With discussions of private foundations and tax returns, philanthropy has garnered some additional attention this political season (for better or worse). But for fundraisers, the more important question is: how will the election affect the donors we work with? Here are a few things that may be on donors’ minds as we head toward Nov. 8.
Good news! According to a study conducted by Blackbaud during the last presidential election, donors who contributed to political campaigns actually gave slightly more to charitable organizations in the same year. So continue full steam ahead with those end of year campaigns, and resist the urge to blame donors diverting gifts to political causes if your campaign underperforms—there’s likely some other issue to correct.
It comes as no surprise that the presidential candidates each offer different tax plans, and you can find a handy comparison of those plans here. Specific items of interest to major gift donors might include policies around itemized deductions, capital gains and estate taxes. It’s always best to advise donors to consult with an accountant or financial planner to maximize their individual tax benefit when making a gift.
Many studies have shown that charitable giving correlates with stock market returns. The market generally favors less uncertainty, so if a clear front-runner pulls ahead and wins the election, the market reaction will likely be minimal. Close polls or a victory by a heavy underdog would likely create more volatility. Obviously, there are a number of other factors that could affect the market, and if it were that predictable, we probably wouldn’t be writing a blog on fundraising!
Every donor is different, so it will take some deft fundraising skill to tease out potential issues for those you are working with. And unless you are raising money for a candidate, tread lightly when discussing the election with donors.
Shocking Statistic: Charitable giving traditionally rises about one-third as fast as the stock market (The Foundation Center).
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