Working With Major Donors During a Tough Economy

Guest Post from David Robinson-Slemp, Development Director, Joe's Movement Emporium (Mt. Rainier, Maryland). David is a friend and colleague from our work together raising money in Indian Country and in the local community arts scene. He offers this idea as a personal approach to major prospects and "high-influence" donors, especially for an organization in the middle of a major campaign where staff are worried about the consistency of pledges during the current economy.

"For major donors or prospects, an organization might draft a proposal asking these individuals to consult their financial advisors about selling low-performing stocks and then donating the cash proceeds. It is possible that these donors would be eligible for a tax benefit because of the capital loss on stocks that were sold below their original value. In addition, these same donors would be eligible for a charitable deduction because of the cash donation.

From the donor's standpoint, this method might assist with honoring pledges or continuing annual support -- but without compromising one's financial position even more during a market crisis. In short, donors would not feel the pinch of tapping into to personal savings or other cash reserves to make a donation. Instead, they would liquidate what they have already purchased and what is presently depreciating their personal portfolios. Furthermore, there are tax-incentives factored into this approach, incentives that donors might seriously consider when pondering the costs of gifts and the ability to make cash gifts in a down economy."

These days, David advises that organizations explore many options -- both within the IRS regs and within organizational capacity -- in order keep the giving process as flexible and doable for donors as possible.

Another idea: Form an informal advisory circle of regular contributors, including board members with finance backgrounds, and ask for their help with fundraising activities that, though complex, might have more appeal with some "high-influence" prospects. These prospects could help cover funding gaps that will likely materialize this year.

How are other development folks continuing -- or deepening -- real connections with your most committed donors in this economic climate?