Arizona has several tax credit programs that benefit taxpayers and nonprofit organizations alike. Two of the most popular benefit both Qualifying Charitable Organizations (QCOs) and Qualifying Foster Care Charitable Organizations (QFCOs). Between the two, single taxpayers can receive tax credits totaling $900. And it’s simple – make a donation, get a receipt, complete the Arizona Form 321, file your taxes, and done!

“For nonprofits raising funds from Charitable Tax Credits, it is important to remember these credits are a way to attract new donors to your organization and increase giving options for existing donors,” says Richard Tollefson, President of The Phoenix Philanthropy Group. “It’s also important to recognize the opportunities tax-credit donors bring and turn these donors into ongoing supporters.”

Tollefson offers these six strategies to help you do that:

01. Make tax credit donors part of a more comprehensive strategy. Tax credit donations are a wonderful tool in your fundraising toolbox. But don’t stop there. Nurture these donors to keep giving well beyond the one-time or annual tax credit donation season. Incorporate these donors into your overall fundraising strategies, starting with a thank you phone call. It’s likely such a call will impress them. But don’t stop at saying thank you — use this as a chance to share updates with them and spend a lot of time listening. You can learn more about why they chose your organization for their tax credit donation. This information will help you better engage them to continue contributing to your organization.

02. Turn a tax credit donor into a monthly donor. Tempt your tax-credit donor to give a monthly gift. When asked, many will at least consider it. Make sure your donation forms provide this option. If they don’t choose this option, try emailing an invitation soon after to join your monthly giving program. Monthly giving is a treasure for you and a welcome convenience for donors. Make your monthly giving program exclusive by giving it a distinct name, or even tempt donors with a one-time premium for signing up.

03. Invite tax credit donors to volunteer. This is another great way to get them engaged and more familiar with your organization. Studies show volunteers tend to give more often and in higher amounts. Maybe start small, with a simple volunteer opportunity. You could also have some special volunteer opportunities designed specifically for tax-credit donors to gain their support.

04. Continue yearlong communications. Be sure to add tax credit donors to your organization’s communications lists so they are regularly informed about the work you do. Tell them what was accomplished. Let them know what you’re doing as an organization, the impact of their giving, how they are making a difference, where additional donations are needed, etc. This communication must be repeated to be effective. Research shows that gratitude must be repeated to be meaningful. Add short video messages to your communications toolbox if possible. They can be effective and feel personal as well.

05. Retain them through proactive engagement strategies. Invite tax credit donors to an event that isn’t a fundraiser. This can be a great opportunity to get some face-to-face time with your tax credit donors, share your organization’s mission, and forge deeper ties with them. Some ideas for non-fundraising events could include a free talk by an expert on your issue or a special exhibition. You can also try an online event strategy, which won’t offer face-to-face time but can still engage them.

06. Look for planned giving opportunities. Optimize the potential for planned or legacy gifts by researching, qualifying, and engaging those with the greatest gift potential. As you learn more about your tax-credit donors through conversations and perhaps even surveys, you begin to develop a more complete profile of these donors. That way, you can better identify qualified planned and legacy giving prospects. Those showing the most immediate interest in making a planned or legacy gift are your most qualified prospects. Be sure to present them with your legacy giving program and opportunity.

Your tax-credit donors are treasures to your organization. Don’t limit your opportunity to grow their overall and long-term giving. Using these strategies can help you secure additional gifts for ongoing donations and turn one-time donors into raving fans that will provide consistent support and perhaps become vocal advocates for your mission.

January 2021