Not-For-Profit Trends Are Continuing To Change

Contributions to Donor Advised Funds

The National Philanthropic Trust (NPT), the largest U.S.
donor-advised fund (DAF) sponsor, has some good news about grants
to not-for-profits from Donor-Advised Funds (DAFs). It reports a
39% increase in the dollar amount of such grants made from its
sponsored funds in fiscal year 2019, for a total of $1.39 billion.
That represents a 28% increase in the number of grants made over
the previous year. The jump aligns with reports from other DAF
sponsors. Fidelity, for example, reported a 48% increase in grant
making from DAFs in the first half of 2019. And Schwab said it
experienced a 33% increase in the dollars granted from DAFs in
fiscal 2018.

Various factors could contribute to this trend, but most notably
the changes in the tax reform have contributed to the increase. The
tax reform has created scenarios where donors have a tax advantage
to make a one-time contribution to a DAF and in subsequent years
determine exactly where those funds will go, while receiving the
full deduction in the year the contribution is made to the DAF.

Related Read: “Deduct Now, Donate Later: Donor-Advised Funds
Offer Significant Benefits“

What does this mean going forward? It is difficult to say. If
the main factor contributing to the increase is the tax reform,
there would likely be an expectation to see contributions to DAFs
in 2020 decrease from 2019. However, many donors may not have been
aware of this strategy in 2019 and are now interested in making a
DAF contribution in 2020 as they learn the advantages and
disadvantages.

Where Is Your Fundraising Professional Going?

More than half of not-for-profit fundraisers plan to leave their
current jobs in the next two years, according to a new survey
commissioned by the Chronicle of Philanthropy and the
Association of Fundraising Professionals. The survey questioned
more than 1,000 fundraisers in the United States and Canada.

Reasons for the turnover include unrealistic expectations that
are set by not-for-profits and lack of salary goals being met for
the fundraising professional. From the survey, 30% indicate they
have recently left or plan to leave the development field entirely
in the next two years; 5% of the survey respondents had already
left fundraising. Only 12% say they plan to retire or have other
personal reasons for leaving.

With the new tax reform not-for-profits are still trying to
determine how exactly they are being affected. This increases the
importance of a development specialist to review the success of the
not-for-profit and determine where the market really exists for
donors. It is important to understand how the not-for-profit’s
donors have changed their strategy and then ultimately how the
organization can adjust its development strategy to achieve its
ultimate fundraising goals.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Corporate/Commercial Law from United States