Encouraging people to leave your organisation money in their will can be a touchy, emotional and…
THE TAKEAWAY: The end of financial year is an ideal occasion for fundraising for organisations with Deductible Gift Recipient (DGR) status because potential donors are looking for a tax break soon. And even if your organisation doesn't have DGR status, you can still take advantage of the goodwill surrounding the sector at this time.
The end of financial year is a time when giving to not-for-profits and other community organisations is at the forefront of people’s minds, as they seek to secure a tax break for the financial year before it ends by donating before June 30.
Donors can claim tax deductions in their income tax returns only on donations made to an organisation that is endorsed as a deductible gift recipient (DGR).
The bad news is that only a small fraction of the 600,000 community organisations operating in Australia have DGR status. Check whether your organisation can be endorsed as a DGR on the ATO website.
The good news is that all not-for-profits, regardless of DGR status, can try to take advantage of the increased visibility and goodwill surrounding the sector at tax time.
Put simply, there is a lot of money floating around at this time of year. Australian Tax Office figures show that 4.2 million individuals claimed a deduction for gifts or donations in 2019—20, at a value of $3.7 billion.
June is also consistently the busiest month for donations on GiveNow. The amount donated to causes on GiveNow during June has been on average 6 to 8 times higher than any other month for every year since it started out in 2000, with the only exception being the Indian Ocean tsunami in 2004.
As the table below illustrates, organisations receive around 30% (ignoring the 2020 figure which is distorted by the impact of the covid-19 pandemic) of the total amount of donations for the year in the single month of June.
|Financial year||% of June donations relative to total FY donations|
* Includes one-off or annual donations only
This means that even if you can’t offer a tax deduction as an incentive, your organisation should still consider an end of financial year appeal or fundraising campaign. People already have their wallets out. This means you don’t have to spend as much time (or money) on convincing people to give and can instead focus your energies on providing them with the means and a reason to give to you.
Such appeals can be set up relatively quickly, and without a lot of stress, provided you know what you are doing. Here are some key things to consider in organising and executing a successful end of financial year appeal:
You need to start preparing for your end of financial year appeal early in order to refine your pitch or theme. Ideally this is in March or April each year. This provides you with sufficient time to prepare your fundraising "Ask" with the team.
However, you could launch an appeal as late as June 20 if you used an online donations facility (such as GiveNow) and a combination of email and social media to ensure you have a launch that grabs the attention of a large number of potential donors.
Ensure you have highly visible donation buttons in your email and on the homepage of your website. GiveNow donation forms can be embedded on your website so your donors will be able to easily donate to your cause without ever leaving your website. Also refer to the online appeal on social media, in your newsletter and on any printed documents you may be mailing out around this time.
The wording of your main appeal, or "Ask", document should centre on what donations could achieve, where the money will be spent and how it will help. Selling the efforts and work of your organisation is paramount, but keep the document relatively brief. Assume you have 30 seconds to make your case, and get your key messages into the first paragraph.
Try also to present positive examples of how effectively you use donations rather than any abstract arguments. If your appeal is focused on a specific project or program, tell people about it. If you are running an online appeal, ensure your email message will motivate people to click through to your website or donations facility.
If time is of the essence, consider using existing material from previous end of financial year appeals as a basis for this appeal. You can quickly tweak a previous email to create a new appeal document, but remember to treat it as a template, adapt information and check details so it doesn’t appear rehashed. Design the material internally, where possible, to save money.
The more personal and relevant your appeal material is to the recipient, the greater the reach of your message and ultimately your chances of success. This is where your carefully maintained database listing members, supporters and previous donors comes to the fore. Your appeal might target everyone in your database, or perhaps just your large or previous donors. You may also segment your database and divide your audience based on certain criteria – gender, age, interests, level of past donations – to customise your appeal message to specific sectors of your audience.
Using recipients’ names is important and can be easily achieved through your database. Emails should always be personalised.
Obviously, it’s no use running an appeal if you have no reason to. Your appeal needs to have a focus. However, most groups will have no trouble identifying a reason to hold an appeal. Options include:
- To ensure your group’s continued operation;
- To raise money towards a specific program or project;
- To support a special event or a cause for which you need to raise money quickly; and
- For major construction, capital or technological improvements.
It’s wise to find an appeal that strikes a balance between being attractive to prospective donors and being useful to your group.
At the end of your appeal document or email, you might want to provide information about how donors can also make a bequest, become a member, attend upcoming events or volunteer for your organisation. You should also provide an easy way for new donors to stay connected to your organisation once they have donated, such as opting to subscribe to your newsletter, and ensure your website is updated with the latest news and events before promoting it in your appeal materials.
Asking people to donate to an end of financial year appeal just so they can claim a tax deduction will not entice them to give. It needs to be about more than the tax man. Give potential donors a reason to get excited and passionate about your appeal. Develop a clear aim for your appeal – such as a target figure – and communicate it to your audience. The tax advantages can then be mentioned at the end, after you have convinced people to donate, and when they are deciding on the amount they can spare.
But if you do set a target, don’t ask for a million dollars. Not only is it unlikely you will reach this unrealistic target, potential donors are likely to view it with scepticism. Instead, aim to have realistic expectations that, with a bit of hard work, you can achieve or even exceed.
OUR TIP: Be sure to send donors invoices/receipts promptly. Doing so allows them to claim donations on their tax returns without delay. Most online donations facilities (including GiveNow) automatically send donors a tax receipt when they donate.
- The audience for your appeal is clearly defined;
- Your material (including any emails or documents you intend to use) is ready to go;
- Your database or mailing list is up-to-date and accurate;
- You are ready to accept donations – you have the people and resources in place to deal with an influx of inquiries and donations by answering phones, responding to emails, processing donations and issuing receipts;
- Your online donations facility is updated;
- You have prominent donation buttons and correct contact details on your website; and
- Your appeal stands out from the crowd. There’s stiff competition at this time of year.