Tag: donor relationships

Should Your Nonprofit Consider a Giving Society?

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.

<h6 align=”center”>Affiliate disclaimer: This content includes affiliate links. That means when you buy something we’re linked to, Nonprofit.Courses earns a commission, at no extra cost to you. It’s a win/win. You get some great content, and we keep the lights on!</h6>

5. Giving Societies: Frequently Asked Questions

What is a Giving Society?

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.

What are the different types of Giving Societies?

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.

How are giving societies recognized?

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.

Can giving society donors remain anonymous?

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.

Why is it called a “Society” instead of a “Membership”?

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.”

Are there special perks for joining?

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)

How do these perks affect my tax deduction?

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)

How do matching gifts affect giving society status?

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.

Does a Life Insurance policy count toward a gift level?

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.

Building Relationships With Major Donors: 5 Best Practices

Different nonprofits have all sorts of fundraising strategies that they use to earn the revenue necessary to operate the organization. Large nonprofits can invest in enterprise-level solutions, such as DRTV, while small nonprofits may get creative with their limited resources by hosting accessible crowdfunding campaigns. However, there are a few fundraising strategies that nearly every nonprofit can benefit from, especially when it comes to cultivating major donors.

Contributions from a few major donors often make up the bulk of a nonprofit’s fundraising revenue. While relying on a handful of individuals to keep your organization running might sound like a precarious situation, if you build strong relationships with your major donors, they can be one of your most reliable, sustainable revenue sources.

Forming relationships with major donors does have some degree of organic development based on personal connections. However, you can take targeted actions to cultivate these relationships, leading to improved fundraising. Here are five ways your nonprofit can build connections with major donors:

  1. Define your major gifts process.
  2. Send targeted messages.
  3. Offer multiple engagement opportunities.
  4. Keep in touch after your initial ask.
  5. Be open to multiple kinds of support.

Following best practices like these can help you systematically approach your major donors. However, be sure to always keep in mind that your major donors are people and not money dispensers. Strategies like these are meant to facilitate natural relationship building, so your nonprofit can develop meaningful, mutually beneficial relationships that will lead to long-lasting support. Let’s get started.

1. Define your major gifts process.

As with any fundraising initiative, your team will need to stay organized when cultivating major donor relationships. Keep track of each relationship’s progress as your nonprofit grows and attracts more donors. By tracking each interaction, you’ll be able to collect and document key information about your donors and avoid mistakes such as confusing donors’ names in conversation or making major solicitations too early in the relationship.

CharityEngine’s guide to nonprofit CRMs recommends looking for a platform that allows you to track each step of the major giving process, including:

This graphic outlines the four steps of the major giving process.

  1. Engagement begins. Few supporters will make a major donation at the very start of their engagement. During these initial interactions, major donors will likely start as moderate supporters.
  2. Prospect research. Use prospect research tools to learn more about your donors and discover if any of them have the potential to become major donors. Your CRM should either come with prospect research tools or integrate with third-party databases to help your nonprofit gain supplemental donor information.
  3. Stewardship. After you’ve identified your prospects, you’ll begin cultivating a relationship through a variety of interactions. Be sure to make note of these in each of your donor profiles to help inform your next course of action in the donor journey.
  4. The gift. Make note of each gift in your donor profiles. Thank them and use prior information to continue building the relationship and set your nonprofit up for receiving future gifts after additional stewardship.

These steps provide a general outline for the major gift process that can help you monitor how close each donor is to making a gift. By tracking individual interactions and your donors’ responses, you’ll be able to determine what actions your team should take to move them along to the next phase.

2. Send targeted messages.

Your nonprofit likely sends out automated messages to your donors, tailoring each one with personalized information like the supporters’ names and other specific details. While this approach can work for your average donors, you’ll want to avoid sending pre-written, generic messages to your major donors.

You should consistently stay in touch with your major donor prospects with personalized correspondences to keep up a personal relationship. As part of this communication, consider turning off your regular donor communication emails for them, ensuring you don’t inadvertently send them a routine request for a donation when you’re in the middle of courting a major gift.

Instead, write individualized messages sharing information about your nonprofit that is targeted to their interests. This can include impact reports, personal invitations to events, and especially stories about your nonprofit’s success. Getting Attention’s guide to nonprofit storytelling offers some key advice on how to construct an engaging story:

  • Know your story’s objective. You shouldn’t be telling a story just for the sake of doing so. Instead, each of your stories should be tied to a specific objective. Ask what you want your major donors to do or think after reading your stories. For example, you may want to inspire them to think more deeply about the impact of making a donation in the days leading up to your major gift request, or, when the relationship is in the beginning stages, you may want to focus on cultivating initial interest.

 

  • Inspire empathy. Donors give because they feel a personal connection to your nonprofit. Stories that emotionally move your supporters can lay the foundation for this deeper connection, which you can then build on through additional interactions. Plus, as you continue to communicate with your major donors, you’ll want to share new information with them, and your nonprofit is likely to always have new stories based on your beneficiaries, volunteers, staff, and other members of your organization.

 

  • Use visuals. Visual elements draw your supporters’ attention, help them better envision your nonprofit’s impact, and can evoke an emotional response to your mission. Choose visuals that help support your story, such as photographs of the people your story is about or graphics that help supporters visualize key statistics related to your cause.

As you gather more information about your major donors, you’ll be better able to tailor your stories and messages to their specific interests. For example, in your first interactions with these supporters, you may base messages and conversations on the initiatives they’ve supported in the past. But as you learn more about their motivations, you can provide more detailed messages targeted for their goals and personal investment in your nonprofit.

3. Offer multiple engagement opportunities.

Your relationships with major donors need to be built on more than just repeated asks for donations. In fact, only asking potential major donors for gifts is likely to result in your nonprofit losing prospective donors. Instead, your stewardship process should include extending invitations to your donors for a variety of engagement opportunities, such as:

  • Events. Nonprofit events can vary widely, so consider your major donors’ interests when inviting them to attend. For example, your more athletic donors may be interested in participating in a community 5K, while other donors may prefer an exclusive gala. Then, take note of which events your major donor prospects do attend in their donor profiles, so you can be sure to invite them to similar events in the future.

 

  • Advocacy campaigns. Advocacy campaigns allow your nonprofit to advance your mission and give all of your supporters a new way to get involved with your cause. For your major donors, advocacy campaigns provide an opportunity to get involved in supporting your nonprofit’s mission and impact in a new way.

 

  • Office tours. Giving your major donors a behind-the-scenes look at your nonprofit can help them feel a little more like VIPs. Get in touch with them to schedule an office tour and ask high-level staff members to meet with them on your set date.

 

  • Volunteer opportunities. Your major donors are invested in your nonprofit, and many of them might want to get involved with a more hands-on method of supporting your cause. Share volunteer opportunities with major donors, and work with them to find roles that suit their skills and interests.

Make note of each engagement opportunity your major donors participate in so you can continue presenting them with activities that will deepen their connection with your mission.

4. Keep in touch after your initial ask.

Developing meaningful relationships with donors takes time, and your nonprofit should continue to steward these relationships after your initial ask. If your donors say yes, you should continue building your relationship and restart their donor journey to lead them towards making another contribution.

After a donor’s first major gift, be sure to thank them profusely for their generosity. This can be conducted a number of ways, but at minimum, it should at least include several one-on-one conversations where you thank them directly for their contribution.

Ensure you never miss a follow-up appointment or message by using major gift tracking and donor management tools to schedule your continued interactions after your ask. Note if the ask was successful and reasons for why it was or was not. This will help your team create a unique strategy for approaching each major donor and will lead to future successful asks.

5. Be open to multiple kinds of support.

Over the course of your nonprofit’s relationship with your major donors, they may not always be able to make a major gift or offer the same level of support they had previously. In these situations, your nonprofit should be flexible and work with your donors to find a solution that works for their current financial situation.

Major donors can support your cause in a variety of ways outside of monetary donations. For example, during a capital campaign, a major donor may only be able to make a relatively modest contribution themselves, but they can still help your campaign by facilitating introductions to other donors who might be interested in your cause.

Support like this from major donors can help your nonprofit increase and diversify your revenue sources. Donors with business connections can put your nonprofit in conversation with corporations that have philanthropic missions that align with yours, potentially leading to a sponsorship or even establishing a corporate giving program for their employees.

Major donations keep your nonprofit running. Ensure that you are investing in these relationships to build mutually beneficial, fulfilling connections that will lead to continued support. Leverage your nonprofit’s software platforms to monitor your interactions and make data-driven decisions to continually move these relationships forward. Good luck!

This guest post was contributed by Philip Schmitz of CharityEngine.

Philip Schmitz is the CEO and founder of cloud-services leader BIS Global, creators of the CharityEngine fundraising & communications technology platform. Founded in 1999, Phil has managed the vision and strategy for BIS’s suite of integrated business applications & hosting tools used by more than 400 businesses & non-profits.