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Raising $1 Million May Be Easier Than You Think

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Is Tax a Real Incentive for Donors?

By Jerold Panas

Pick up any organizational brochure or piece of campaign literature. The chances are almost certain there will be a major reference to the tax deductibility of a gift. And there’s often a prominent reference to it in written and verbal presentations to potential major donors.

But how significant is the matter of tax deductibility? Not very, according to interviews for my book, Mega Gifts: Who Gives Them, Who Gets Them.

 “I don’t give much thought to the tax consideration,” Cyril Magnin, founder of J. Magnin told me. “I get paid off in the satisfaction of knowing I’m doing something that is good.”

When Dmitri George, a Chicago developer who transforms apartment buildings to condominiums, made his million-dollar gift to a hospital, the tax implication wasn’t a factor at all. His father had received excellent care following a difficult heart operation. Mr. George made the gift to show his appreciation. 

By his own estimates, Leo Roon gave away $100 million in his lifetime. And that didn’t even count gifts that weren’t tax-deductible.

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“I think a person who really enjoys giving doesn’t worry much about the taxes,” said Roon. “There was a young boy, a cerebral palsy victim, who was a great friend of my grandson’s.

“I knew he was going to have a terrible time in life and so I decided to establish a trust for him. It amounts to about $100,000. I’ll tell you, that gives me just about as much satisfaction as any gift I’ve ever made.”

 Roon went on to say: “I declare everything I can. But tax isn’t a major factor, ever. When Ann and I see a need that’s important, we give.”

Like Roon, every major donor takes full advantage of the tax laws. Of course! But it’s doubtful tax appreciably affects the philanthropic pattern of major donors. Donors give – tax advantage or not.

The fact that the government participates in the giving encourages the donor to do even more.
George Pardee, who along with his father and brothers were pioneers in turning Las Vegas’ dirt roads into communities, fit this category.

Here’s what he told me: “There are several things that affect my giving in a major way. The tax consideration is always a factor, but it’s not the first thing I think about.”

Louise M. Davies had a banker and an attorney who worked with her in her tax planning. She listened to them. But she still did as she pleased. “Tax is certainly not a factor for me,” she said. “It really isn’t. I always make the gift first, and then worry about the tax.”

Consider this, too. Most of the major donors give beyond the maximum limit. Dorothy Simmerly considers taxes when giving, but points out that generally it doesn’t do any good. She gives far beyond the deductibility limit.

Arthur Rubloff was another who exceeded the deductible amount allowed by law. “I disregard the tax question completely,” he said. “It has no relevancy in determining whether I would make a gift or not.”

In interview after interview, tax was played down, if not dismissed, by the mega givers. Do I take that at face value? I do!

By training, I am a listener. In a major way, that’s how I make my living. Listening.

With each million-dollar donor, I explored the matter of taxes. Scrutinized. Poked and probed. 

Inquired in a variety of ways. I am convinced the responses were open, direct, and candid. And from the heart.

On top of all of that, most of the people I interviewed were friends, and if not friends at least men or women I felt I knew well. They had nothing to prove – not to me, not to anyone.
In my mind, the evidence is clear and incontestable. You don’t sell a major donor by talking about the tax advantages.

An author, popular speaker and consultant, Jerold Panas is considered one of the most creative men in the field of fund raising. His books include Asking, The Fundraising Habits of Supremely Successful Boards, and Mega Gifts, all published by Emerson & Church. Panas is Executive Partner of one of America's leading fund raising firms. For more information, visit www.instituteforgiving.org.

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