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Monday, January 22, 2018

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Could the Feds be any clearer, folks?
Tom Ahern

November, 2014

"If your nonprofit
does not aggressively
promote charitable
bequests, then your
nonprofit is by
definition an
irresponsible loser." 
High-ranking agency official: "I can't believe people are still on the sidelines about this. It's like being on the sidelines about cigarette smoking."


Exhibit A comes from the Wall Street Journal, September 25, 2014, where an article noted: "Harvard relies on the endowment's earnings for more than one-third of the university's operating budget."

Well, that's interesting. Harvard meets one-third of its annual nut from endowment income. Smart.

So, OK, if it's that lucrative for annual, where doesendowment come from, a sly boss might ask you?

Your answer: "From charitable bequests, by and large." Rock forward a bit on your toes when you say it.

And yet bosses and boards say No! to bequest marketing, when asked.

They want more proof of the program's worth. Chests inflate. Actual testimony:

"Show me the data!"

"Stick to your knitting. That's a different pond."

"We don't have time for dead donors. We need living donors right now!"

(Dear Fundraiser: That was your first mistake. You asked for approval.

(Why seek approval from anyone? Fundraising tactics are exclusively your domain, no one else's. It's your head on the chopping block, after all. Not theirs. Who cares about their dumb opinions? You're the one who's supposed to really KNOW the vast body of fundraising knowledge. There is a body. And you should know it, or you're not a professional at all.

("I don't have time to read," you object. Prepare to be worthless, then. Of course, have your fantasies. Your Svengali-strength powers of persuasion could do the trick.

(For the rest of us.... To succeed wildly well, fundraisers must exercise ABSOLUTE control over all donor communications -- word and image and offer.

(Any other approach is an indefensible joke and bad management. Allowing untrained people approval over fundraising materials is akin to allowing monkeys loose in a missile launch room where bananas hide the buttons.)

Which led the IRS to pass a new rule

The new rule from the Feds, formulated in response to many complaints from senior NGO industry executives, stipulates,

"If you do not market charitable bequests to your best prospects, i.e., your most faithful donors, then you are a hopeless chump agency that needs new management as fast as possible. And until you get this fixed, we're revoking your 501(c)(3) status and you cannot legally pretend to the world that you are competently managed."

There are only two known reasons why a charity would not actively engage in bequest marketing aimed at its most devoted donors:

(1) ignorance; (2) suicidal tendencies.

Fear. Management desperation. They might qualify, too.

Fear? Really? Don't waste your time. There's no downside. It costs you exactly one letter a year to effectively market charitable bequests. That's the entire cost. One letter a year; you're done.

Fundraising for the future as well as right now

"Harvard relies on the endowment's earnings for more than one-third of the university's operating budget."

What does that actually mean?

It means that your organization, if it were in Harvard's shoes, would only have to fundraise two-thirds (66%) of its annual philanthropically-underwritten operating budget, rather than 100%. A third is already guaranteed, from past gifts via bequests.

What a relief! You can imagine....

You can think straight for a change. You can think strategically about growth instead of frantically, endlessly grubbing to more or less fill the annual pot.

Here's the thing.

I speak to thousands of fundraisers. I routinely ask them, "Who expects to be out of business in 50 years?" No one raises a hand.

And yet....

Nearly none of them, I'd wager, has an effective bequest marketing program in place.

Spell "delusional" for me.


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