Tips for Non-Cash Donations to Your Organization
The average American holds only 9% of their net worth in cash, with the remaining 91% tied up in non-cash assets. Despite this, an overwhelming 99% of charitable donations are made in cash. There is a significant opportunity here for non-profits to diversify their donation portfolios by effectively soliciting and handling non-cash donations. Here are some essential tips to guide your organization in maximizing non-cash contributions.
1.
Understand the Types of Non-Cash Donations
Non-cash donations can come in many forms, including real estate, stocks, vehicles, art, and even intellectual property.
Each type of non-cash asset has its own set of advantages and challenges. For example, donating appreciated stocks can provide donors with significant tax benefits, while real estate can be more complex to manage but offer substantial value.
2.
Establish Clear Policies and Procedures
To handle non-cash donations efficiently, your organization should establish clear policies and procedures. This includes guidelines on what types of non-cash donations you accept, how they will be valued, and the process for selling or otherwise utilizing them.
Having these policies in place not only ensures compliance with tax regulations but also builds donor trust.
3. Work with Professionals
Handling non-cash donations often requires specialized knowledge. Work with financial advisors, appraisers, and legal professionals to ensure that your organization and your donors receive the maximum benefit from these contributions.
For example, the IRS has guidelines on how to value different types of non-cash donations, which can be complex.
4. Educate Your Donors
Many potential donors may not be aware of the benefits of non-cash donations. Educate them about the tax benefits and the impact of their contributions. For instance, donating appreciated assets can help donors avoid capital gains tax while still receiving a charitable deduction. Create marketing materials, host informational events, and use your website and social media platforms to spread the word.
5. Streamline the Donation Process
Make the process of donating non-cash assets as straightforward as possible.
Provide clear instructions and necessary forms on your website. Ensure your staff is well-trained and knowledgeable about the process so they can assist donors effectively. The simpler you make it for donors, the more likely they are to contribute.
6. Build Strong Relationships
Developing strong relationships with your donors can lead to more substantial and frequent non-cash donations. Personalize your communication, acknowledge their contributions promptly, and demonstrate the impact of their donations.
Building trust and showing appreciation can go a long way in securing long-term support.
7.
Promote Success Stories
Highlight successful non-cash donations and their impact on your organization. Share case studies and testimonials that illustrate how these contributions have made a difference. This not only builds credibility but also encourages other potential donors to consider non-cash contributions.
By diversifying your donation streams to include non-cash assets, your organization can tap into a significant source of untapped potential. With clear policies, education, and streamlined processes, you can make non-cash donations a valuable part of your funding strategy.
For more detailed guidelines on non-cash donations, refer to resources such as Charity Navigator which offers comprehensive insights into accepting and managing these types of contributions.
By implementing these tips, your organization can better serve your mission and make the most of the generous support from your community.