A Giving Society, known also as giving club, is great recognition tools to motivate donors to make gifts of a certain kind, or a certain way. This technique is as old as charitable gift fundraising. At its core, a giving society appeals to our human desire for exclusivity, to associate with people of like interests or status, or even show one’s status above others.
Giving societies typically have one of four fundamental natures:
- Gift level
- Gift type
- Gift purpose
- Donor age
Gift Level:
Giving societies based on gift level will “grade” the charitable gift by the amount given. For example, if your gift was $100, you would be in the bronze society. If you made a gift of $250, you would be in the silver society. If you made a gift of $500, you would be in the gold society. At $1000, you are in the platinum society. This can encourage donors to move up if they see their peers at certain levels, or if they want to associate themselves with the name of the level. There are no upper or lower end of gift levels.
Gift Type:
Sometimes, you want to encourage a specific kind of giving. For example, you may want to highlight the benefits of leaving your organization in the donor’s will. Or, you may try to get more people to make monthly recurring gifts. Maybe you have a program that turns specific types of gifts and kind into organizational revenue, such as used cars. Each of these can be labeled as a specific kind of gifts society. This is a good way of making potential donors aware of that giving method.
Gift Purpose:
Another way of encouraging giving is to designated gifts society for a particular purpose. You may be trying to raise funds for a new building, or a specific piece of equipment. Maybe you want people to give to a scholarship fund, or unrestricted giving. Forming a giving society around that purpose can highlight the importance of the purpose and provide you with a strong talking point to donors interested in that cause.
Donor Age:
As a way to encourage young donors, some nonprofits will create a giving society based on donor age. In higher education, they’re often known as “GOLD Clubs” (Givers Of the Last Decade). Some nonprofits name them “young professionals” groups or the like. These often have a social as well as philanthropic purpose, and may also serve as gateways into volunteering, or even board or committee membership. Many times, age-based giving societies offer a “discount” on standard recognition levels. For example, if the Century Club requires a $100 gift, Young Professionals may get the same recognition with a $75 gift.
Giving Society Marketing:
Declaring a giving society doesn’t make it desirable for donors. You have to market it. It starts with the name, purpose and nature (such as giving levels) of the giving you are trying to promote. You’ll need to create long and short marketing copy for publications and social media. It’s important to mention the giving society when soliciting gifts of the type you’re seeking, so consider a bit of scripting. It also helps to develop symbols associated with the grouping. You may even consider physical objects, such as certificates, pins, statuettes and other items.
Donor Lists:
A popular method of marketing is to print, display or post the names of donors in specific giving societies or by levels within a specific society. Making names public is a powerful way to encourage others to join, and to thank donors for their gifts. However, in these days of privacy concerns, it’s important to let donors know that their names will be visible. Some may wish to remain anonymous. Therefore, provide an opt-in on a pledge card, or a statement that all names will be public unless a donor opts out.
Naming your Giving Society:
Naming a gift society can be as simple as labeling each grade by traditional precious metals, or something more sophisticated, such as using the names of founders you wish to highlight or early donors of a specific kind of gift. Whatever you do, give some thought to the motivational value of the label to the donor. Don’t forget, that the name needs to be relatively easy to understand. You might name something the James Smith society, but if nobody knows who James Smith was in relation to your organization, potential donors will find it pretty meaningless. So, when you’re naming, you may have some marketing/education to do about why, for example, James Smith, was important to your nonprofit or that kind of gift.
Giving society privileges:
To give a giving society a boost in prestige or as an incentive to give, you may consider adding certain privileges or additional recognitions. These may come in the form of certificates, lapel pins, some kind of a statuette and other custom pieces. This allows the donor to show off their status to their friends and family and promotes similar giving by others. You may even consider some kind of event, Such as a dinner, or reception, either to recognize current members or “induct” new members into the group. Maybe you invite members of a recognition society to “pre or post event, event,” such as a pre-theater show reception or a post-game meet-up with athletes.
It’s important to keep in mind that the Internal Revenue Service has rules around such “deliverables.” In other words, if you give something in exchange for what it’s supposed to be a charitable gift, the gift could be interpreted as a purchase of the item or privileges. There are very specific rules about this practice. If the deliverable is “token” in relation to the value of the gift, such as a lapel pin or certificate for a gift of $500, for example, then no action is required (“token” = about 2% of the gift value). However, if that same $500 gift comes with a free recognition dinner, the price of the dinner should be deducted from the value of the gift. If It would cost 100 dollars to have the same dinner out at a restaurant, then the value of the gift would be $400, not $500. This needs to be reflected on the receipt and the donor may only take $400 as a charitable deduction on their tax forms. You can see IRS publication 526 for more information.
Caution 1: The word “membership”
In the nonprofit world, the word “membership,” can be problematic, especially for 501(c)3 charitable organizations (as opposed to other kinds of nonprofits, such as credit unions, chambers of commerce, trade unions and the like.)
Membership often implies specific deliverables and often some kind of control. Members may get discounts or specific items or be able to vote on specific actions of the organization, such as installing board members. Therefore, while it’s tempting to say “your XYZ Society membership,” it’s a phrase best avoided in all but the most informal speech.
Caution 2: The Matching Gift Dilemma
What do you do when this happens? Sally writes a $1,000 check and proudly sees her name in the Millennial Club each year. Dan, the new donor, writes a $500 check, then takes the gift receipt to his company’s human resources office, where they trigger a check for $500 from their company as part of their one-to-one matching gift benefit. Should Dan be in the Millennial Club because he brought in $1,000 to your organization, or in the Semi-Century Club, because his own gift was $500? Plus, how do you recognize the company, if you do so at all. (And you thought giving societies would be easy?) At some point or another, every nonprofit grapples with this question. There is no right answer. Just answer it before you start your giving society.
Caution 3: Gift Value
You’re running a campaign, and Sally steps up with a $100,000 gift. You’re thrilled and place her name at the top gift level. Dan is younger. He aspires to Sally’s level but doesn’t have the cash. “I know,” he says to himself, “I’ll take out a $100,000 life insurance policy that names the nonprofit as the beneficiary.” Should Dan get the same recognition as Sally? Like matching gifts, this is a discussion worth having before you declare your giving society open. Dan’s $100,000 probably won’t come to your nonprofit for many years, if at all. Sally’s is in hand, right now. Do you base recognition on “face value” or “current value.” Face value, they’re the same. In current value, Dan’s is much less, because even if he were to pass today, the policy may not be worth the full $100,000. And when he dies years later, $100,000 won’t be worth then what it is now.
Giving Societies can be a great way to recognize current donors or motivate others to give. If well managed, a giving society can inspire donations for years, maybe decades.
