A weekly rundown of the latest fundraising news, ideas, and trends gathered by our fundraising editor Eden Stiffman and other Chronicle contributors. You’ll also find insights from your fundraising peers. Delivered every Wednesday.
From: Eden Stiffman
Subject: Fundraisers Respond to Biden's Win and the Stock Market Surge
Hi, I’m Eden Stiffman, senior editor at the Chronicle of Philanthropy.
This week, we talk about what a Biden win and the surging stock market may mean for giving. Plus, the share of donors who say trust is an important factor in their charitable giving is declining.
Thanks to sponsor iDonate for supporting Fundraising Update.
How Donors May Respond to the Biden-Harris Win
Some progressive nonprofits saw a surge in donations following President Trump's election four years ago. They rode the wave of so-called rage giving over the past four years and are hoping they can keep the momentum going.
That spike in giving four years ago — dubbed the "Trump bump" — wasn't an isolated phenomenon.
Michael Conklin, a professor of business law at Angelo State University in Texas, analyzed donations following the past four presidential elections. He found that nonprofits that were politically aligned with the losing presidential candidate saw a substantial spike in giving compared with those aligned with the winner.
Throughout the years examined, nonprofits associated with the opposite ideology of the presidential winner saw an average 57 percent bump in contributions while those with the same ideology as the presidential winner saw a nearly 3 percent drop. The more unexpected the election outcome, the greater the gap between liberal and conservative contribution levels.
This year might buck that trend, he says. "It's possible that liberals got the best of both worlds. They got the win, but they didn't win in the manner that was as one-sided as expected."
President Trump received more votes than any presidential candidate in history other than Biden, and the future of the Senate is still unclear. Progressives are "staying vigilant. They're not being complacent, which is a good thing for contributions," Conklin says.
That's the case at the Environmental Defense Fund.
The advocacy group had planned campaign messaging for multiple election outcomes. When the Associated Press called the election for Biden on Saturday, the organization had an email ready to go to supporters.
The group is promoting a two-to-one match for donations. While it's too soon to judge the results of the appeal, Anne Senft, vice president for development, says online giving was quite strong over the weekend, and she's cautiously optimistic that will continue.
"Our donors are smart" she says. "They know that just having Biden and Harris in the White House is definitely a step in the right direction for the environment, but it's not a slam dunk. There's still going to be a lot of opposition that we have to overcome. So we want to keep the pressure on."
So will there be a "Biden bump" with a surge of gifts to causes aligned with the GOP?
It’s a complicated question, says Leslie Lenkowsky, an expert on philanthropy and public affairs at Indiana University and a regular contributor to the Chronicle.
"The big issue is we just don’t know what the Biden administration is going to look like, especially the degree to which he will move toward the left end of his party," he says.
If the administration leans more to the left, he expects to see some conservative grassroots organizations pop up and attract donations, although he doesn't think donors will move as quickly as they did in 2016.
John Walters, chief operating officer of the right-of-center Hudson Institute, says he expects there might be some "defensive giving or defending things that might be under attack under a new administration." But right now "it’s not so clear what those are," he says.
The stock market's surge following Biden's victory and positive news on the development of a potential coronavirus vaccine may bode well for end-of-year giving for nonprofits of all stripes.
And while some tax experts say some of Biden's proposed policies could deter giving, other fundraisers say their supporters are so far buoyed by the Biden transition team's early moves.
Marcela Howell, president of In Our Own Voice, a policy advocacy group focused on reproductive justice for Black women, says the prospect of a national response to Covid-19 is energizing her group's donors.
"I don't know if the Biden-Harris win does it, but I think people are now more optimistic about having a structure around fighting Covid, as opposed to piecemeal stuff," Howell says. "That, I think, is giving more people a feeling like they can contribute to other groups."
Fundraising consultant Lynne Wester expects the impulsive giving seen during the Trump administration to die down. "Now that the election is wrapping up, one of the things I think we'll see less of is rage donating, and people will settle back into their more normal, more kind of standard philanthropic priorities," she says.
Even so, Wester doesn't expect a complete return to pre-Trump giving behavior until the pandemic is under control. "I think the exception to the normal pattern of giving will be, of course, social and racial injustice," she says. "I think there will be larger pushes for that."
Read the rest of the story from Emily Haynes and me.
Hear From You
Do you see donors giving differently now that we have a new president-elect? Is the election outcome affecting your fundraising strategy? If so, how? Drop me a line and tell me what's happening.
Major Biden Gifts
One charity is especially pleased that one of its own will soon move into 1600 Pennsylvania Avenue.
Major Biden, one of the president-elect’s German shepherds, will become the first rescue dog to live in the White House. And the Delaware Humane Association, which runs the shelter from which the Biden family adopted him, is planning some appeals around the first dog-elect.
Fundraising around political events can be tricky, says Daniel Condoluci-Smith, the humane association’s director of philanthropy.
“Our focus will be on the ultimate rags-to-riches story showcasing the potential shelter animals are given when people choose to adopt,” he says. “So far, most of the response from our community has been very positive and supportive.”
Need to Know
— Share of donors who say trust is of "high importance" in making giving decisions
The share of donors who say trust is an important factor in their charitable giving is declining, according to a new study from the Better Business Bureau’s Give.org charity evaluation site. The study found the proportion of donors who say trust is of “high importance” before making a donation declined from 73 percent in 2017 to 64 percent in 2020, my colleague Michael Theis reports.
The survey also found individuals who say trust in a charity is highly important are more likely to donate than those who assign low importance to trust in charities; 53 percent of respondents who say trust is highly important gave more than $200 to a charity in 2019, compared with 39 percent of those who said it was not as important.
Further, donors are giving less weight to a charity’s financial ratios as a “trust signal.”
- Now that the election is over, Michael and editor Dan Parks are following nonprofit advocates' push to enact another round of stimulus spending. A key provision in the stimulus package enacted in the spring was the Paycheck Protection Program, which provided forgivable loans to nonprofits and businesses. Nonprofits are pushing for a renewal of that program and an expansion of it, although some are seeking a cash-relief program with a simpler grant-application process. In the spring, Congress approved a provision for the 2020 tax year only that allows taxpayers who don’t itemize to deduct up to $300 in charitable giving. Senate Republicans support legislation that would increase that amount to $600 for individuals and $1,200 for couples, a sign of “momentum to move in the right direction,” said Jeffrey Moore, chief strategy officer at Independent Sector.
In addition, under the Cares Act of 2020, donors can this year write off cash contributions for up to 100 percent of their adjusted gross income; the limit in the past was 60 percent.
For example, someone who makes $100,000 and writes a check for a $100,000 donation can receive the full tax benefit for doing so. The incentive is only applicable for donors who itemize and doesn't apply to gifts of appreciated securities, real estate, or items like art or jewelry.
"For the very wealthy — people who do not need their salary to live off of — this is good news," fundraising consultant Peter Heller told me back when Cares Act was passed. "However, I don’t think that this tax law is going to be their main motivator for giving."
But in a recent advice column, my colleague Maria Di Mento reported some donors are taking advantage of that new incentive.
Earl Granger III, chief development officer of the Colonial Williamsburg Foundation, said his nonprofit has received several six-figure commitments this year from donors who were able to take advantage of the new policy.
In addition to better understanding philanthropic passions, Granger told Maria, it is also important to understand a donor’s interest in tax advantages.
It’s not clear if Congress will extend that measure beyond this year, so reminding donors of its availability through year’s end could spur affluent donors to increase their giving substantially by the end of 2020.
Are you talking to big donors about this option? Are they taking advantage of the provision? Drop me a line and let me know.
Tips & Tools
- Study Shows How Nonprofits Should Improve Online Gatherings: Many meetings have little structure, and participants don't always know if they need to turn on web cameras or whether it's OK to leave them off.
- How to Make the Most of GivingTuesday or Any Giving Day: Tools, articles, and other resources to help you prepare for #GivingTuesday next month.
- Your Discriminatory Database May Be Turning Off Donors. Here’s What to Do About It: Accurately recording donors' names and identities is vital to effective fundraising and strong donor relations.
What We're Reading
- Patients are uneasy about fundraising solicitations from their doctors or hospitals, according to the first systematic survey of the public on the issue of "grateful patient" charity appeals. Nearly all of the 513 people surveyed thought it was unethical for doctors to pass along to development staff the names of patients deemed good fundraising prospects — or for fundraisers to research patients' information to gauge how much they could donate. Large majorities also object to generous donors receiving perks, such as the doctor's cellphone number or expedited appointments. The study's authors say it has added salience given the Covid-related surge in hospitalizations this year. (Conversation)
- Some people who are prospering during the pandemic see charity as one way to ease the guilt that some financial advisers say their clients feel. In addition to giving big tips and spending more at struggling local businesses, 56 percent of U.S. households have given to charity in response to the pandemic. The Restaurant Employee Relief Fund, for example, received more than $21.5 million in donations for restaurant workers as of July 2020, with an average individual gift of $75. Many have sent in anonymous donations, some as large as $5,000 and $10,000. (Wall Street Journal — subscription)
- The small talk was less “Where did you summer?” and more “Where are you living?” Washington’s power brokers are adapting to the New Normal — and that includes changes in how they party and raise money. (Washington Post)
Subscribe to Our Other Newsletters
- Philanthropy Today — News, opinion, and features (daily)
- Philanthropy This Week — Roundup of news, opinion, and features (weekly)
- Nonprofit Adviser — How-to’s for nonprofits (weekly; subscriber only)
- Chronicle Insider — Highlights from each new issue (monthly; subscriber only)