Educating the Donor to Make the Most of Charitable Giving

It is also important that donor education courses lead donors to ask the right questions, and that fundraisers are prepared to answer them. “It almost comes with the territory that ‘If I have the money, then I have the knowledge’,” says Cole Wilbur, former president of the Packard Foundation. “Most of the questions in the philanthropic field are questions that people don’t know to ask. They are not obvious.” ( (9)

Wilbur goes on to say, “It should also be noted that in some cases donor education can be harmful if it makePerson holding a hoop in front of a mans so-called ‘strategic giving’ seem too complicated, time consuming and overwhelming. It can make a would-be donor jump through too many hoops to master the craft of giving. Donor educators need to acknowledge up front the vital role that personal passion, deep values, and gut-level instincts play in any good giving. The notion and role of craft should not trump good intentions and natural inspiration. Donors do have the option to add varying degrees of planning, strategy and focus to their giving, but the presentation of those options should not create barriers to taking the initial steps forward.” ( (10-ibid.)

Donors who are passionate and well informed about the organization’s mission are valuable ambassadors in the community. It’s important to determine what donors know and don’t know about an organization by conducting focus groups with donors to find out what they want to know. As Michele Minter points out in CASECURRENTS, April, 2011: “Even when they feel empowered and know how to give efficiently, donors can still find themselves stymied by their lack of subject-specific knowledge. Once donors have identified their philanthropic focus, they face the challenge of sifting through large amounts of information to choose how best to give. With so many nonprofits and media outlets competing for attention, where will a passionate donor find relevant, trustworthy information? “

Here, then, are some key questions for donors to consider when considering making a charitable gift:

Which charities do they want to benefit?

Donors should know the goals, objectives and mission of an organization and if they match their values and giving goals. They should explore the “why” questions of philanthropy based upon their personal history, values, passions, relationship with money, and planned legacy.

What kind of property do they wish to donate?

Do they want to donate money, items, property, stocks, etc? This will affect the type of gift set up and giving process as well as who is involved.

Gifts of significance come in many forms. They may be substantial cash contributions, gifts of appreciated securities, or in-kind gifts such as contributions of valuable art or tangible personal property. Often major gifts are in the form of multiyear pledges given outright or through planned giving vehicles such as bequests, charitable trusts, or gift annuities. Regardless of the form they take, gifts of significance usually come from donors who have contributed several smaller “gifts” over a period of time. (

How important are the income tax effects of the gift?

Depending on the size, the donation will be effected by tax policy which will be applied accordingly.

How important are the gift/estate tax effects of the gift?

This will again depend on the size/type of gift. If a donor makes a planned gift, (CRT, CRUT etc.) it will be affected differently by tax policy and how much the donor gets back from the school regarding their CRT/planned gift policies. For example, a CRUT is the most versatile of planned giving instruments, but it must meet strict IRS code requirements in order to be tax exempt and receive a charitable deduction. (Sargeant, Adrian and Jen Shang, 2010.)

Does the donor want the gift to be in effect during his/her lifetime or at death?

Depending on the type of gift the donor wishes to make, it will kick in either after or before death. For instance, if the donor puts an institution/organization in his/her will (a charitable bequest), it will only be available to the institution/organization after death. But if the donor gives through a CRT or CRUT, he/she will be giving the money upfront and it will be active during his/her lifetime and after death.

Does the donor wish to retain interest in the property gifted and to be involved with where the gift is used?

It is important for donors to be clear about how much money, time, and influence they are prepared to commit to a project, and that they have considered the strategic and personal commitments it will require.

Are the values of this organization aligned with the donor’s?

It is important to give to an organization with which the donor has a connection regarding values. That connection will make the donor willing to give more and participate in the organization if necessary. The donor can also represent the organization to the community to possibly recruit more donors.

Does the organization have an operating strategic plan and is it regularly revisited? Does it have an evaluation plan and methodology that captures real outcomes?

What determine the importance of strategic planning are the small number and the long term, organization-wide impact of the decisions in the strategic plan. It is important that the donors have a clear understanding of the goals and long term strategy of the organization so that they are aware of where their money is going and how it will achieve its objective.

Does the organization possess the financial health and managerial capacity to achieve its objectives?

It is important to be sure that the organization/institution to which donors are giving is able to perform the activities and objectives that it promises to. If the managerial capacity is lacking, or if the organization does not have the proper financial capacity to perform the necessary actions and execute its strategy, then it is a bad investment. It is important to ask for the future strategy and to meet other donors involved with various levels of leadership within the organization.

Does the organization readily make its financial and operating information available?

This information should be available on the organization’s website. Its tax forms should be readily available online to ensure that its practices are transparent and that it is financially reliable and accountable.

Donors need to know the tax status of the organization/institution to which they are giving: In order to be deductible, charitable contributions must be made to qualified organizations. Donors can ask any organization whether it is a qualified organization, or they can check IRS Publication 78, Cumulative List of Organizations. It is available at (,,id=172936,00.html)

It is important that all levels of donors ask these type of questions, and that such questions are addressed at a financial literacy program. “The principles that apply to the wealthy apply also to the less-wealthy because they still have limited resources and limited time,” Tierney says. “The moral of the story is: Don’t wait too long to ask life’s most important questions.” (



Starting in 2007, donors need a receipt for any donation. The old limit of $250 has been eliminated, so even a $10 bill in the collection plate requires a receipt if they want to deduct it. Here are some specific guidelines:

Donors may deduct up to 50% of their adjusted gross income in one year for charitable donations. (Certain contributions, though, may have lower limits.)

If they give more than 50%, they can carry the excess forward for up to five years.

If they donate goods to an organization, it must be in good condition or better in order to be deductible; and if it’s worth more than $500, they have to get a professional appraisal to prove its value.

If they receive something in return for their donation, they can only deduct the excess of their donation over what they received, i.e., if they paid $100 for a charity dinner with a value of $30, they can only deduct $70.



Patricia Annino
is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime. To download Annino’s FREE eBook, Estate Planning 101 visit,

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