April 18 is coming soon, and we really need to talk about taxes.
Everyone knows that taxes are one of the two things you can count on in life, but no one likes to talk about them. As fundraisers and development communicators, we need to rethink this strategy and change how we approach—or don’t approach—the topic with our prospects and donors.
There is a common mythology in advancement that you don’t bring up taxes when making an ask. To discuss the tax benefits around philanthropic giving is seen in many quarters as a non-starter. The reasons behind the myth are manifold and each seems reasonable on the surface.
Those of us who have worked in the field for an extended period have heard the reasoning.
We want to inspire our donors with our higher ideals.
To talk about taxes changes the language from “what’s in it for us to what’s in it for me.”
It’s complicated to discuss and will bog down our conversation in unwanted and complex details.
Like so much of conventional wisdom, these concerns are not supported by development communications research. In fact, the research shows that not talking about taxes may well negatively impact the number and dollar amount of gifts received.
While so many of us know the myths, the truth is much less understood. First, research like the 2016 work of Peter Backus and Nicky Grant in the University of Manchester Economics Discussion Paper Series shows through a series of statistical analyses that higher tax benefits do indeed lead to higher levels of charitable giving. In plain English, Backus and Grant found that people give more in charitable donations to pay less in taxes.
Still not convinced we need to talk about taxes?
Russell James at Texas Tech University took the experiment a step further in the Summer 2018 edition of Nonprofit Management & Leadership. In his experiment, James led subjects through a series of descriptors for planned giving options, like a charitable remainder trust. He found that compared to baseline interest, subjects who were first introduced to the tax benefits of each instrument were much more likely to express interest in giving through that instrument.
In other words, by leading with the tax benefits, planned giving directors will achieve greater success in securing gifts. Far from a turnoff, quickly explaining these benefits in plain language is much more likely to pique the interest of potential donors than language that does not include such language.
At BWF, we work with advancement communicators to solve complex communications problems, review ongoing work, and create plans that strengthen organizational fundraising. We’d welcome the chance to make a difference for you. It’s a privilege to help. Contact me directly at email@example.com.