Federal cash for social programs will drop massively by 20%
Federal cash for NonProfits is lowest in 40 Year Average of GDP.
In 2019, it drops to 11.1%.
Social Security and Medicare costs place incredible pressure
to shrink community development, education, arts, afterschool, LGBT civil
rights, etc. Some of that money flows to
states and cities and then to your agency –it’s drying up by 10% right now. I
see frantic responses to save great programs that are cash starved,
Contributions are declining. Tax Law changed in 2017 so there is no tax benefit for most people to make a gift.
Religion is quickly declining. Religion has been an important teacher about charity and volunteering. Belief has dropped 12% in a decade.
On Giving Tuesday, I’m offering five NonProfit leadership teams relief from the stress. Apply here. It’s not a miracle but you may get a new direction. I’ll give a two hour coaching session to each team over the holidays. There is no cost at all. Part of the discussion will be planning multiple cash streams to keep your agency stable. I use the proven Four Decisions system (People, Strategy, Execution, Cash).
Apply here. Like the lottery, the only way to win is to try! I hope the best for you.
Many nonprofits are being damaged by fundraising. The change is like being hit by a fast freight. Next year will not feel like last year. Nonprofit leaders often regard charitable gifts as the first and major provider of money. It’s critical! Cash pays staff and helps clients. Three forces are changing the giving landscape. Are you ready?
First, Tax reform in 2017 doubled the standard deduction. Only richer people and tithers (people who have a spiritual habit of giving) benefit financially from gift-making. Reports indicate that gifts from individuals declined by 1.1% in 2018. Charitable gifts from corporations increased. Gifts from those over 70 years old who made gifts from IRAs also increased.
Second, the number of corporations that received half of all profits in the USA declined. In 1975, 109 companies made 50% of all profits. In 2016, the number dropped to 30. There are very big gifts but not as much capacity for small and medium gifts.
Thirdly, Christian religious affiliation is declining rapidly in the USA. Christianity has been a major inspiration for giving. Pew Research shows a decline of 12% in the last decade! It’s hard to describe what changes this rapid rejection of religion will make in American society, but charitable gifts will be affected.
Are you watching your dependence on gifts and making appropriate changes?
I coach nonprofits who face turbulence. Contact me at email@example.com for a free consultation.
Giving is a good thing. The United Nations Foundation and the 92nd Street Y started a giving campaign in 2014 that has gone viral. CauseVox states that 2017 raised $125 million more than 2016 – $300 million in total.
They also point out that its a great time for donor education. 22 billion hits on nonprofit web pages happened that day in 2017.
I have a formula to see if it’s right for you, Find your expected Total Revenue. Multiply it by .1 and save the number. Now multiply that new number by .5 and you have a range. Do the charitable gifts that you expect this year plus Giving Tuesday fall within that range? If so, then you are robust enough in your charitable funding to invest the energy and work hours.
Let’s illustrate. The Rochester, NY YMCA 990 report had a revenue of $45 million dollars in 2017. $38 million was from fee for service so that was the primary financing plan. Because management is committed to protecting the agency, they should have set a goal for a 10% surplus of $4.5 million ($45 million x .1). They actually had a deficit of $2 million for 2016 and for 2017 so they need cash. (I’m available to coach 🙂
Because they know that priorities can change quickly, they also want a secondary source of financing (government contracts, charitable gifts, etc.) They take the surplus number of $4.5 million and multiply by .5 which equals $2.3 million. Their required range for donations as their secondary source is $2.3 – $4.5 million. Their 2017 charitable gift total was $4.2 million.
They know that the average gift on Giving Tuesday is $100. Let’s assume that they check with the Board and decide that they will solve 10% of their deficit (2,000 gifts) on Giving Tuesday. The effort seems worth it because they will also call attention to all of their social media. They realize that some of the gifts would have come in without Giving Tuesday but charitable donations are a very good secondary financing plan for them.
What did they get? You’ll have to check after Giving Tuesday 🙂
What if your normal gift total is $40,000 for the year on a $45 million budget?
Determine what is the best secondary financing and also do you have it already in operation? Many nonprofits only have government contracts and they desperately need to choose one more financing source. Many nonprofits do not receive much charitable funding. Don’t jump for Giving Tuesday just because everyone is doing it. It may not be your secondary source solution.
Use Giving Tuesday if its part of a larger plan for secondary source financing for your mission!