A windfall for your donors and you

A recent Chronicle of Philanthropy study of 118 large charities (that make up 10% of total US giving) found these charities had, on average, a 41% increase in revenues year over year in the second quarter.  More than half (55 of 94) reported significant increases in small gifts.

And they saw increases in gifts of $600 and $1200.  We’ve seen it too with several of our clients.

It doesn’t make a lot of sense… until you remember that the COVID-19 stimulus checks sent back six years ago were for $600 or $1200.

Um, my colleague is telling me that was actually just back in April.  Easy mistake to make.  COVID-19 time is a flat circle.

Anyway, in summary, some people donated the entirety of their checks to a single charity.  There was even reporting on this at the time.

What can we learn from this?  The easy answer is to make sure you are scrubbing your ask strings.  Someone whose donations to you are, in order, $20, $20, $20, $20, and $1200 doesn’t deserve an ask string for $1,200, $1,800, $2,400, other.  That’s assuredly a way to make a donor an ex-donor.

But the bigger point is about how people donate.  People are more likely to donate windfall money of the easy-come, easy-go sort.  Researchers in China found that subjects who were given 50 yuan were 7-9 times more likely to donating the full amount to charity if they were told it was a gift rather than something they had earned.  Closer to home, American college students donate almost 25% of their gifts from participating in a study to charity… but only 19% of their “earnings.”  All that differed was the phrasing.

Clearly, many people needed their stimulus checks.  Just as clearly, others did not and used that fact to make lives better for their fellow citizens of this nation and of the world.

This brings up the question of how one can get these gifts from windfall income.  One proven technique is to ask people to make a commitment before the windfall comes — lottery winners were 25% more likely to give if they made a commitment to give before the windfall.

But, of course, if you could predict who was going to win lotteries when, you wouldn’t have to do fundraising — you could donate all you wanted from your private island.

What happened with COVID-19 checks, however, isn’t unprecedented.  The 2001 tax bill and 2008 stimulus bill both included paper checks sent to taxpayers.  And as we look at 2021, there’s a chance of another stimulus coming.  If one does that includes direct payments to taxpayers, there may be an opportunity on the horizon.  And if not, the found money rule still applies to major gift solicitations, appeals around tax season, and more.

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