Building the Bear; An Epilogue
In the summer of 2017, I set out to do something I never dreamed possible; I wrote a book. After reading Jeremy Allen Darlow’s “Brands Win Championships,” I was inspired to say the least. It got me thinking about the realities that face athletic organizations at all levels. I wanted to share that even at Mercer’s competitive level as a mid-major, the challenges remain the same across the board. Budgets are limited, individuals matter and strategic thinking is imperative for forward progress. I knew I could share tangible examples of how other fundraisers could take a sleepy annual fund model and employ a dynamic fundraising approach.
This is how “Building the Bear” was born. I am thrilled to say the response to the book has been overwhelmingly positive. However, since penning the book, a monumental shift rocked our industry in the form of the recent tax reform bill.
The changes in the tax code are the perfect illustration of what life is like in the fundraising world. This industry is constantly evolving. The methods that worked 10 years ago are different than those of current day and it’s likely that the landscape will shift greatly in the next 10 years.
While the changes of the tax code have required our team at Mercer to plan ahead and shift strategy, most of “Building the Bear” revolves around themes that will not change—the importance of culture, organization, stewardship and marketing. The nuances of programming will constantly be tweaked but the overarching principles of fundraising will always remain the same.
An opportunity to return to basics
The new bill has played a role in shifting ideology when it comes to giving. The model of seat-based, transactional giving known as the “give to get” model will not be sustainable in this current landscape. At Mercer, we’ve embraced a philanthropic approach in the wake of these changes.
When benefits exist how does philanthropy remain on center stage?
At Mercer, we remind donors through graphics, video, print materials and in conversation about the importance of giving. Rarely do we “sell” parking or other benefits as the carrot for making a gift. While those benefits are a nice perk, the language we employ on a daily basis revolves around two themes:
- Student-athlete experience
- Visible change due to investment
Bringing the conversation away from benefits and back to our student-athletes reminds donors of why they are investing in the Mercer Athletic Foundation. It is less about the five home football games and more about enhancing a student’s experience for four years. On our Foundation website (supportmaf.com) we highlight photos/majors of student-athletes on nearly every page. The language used throughout the site mirrors conversations with donors: “Get involved and help make a difference.” We want to humanize our student-athletes and bring their stories to the forefront.
The second theme is constantly showcasing the impact fundraising has made. We feature numerous projects on our website – both completed and under construction – to show donor dollars at work. Through imagery and video we show the cost of outfitting athletes. When donors see an infographic clearly articulating the cost to outfit one football player it sends a powerful message. When donors learn a soccer ball costs $150 by watching one of our videos it sends the message that all gifts matter and everything related to our operation has a cost associated.
By highlighting the student-athlete experience and showcasing the impact of donor dollars we have developed a strong culture of philanthropy; something that survives through any tweaking of the tax code.
What did Mercer do in the wake of the tax code changes?
While it was impossible to predict how everything would turn out, we had the last month of 2017 to prepare before changes went into effect. We built a multi-tier plan based on several potential outcomes:
Step 1: Communicate with donors/finish 2017 strong
Even with uncertainty of the outcome, it was imperative to communicate with donors prior to the end of 2017. We consulted with a number of institutions about the wording of their e-blasts, letters and communications and created a hybrid email which fit for Mercer. We sent this email to all of our Bear Plus donors (donors who were members of our preferred seating/parking program). The email communicated the changes ahead and encouraged those donors make a gift by the end of 2017 to ensure 80/20 tax deductibility for 2018. The response to this email was fantastic. Our donors made December ‘17 the single largest giving month in our annual fund’s history.
Step 2: Finalize the 2018 plan
After the tax bill was passed, the basis of our plan boiled down to the following:
Seat-based required giving (80/20 rule) was no longer tax deductible. Outside of seat location, what is the most important aspect of game day which dictates a donor’s experience? The answer: parking.
Knowing parking was the carrot, the Bear Plus program needed to be transformed. Since its inception in 2013, the Bear Plus program was a seating and parking program which guaranteed the best seats and optimal parking for our donors. For 2018 and beyond, Bear Plus needed to shift into a game day experience and parking program. The changes brought about new questions, most notably, how would deductibility work with the “new” Bear Plus?
Step 3: Details about deductibility
The following list was the thought process behind determining deductibility with the “new” Bear Plus:
Gifts associated with seating location were only 80% tax deductible.
At institutions with priority point systems, annual fund gifts were 80/20 due to points impacting a donor’s rank/priority for seating.
At Mercer we do not have a priority point system. A gift to the Athletic Foundation outside of Bear Plus giving had no impact on seating location; thus it was and is 100% tax deductible.
“Old” Bear Plus (prior to 2018) impacted seating location so 80/20 was applied.
“New” Bear Plus (2018 and beyond) does NOT impact seating location.
Bear Plus gifts now have a parking benefit associated with membership and therefore the value of parking is removed from the total gift amount.
All other Bear Plus benefits are de minimis (minimal and not taxed).
The “new” Bear Plus actually ends up being more tax beneficial when compared to the previous version of the program. A parking benefit will be taken out of each Bear Plus gift, regardless of level, which percentage-wise is greater than the previous 80/20 split.
Step 4: Rolling-out the new Bear Plus
As of January 1, 2018, we removed all mentions of ticket/seating location from the Mercer Athletic Foundation website along with any language which referred to Bear Plus as a seating and parking program. We now talk about Bear Plus as a game day experience and parking program.
In many ways the new program is cleaner than before. Everything that happens inside the stadium is handled by the ticket office and isn’t tax deductible. The Athletics Foundation handles everything that happens outside the stadium (parking and fan experience) and includes tax benefits for donors.
We eliminated the crossover that previously existed and this new program is easier for our donors to understand. Ticket questions are handled by the ticket office and giving related items are housed in the Foundation. It’s a better overall experience for our donors and fans.
Step 5: Looking ahead
Each and every institution is different and giving programs vary. The changes at Mercer may not work at another school – but the core principles can translate into any setting: Tax code changes will continue in the future and just like November/December of 2017, development professionals need to remain educated about potential changes. Communication with donors will continue to be the key to sustained success.
About the author:
Brian Gerrity is the author of Building the Bear: A Mid-Major Fundraising Story, (buy it on Amazon). Gerrity is currently the Athletic Foundation Executive Director and Senior Associate Athletic Director at Mercer University. Brian drew from his experience to outline the process of developing programming for fundraising while simultaneously starting a Division I FCS football program.