With 30% of all annual charitable donations taking place in December, an end-of-year fundraising push can be critical for nonprofits to successfully reach their fundraising goals. However, nonprofits must be careful when crafting year-end appeals because they create binding obligations on the organization. Therefore, it is important for charitable organizations to carefully word appeals to avoid any future legal obstacles, so they can instead focus on putting those donations to good use.
How to Craft the Year-End Appeal:
- Register. First things first, if not complete already, charitable organizations should register with the Registry of Charitable Trusts before soliciting any donations, unless the entity is exempt from registry because they are a hospital, educational institution, or religious organization.
- Carefully Word Appeals & Donation Conditions. A year-end appeal is not just a request for donations. When completed, it constitutes a contractual donation agreement according to the terms of the request. If a nonprofit provides a donor the option to designate their gift towards a capital improvement campaign, the nonprofit is bound to use the gift for that purpose when the donor designates the option. Generally, the only way to alter how the funds are utilized is through written consent from the donor or court action, following notice to the State Attorney General. Moreover, if an appeal is overly restrictive and the charitable organization does not allocate a donor’s funds according to the donor’s stated intent on the appeal, the organization could be liable for a breach of contract and Charitable Trust rules. Accordingly, charitable organizations should ensure the terms of their year-end appeal are conditions they can abide by. One simple way to avoid future problems is by only allowing donors to donate to a “General Fund” as opposed to, or in addition to, the option to designate specific uses in the appeal.
- Substantiate Donations. Always remember to say thank you! After receiving donations, remember to substantiate the gift. This is important for internal recordkeeping, and also provides the donor with the necessary information they need to claim the donation on their taxes. For more tips, this helpful article provides additional details on best practices for substantiating charitable gifts.
