Year-End Messaging to Offset Loss of Deductions
In a recent blog, we wrote about the new tax bill that doubles the standard deduction, effectively reducing the number of taxpayers who itemize deductions from 30 percent to 5 percent, according to experts. That’s a decrease in roughly 30 million households.
We have spoken with a number of clients who are concerned (read: “freaked out”) about the implications for end-of-year campaigns, which have relied on promoting the ability to take an itemized deduction to stimulate donations.
December is the make-or-break month for many nonprofit organizations, houses of worship and other charities dependent on Americans’ year-end giving. According to a report by the Lilly Family School of Philanthropy, itemizers are much more likely to donate to charitable causes.
The study found that “83 percent of itemizers reported donating any amount of charitable giving at all, compared to 44 percent of non-itemizers. In fact, non-itemizers contribute less than 20 percent of total giving.” Moving 30 million households from “itemizers” to “non-itemizers” will have a measurable impact on donations.
Because this shift in incentives to donate will affect middle-income Americans rather than those in higher income brackets (who are likelier to continue to itemize), the decline is expected to hit the kinds of charities middle-income Americans support, particularly local charities, congregations and basic needs organizations. Those charities would likely be more affected rather than arts organizations and educational institutions favored by the wealthy.
So, it’s not surprising that many nonprofits are struggling to figure out their messaging for this year’s end-of-year appeal, which is now less than 10 months away.
A strategy that we would recommend is pretty straightforward—emphasize seasonal moral and religious themes in the messaging. Part of this is because you will be fishing where the fish are. A report by Giving USA on religious giving found that “62 percent of religious households give to a charity of any kind, compared with 46 percent of households with no religious affiliation.”
But reminding people of the moral teachings of Jesus, Mother Teresa or Mohammed, for example, will also be effective in activating people who aren’t Christian or Muslim. That’s because of a tendency people have that psychologists refer to as moral elevation.
Moral elevation is an emotional state that has been studied by psychologists for the past 30 years. Basically, you can think of it as an emotion that is similar to awe. The opposite of moral elevation is disgust. When people witness others behaving compassionately, their reaction of appreciation is accompanied by feelings of warmth. Imagine how you would feel if you saw a small child kiss the knee of another small child who had just fallen down.
Observing morally virtuous behaviors often results in people feeling optimistic about humanity and creates a desire to become better people themselves. This is moral elevation.
New York University social psychologist Jonathan Haidt is an expert on moral emotions. He describes moral elevation this way: “Elevation is elicited by acts of virtue or moral beauty; it causes warm, open feelings in the chest; and it motivates people to behave more virtuously themselves.”
Here’s some good news. Research has shown that when people think about their “true” self they think of themselves as both moral and good. People want to see themselves as the kind of person who “does the right thing.”
Emphasizing religious traditions will help people reflect more intentionally on their contributions at the end of this year. Instead of attributing their generosity to a tax break in December, emphasizing moral and seasonal religious themes will allow people to associate their faith and values to their giving and the work of the nonprofits that they support.
What’s the best possible outcome? That the seasonal giving you inspire is not about the tax season, but the moral season.
Otis Fulton, Ph.D., spent most of his career in the education industry, working at the psychometric research and development firm MetaMetrics Inc., Pearson Education and others. Since 2013, he has focused on the nonprofit sector, applying psychology to fundraising and donor behavior at Turnkey. He is the co-author of the 2017 book, ”Dollar Dash: The Behavioral Economics of Peer-to-Peer Fundraising,” and the 2023 book, "Social Fundraising: Mining the New Peer-to-Peer Landscape," and is a frequent speaker at national nonprofit conferences. With Katrina VanHuss, he co-authors a blog at NonProfit PRO, “Peeling the Onion,” on the intersection of psychology and philanthropy.
Otis is a much sought-after copywriter for nonprofit fundraising messages. He has written campaigns for UNICEF, St. Jude’s Children’s Research Hospital, March of Dimes, Susan G. Komen, the USO and dozens of other organizations. He has a Ph.D. in social psychology from Virginia Commonwealth University and a Bachelor of Arts from the University of Virginia, where he also played on UVA’s first ACC champion basketball team.
Katrina VanHuss has helped national nonprofits raise funds and friends since 1989 when she founded Turnkey. Her client’s successes and her dedication to research have made her a sought-after speaker, presenting at national conferences for Blackbaud, Peer to Peer Professional Forum, Nonprofit PRO, The Need Help Foundation and her clients’ national meetings. The firm’s work is underpinned by the study and application of behavioral economics and social psychology. Turnkey provides project engagements, coaching, counsel and staffing to nonprofits seeking to improve revenue or create new revenue. Her work extends into organizational alignment efforts and executive coaching.
Katrina regularly shares her wit and business experiences on her and Otis Fulton's NonProfit PRO blog “Peeling the Onion.” She and Otis are also co-authors of the books, "Dollar Dash: The Behavioral Economics of Peer-to-Peer Fundraising" and "Social Fundraising: Mining the New Peer-to-Peer Landscape." When not writing or researching, Katrina likes to make things — furniture from reclaimed wood, new gardens, food with no recipe. Katrina’s favorite Saturday is spent cleaning out the garage, mowing the grass, making something new, all while listening to loud music by now-deceased black women, throwing in a few sets on the weight bench off and on, then collapsing on the couch with her husband Otis to gang-watch new Netflix series whilst drinking sauvignon blanc.
Katrina grew up on a Virginia beef cattle and tobacco farm with her three brothers. She is accordingly skilled in hand to hand combat and witty repartee — skills gained at the expense of her brothers. Katrina’s claim to fame is having made it to the “American Gladiator” Richmond competition as a finalist in her late 20s, progressing in the competition until a strangely large blonde woman knocked her off a pedestal with an oversized pain-inducing Q-tip. Katrina’s mantra for life is “Be nice. Do good. Embrace embarrassment.” Clearly she’s got No. 3 down.