The political and economic landscape continues to shift dramatically, leaving many social sector organizations and advancement professionals scrambling to adjust to a host of executive orders, policy changes, public opinions, and donor anxieties. Whether you face economic uncertainties, new tax policies, or evolving regulations on nonprofit organizations, this new era brings challenges, some known and many unknown. I also believe there are opportunities.
Below are suggested key steps that you and your organization can consider to stay ahead of the curve and ensure your fundraising efforts continue to thrive in this turbulent time. From rethinking donor engagement to reevaluating your compliance strategies, here are concrete, actionable steps you can take as the political winds shift.
1. Stay Informed and Adapt Quickly
In an environment of constant change, the first step to staying ahead is to keep yourself and your team informed. The new term of the 47th president continues to produce a flurry of executive orders, with many having significant implications for tax laws, charitable giving, and government-funded programs. These rapid-fire orders can change how your donors think about giving and the types of incentives they expect.
Actionable Tip:
Subscribe to Legislative Updates: Ensure you or your team subscribe to dependable subject- or mission-specific newsletters, blogs, or policy trackers to help you monitor these changes in real-time. Many organizations like the National Council of Nonprofits, Movement Advancement Project, and Independent Sector offer resources that highlight key policy shifts. These resources should include local, state, regional, or national coordinating organizations aligning with your mission or program areas.
Collaborate with Your Legal Team: If your organization has a legal team, develop a close relationship with your legal or compliance teams to interpret how these changes may impact your organization’s operations or fundraising strategies. If you do not have access to in-house counsel and using outside counsel is cost-prohibitive, consider leveraging board members or key stakeholders closely connected to your organization and qualified to provide pro bono or low-bono guidance.
2. Reevaluate Your Donor Engagement Strategy
Political instability or policy changes lead to shifts in donor priorities. Donors might reassess how they allocate their giving in response to political climates or changes in tax laws. As a fundraiser, it is vital to maintain strong relationships with your donor base, provide them with information on how these changes affect the organization’s mission and their charitable contributions, and offer clear calls to action.
Actionable Tip:
Engage Donors in Dialogue: Reach out to your major donors and ask about their current concerns and priorities. A brief survey or a personalized call can help you understand how the political changes are influencing their philanthropic decisions.
Leverage Technology for Donor Communications: Use CRM software and email automation to send targeted updates about tax deductions, new laws, or regulatory changes. Being transparent about how these policies affect giving and showing how your organization can provide impact will keep your donors engaged.
3. Adapt to New Tax Incentives and Regulations
With each executive or legislative term, there are likely to be shifts in tax law that impact giving. Whether it is changes to deductions for charitable gifts or the introduction of new tax incentives, the key to maintaining a healthy giving pipeline is staying ahead of these changes and communicating with your donors.
Actionable Tip:
Educate Your Donors on Tax Benefits: If new tax incentives for charitable giving are introduced, ensure your donors know these changes and understand how they can benefit or be impacted. Consider working with a tax advisor or financial consultant who can offer workshops for high-net-worth individuals on maximizing their giving under the new law to calm the concerns of your most loyal donors.
Consider and/or Revise Your Planned Giving Strategy: In response to policy changes, consider reassessing your planned giving campaigns. Planned giving can be especially sensitive to tax law changes, so be sure your donors are aware of new options that might suit their goals. If your organization does not currently use a planned giving strategy, consider offering this longer-term donation option for donors that may rise above the turbulent times presently affecting the sector.
4. Diversify Revenue Streams and Rely on Multiple Channels
Given the uncertainty around government funding, possible cuts to nonprofit programs, and tax implications for annual giving, it is crucial, perhaps now more than ever, to avoid relying solely on one source of revenue. A shift in government policy could dramatically impact or have unintended collateral consequences on donor giving, grants, government funding, or tax incentives on which many organizations rely.
Actionable Tip:
Expand Your Donor Base: Take the time to expand your donor base and diversify your sources of revenue. Consider how different donors give to your organization and look for new opportunities that align with the intent of groups of donors you might not yet be reaching. Cultivate new donor groups, such as young professionals or foundations that may have different funding priorities, given the current circumstances under the new administration. Digital giving and crowdfunding can also open new avenues of support.
Consider Corporate Partnerships: Corporations may play a more significant role in funding nonprofit initiatives, especially if they have and continue to pursue a corporate social responsibility strategy for marketing or support, as tax incentives or government funding programs become less dependable. Seek to develop mutually beneficial partnerships with aligned and allied businesses, which can offer financial support and greater exposure for you and the corporate organization. The Association of Corporate Citizenship Professionals (ACCP), which focuses on advancing the practice of corporate social impact by connecting and supporting CSR and ESG professionals, might be a good place for you to explore.
5. Reevaluate Your Organization’s Advocacy and Public Policy Stance
In a political climate that is constantly shifting, nonprofits must be vigilant about how they align with government policies and positions. Advocacy efforts will play a critical role in this environment, whether to influence policy or protect nonprofit interests. Understand the limits of your organization based on your IRS designation and carefully operate within those guidelines. The current government leadership will likely introduce policies that impact issues nonprofits care about, such as social justice, well-being, healthcare, social sector support, and environmental concerns.
Actionable Tip:
Identify and connect with trusted advocacy resources: The Charitable Giving Coalition encourages giving and advocates for the charitable tax deduction. The Council of Nonprofits is leading at the forefront of recent social sector developments. Coalition-building organizations by geographic area or mission focus can be sources of actionable ideas, resources, and activities for you, your board, and key stakeholders.
Collaborate with Other Nonprofits: Strengthen alliances with other nonprofits in your sector by mission and location. Coalitions can amplify the impact of missions and the effectiveness of advocacy efforts, especially when responding to sudden policy changes that may affect a group of organizations.
Engage in Policy Advocacy: Within the allowable IRS regulations of your organization, now may be the time to advocate for policies that will help your organization and your cause. Ensure that you follow new legislation closely and that your organization is equipped to respond effectively. Remember that you are also a citizen and have the right to advocate within that role.
6. Prepare for Increased Scrutiny and Regulatory Changes
New policy decisions often invite increased scrutiny of nonprofit organizations, especially those serving targeted populations or having large endowments. Whether it is manifested as changes to nonprofit tax exemptions or heightened accountability standards, organizations must prepare for greater regulatory requirements.
Actionable Tip:
Invest in Education and Training: Equip you and your team with the tools they need to remain compliant with new regulations. Consider working with other organizations, hosting a compliance training workshop, or bringing in an expert to cover the essentials. Take advantage of opportunities offered by local, state, regional, or national coordinating organizations that align with your mission.
Conduct a Compliance Audit: Take time to conduct an internal audit of your organization’s compliance with current regulations. Review your donor tracking processes, financial reporting systems, and tax documentation to ensure everything is in order. Your federal or state representative’s legislative aides with responsibility for your sector are a good source of providing current information.
7. Harness the Power of Data and Analytics for Strategic Decision-Making
In times of change, tracking real-time shifts in donor behavior and giving patterns is essential. Nonprofits with access to rich data and insights are poised to respond more quickly to these changes and refine their strategies.
Actionable Tip:
Monitor External Trends: Look beyond your donor base and monitor the larger economic and social shifts. Pay attention to national and local economic reports, as they can give insight into potential changes in charitable giving patterns. The Giving USA Project, a public service initiative of The Giving Institute, tracks philanthropic giving trends in the United States. The National Philanthropic Trust (NPT) and AFP’s Fundraising Effectiveness Project (FEP) are additional resources tracking trends in giving.
Invest in Data Analytics: If you have not already, now is the time to integrate advanced analytics into your fundraising strategies. Consider this action as an investment in infrastructure and organizational longevity. Tools that track donor behavior, engagement, and giving trends will help you stay ahead of any changes in donor preferences due to political or economic shifts.
Do not be overwhelmed
It should go without saying, however, that you must prioritize you. You are a valuable resource for your organization; to be the most effective in your role, you must take care of yourself. You cannot be of service to your mission, organization, or donors by jeopardizing your own resiliency.
By staying informed, diversifying revenue streams, maintaining strong donor relationships, and embracing technology, fundraisers and advancement professionals can position themselves to survive and thrive in this period of uncertainty. While the beginning of any new legislative term introduces new challenges, the resiliency of the social sector inevitably shifts the paradigm from roadblocks to opportunities for innovation and adaptation.
Remember, the key to navigating any tumultuous political or economic shift is flexibility and transparency. By proactively adjusting your organization’s strategies and focusing on your mission and the needs of your donors and supporters, your organization can survive and find new ways to grow and succeed in an evolving landscape. By being transparent with your communication, you can create valuable dialogues with your Board, donors, and other stakeholders so that they understand the impact and consequences of the actions affecting your organization and be more engaged in the problem-solving process.