existing donors can view this as the organization lacking focus on its primary goals.

If you are considering expanding your organization’s focus, that will demonstrate your commitment to supporting diverse communities, whether through participating in events or providing support in other ways. The best approach is to balance broadening your focus and keeping your main goal connected to your mission.

Question: I have been incorporating strengths-based messaging or asset-framing for describing people we serve. How do we incorporate that into a DEI policy?

Answer: One way to incorporate strengths-based messaging into your DEI policy is to highlight unique skills, experiences, and perspectives from diverse backgrounds. This emphasizes the valuable contributions diversity and inclusion can bring to your nonprofit.

If you’re working on creating or updating a DEI policy at your organization, you can review Bloomerang’s DEI Policy Template to help you get started.

What other DEI-related questions do you have? Ask away in the comments below.

The post Q&A: Fundraising Best Practices When Connecting With Diverse Audiences appeared first on Bloomerang.

This article originally appeared in Bloomerang. See the original article here.

Make-A-Will Month: Here’s Why You Should Prioritize Planned Giving In August

Posted on 2 August 2023 by Guest Author

Posted in Fund Development, Uncategorized

Did you know that August is National Make-A-Will Month?

It’s a significant opportunity to increase your nonprofit’s planned gifts by making your donors aware of this. Charity Navigator has documented that 10% of overall giving comes from bequests made by Wills.

The easiest planned gift for your supporters to make is to leave a portion of their estate to your nonprofit as a bequest in their Will. Even if that gift is only 1% of a donor’s total estate, it can have a huge impact.

According to Giving USA, the average planned gift in the US is more than $78,000 per donor’s estate. Yet, only about 30% of Americans say they have a Will, which means that most of your supporters probably need to make one.

Even if you don’t have a planned giving campaign devoted to Make-A-Will Month, you should at least promote it several times via email, social media, and other communications. Mailing a letter as well is best practice. There are many free samples of a “include us in your Will” donor letter online if you search that subject.

You should also include this resource in your donor communications to help your donor’s plan their future giving. This free, online resource guides the donor through the process of creating a legally valid Will in 20 minutes or less.

The fact is that many of your donors mistakenly think that Wills are only important if you have a lot of money or property. That is simply not true. You must debunk this myth in your donor communications, and this list of the ten reasons a Will is important will help you do that.

When you ask your donors to include your nonprofit in their Will, also ask them to let you know when they do. Here’s an example from the Palestinian Children’s Relief Fund of a website announcement and related form that you can model your nonprofit’s message after.

Thoughts on planned giving from 860 donors

If I have not convinced you yet, this data will. Using data from a survey with 860 donors, we learned the following:

The average age donors wrote their first Will was 44 years old and almost all (91.6%) used a legal advisor to write their Wills.
Over half (53%) of donors established their first planned gift at the time of writing their first Will.
7% of study participants felt their estate planning process was “very easy” or “somewhat easy” with another 22.9% reporting feeling neutral about the process.
The average age at which donors made their first planned gift was 52.8 years old. Among gay and lesbian donors, the average age of first gift was slightly younger, at 50 years old.
Respondents were most likely to make a charitable bequest (68.1%), followed by a charitable beneficiary of a retirement plan (29.7%), insurance policy beneficiary (18.5%), and charitable trust (18.5%). Interestingly, donor-advised funds (DAFs) surpassed charitable gift annuities in the donor sample.
The top three motivations donors cited for making a planned gift were: the importance of the cause; the belief that the nonprofit makes a significant impact; and the donor’s ability to make a larger gift through their estate than during the donor’s lifetime.

To learn more about planned giving overall, chapter 13 of my book, The NonProfit Fundraising Solution is a must-read.

How do you plan to take advantage of Make-A-Will month?

The post Make-A-Will Month: Here’s Why You Should Prioritize Planned Giving In August appeared first on Bloomerang.

This article originally appeared in Bloomerang. See the original article here.

12 Elements To Help Conduct Your Mid-Year Nonprofit Tune Up

Posted on 31 July 2023 by Guest Author

Posted in Fund Development, Uncategorized

When most people hear the word “tune up,” they naturally think about automobiles, and probably that their own car is overdue. A car represents a major investment, and timely service and maintenance ensures the best return on that investment.

All for-profit and nonprofit organizations will enormously benefit from similar tune ups to ensure operations are performing at peak efficiency. We often hear that nonprofits should model themselves more like businesses. I’ll take that one step further: Nonprofits that need to stretch nickels into dimes even in good times have more motivation to make sure they’re running as efficiently and cost-effectively as possible. There is little, if any, fat to trim.

The pressures to maintain and increase gift income mount as the need for programs, services, and benefits escalate during times of inflation and challenging economic realities when more people are struggling.

Here are 12 elements to consider for conducting a mid-year nonprofit tune up to diagnose and make improvements that will drive up the gift income that is so essential in carrying out your mission.

Make a brutally honest assessment of where every part of the resource development program stands. What were the goals and objectives set at the beginning of the year? As temperatures rise during the summer, how is your organization doing? Are you ahead, on, or behind pace?
Engage as many members as possible of your nonprofit family in these frank discussions. If the mindset is that resource development is solely the responsibility of the development staff, the nonprofit is handcuffing itself and compromising its potential. All professional and volunteer team members of the nonprofit have a role to play, and this starts with contributing their ideas and best thinking on where fundraising is succeeding and where there are opportunities for improvement.
Be sure your assessment addresses the external environment. How is the local economy fairing? Have any major employers moved in or out of your community? How severe was the impact of the pandemic? How visible and positive is the perception of your nonprofit’s leadership?
How well do you understand the motivations of your donors? The tune up needs to feature private conversations with your leading donors on what they believe provides the greatest satisfaction from their gifts. What have they enjoyed from gifts made to other good causes that they haven’t seen receive enough attention from your nonprofit?
Communications and fundraising are seamless. In other words, you can’t tell where one ends and the other begins. The good news is that there are many communication tools to connect with donors and prospects. The challenge is to most effectively integrate all of the different communications activities so that they truly reinforce each other. The first step is spending enough time to precisely identify your three most essential messages. Then make sure that your print, electronic, and digital media efforts are relentlessly driving those messages home.
Though their share has dropped a few points in recent years, the vast majority of gifts still come from individuals. When you add bequests and gifts from family foundations to individuals, this share of the philanthropic pie is about 85%. By all means, welcome gifts from corporations and foundations, but prospect lists must emphasize individuals, because in the words of the infamous bank robber Willie Sutton: “That’s where the money is.”
We live in a fundraising environment increasingly dependent on major gifts as fewer and fewer donors are making larger and larger gifts. Keep your prospect list of major gift donors in front of you every day of the week. Are they receiving priority cultivation? If not, identify the bottlenecks. The larger the gift target the more challenging it is to get on the prospect’s schedule. Quality interaction is at a premium as money follows time. Is your major gift prospect list missing potential individuals, corporations, and foundations? The Six Degrees of Separation reminds us that everyone on the planet is separated by no more than six personal relationships. Take full advantage of doors that can be opened by staff — both fundraising and programmatic — board members, volunteers, and donors.
It is amazing how often this simple truth is overlooked: You have to ask every donor prospect for a specific amount, for a specific purpose, and to be paid by a specific time. The more that you ask — especially in face-to-face meetings — the more money you’ll raise. There is no precise formula on the duration of the cultivation period, other than we know that the greater the desired gift the more cultivation is necessary. Sometimes the cultivation phase — forging a personal and emotional alignment between the nonprofit’s mission, vision, and values and the donor prospect’s philanthropic priorities — can be completed in months if there is enough quality interaction. For major gifts, this may take a year or more. But no organization should delay its ask one day more than is absolutely essential. Remember that your donor prospect is likely being cultivated by other deserving nonprofits championing admirable causes.
Your most likely major gifts will come from your current donor base. Is your stewardship program genuine and robust in acknowledging and thanking people for their gifts of time and money? This can take a wide range of forms from intimate recognition events to much larger public events. Stewardship should be carefully designed with the donor’s personality in mind. The deepest concern for the vast majority of donors is understanding how their gift dollars are making a difference. New technology is providing more and more effective strategies such as impact videos. Never underestimate the power of donors personally interacting with the beneficiaries of their generosity. In higher education, this power is very visible when donors meet with scholarship recipients. Study your retention rate in keeping donors to make repeat and hopefully larger gifts each year. It is so much more cost-effective to retain a current donor than to acquire new ones.
Are all your outreach channels emphasizing new and popular ways of giving? Donor advised funds have emerged as the most dynamic component of American philanthropy. According to the most recent data from the National Philanthropic Trust, grants from DAFs rose 28% to $46 billion. Your website, marketing materials, and especially solicitation activities should inquire about opportunities to give through DAFs.
People can make gifts several times larger through their estates than through wealth. Be sure to discuss the wide range of options from charitable bequests, retirement funds, insurance policies, gifts of stock, and other assets.
Celebrate victories. Recognize the roles played by everyone in the discovery, cultivation, solicitation, and stewardship of gifts. They don’t come easily, especially major gifts. Let everyone know that they are directly advacing your mission.

This list is by no means all-inclusive. No doubt, you can and should add other components to assess, analyze, and upgrade the caliber of your resource development program. Final word: Don’t be afraid to make changes as you conduct your mid-year nonprofit tune up. Keep in mind sound fundraising principles and best practices, but take full advantage to adjust strategies as circumstances warrant. Your nonprofit needs to be operating at peak performance as you enter the later stages of the year when the most money is raised.

The post 12 Elements To Help Conduct Your Mid-Year Nonprofit Tune Up appeared first on Bloomerang.

This article originally appeared in Bloomerang. See the original article here.

[ASK AN EXPERT] What’s The Best Place To Look For Grant Opportunities If Your Nonprofit Is New?

Posted on 28 July 2023 by Guest Author

Posted in Fund Development, Uncategorized

Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity. Today’s question comes from a nonprofit employee who wants advice on where to look for grant opportunities for new nonprofits:

Dear Charity Clairity,

I am a new nonprofit and want to pursue a grant(s) to fund our mission. Our nonprofit focuses on the mental health of teens and young adults and we would like to fund expeditions in some of the national parks in our state. Any advice on where to look for grants that fit our mission or other funding sources?”

— Grant Newbie

Dear Grant Newbie,

I understand you’re asking for advice on to where to look for grant opportunities that fit your mission of focusing on the mental health of teens and young adults. One of the ways you’d like to do this is through expeditions in national parks in your state. Sounds great!

Where and how to look for grants is a broad topic that doesn’t lend itself to a quick Q & A. However, I can point you to some helpful resources.

Your best bet is the Foundation Directory. It’s searchable online. You can plug in your geographic area, the type of grant you’re looking for, and the dollar amount you’re seeking. You’ll get a list of funders that fit your parameters, including staff and trustees. This can be helpful in the event someone on your team knows one of these individuals. The Directory is extraordinarily useful, as 90% of foundations do not have websites, making them difficult to find using standard search engines.

There is a monthly subscription fee. However, if you live near a Foundation Center library you can do research on site for no cost.