By Monica Mattioli
Pandemics present the advancement profession with a unique set of challenges, different from those of other crisis events and natural disasters. Simply put, pandemics move the philanthropist’s lens and, in turn, the fundraiser’s approach, from an act of magnanimous benefit of served population to an alternative view that includes acknowledgement of, and mitigation toward, risks associated with the various challenges affecting the donor him/herself. Hence, during pandemic the challenge for fundraisers, accustomed to a world of magnanimity, toward involvement with the unusual complexities associated with self-preservation – in this case, fear of immediate instability affecting the donor’s own checkbook balance, as well as longer term financial instability in terms of their retirement portfolio. Compounding such uncertainties are the cacophonies of real-time advice emanating from opinion makers taking different positions on wealth management, which seldom consider philanthropy. How does the fundraiser break through this noise and confusion to communicate need while concurrently protecting the interests of donors?
Since the onset of the pandemic, philanthropy advisors and consultants have encouraged two key pieces of advice, which have proved effective. First, develop a case for near term need and second, hold off on planned giving appeals. Amidst fear of one’s own mortality, legacy giving appeals are best postponed. Those institutions which have chosen to leverage the pandemic as encouragement to revisit one’s will have been widely criticized and, in the case of the University of Texas at San Antonio, have sometimes retracted the appeal, with an apology to the alumni audience:
“Earlier today you received an email from the UTSA planned giving program that referenced the coronavirus pandemic. The content of this email was insensitive and it was sent in error. We sincerely apologize for this mistake,” wrote Karl Miller-Lugo, vice president for development and alumni relations.
While our intent was to convey how important it is to continue supporting students and UTSA during these uncertain times, we should not have associated the current health crisis with an estate planning request.”
Over the passing of several weeks, sensitivity to planned giving appeals has abated. Appeals couched in sensitive terms are slowly emerging in the sector.
The current reality of higher education budgets and financial constraints is both unprecedented and dire. Therefore, it is incumbent upon college and university advancement departments to pursue philanthropy. Best practices for fundraising amidst pandemic are emerging.
Focus upon the served population is extraordinarily important. That is, raising support for the college or the university, as institutional entity, is not ideal. Rather, focus upon institutional mission and served population – that is, students – is most compelling to prospective donors. That emotional connection, indeed compassion for the plight of current students whose experience has been disrupted, resonates with the institutions’ alumni. When reminded of the joys and benefits of their own student experiences, particularly when compared to the current state of affairs for students amidst the crisis, alumni open their hearts and their wallets. Students have been sent home, are adapting to online learning (often reliant upon faculty who are teaching online for the first time), and are deprived of the resources and social interactions afforded to them on campus. At first blush, to the prospective donor, this sounds like a golden opportunity for institutional savings. Isn’t money being saved when dorm rooms that have been paid for are empty, when the dining hall has no food expenses, when “free” technology has replaced space and facilities utilization? The short answer is “No.” Development staff steps in with the long answer.
Consultants far and wide recommend the following good ideas and best practices:
- Whenever reaching out to prospective donors, always be mindful that we all are dealing with uncharted territory. Donors are isolated at home, concerned about their own health and the health of loved ones, often financially challenged through job suspension or loss in their own families. It is extremely important to have and to exhibit genuine concern for others first. Development staff should be prepared to listen, and sometimes to abandon their original purpose, instead simply providing support and assistance to the individual to whom they have reached out. An example for faith-based institutions might be to offer access to prayer requests, online worship, and the like.
- Collect talking points from around campus to explain specific challenges. Facilities, though empty, are being sanitized to an extraordinary extent in an effort to ensure safety upon the return of students. Career centers, tasked with assisting student connections to jobs and internships, are stymied when “go-to” alumni who would usually provide advice and welcome interns are themselves working from home and have neither wisdom nor job placements to offer. Faculty, whose curricula were well prepared for deployment in classrooms, have become learners themselves, dealing with myriad content and delivery challenges associated with online platforms and best practices. Admissions professionals, whose responsibility it is to recruit an incoming class, have limited access to graduating high school seniors, many of whom might decide to choose only among colleges close to home – either by their own choice or by that of their parents. Additional pressures accompany the reality that this year’s incoming freshman class will inform institutional budgets, not only this year, but also for the ensuing three years. These talking points are illustrative and clarifying, as development officers and institutional leaders communicate with loyal donors and other constituents.
- Establish a specific fund as repository for contributions to offset these challenges. The fund should be clearly and inspirationally named, such as the Solidarity Fund or the Fund for the Future. The fund should be communicated and promoted widely. Because development staff cannot visit donors at this time, other means of communication leveraging emotional appeal are generally limited to online direct communication (phone calls, emails, eblasts), social media (You Tube videos and posts to Facebook, Instagram and the like) and direct mail, including the college’s magazine.
Several traditional best practices of fundraising do apply in the midst of pandemic. Attention to the challenge at hand and its impact to organizational mission are imperative. These include strong case statements, detailed proposals, and explicitly defined return on investment. Prompt gift acknowledgements are necessary. Personalized messages, such as notes and calls, thanking donors are important. Expressions of student appreciation via video are highly impactful.
As for planned giving solicitations, their time will come. Financial planners and trust/estates attorneys will be challenged to translate new strategies and paradigms to their clients as tax law and associated regulations morph. Many of our loyal donors – often alumni – are faced with shrinking portfolios, shifting due dates and adjustments to rules. As of this writing, best practices are evolving, with wise advisors recommending a fluid, or even wait and see, approach. Familiar strategies for tax reductions, such as IRA qualified distributions, are in flux. Alternative and formerly less favored vehicles, such as Charitable Remainder Trusts, are undergoing reevaluation. Donor Advised Fund decisions are subject to ongoing valuation assessments associated with and contingent upon portfolio mix.
The ethical construct for development professionals, however, remains the same.
Congress has passed and the President has signed into law the Coronavirus Aid, Relief, and Economic Securities (CARES) Act. The intent is to relieve American families and businesses while managing through the COVID-19 health and economic crisis. Among its provisions are extensions of the 2020 IRS tax filing deadline. The deadline for IRA and Roth IRA contributions has been extended for the 2019 tax year. As well, required minimum contributions have been changed in an effort to help build account values, which are contingent upon investment performance.
As we are currently aware, market valuations are diminishing. Stimulus funds have been provided to individuals to spark the economy. Some business owners have been offered tax relief and opportunities to apply for payroll loans in order to keep operating, thereby fueling the economy. Federal student loan payments have been temporarily suspended until September 30, 2020, in hopes that individuals, temporarily relieved of student debt, will participate more in the economy. Ordinary distributions from IRA and Roth IRA have been altered, also with a goal of growth to the funds. Special rules have been created for early withdrawal of retirement funds. It is fair to say that these rules are potentially fluid, that is, subject to further change. Additional complications arise for individuals, as these forces may result in migration among tax brackets due to changes in value and interest bearing loans eventually come due. Stocks, bonds and options values change with the markets, as do the values of art, precious metals and jewelry, classic automobiles, etc. Donor portfolios can comprise a variety of such instruments.
These circumstances create an environment of necessity for real-time, solid financial advice. Donors, prospective donors and advancement professionals are increasingly turning to certified financial planners and trusts/estates attorneys for expert guidance.
Fortunately, for the professional fundraiser, AFP rules inform our actions and decisions. In the interest of professional integrity, protection of donor interests and stability of our organizations and institutions, the Association of Fund Raising Professionals provides a clear set of rules, as well as a cadre of colleagues to provide expertise.
A 1977 graduate of St. Bonaventure University, Monica Mattioli is an adjunct instructor in the the university’s Masters in Strategic Leadership program. Currently director of planned giving with Belmont Abbey College, she has worked in an administrative role in St. Bonaventure’s office of advancement, executive leadership with SUNY Genesee Community College and marketing and public relations with Roberts Wesleyan College.