DID YOU KNOW? Last week, after indulging in the tempting deals of consumer-centered Black Friday and Cyber Monday, millions of people opened their checkbooks to support their favorite causes on the annual day of charitable giving, “#GivingTuesday”. Since its founding in 2012, #GivingTuesday – typically used with a hashtag to denote its widespread presence on social media – has helped encourage over $1 billion in charitable donations to nonprofits. A preliminary estimate published by the Nonprofit Times announced that this year’s #GivingTuesday donation total exceeded $380 million in the U.S., with over 3.6 million donations, making it the most successful year yet. This marked a 27 percent increase from last year’s total, which reached an impressive $300 million, and a 45 percent increase in the number of individual donations, which stood at over 2.5 million in 2017. In a press release last week, Henry Timms, Executive Director of 92Y and Co-Founder of #GivingTuesday, expressed that the original intentions when creating this day were to overcome division and emphasize shared values. “To now surpass a billion dollars in giving and volunteering is a testament to a global spirit of generosity that may not always make it into the headlines but is evident in every corner of America and around the world,” Timms said in a press release last week. Starting from a simple idea, #GivingTuesday is now recognized as an international day of giving. Its founders are hoping to increase the impact of this day in future years by encouraging participants to consider also volunteering on this day, rather than simply making a donation. For more information on this year’s #GivingTuesday numbers and the history of the day of giving, visit this article from the Nonprofit Times.

1. Patagonia to Donate $10 Million of New Tax Cut to Nonprofits Fighting Climate Change  

Last week, Patagonia made one of this giving season’s biggest donations yet. Rose Marcario, CEO of the outdoor clothing company, announced that the company would donate all $10 million of the money it received as a result of the new corporate tax cut to organizations fighting climate change. While Patagonia has long been a supporter of environmental groups, this will mark its largest single donation to charitable causes. In a statement posted on LinkedIn, Marcario took a critical stance of the new administration’s decision to change the tax code, accusing the it of threatening essential services to society’s most vulnerable, including the planet, typically funded by these taxes. According to Marcario, “being a responsible company means paying your taxes in proportion to your success and supporting your state and federal governments, which in turn contribute to the health and well-being of civil society.” The post also included an economic critique of this policy. Citing the most recent Climate Assessment Report, which predicts that the U.S. economy could suffer billions of dollars of losses as a result of the current climate crisis, Marcario mentions a few ways the country has already felt these consequences, including mega-fires, deadly heat waves, and toxic algae blooms. Some are skeptical of the motivation behind the decision, claiming that it was meant as an appeal to its consumers rather than a moral objection to the new tax code. In a speech made at UC Berkeley earlier this year, Marcario stated, “Any time that we do something good for the environment, we make more money.” Yet while the company’s consumer base does indeed consist primarily of those who care deeply about protecting the environment, others argue that this alone is not likely to elicit such a significant donation. Many are looking at other companies to follow suit. In a report from Bloomberg, similar “unplanned cash” that 180 of the country’s biggest corporations found themselves with as a result of the tax cut amounted to a remarkable $13 billion. So, this giving season, by focusing on strategic solicitations, your organization might be able to reap the benefits of particular socially-minded organizations feeling a little extra “generous.” For more information on Patagonia’s decision, click the link to the article above from Nonprofit Quarterly.

2. Scaling Sustainably

In an article from the Forbes Nonprofit Council, Eric Griswold, CEO and Chairman of the Board at “The $100 Solution,” establishes a few priorities an organization should establish when attempting to scale or grow a nonprofit. According to Griswold, whether it means providing more services or expanding the reach of your services nationally, deciding what scaling means for your organization is a necessary place to start. Ensuring that your organization has the proper infrastructure in place is the next step in planning such an expansion. Yet this might not only require expanding to new properties or hiring more staff. Building this infrastructure will also involve acquiring the software and tools to handle an increase in online traffic and getting your website up to date. Another essential precautionary measure to take will be implementing sustainable fundraising practices. While asking your donors for a one-time gift for a new project expansion will, in most cases, lead to a hike in fundraising, this temporary solution will not lead to lasting, secure funding that will allow you to maintain such an expansion. When asking donors to consider supporting new scaling, paint them a picture of what your organization will look like many stages into this growth, highlighting the greater reach of your impact. In order to diversity this funding, consider identifying and applying to grants for which you might now qualify as a result of newly offered services. Finally, when contemplating an expansion, consider how your team members’ roles might shift during this process, making note of how particular members’ strengths might naturally fit into new positions. Don’t be afraid to look outside your organization if you do not envision a successful transitioning of roles of current staff. Though increasing the scale of your organization typically does not happen overnight, having a plan in place for future infrastructure, funding, and personnel will ensure a smooth process when this scaling does occur. To learn more tips on scaling and how Griswold saw these ideas play out at his own organization, check out the link above.

3. Rise in 501(c)(4)s Further Blurs Line Between Tax-Exempt Status and Political Activity

A recent article in The Atlantic discusses the considerable increase in registrations of 501(c)(4) social welfare organizations as a result of the current political climate and the newest changes to the tax code. According to the article, a significant number of nonprofits that have historically focused on litigation and education are reorganizing themselves and entering the political stage as social welfare organizations. Conservative organizations have typically been more inclined to abandon the benefit of tax deductible donations inherent in 501(c)(3) status for the permitted political activity tied to 501(c)(4)s. Many liberal organizations were initially critical of this politicization of social welfare organizations; however, a recent skepticism in the effectiveness of the “court-centric” approach to producing social change as well as the heightened charitable deduction thresholds in the new tax code has led many liberal organizations to follow in the footsteps of their conservative counterparts and adopt 501(c)(4) status. Specifically, according to the article, the most recent conservative appointment to the Supreme Court made many nonprofits and resistance groups question the court’s future ability to promote liberal values, prompting many to jump into the political ring themselves. Similarly, the passage of the Tax Cuts and Jobs Act, under which most taxpayers will no longer be able to itemize and receive tax deductions from charitable donations, made claiming 501(c)(3) status considerably less relevant for fundraising purposes and thus far less attractive. In 2017, the American Civil Liberties Union (ACLU), which operates both a public-charity and a social welfare organization, saw the total assets of its 501(c)(3) grow 17 percent, while the total assets of its 501(c)(4) grew at an astonishing 89 percent. The NAACP took an even bolder step, restructuring itself completely from a 501(c)(3) into a 501(c)(4). This transformation, according the article, represents a “distinct brand of legal liberalism for the 21st century—one less oriented around lawsuits and tax-subsidized donations and more closely connected to partisan politics and grassroots organizing.” While the emergence and increasing importance of 501(c)(4) organizations is not a new realization, understanding how this trend is tied to the current political climate will lead to more accurate predictions of their roles in civil society going forward. To learn more about how this trend will further complicate the role of tax-exempt organizations in the political arena and the increased pressure on Congress and the IRS to regulate tax-exempt statuses and the potential flow of “dark money” as a result, click the link above.

4. House Republicans To Consider Rescinding Nonprofit Tax

Speaking of new tax legislation. Last year, a Republican-backed provision of the Tax Cuts and Jobs Act required historically tax-exempt organizations such as churches, hospitals, and colleges to pay a 21 percent tax on some types of employee fringe benefits. Many churches and other nonprofit organizations, previously foreign to the complex tax filings of the IRS, immediately renounced the tax. Now, according to an article in Politico, House Republicans, led by Ways and Means Chairman Kevin Brady (R-Texas) and hoping to get the new tax bill to the President’s desk before the end of the year, are proposing to overturn this tax. The legislation, which, among other changes, proposes to revise some temporary provisions that have since expired and “revamp the IRS,” faces opposition ahead from Democrats, who have consistently opposed the legislation for other purposes. While many Democrats have publicly opposed the new nonprofit tax specifically, it is unlikely that this revision alone will get the Democrats on board. Yet, the new proposal to overturn this measure does suggest possible hope for nonprofits. Last week, Senators James Lankford (R-Okl.) abd Chris Coons (D-Del.) sent a letter asking the Treasury Department to temporarily suspend the nonprofit tax. While the heightened thresholds for charitable deductions in the new tax code still threaten nonprofit funding and the future of this specific nonprofit tax provision still hangs in the balance, such collaboration represents a promising outcome. To read more about Chairman Brady’s proposal and its likelihood of success, visit the article above.

5. Keeping it Short and Sweet: Communicating Your Message to Policymakers

Engaging policymakers in your organization’s mission is often no easy task. Conveying your message to any potential collaborator poses its own set of obstacles, let alone career public servants with long lists of to-do’s and a million similar proposals sitting on their desks. In an article in the Stanford Social Innovation Review, Lisa Witter and Odette Chalaby outline eight tactics that social sector leaders should employ when creating presentations or solicitations for such policymakers. The data used to compile this list is taken in part from a study done by Apolitical in over 140 countries that asked policymakers what resources typically have the greatest impact on their decisions. One of the first findings of the study was that public servants are heavily time-burdened. While a seemingly obvious observation, this can have important impacts on the proposals a policymaker chooses to hear. Thus, in order to effectively communicate your message to busy public servants, get to the point. The article suggests keeping written pieces to around 700 words or less, using graphics and visuals to summarize lengthy information, and avoiding complicated details and colloquial language that someone outside of your field is unlikely to understand. According to Witter and Chalaby, “policymakers like to get real, and fast.” Your presentation is far from the first they have heard of its kind, likely that day alone. Make sure to outline the process, timeline, and scalability of your proposal quickly and matter-of-factly, and be realistic about possible risks and delays. Another tip encourages organizations to be upfront about exactly which departments and how much money it will take to accomplish their goals. If the involvement of several departments will be necessary, give the policymakers all the tools they will need to get them on board. If you leave this part up to them, your proposal is likely to get lost in a mound of paperwork under other pressing issues. To read more suggestions on how to get your local policymakers’ attention without drowning them in information, visit the link to the article above.

That’s it for this week’s Friday Five! For tips from the online fundraising platform Classy on how to capitalize on post-#GivingTuesday excitement and how to steward and engage donors in the final month of this giving season, click here.

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