- Sticker Shock is not just for gas pumps. In the past week I have seen 3 client’s jaws drop when they saw the estimated costs of their building renovation plans. Supply chain issues, lack of workers, and rising demand are causing pricing – and estimates – to rise. There is no crystal ball to know what will happen in in 2023 and beyond but we should all be prepared for when the shovel hits the ground with even higher costs.
- Endowments have value to donors. Pre-pandemic the idea of raising money for an endowment was tough without a capital element. Everyone liked an organization to have a large endowment – but few wanted to support it. There were some exceptions for those who were giving enough to name their own fund or “chair.” But many of those gifts came with restrictions. Cut to 2022, when capital campaigns are different, and donors understand that there are economic uncertainties that are out of everyone’s control and an endowment provides stability. And annual resources. As well as security. And ensures the organization can weather the next downturn.
- Donor Advised Funds (DAFs) can be used for pledges. Well, sort of. While someone with a DAF cannot make a direct pledge, they can offer a non-binding letter of intent. The nonprofit cannot use it as collateral for financing as a regular pledge can be deployed. But the letter of intent will still enable a donor to indicate a larger gift, payable over multiple years. Such a letter acknowledges the donor’s intent to recommend a grant from their DAF for multiple years. Read more about DAF letters of intent from Fidelity here.
- Competition for major donations can be a concern after 2 years of holding off on asking. Most nonprofits who started to consider a feasibility study and/or capital/endowment campaign in 2019, 2020, or 2021 are all looking to 2022 to raise money. This can be good for organizations who engaged donors during the pandemic -they remember you and still value you! And a lot harder if you held off contacting your donors. Either way, there will be a lot of nonprofits asking for capital and endowment gifts this year. In other words, if you are thinking about it, don’t hold off too long. Or you may find your donors have committed to other campaigns.
- Markets are unsettled which means you may have to be creative about how donors want to give. You can write a five-year gift of $100,000 as $10,000 this year, $20,000 for 3 years and $30,000 in the 5th year. Or vice versa. Maybe they don’t want to start until 2023. Or they want to give it all now. Or whatever the donor wants. We believe in “campaigns of one.” You strategically plan for the engagement, solicitation, and stewardship for each donor within a campaign. Just be aware that if they rely on financial markets for income they might not feel as secure as they did a year ago. I guess some things about capital campaigns are different in 2022, and some are not.
Interested in learning more about a feasibility study to know if your community would support an endowment or capital campaign? Set up a time to have a free 30-minute consultation with Abigail or David