Over two decades ago when the Arizona legislator passed the first tax credit bill, many nonprofit leaders were sure this would stem the trend of less and less households making charitable donations every year and be the answer to their funding needs Sadly, it hasn’t happened. And although accurate numbers are slow in being released and often vague at best the percentage of the Arizona economy donated has at best held steady for those two decades. And the share that is contributed by large institutions and the very wealthy has increased dramatically. Two groups the tax credit had little or no effect on. Why is that? The simple answer is nonprofits are about relationships not transactions. And the tax credit more often than not reduces the relationship of donating to a nonprofit to a transaction. A simple trading of dollars, that does not require the donor to make a real commitment to a cause.
A wise man once told me, “It ain’t giving if it doesn’t hurt a little”. It is understandable that nonprofit leadership decided asking people to loan them some money until the state would pay it back, was a lot more painless, than asking them to make a commitment to a nonprofit’s mission. The problem is when we took the easy route, we failed to make our donors want to be part of what we were doing. Simply put, they didn’t have to “buy in”.
Nonprofits are based on relationships. Relationships between the nonprofit and those they serve and the donors who make that possible. A big part of what a successful nonprofit does for those they help is they offer empathy and hope that the future will be better. That means one on one concern, not simply dropping a box of food in their car trunk as they wait in line for a hand out. And they also offer hope to their donors, that there are solutions for those that are suffering and if we all pull together we can actually solve some of society’s problems. That personal relationship is why nonprofits get started and why they do the amazing things they do. Without that nonprofits become just another bureaucracy providing a hand out.
“Telling your Story”, identifying the problem and explaining how you are going to solve it, is the most important thing a nonprofit does. It’s what creates the kind of “true believer” donors who will share that story with friends and neighbors, volunteer, or maybe even come up with the solution to some of the most difficult issue you face. They are people who will tell you “no I want to.” when you suggest their donation maybe a little too generous Getting to that point isn’t as easy as the simple tax credit transaction, but when you have those kind of people in your corner the chances of really completing your mission are increased many fold.
Another problem with the tax credit and institutional funding is to qualify you may need to change or abandon programs, to fit in their guidelines, that are working for you currently . When we first talked to Paula Sedillo, Founder and President of Tennies for Tots, about her all volunteer effort to provide new shoes for kids under
five enrolled in Head Start programs all over Northern Arizona I asked if she had applied to be a Tax Credit nonprofit. She said she had but hadn’t heard back yet. It turned out it was lost in the mail. When she sent copies, the response was that the book bags and books she was giving with the shoes weren’t “essentials” so she could not be included in the calculations. Here was a single mother who voluntarily has taken on the job of raising the money, shopping for the best deals on shoes, and delivering them to 30 different Head Start Programs all over Central and Northern Arizona and for every $20.00 she gets donated is able to give a child living in poverty a new pair of shoes, socks, a book, and a book bag. Shouldn’t a program like Paula’s be just what the tax credit was created to encourage, neighbor helping neighbor. Once again the system deals with helping our needy as a transaction and not a relationship that wants to find a long term solution.
As the tax credit gained more and more exposure most social service nonprofits have adapted what they do to fit tax credit guidelines, whether it made their program better or not. That’s not how it should work. The people providing the service have a lot better idea what works, than the Arizona Legislators And now with so many nonprofits fighting for their piece of the tax credit pie, the sales job about their mission they abandoned is once again becoming more important. But now even if we can still attract the donors we need, our relationship with them is much more fragile because, if all they have done is advance us tax dollars they really have very little skin in the game.
It’s time for social service nonprofits to return to telling us about the wonderful thing they do and their many accomplishments instead of how it really doesn’t cost anything to make those things happen.
All that said and despite these reservations ,and an email clarifying exactly what we were doing, we were thrilled when just a few minutes ago we received notification that Tennies for Tots has qualified as a Tax Credit Charitable Organization, QOC code 22452.
