Experts Predict Strong Finish to Fundraising Season

The 2016 holiday fundraising season is poised to be a big one for many nonprofits, especially those that can tap affluent donors’ generosity, experts say.

With the stock market roaring and the economy building strength, many charities say they are on track to meet their goals for the year-end period, noting that some wealthy donors have already started to make big gifts. Some groups report that giving by small donors is also strong, especially online. Contributions made through online-gift processor Network for Good were up more than 18 percent for the week of December 5 over the same week in 2015.

Giving Tuesday offered a glimpse at how the holiday-giving season is playing out so far. Nonprofits raised an estimated $168 million online through more than two dozen gift processors on the fifth annual day devoted to philanthropy.

“I think people are having a much easier time than they may have thought,” said Kim Klein, principal at Klein and Roth Consulting, which advises mostly small social-justice organizations on their fundraising. “I think people thought the election would use up much more money.”

Clients of the Marts & Lundy, which include colleges, hospitals, and other large organizations, seem “cautiously optimistic” about the holiday season, with most on track to meet their year-end goals so far, said Phil Hills, chief executive of the fundraising-consulting firm.

“It could end up being a pretty good year,” Mr. Hills said.

In January, his firm along with Indiana University’s Lilly Family School of Philanthropy forecast that giving would grow 4.1 percent in 2016 over the year before. Mr. Hills said he still stands behind that prediction because of gains in the markets in November and December.

Looking ahead to 2017, nonprofits might need to start placing more emphasis on fundraising, some observers say, as President-Elect Donald Trump and Congress might take actions that will lead to financial troubles for charities. Cuts in federal spending could mean fewer contracts and grants for health care, social services, and educational institutions, some experts say, and possible changes to the tax code next year might also reduce giving incentives.

Market Growth

Still, markets have seen relentless growth since Mr. Trump’s election victory, and other economic indicators, like the gross domestic product and the unemployment rate, appear to be improving.

It’s hard to know how long those conditions will last, analysts say, so it’s important for nonprofits to seize opportunities now.

With the markets booming, Ms. Klein said, nonprofits need to inform their donors about the benefits of donating appreciated stock — noting in that addition to being tax-deductible, such gifts are exempt from the capital-gains tax.

Mr. Hills said he’s advising his clients to be aggressive in pursuing donors who may have seen assets appreciate — and many groups report that they’ve started contacting their biggest and most loyal supporters already.

Stock Gifts

Fundraisers at the Dana-Farber Cancer Institute, for instance, started ramping up calls and invitations for meetings with big donors in October and are hoping to close some major gifts this December, said Susan Paresky, senior vice president for development.

The hospital saw a 20 percent increase in the number of stock gifts in October and November compared with last year, raising $1.42 million from the transactions. Ms. Paresky said she expects even more stock gifts to come as the year ends.

Her team uses targeted mailings and emails and one-on-one and group meetings to educate donors on giving stock throughout the year.

During the holiday season, her staff is homing in on supporters who have made large gifts in the past or those who might be able make a big donation for the first time.

In making their pitches, Dana-Farber’s fundraisers will highlight the hospital’s breakthroughs in research and successes in treatment and tell previous donors what impact their past contributions have made.

“It’s not so much about just an increase in the stock market,” Ms. Paresky said. “It’s about how that increase can help leverage even more money for cancer research than there was before.”

Tax-Code Changes

Some nonprofits are making the argument that 2016 is an especially good year for donors to make big gifts, because cuts to income-tax rates that Congress has promised to pass next year will reduce the value of charitable deductions. Experts say that some GOP members of Congress might push for limits on giving incentives altogether as part of a tax-overhaul proposal.

Earlier this month, the Greater Milwaukee Foundation sent an email to donors saying that possible “changes to the U.S. tax code” could make the year-end period “an ideal time to establish or add” to their giving funds. It added: “Your end-of-year gift will ensure you realize maximum tax benefits from your generosity.”

Schwab Charitable, which offers donor-advised funds, also sent a message to account holders in late November that alerted donors to possible new limits on the charitable deduction. “This uncertainty is leading some donors to increase charitable giving so they can realize the significant tax benefits now and proactively manage the size of their taxable estates,” wrote Kim Laughton, president of Schwab Charitable, in the note.

Since the start of its fiscal year in July, the number of contributions to Schwab accounts is up 43 percent compared with the same period last year, while the number of new accounts is up 27 percent.

“I expect it’s because both the markets are good and people want the certainty of the deduction at the level they’ll get it this year versus the uncertainly this year,” Ms. Laughton told The Chronicle. She added that Schwab had ramped up advertising in the holiday season to attract more giving.

Trump Bump

Groups that advocate for civil and human rights, minorities, women, and the environment are still benefiting from a post-election bump in donations.

The American Civil Liberties Union, for instance, has raised more than $19 million online since Election Day, and the rate of giving to the organization has stayed “surprisingly steady,” said Mark Wier, chief development officer for the ACLU in an email.

“If post-election trends continue, we anticipate this year-end will be the biggest in the ACLU’s history,” he said, adding that membership had also spiked by roughly 500,000 since Mr. Trump’s surprise victory.

The Anti-Defamation League has seen its post-election surge in contributions subside slightly, although it’s still receiving online gifts at a volume that is about eight to 10 times higher than in previous Decembers, said Frederic Bloch, senior vice president for growth, in an email to The Chronicle.

“We expect, and are experiencing, a significant pick-up in year-end giving versus 2015 across all channels, including direct response, web, and in person-to-person solicitations,” Mr. Bloch said. The organization, he added, is fielding many more inquiries about volunteering opportunities than usual — and reports about incidents of bias.

Mr. Hills, of Marts & Lundy, said many nonprofits will likely be sending year-end appeals that refer to Mr. Trump’s victory — either implicitly or explicitly — even if they do not focus on political causes. He said the appeals, for example, might say that the group’s “mission is in danger” or that the “people we serve are in need more than ever.”

“I think we’ll see that a lot,” he said.

Tried and True

Ms. Paresky, of Dana-Farber, said nonprofits will face a lot of competition in the year-end season and that most donors will likely be flooded with appeals. Still, she thinks with the economy so strong, all nonprofits have the opportunity to do well. If a charity falls short of its fundraising goals this season, she said, it needs to ask itself why.

Mr. Hills suggested that fundraisers stick with what’s tried and true: Connect with the closest and strongest donors, tell them what the organization is doing with their gifts, and make a case for why money is needed now.

“There’s a lot of things changing in the world right now,” Mr. Hills said, but the basics of fundraising largely remain the same.