Year-End Major Gifts
The Katrina Factor
This year major gift donors have a special opportunity to put special Holiday Gifts under your Giving Tree. It's called the Katrina Factor. Certain donors can take up to 100 percent of their adjusted gross income, double the normal limit of 50 percent between now and December 31, 2005.
IRA's are in play too. Under current law, if a taxpayer with $50,000 in income and $100,000 in a retirement fund wanted to contribute the money in his retirement fund to charity, the most he could deduct is $75,000 (that is, 50 percent of $150,000) adjusted gross income for the year. The Katrina Tax Relief Act allows the donor a 100 percent deduction.
If your organization is in the midst of a major/capital gifts campaign with donor pledges on the books, this is also a great opportunity to ask donors to accelerate their pledge payments. It's a win/win, especially when you are trying to keep construction financing costs down on a new building. (Private foundations, support organizations or donor advised funds do not qualify for the higher limit.) For more information about the newly-signed law, contact Jason Lee, Director, Government Relations, at jlee@afpnet.org.
Finding Major Gift Prospects
Major gifts should be plentiful in Florida in coming years. According to the Merrill Lynch 2005 World Wealth Report, high-net-worth individuals, those with at least $1 million in assets excluding their primary residence, increased by 10% worldwide in 2004. America has 2.7 million households with a net worth of at least $1 million. In Miami, Florida millionaire households are up 6.36% from 20,183 in 2003 . The report predicts Miami will see a 49.4% increase millionaire households in the next five years.
A frequent question asked of us is, "If there are so many wealthy people out there, how do we find them?" First, you have to do some research as to where they live, their household income, net worth and the like. It's as easy as renting a list. The real work comes in the researching of wealth indicators, then segmenting the database so that you focus on those with the greatest financial capacity to give.
Why is wealth analysis so important? Most major/capital gift campaigns for community based groups and even colleges and hospitals, run out of prospects before the requirements of the gift table are met. Scrambling around during a campaign to find more prospects is counterproductive. The time to research is before the campaign.
Another issue in major gift fund raising that we have seen with clients is what we call Analysis Paralysis. Staff want more information on major gift prospects, usually financial. What's the point? Once you have qualified the prospect as having the money to give, the only other intel you need is social. Ninety percent of the time, social information provides the critical link between the solicitor and the prospect. What clubs does the prospect belong to? What hobbies or interests does the prospect have? And, what (if any) linkage does the prospect have to your organization?
We recently heard a story about a top CEO being asked to endow a chair in engineering, since he was in engineering his entire professional life. Thus, as he was retiring from his Fortune 500 company, the university staff felt it was a no brainer to ask him to establish an engineering chair. Turned out the prospect was a devout Catholic, interested in religious studies. For information on prospect research check us out at: www.donovanmanagement.com click on Prospect Research.
Here's a Major Gifts Tip: Donors make major gifts -- first and foremost-- because they have the money to do so, they are asked to give by the right person, at the right time for the right purpose.
Visit our website www.donovanmanagement.com for more Free Tips.
Jim Donovan
President/CEO
Donovan Management, Inc.
dmimgt@aol.com
407 321 0024
This year major gift donors have a special opportunity to put special Holiday Gifts under your Giving Tree. It's called the Katrina Factor. Certain donors can take up to 100 percent of their adjusted gross income, double the normal limit of 50 percent between now and December 31, 2005.
IRA's are in play too. Under current law, if a taxpayer with $50,000 in income and $100,000 in a retirement fund wanted to contribute the money in his retirement fund to charity, the most he could deduct is $75,000 (that is, 50 percent of $150,000) adjusted gross income for the year. The Katrina Tax Relief Act allows the donor a 100 percent deduction.
If your organization is in the midst of a major/capital gifts campaign with donor pledges on the books, this is also a great opportunity to ask donors to accelerate their pledge payments. It's a win/win, especially when you are trying to keep construction financing costs down on a new building. (Private foundations, support organizations or donor advised funds do not qualify for the higher limit.) For more information about the newly-signed law, contact Jason Lee, Director, Government Relations, at jlee@afpnet.org.
Finding Major Gift Prospects
Major gifts should be plentiful in Florida in coming years. According to the Merrill Lynch 2005 World Wealth Report, high-net-worth individuals, those with at least $1 million in assets excluding their primary residence, increased by 10% worldwide in 2004. America has 2.7 million households with a net worth of at least $1 million. In Miami, Florida millionaire households are up 6.36% from 20,183 in 2003 . The report predicts Miami will see a 49.4% increase millionaire households in the next five years.
A frequent question asked of us is, "If there are so many wealthy people out there, how do we find them?" First, you have to do some research as to where they live, their household income, net worth and the like. It's as easy as renting a list. The real work comes in the researching of wealth indicators, then segmenting the database so that you focus on those with the greatest financial capacity to give.
Why is wealth analysis so important? Most major/capital gift campaigns for community based groups and even colleges and hospitals, run out of prospects before the requirements of the gift table are met. Scrambling around during a campaign to find more prospects is counterproductive. The time to research is before the campaign.
Another issue in major gift fund raising that we have seen with clients is what we call Analysis Paralysis. Staff want more information on major gift prospects, usually financial. What's the point? Once you have qualified the prospect as having the money to give, the only other intel you need is social. Ninety percent of the time, social information provides the critical link between the solicitor and the prospect. What clubs does the prospect belong to? What hobbies or interests does the prospect have? And, what (if any) linkage does the prospect have to your organization?
We recently heard a story about a top CEO being asked to endow a chair in engineering, since he was in engineering his entire professional life. Thus, as he was retiring from his Fortune 500 company, the university staff felt it was a no brainer to ask him to establish an engineering chair. Turned out the prospect was a devout Catholic, interested in religious studies. For information on prospect research check us out at: www.donovanmanagement.com click on Prospect Research.
Here's a Major Gifts Tip: Donors make major gifts -- first and foremost-- because they have the money to do so, they are asked to give by the right person, at the right time for the right purpose.
Visit our website www.donovanmanagement.com for more Free Tips.
Jim Donovan
President/CEO
Donovan Management, Inc.
dmimgt@aol.com
407 321 0024
posted by Jim @ 3:29 PM
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