A donor goes to your website, clicks the “donate now” button, and it’s a donation. Right? Right. But it’s also a donation when someone volunteers at your event or when your friend says, “Sure, use my computer printer.” Every single donation can help your nonprofit!
This chapter will help you think outside the standard donation box and consider some previously untapped sources of donations.
Here’s a hint: replace the word “donation” with the word “support.” Maybe support looks like borrowed office space or a team of your friends staffing a 5K run for you. Maybe support looks like a matched gift or a sponsorship. It’s so much more than a monetary donation (though those are nice, too!). Let’s take a look at some different types of donations you might want to consider.
Matching Gifts
Matching gifts are, perhaps, the easiest way possible for nonprofits to raise money effortlessly. That’s because most companies have a philanthropic goal, and they meet it, in part, by matching charitable donations made by their employees.
While there are a few different ways to get matching gifts, we will shamelessly promote Double the Donation. CharityEngine has partnered with this organization for years to help our clients maximize their outreach efforts. How does it work? Any nonprofit can integrate with the match tool, which scans its database of companies in real-time as someone makes a donation. Once the software determines that the gift is eligible for a match, the donor is prompted to download and file the forms. There’s also an option for auto submission, in which the donor simply makes the gift, and the software does everything else until the matching gift is received. Matching gifts are an easy win for your nonprofit!
Now, we’re not getting kickbacks from Double the Donation. There are other options out there, but this is the one we know and we recommend to our clients.
Stock
Another source of funds for a nonprofit is stock. When an individual donates stock, they avoid the capital gains taxes they would have to pay if they sold it, and they will get a tax deduction for donating to a nonprofit.
You might think of stock donations only as gifts made posthumously or pledged by an elderly donor. Not so! Many tax-savvy donors have been turned on to the benefits of charitable gifts of stock, and it’s worth taking a look at your pool of donors – easy with a nonprofit CRM – and investigating whether or not this is a viable option and one you should promote.
Want to check it out? We like DonateStock. Similar to Double the Donation, DonateStock is an integration that allows donors to submit an online donation form. The software then routes the form to the donor’s broker, who transfers the stock to the nonprofit’s account. From there, you (the nonprofit) can choose to sell the stock and receive cash or receive the stock and add it to (or start!) an investment account for your organization.
A caveat: we are very, very good at helping nonprofits with donor management, engagement, and nonprofit fundraising. We are definitely not very, very good at tax advice. If matching gifts or stock are of interest, reach out to the organizations and then consult a tax professional.
In-Kind
When you think of in-kind donations for nonprofits, what comes to mind? For most of it, it’s tangible items, like computers, printers, office equipment, furniture (or, honestly, even office space).
But in the official world of in-kind donations, there are four types: loosely, tangible stuff, intangible stuff, time or services, and real estate. What they all have in common is that they are non-cash gifts.
- Tangible in-kind donations include the things we’ve mentioned, and that’s just the beginning. Tangible donations can include snack bags for your food pantry, hygiene products for your shelter, or toys for kids in your care. It can include any kind of supplies that support your mission, up to and including office space, cars, or other heavy equipment.
- Intangible donations include things like intellectual property, securities, or patents.
- Time or services can include volunteers, consulting, transportation, legal services, free media, or air time.
- Real estate would most likely be the gift of an office space, warehouse, land, or something similar.
Now, a note: if you want to, or have to, claim in-kind gifts on your financial statements, Generally Accepted Accounting Principles (GAAP) say they can be recognized under two conditions:
- The services create or enhance non-financial assets.
- The services require specialized skills, are provided by people possessing those skills, and your nonprofit would have to purchase the services if they weren’t donated.
If you have questions about this, don’t call us! That’s a job for (and responsibility of) your accountant. We'll stick to our day jobs.
Corporate Sponsorship
If you haven’t explored corporate sponsorship, it’s an important avenue of revenue for many nonprofits. And you’ll find that many companies that donate to nonprofits do so to fulfill budgetary guidelines. In other words, most large companies must donate to nonprofits…so why not yours?
Identify some companies that might share your mission or your neighborhood or that might have any reason to consider your nonprofit. And cast a wide net!
Think about the type of sponsorship you want. Is it a contribution to a capital campaign or an event? Is it signage, merchandise, or advertising?
It could also be a restaurant that caters your event or meeting, a spa that donates gift certificates to be raffled, or a grocery store that lets you set up space to collect groceries. Any for-profit entity can be a corporate sponsor.
Corporate sponsorship benefits the company because, frankly, it makes them look good. And it helps you by raising awareness of your mission (and maybe helping you attract new supporters), as well as boosting your credibility. It’s a win/win.
Recurring Gifts
The health of a nonprofit can often be measured by sustainers, or those donors counted on for monthly giving. We’ve talked about ways you can strengthen recurring giving, which comes down to creating a successful sustained giving program. Our largest sustainer client has more than 250,000 monthly donors that give an average of $6 million a month. We know that’s not likely for many of our clients, but it gives us a great resource to mine for tips. Here are some of the basics used by that giant client to grow a strong sustainer program:
- Make it easy for donors to give. For example, add a button to your donation form asking every one-time donor if they’ll turn that donation into a monthly gift.
- Use data to learn about your donors. You can identify potential sustainers and offer a personalized appeal that’s hard to resist.
- Develop a nurture campaign to keep donors engaged and knowledgeable about what your nonprofit is doing.
- Keep your eye on sustainer management. Don’t take them for granted, or they’ll disappear.
- Use billing software that maximizes your revenue collection. Look for a system that offers helpful features, like an automatic credit card updater. (If you can’t find one, give us a shout. We’ve got a good one!)
- Rely on donor analytics and other data points – like your collection rate for revenue – to ensure your program is as healthy as possible.
A healthy sustainer program is key to a healthy nonprofit, so take stock of yours and show it a little love if need be. It will pay dividends.
Major Gifts
Sometimes nonprofits focus on major gifts because of a capital campaign or as part of a year-end giving appeal. But we would argue that focusing on major gifts all the time can yield unexpectedly fruitful results.
A major gift is usually the byproduct, or result, of a strong relationship with a donor. Like planned giving, a donor can give or bequeath stock or cash gifts that are often one-time and larger than standard donations. Major gifts can help recession-proof your nonprofit!
There are a few tips to keep top of mind throughout the year that will help you identify and capitalize on major gift donors:
- Use your CRM to find potential donors. For example, if the CEO of a Fortune 500 company supports your nonprofit personally, they're a great candidate for major gifts.
- Get out in the community and talk to donors. What makes them support your nonprofit? Start to develop relationships with those who have shown loyalty.
- Find different ways to get supporters involved, whether volunteering, touring your facilities, or just having lunch or coffee. Major gifts are all about building these relationships.
- Make it easy to give big gifts. You can talk about the taxes donors will save or show them it’s easy to donate from an account.
- Educate, educate, educate. Repeat yourself over and over as you explain how major gifts benefit both your nonprofit and the donors. Talk about the options you can support that will benefit the giver.
- Ensure you have a stewardship program for those who you’ve identified as major donors. They are superstars in your fundraising world, and they need to know, on an ongoing basis, how much you appreciate them.
One other related-ish topic: Donor Advised Funds (DAF). This is an account donors can create that exists for the sole purpose of supporting nonprofits they care about. This type of gift can offer significant tax savings to donors.
Ask your accountant for the lowdown on some of these options, and then let your supporters know they exist. When they’ve proven loyalty and you make giving easy, you’re knocking obstacles down as fast as they pop up.