December 2012 AFR

The IRS Applicable Federal Rate (AFR) for December 2012 has increased back to its October level of 1.2%.  Also known as the Discount Rate, the AFR means that charitable deductions on new gift annuities and charitable remainder trusts will continue at very low levels.

While this low rate minimizes charitable deductions, it also means that tax-free income to gift annuitants will be maximized, having the effect of increasing their overall effective rate of return.

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 As 2012 comes to a close, the focus is on year-end gifts and rightfully so. This is a great time of year to raise money for and awareness of your organization's mission and goals.

However, the focus often moves elsewhere when the new year arrives and donor outreach drops off. Many organizations reach out to their donors once or twice in the fall and then do nothing in the spring. These organizations are leaving money on the table - a lot of money.

To give an idea of how much money, Spencer Group looked at two groups of organizations. One group of 8 organizations that does their primary outreach in the Fall and very little in the spring and another of 9 organizations that have solicitation plans with a year-long strategy, including both fall and spring outreach.

On average over the last three years, the programs with fall-only outreach brought in 44% LESS income in the spring than the fall, while organizations that solicited in both the fall and the spring brought in 8% MORE income in the spring than the fall. That's right - organizations with a year-long solicitation strategy more than doubled the revenue they received in the fall in the spring.

If you aren't doing strategic donor outreach in the spring you're missing out. A few to-do's for a successful spring solicitation program while maximizing return-on-investment:

• Continue to purse LYBUNTS and SYBUNTS. Some donors need 3 to 5 asks before they will renew, but many WILL renew.

• Thank your current year donors and ask them for a second gift. Many donors will have a comfort level in terms of the amount they will give per ask, but they are willing to give that amount more than once during the year.

Don't write off the spring - the money is on the table.

You just need to ask for it.

If you'd like to know more about how Spencer Group can help you will your spring outreach email us or call 

(802) 865 - 4100  for a free consultation.