The economy has hit our nonprofits hard, but Washington is trying to hit us even harder. Burdened with almost $1.5 trillion in debt, the Obama administration, Democrats, and Republicans are united and resolute (at least conceptually) in curbing U.S. government spending. Two current proposals – the two greatest threats in my opinion to nonprofit fundraising today – aim to do just that, but at our expense. What are the proposals, why do they threaten us, and how can we respond? I explain below.
What are the proposals and why do they threaten us?
House Resolution 2309 Seeks to Eliminate the Nonprofit Standard Mail Rate
On June 23, 2011, Congressman Darrell Issa (R-CA) introduced a bill to restore the financial solvency of the U.S. Postal Service and subsequently curb U.S. government spending. A provision in the bill seeks to remove the reduced rate for your nonprofit mail (currently 16.8 cents a letter) and overturn a policy consistently held by Congress since 1951.
I don not think anyone would argue that the Postal Service should be held accountable, but at our expense? According to a 2011 Nonprofit Research Collaborative survey, 78 percent of all nonprofits used direct mail for their fundraising last year. Of those that did, the survey found that almost half experienced an increase in donations as a direct result – the most growth of any fundraising vehicle (foundation proposals, online giving, telephone appeals, etc.). Such growth would likely turn to loss if you had to pay 44 cents a letter or forego direct mail fundraising altogether. Something we and those we serve cannot afford in these uncertain times.
Joint Select Committee Seeks to Limit Charitable Tax Deductions
The Joint Select Committee on Deficit Reduction, a unique organization created by the Budget Control Act of 2011, has the thankless job of making a formal recommendation to Congress before December 23, 2011 on how to reduce the deficit by at least $1.5 trillion over the next ten years. One of the ways they are considering doing so is to limit charitable tax deductions on individuals who want to donate to our nonprofits.
During his October 18, 2011 testimony at a U.S. Senate Committee on Finance hearing, Brian Gallagher, United Way president and chief executive officer, cited recent studies that estimate annual charitable giving losses between $2.9 and $5.6 billion annually should deductions be capped. To place the later figure in context, Gallagher added that it equates to eliminating all of the private donations each year to (1) the Red Cross, (2) Goodwill, (3) the YMCA, (4) Habitat for Humanity, (5) the Boys and Girls Clubs, (6) Catholic Charities, and (7) the American Cancer Society combined. If those organizations are at risk, ours surely must be too. However, as you can see we are not alone and not without options to respond.
What can we do to respond to the proposals?
- Contact your congressman or congresswoman. We can’t expect our congressman or congresswoman to always have our best interests in mind. They need us to help remind them. The Association of Fundraising Professionals even made it easy for us – they provide a sample letter and a fact sheet that frames the elimination of nonprofit standard mail rate issue and provides an outline for such correspondence on their website. Yet, the National Council for Nonprofits, the nation’s largest nonprofit network, made it even easier. By simply filling out a short form on their website, we can join other nonprofits throughout the country in signing a Letter to Policymakers from the Nonprofit Community (a letter they’ve already written for us) urging support for the charitable deduction.
- Stay informed. Knowledge is power or in this case money. Stay up to date on the bill and committee – directly or indirectly through traditional media, social media, etc.
- Spread the word. Let everyone you know in the nonprofit business know about these proposals starting with your organization and your board. Begin a conversation with America about the proposals using every available means – through your website and social media sites, by writing an op-ed, by conducting an interview, etc.
- Innovate. Take yourself out of the equation. Nonprofits in San Francisco for example are partnering and/or merging with one another to do just that. What will you do, how will your nonprofit innovate? Let us know – leave a comment.
About the author: Major Martin L. O’Donnell is a U.S. Army public affairs officer and a former NATO strategic communication officer. Marty is currently finishing the Master of Professional Studies in Public Relations and Corporate Communications program at Georgetown University, while at the same time serving as a communication consultant for two nonprofits – the U.S.-Afghan Women’s Council and Adventure Theatre. You can find Marty on LinkedIn or on Twitter microblogging about all things related to Afghanistan and communication.