Should Your Nonprofit Consider a Giving Society?
Estimated reading time: 12 minutes
Key Takeaways
- A giving society, also known as a giving club, motivates donors through recognition based on various criteria like gift level, type, purpose, or donor age.
- Different types of giving societies can focus on specific gift amounts, purposes, or methods, appealing to diverse donor interests.
- Effective marketing of giving societies is essential; it includes creating compelling names, symbols, and publicly recognizing donors to encourage others.
- While giving societies can inspire donations, nonprofits must navigate IRS guidelines regarding deliverables and avoid using terms like ‘membership’ that imply rights or control.
- Considerations like matching gifts and life insurance contributions complicate recognition in giving societies, requiring clear policies before implementation.
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.
Table of contents
1. Types of Giving Societies
Giving societies typically have one of four fundamental natures:
a. 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.
b. 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.
c. 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.
d. 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.
2. 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.
a. 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.
b. 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.
c. 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. (See Cautions, below, about “deliverables.”)
3. Cautions
While giving societies and clubs are very useful for the nonprofit to encourage more donations, keep the below in mind.
a. Deliverables (AKA: Benefits)
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.
b. 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.
c. 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.
d. 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.
4. Resource List
- Bloomerang: This is a premier tool for nonprofit fundraising and gift accounting. Use it to manage your Donor Lists and track Gift Levels (Bronze, Silver, Gold, Platinum) to ensure donors are accurately recognized in their respective giving societies.
- Piktochart: Use this infographic creator to design the symbols, certificates, and visual marketing copy needed to make your giving society desirable. It is also helpful for creating educational visuals that explain why a specific namesake, like “James Smith,” is important to your organization.
- Sign.Plus: This online signature service is essential for managing Donor Lists and privacy concerns. Use it to have donors sign opt-in or opt-out forms regarding the public display of their names in publications or on your website.
- Aplos: As an accounting and finance tool for nonprofits, Aplos should be used to handle the Deliverables (AKA: Benefits) dilemma. It can help you calculate and record the correct charitable deduction on receipts (e.g., deducting the $100 value of a recognition dinner from a $500 gift) to comply with IRS guidelines.
- 48 Hour Logo: Use this service for logo creation to develop a unique and professional visual identity for your giving society. A distinct logo helps build the “prestige” and exclusivity that motivates donors to join.
- ApparelnBags.com: This resource provides novelty clothing and products that can be used as giving society privileges. Consider creating exclusive lapel pins, branded apparel, or other physical objects that donors can use to show off their status to friends and family.
- GEMS (Grant Management Made Easy): While typically for grants, a Grant Management System can assist in tracking Gift Purposes. Use it to ensure that donations made to a specific giving society (like a scholarship fund or new building) are earmarked and managed correctly for that designated cause.
- HoppyCopy: Use this email creation service to draft the long and short marketing copy needed to promote your giving society. It is particularly useful for sending “invitations” to exclusive privileges, such as a pre-theater reception or a meet-up with athletes.
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5. Giving Societies: Frequently Asked Questions
A giving society (or giving club) is a recognition tool used to motivate and thank donors who give in a specific way or at a certain level. It appeals to a donor’s desire for exclusivity and allows them to associate with peers who share similar interests or philanthropic goals.
Gift Level: Based on the amount given (e.g., Bronze, Silver, Gold).
Gift Type: Encourages specific methods, like monthly recurring gifts or gifts in a will.
Gift Purpose: Focuses on a specific cause, such as a scholarship fund or a new building.
Donor Age: Aimed at younger donors (like “GOLD” clubs for Givers of the Last Decade) to encourage early-career philanthropy.
Organizations often recognize members by listing their names in publications or on digital donor walls. Some societies also offer physical symbols of appreciation, such as lapel pins, certificates, or statuettes.
Yes. Due to privacy concerns, most organizations provide an “opt-in” or “opt-out” choice on pledge cards. If donors prefer not to have their name displayed publicly, they can simply notify the organization. However, since one of the reasons for a giving society is to encourage others to give in the same way, always ask what kind of recognition a donor does not want. They may not want to be on public list, for example, but are okay if you tell people personally.
In the nonprofit world, “membership” often implies legal rights, such as voting on board members or receiving significant discounts. To keep the focus on the charitable nature of the gift, organizations typically use the term “Society.”
Many societies offer “privileges,” such as invitations to exclusive dinners, receptions, or “pre-event” meet-ups (like a backstage reception before a show). See IRS Publication 526 for complete details (https://www.irs.gov/publications/p526)
According to IRS guidelines, if you receive a benefit in exchange for your gift, you can only deduct the amount that exceeds the value of that benefit.
Tokens: Small items like lapel pins (usually worth less than 2% of the gift) do not affect your deduction.
Significant Benefits: If you receive a dinner valued at $100 for a $500 gift, your tax-deductible receipt will show $400.
See IRS Publication 526 for complete details (https://www.irs.gov/publications/p526)
This varies by organization. Some nonprofits credit the donor for the total amount brought in (personal gift + corporate match), while others only recognize the donor’s out-of-pocket contribution. It is best to create a specific policy on this before you introduce the giving society.
This depends on whether the organization recognizes “face value” or “current value.” A $100,000 life insurance policy to be paid in the future is often valued differently than a $100,000 cash gift given today. Most organizations establish clear rules on this before opening the society to donors.
