How Natural Disasters Will Impact Year-End Giving

Flooding in Houston. Wildfires in Montana. Life-threatening winds in Florida.

There have been an extraordinary number of natural disasters this summer that have hit our communities hard.

Houston – one of the United States’ biggest cities – is suffering economically as it begins to rebuild after Hurricane Harvey, which could end up being the costliest storm in US history.

Fires tearing across Montana are so intense that the air is dangerous to breath.

We don’t know the damage wrought by Hurricane Irma yet, but the impact will be enormous.

It’s also happening around the globe. Hurricane Irma obliterated one half of the island nation of Antigua and Barbuda. Monsoon rains in Southeast Asia have affected 41 million people, many of whom were already impoverished before having their entire material lives destroyed.

These events are inescapable, featured on the front page of all news websites and broadcasted to TV sets around the country by all the major networks.

Keep this in mind as your nonprofit gears up for year-end giving.

Each year, nonprofits compete for the nation’s generosity, participating in Giving Tuesday and rolling out carefully crafted campaigns to ensure that they have the resources they need to pursue their mission.

This year has already seen a surge in philanthropic giving resulting from the heated political environment, with legal and political groups benefiting the most. How this tends will affect the all-important year-end giving season is unclear. Have donors already maxed out their wallets?

The recent natural disasters will also inform how donors give. Humanitarian and basic needs organizations will be fundraising to help people reeling from these cataclysmic events, and the giving public – with horrific images and footage of the disasters in the forefront of their minds – could very well prioritize these organizations over other charities not directly involved in recovery efforts.

This could be among the most competitive year-end giving seasons in recent memory. The time to start cultivating messaging and strategy is now.

Brexit & Job Growth: Strong Forecast for Year-End Giving Season

While Brexit has generated anxiety among economists and world governments (which has already abated somewhat), there are some signs that the short-term consequences could actually be a boon for the United States, and in turn may have a positive impact on 2016 year-end giving for nonprofits and fundraisers.

As has already been well-documented (and discussed in detail here on The Tap), Brexit has amounted to a self-inflicted wound for Great Britain, which is reeling in the EU referendum’s aftermath. Britain’s departure from the EU has sent the pound plumetting to a 30-year low. Various industries, including car manufacturing, face an uphill battle as companies’ dollar and euro-denominated debt worsens due to Britain’s monetary collapse. The nation’s trade deficit is also set to expand, as the already high-consumption Britain is set to lose ready access to the EU market for its own goods and services. Various European financial institutions are also planning on relocating London offices to other European cities, such as Amsterdam.

Additionally, the United Kingdom itself could very well dissolve, leaving a diminished and economically anemic England. Scotland – which overwhelmingly voted to stay within the EU – may make another bid for independence. There are also stirrings in Northern Ireland for unification with Ireland, an EU member state. If both of these divisive political developments occurred, Britain would consist only of England and Wales – a mere shadow of Britain’s former self.

While the United States is in some ways affected by the general financial fallout of Brexit, the nation may actually stand to benefit. Economists are predicting that the U.S. real estate market may receive a boost as investors weary of the British economy flock to the United States. With this unexpected stimulus, there is also speculation that the Federal Reserve could forgo raising interest rates for a while longer to take advantage of this unplanned advantage (as well as to quell investor concerns over the general economic impact of Brexit).

As the United States’ trade deficit swings in its favor, with more money flowing into the comparably safer US markets, inflation rates may also shrink, increasing the buying power of US citizens.

This could have two positive implications for nonprofits: with larger financial institutions receiving an influx of investment, companies may be poised for more generous corporate giving; additionally, increased buying power for US citizens could encourage greater philanthropy, especially as low income individuals are already more predisposed to giving than other income brackets.

While increased expenditures on loans and mortgages may result in more savings for average consumers, there is yet one more factor that could lead to a successful year-end giving season: a consistently improving job market. Despite pessimistic outlooks, it appears that employment in the United States is likely to continue improving throughout 2016, according to McVean Trading & Investments LLC.

With a diminished unemployment rate, consumers emboldened by a more competitive dollar, and greater financial investment, nonprofits could see a particularly profitable year-end giving season. Even if the US populace looks toward saving during this momentary economic reprieve, that could still result in stronger giving in FY2017.

The Tap will continue to provide economic insight through the lens of today’s hottest issues for the benefit of fundraisers and nonprofit professionals.

Fundraising Takeaways from 2015

(2015 takeaway: Millennials are the next great giving generation, and they donate via mobile technology.)

After 5 straight years of growth in the fundraising world (2014 topped previous records, pulling in $358.38 billion in philanthropic dollars, and 2015 will likely be even bigger), things are looking good for nonprofits.

The sector has risen from the financial disaster of 2007 faster than other industries. Nonprofits are becoming more adept at deploying technology and reaching the digital marketplace. And, to top it off, #GivingTuesday has changed the game, infusing the holiday season – long overshadowed by the rampant consumerism promoted by days like Black Friday and Cyber Monday – with a philanthropic spirit.

This last component – #GivingTuesday – is also having a huge impact on how nonprofits organize their fundraising calendars. Combined with the increased significance that millennials possess as a charitable demographic, there are a couple key takeaways from last year that will better position nonprofits to thrive in 2016.

While year-end giving has always carried great weight – setting up fundraisers with the bulk of their annual revenue – December’s importance has shifted heavily to #GivingTuesday. With the day’s skyrocketing popularity, it is fast becoming a competitive flashpoint for organizations looking to secure their financial situation going into the new year.

An unintended consequence of #GivingTuesday may be tapped giving. As more and more charitable individuals (including millennials, who are more likely to give small amounts online) make gifts on #GivingTuesday, they may be less responsive to appeals later in the month. This means that the fundraising potential of December may be shifting to the beginning of the month, requiring nonprofits to refocus their strategies and energies in order to finish the year off with a bang.

Another essential area where nonprofits need to pay attention is millennial giving. Defying predictions that the generation would be self-absorbed, millennials are displaying great philanthropic character. In 2014, 84 percent of millennial employees donated to a company cause. Of those that didn’t donate through work, 78 percent donated on their own. For #GivingTuesday 2015, one out of every three millennials in the United States were projected to participate in some capacity.

It’s evident that millennials give. But how to solicit their gifts? They value simplicity and transparency. It is absolutely essential for nonprofits to adapt to mobile giving strategies and digital infrastructures, meeting their desired audience’s attention where it is being directed – namely, on smart phones. Furthermore, nonprofits need to be clear about how solicited money will be used. Millennials need to see the impact they are making. Visualize operations through graphics and video, and quantitatively explain the difference that donors are making.

While the forecast is good for fundraisers, it is essential that they keep on their toes in order to keep a head up on competition. Following these trends will, in part, aid in those efforts.

Hanukkah, Nonprofits, and Year-End Giving,

Hanukkah kicked off on Sunday, December 6, presenting Jewish organizations the opportunity to fundraise for their important work during this festival of rededication and renewal.

Lasting through December 14, the festival comes on the heels of the most successful #GivingTuesday to date. On December 1, tens of thousands of nonprofits raised more than $115 million. Many of those organizations were faith-based nonprofits, including Jewish groups such as the The Associated: Jewish Community Federation of Baltimore, which raised $1 million with 150 callers on #GivingTuesday.

The very foundations of #GivingTuesday stem from the ingenious fundraising efforts of the 92nd Street Y in New York City, a Jewish community organization. The group founded #GivingTuesday in 2012, planting the seed that has grown into the wildly successful day of giving that now exists.

Some Jewish community leaders are using the start of Hanukkah to give back. Jewish Family Service in Seattle has provided basic need assistance for disadvantaged families and announced its charitable support for resettling Syrian refugees.

Leaders of Jewish nonprofits can help secure year-end gifts by using Hanukkah-themed communications, and in doing so reestablishing the strong cultural ties between donors, prospects, and the nonprofit institution in question.

China’s Financial Crisis and Nonprofits: What to Expect

Global stock markets are reeling after the widely predicted (yet no less jarring) Chinese financial crisis caused the Shanghai Composite to plummet, stoking fears that the world’s second largest economy is facing a bleak economic outlook. The Dow Jones plunged 1,000 points (before rebounding a bit). Markets from Europe to Southeast Asia also suffered big loses.

Throughout the summer, Chinese markets had been on the rise. Between 2014 and 2015, the stock market rose 150 percent, in part because 40 million Chinese citizens entered the stock market for the first time.

Many of these new accounts – however – were founded on borrowed money. Analysts projected the eventual reversal of fortune, as China’s debt-fueled economy and speculative investing were unsustainable bedrocks for the country’s surging financial sector. Last minute efforts by the Chinese government to regulate debt-based investments, pump the economy full of cash, and suspend new public offerings were ultimately too late.

The global financial plunge comes at a poor time for the nonprofit sector. With an amazing post-recession rebound, the philanthropic sector has benefited over the last year from an uptick in giving and other positive developments, such as the growing popularity of #GivingTuesday.

The continued resurgence – however – may be tempered by a growing financial storm, as nonprofit professionals head into the biggest fundraising season of the year with markets in the doldrums. Top-income level donors who leverage assets to make their charitable gifts may be less inclined to give this holiday season, as well as other giving demographics that choose to spend conservatively amidst the confusion and pessimism that may emerge from the Chinese crisis.

Development and nonprofit professionals eager to continue the positive fundraising trends of the last year need to begin gearing up for year-end giving immediately. Only through careful planning and considerable time commitment can fundraisers excel in times of financial uncertainly and flux.

Fundraising Essentials: Mobile Giving

Earlier this month, Paypal announced its 2014 charitable giving statistics. If there is one thing that the numbers tell us, it’s that donors are moving toward mobile devices as their preferred means of digital giving.

Paypal – an online payment service – saw a 50 percent overall increase in year-end giving, totaling $212 million in donations. #GivingTuesday had its best year since its founding in 2012. Donors gave 66 percent more than they did through Paypal the previous #GivingTuesday, and mobile giving leaped an astonishing 101 percent.

The trend in mobile spending is not unique to nonprofits. On Black Friday this year, retailers witnessed a 62 percent increase in Paypal purchases made through mobile devices.

The biggest reason for this development is that mobile giving is extraordinarily easy. Revolutionizing during the tragic earthquake in Haiti, nonprofits adapted text-based donations into their campaigns with great success. By simply responding to or sending text messages, donors could send gifts in response to ongoing events completely hassle-free.

Political campaigns took the strategy one step further during the 2012 presidential election. Campaigns stored their donors’ credit card information, soliciting funds via emails that allowed repeat donors to merely click a giving level to immediately send a gift.

Mobile fundraising simultaneously taps into the immediate psychological gratification that derives from charitable giving, while also satisfying consumers’ ever-growing preference for convenient, streamlined, and user-friendly digital designs that simplify financial transactions.


Take tipping at restaurants and cafes, where a similar trend has emerged. Tipping has increased due largely to the intuitive design of iPad checkouts, through which a click of a button enables the consumer to tip without experiencing any interruption to flow of the transaction

Advancements in computer technology have driven the size of consumer electronics down, while greatly increasing their capability and utility. In thirty years, we’ve seen seen the arc of technological progress span between the release of the household desktop to this year’s highly anticipated iWatch.

Consumer behavior – part catalyst for this rapid change, but itself molded and affected by technological progress – now evolves at a quicker rate than ever before. Keeping track of this evolution is essential market-watching for fundraising professionals.

Congress Gives Partial Extension to IRA-to-Charity Rollover

On December 16, the U.S. Senate voted to extend several charity tax breaks through only the end of 2014, though many in the nonprofit sector want a permanent implementation of the policies.

Many fundraising professionals support the IRA rollover tax break in particular, which they want implemented permanently. Before the vote, the tax breaks only applied to 2013 tax filings, but are now slated to apply to donations made by the end of the 2014 calendar year.

Enacted in 2006, the IRA tax-to-charity rollover allows 70-1/2 or older U.S. citizens to donate up to $100,000 from their Individual Retirement Accounts (IRAs) to public charity without being taxed. According to some sources, older philanthropists were waiting to see the result of the vote before making giving decisions in the final weeks of 2014.

The IRA-to-charity rollover encourages charitable giving among older prospective donors – especially those who do not itemize their donations. The tax break allows individuals to give large sums from their IRAs to charity without that allotment applying to their adjusted gross income. Additionally, the donations are applicable to required minimum deduction. This means that on joint-tax returns, a spouse can used a Qualified Charitable Distribution (QCD) to exclude up $100,000 per his/her partner’s charitable giving through the IRA rollover.

In the past, Congress has voted on the retroactive applicability of the IRA rollover tax. If Congress picks up the debate again and passes similar legislation, the tax break could theoretically apply to the 2015 calendar year.

Other tax breaks given partial extension through the end of 2014 include conservation donation incentives that help modest-income landowners contribute to land conservation efforts and food inventory gift incentives that encourage farmers to donate excess food stock to food banks.

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