Financial Policy Best Practice Framework

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On March 18th 2014 the US Federal Reserve Chair Janet Yellen stated the need for “reasonable confidence” in order to effectuate a more conservative monetary policy focusing on interest rate raise. Chair Yellen has indicated four macroeconomic factors that need to be further monitored.

  • The labor market with further unemployment rate decline;
  • A continued rise in currently slumped wages;
  • Core inflation stabilization (independent of energy ‘push’);
  • A higher “market-based” expected inflation rate.

The Fed’s decision to hold off on short term rate hikes comes one week after its macroprudential bank stress tests. Notable amongst the results was the “conditional approval” of Bank of America’s capital plan, with complete rejection of Deutsche Bank and Santander’s capital plans. It is clear that under Yellen the Federal Reserve is attempting to uphold the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. From a general standpoint, it is also quite glaring that the Federal Reserve as a central bank is fast adopting more of an eco-political role as a quasi-indirect financial system regulator through financial system monitoring. As has been mentioned before, monetary policy is the fastest mechanism to quell financial system defects, as fiscal policy results tend to lag.

Since the 2008 financial crisis, many economists have called for a more active regulatory role from central banks other than pure monetary rate fixes and being a lender of last resort. In January 2013 Fed Governor Powell met with members of the Financial Services Forum Policy Roundtable to the need for further engagement with appropriate bank regulators with regards to Dodd-Frank and specific cooperation among federal banking agencies. Here we see the Federal Reserve’s role expand into embracing full regulatory responsibilities and acknowledging the need to be more cognizant of fiscal agency activities. Since it is fast becoming the trend of the US Federal Reserve and of central banks in general to take up more than pecuniary monetary policy functions, it is the responsibility of the Financial Policy Council to suggest optimal regulatory best practices.

After careful examination, we found great quantitative insight in regards to the prevention, control and monitoring of financial crises by central banks through the International Monetary Fund’s Policies for Macrofinancial Stability: How to Deal with Credit Booms. (Giovanni Dell’Ariccia, Deniz Igan, et al. 2012). As the title suggests, credit booms are cited as the main, very complex cause of large scale financial crises which mere shifts in short term interest rates cannot fully solve. It is important to note that credit booms are intrinsically not detrimental to the financial system and to the macro economy at large, once properly and timely monitored. The tail risk associated with credit booms can bring strong growth or absolute demise to the financial sector depending on how it is mitigated during the boom, and controlled for the expected credit trough cycle. While there is increased regulation of the overall banking sector within the US, there is a renewed tendency towards credit increase within the non-banking business sectors, which in turn spur the banking sector to increase product (mortgage) marketing to remain competitive. This is a structural aspect of the financial system which encourages credit booms, and credit crises within the US.

Credit Boom Identification

  • The IMF defines credit boom as any period during which the annual growth rate of the credit-to-GDP ratio exceeds 10 percent. A boom ends as soon as the growth of the credit-to-GDP ratio turns negative; thus, the credit-to-GDP measure for any sovereign is crucial to monitor by the Federal Reserve, even in the resetting of an indirectly related short term market shocks.
  • Dell’Ariccia and his IMF colleagues applied the definition of a credit boom and ensuing variance stress tests to a sample of 170 countries with data starting as far back as the 1960s and extending to 2010, with the identification of 175 credit booms therein.
  • One of the most telling results of sample testing showed that no matter the country classification or geographical sphere, one in three booms was followed by a banking crisis within three years of the boom. As well, the IMF results showed that the geographical regions that experienced credit booms had even greater credit delinquency during and well after the crises.
  • Three out of five booms were followed by subpar growth in spite of further macro economic stimulus packages for at least six years following the credit contractions, or outright credit busts. The referenced term for this phenomenon is a “creditless recovery.” One very strong contributing factor to this type of recovery is a failure of both monetary and fiscal policy to focus on credit aggregates, and instead silo industries and sectors according to individual need (e.g. Real Estate).
  • An even more concerning find by the IMF study showed that credit booms generally start at the tail end or after buoyant economic growth. Many decision makers in the lower federal or parliament house tend to believe a credit boom is an absolute sign of economic growth. This is not necessarily so. In many cases, a credit boom occurs to make up for declining economic growth, depending on the sovereign’s liquidity position.

Monetary Policy Control

In particular, credit booms seem to occur more often in countries with expansionary macroeconomic policies, and low quality of banking supervision. This model usually fits a developing country or emerging market paradigm. Thus, it is noteworthy that the major financial crises of 2008 stemmed from the US banking and financial systems, and even more so from a primarily credit risk perspective. It is as if the central banking system completely dismissed signs of macroeconomic overheating. Should monetary policy then remain conservative with high cost of borrowing, low asset price valuations to stifle credit growth? The answer goes both ways. Most times central banks focus on short term rate adjustments to adjust money supply, all the while paying attention to market risk. This was the case of the US Federal Reserve prior to the financial crisis of 2008. We have already pled the case for allowing a credit boom to occur, with control. A credit boom naturally has credit risk to adjust for; therefore it is necessary for central banks to change monetary policy in response to aggregate asset price. We note here that aggregate asset price valuation control is necessary over a focus on individual bank institutions to effectively mitigate credit risk factors.

A serious problem faced by central banking decision makers is tightening monetary control during the first sighting of a credit boom, as purely political decision makers may confuse a credit boom with absolute economic growth. Monetary policy measures to control a credit boom can spur a higher short term unemployment rate, which leads to fiscal issues. Well meaning monetary policy control can also exacerbate macroeconomic pressures: increases in rate borrowing costs can lead to an outflow of funds to foreign lenders, even more creative variable interest only lending options, and a further increase in the banking sector’s debt service.

Almost all sovereigns immediately turn to monetary policy unsupported by immediate regulatory policy to ‘fix’ the repercussions of a credit decline, credit bust, and ensuing financial crisis, since monetary policy does have the ability to create corrective action without an extensive time lag. The IMF study states that stand-alone monetary policy can help slow down a credit boom during economic overheating, or simply put, when the economic crisis hits. However stand-alone monetary policy is still reactive without the support of immediate macro prudential regulatory policy, with a policy framework considering aggregate changes.

Fiscal Policy

Fiscal policy has the least immediate positive effect on immediately controlling credit booms. Fiscal policy counts in the long term outcome of controlling the likelihood of credit booms through resetting tax provisions that affect borrowing. The IMF study cites that fiscal consolidation independent of a credit boom can bolster the financial sector in case of a credit crisis. However, the time lag and political implications associated with fiscal policy are inhibiting factors to a proactive control at the early stages of a credit boom. This brings to question the overall effectiveness of governmental fiscal policy in an ever changing and increasingly sophisticated global financial arena. Empirical support from the IMF study suggests that fiscal tightening is not associated with a reduced incidence of credit booms that lead to financial crises in the short to medium term. If so, it may be quite precarious to place increased financial system decision making in governmental folds.

Dell’Ariccia and his IMF colleagues propose countercyclical taxes on debt to offset the credit cycles, and so add tightening balance during a credit boom. In this regard, there will be further fiscal consolidation, or “buffers” that may act in the same manner as a regulatory capital requirement. A salient point made in favor of this measure is that the taxation would apply to the very active nonbank financial institutions as well. The issues cited with such fiscal policy modifications have to do with an easy circumvention of tax policy through various “tax planning” mechanisms especially employed by the nonbank sectors. Indeed, the IMF regression results actually depict that during a period of high economic growth, increasing tax revenues are simultaneously correlated with an increase in credit lending by both bank and nonbank entities. Further taxation may then truly be counterproductive to financial system tightening.

Regulatory Policy

Macro prudential policy consists of capital and liquidity requirements, and regulatory stress testing of the banking sector throughout the economic cycle. Capital and liquidity requirements act as countercyclical buffers to control the cost of bank capital; loan-loss provisions especially demand capital increases to account for an economic trough. When put into practice in a consistent manner, regulatory policies provide adequate information to decision makers on the credit health of the banking sector. To date, most of these policies have been fully monitored and implemented in hindsight as it pertains to curtailing and preventing a credit boom. Regulatory policy as a stand-alone has not been fully effective with curtailing the start and duration of an overheating credit boom.

Aggregate measures of macro prudential policy include the following:

  • Differential treatment of deposit accounts;
  • Reserve requirements;
  • Liquidity requirements;
  • Interest rate controls;
  • Credit controls;
  • Open foreign exchange.

The IMF team found through empirical analysis that these measures are truly helpful in predicting a negative outcome of a current credit boom, rather than being able to actually prevent credit overheating in the financial system. The IMF also found that the global banking sector has been able to circumvent credit controls such as asset concentration by utilizing foreign partner or parent banks, and/or by creating foreign banking and nonbanking spinoffs. Empirical analysis also suggests that the Loan to Value (LTV) ratio monitoring is particularly prudent in restricting negative credit overheating, especially when faced with real estate credit crises.

Conclusion

The IMF study suggests and we agree that financial policy is justifiable in preventing, curbing and monitoring credit overheating in the global economy. We also see that stand-alone policies are not fully effective in mitigating negative credit and tail risks with the boom. Overall, a credit boom occurring during an economic boom can have positive returns once aggregate risk is effectively managed. Since the 2008 financial crisis we see the US Federal Reserve take a more active role in setting financial system policy monitoring, which in effect may be necessary given the highest stand-alone weakness of fiscal policy. Suggestions are as follows:

  • When credit booms coincide with a general economic boom, monetary policy can be the initial (not sole) tool to manage and slow down economic overheating.
  • During the early stages of a credit boom, macro prudential and other regulatory policies should be effectuated in line with monetary policy to ensure capital buffers to mitigate a credit crisis.
  • The IMF has stressed that the governing body to enforce macro prudential polices must have a thoroughly structured task force to supervise and detect when capital requirement thresholds are triggered on a case basis and in the aggregate.
  • More than half of credit booms examined that started at an initial credit-to GDP ratio higher than 60 percent ended up in crises. This ratio needs to serve as a primary quantitative credit risk trigger for central banks and federal agencies.
  • Fiscal policy falls short in curbing credit overheating in the short term, even when coupled with monetary or macro prudential policies. Fiscal policy providing tax code provisions to limit borrowing can bolster the overall health of an economic boom, but possibly may not aid in curbing a specific credit overheating.

As global markets become more sophisticated and fast paced, we see the need for central bank decision making for the financial system, which entails a marked focus on credit risk and macroeconomic indicators. We expect to see the US Federal Reserve and central banks in general employ a well structured mix of financial policies to manage credit booms, mitigate associated risks, and turn around “creditless recoveries” into long term economic stability.

SOURCES

Giovanni Dell’Ariccia, Giovanni, Igan, Deniz et al. “Policies for Macrofinancial Stability: How to Deal with Credit Booms.” The International Monetary Fund Staff Discussion Note. June 2012.

Matthews, Steve. “Yellen Is Watching These Four Indicators for Signals on When to Raise Rates.” Bloomberg Business Online. March 2015.

The US Federal Reserve Regulatory Reform. “Resolution Framework.” The US Federal Reserve Online. March 2015.

Van den end, Jan Willem et al. “The Interaction between Central Banks and Government in Tail Risk Scenarios.” De Nederlandsche Bank Working Paper. March 2013.

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My Personal Reflections on Davos 2015

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In just a matter of years, we’ve seen the digital revolution transform business, politics, media and society right across the world.

The Davos fest early this year only confirms the trend where this revolution is clearly driving a shift from ‘old’ to ‘new’ power in the world.

A new power’ world characterized by a shift away from unthinking consumption to people being ever more involved in creating, sharing, funding and owning products, services and ideas.

Where old power business models are defined by what one company has that others haven’t, new power models are renewable because they are driven by the passions and energies of the many.

Take a close look at Bitpay and Blockchain, both shaking up the banking industry by giving more people access to a new currency in a secure way, without the permission of governments and institutions…. Along with Sidecar with their true marketplace experience challenging Uber and Lyft to get people moving.

Although new power doesn’t necessarily mean for the better, I think the shift will force old power models to adapt and will most importantly lead to interesting collaborations between old and new power models.

What are we to make of all of this?

I believe the battle ahead, whether you favor old or new power values, will be about who can control and shape society’s essential systems and structures.

Let’s face it, many of our systems need a real shake up. Why wouldn’t you upload the power and talent of billions to do it?

Do we have what it takes to make it happen?

Well I certainly hope so because if you had to reflect on Davos’ recent gathering of world leaders, I am afraid the mood this year was more pessimistic than in 2014, when the euro zone seemed on track to recover from its deep financial and economic crisis. Since then, a range of geopolitical risks have surfaced and growth in Europe has stalled.

Further, reviewing the global economic outlook at the Conference, speakers from the IMF, the ECB, the Bank of England and the Bank of Japan said their ultra-loose monetary policy could only buy limited time for politicians.

My hope is to see word leaders not succumbing to pessimism over the state of the world economy.

A year before, no one had foreseen the fall in the oil price, which has dropped more than 50 percent and reached levels last seen during the financial crisis.

While producer countries in OPEC and beyond were suffering, much of the world could benefit and develop.

In fact , I believe the plunging price of oil and gas provides a once-in-a-generation opportunity to fix bad energy policies.

We just need confidence and less uncertainty and focus on “transitioning growth” from consumption to investment.

Share your thoughts….

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Is Greed Good for the Goal of Improving Society?

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Remember the infamous quote of villain financier Gordon Gekko in the movie Wall Street…back in 1987?

“I am not a destroyer of companies. I am a liberator of them! The point is, ladies and gentleman, that greed–for lack of a better word–is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms–greed for life, for money, for love, knowledge–has marked the upward surge of mankind. And greed–you mark my words–will not only save Teldar Paper, but that other malfunctioning corporation called the USA”.

I guess in this context, Gekko is using “greed” to define the constant desire for more, whether someone else has it or not.  He likens it to an evolutionary drive, that the need for more makes us figure out how to get it faster, more efficiently, and ultimately, easier.  And that this, in turn, results in benefits to everyone.

This is clearly a very particular definition of greed, and if you look at it from that perspective, it is indeed “good” in that it is a simple motivator that derives benefits beyond the individual actor.  In essence, it’s an “ends justify the means” argument.

Though this was quoted over two decades ago in one of the most controversial Hollywood movies ever, it resonates more than ever today… The only difference is that it is occurring at a much bigger scale.

So what do you make of it? Is greed good?

I guess as with any question like this, we need to start with the word “good.”

It is a fault of our language that “good” is most often used in an unqualified way. This is a symptom of our natural preference for dualistic thought. So what does unqualified ‘good’ mean?

Is greed good if your goal is monetary gain?  Absolutely, it’s the prime motivator.  Is greed good if your goal is running a successful soup kitchen?  Probably not.

Is greed “good” for the goal of living a happy life?  It could be, because it motivates you to improve your life in very real ways; on the other hand, there’s a fair amount of research that indicates over-attachment to material belongings draws your focus from other aspects of life that pay higher happiness dividends (personal relationships, self-improvement, etc).

Is greed “good” for the goal of improving society?  I doubt it.  I suppose it could motivate you to amass more resources, which you could then apply to humanitarian causes, but a very greedy person would probably also be unlikely to part with it.

Another way to use the unqualified “good” is as a sort of estimated sum of how effective greed is for helping you meet each of your goals, weighted by priority.  Let’s call this the “all-in-all” meaning.

So, is greed “good” in the all-in-all sense?  Will greed help you live a happier life?

From a wide-scope approach, it might be said that an economy of greedy people is an economy of motivated, productive workers.  This might be true, to a certain extent.  However, a society of extremely greedy people would mean a society of very stingy people; I doubt a country of greedy financiers, sitting on their money would lead to a robust, healthy economy.

But this is all about your average person.  Aberrations exist.  What if you’re not like most people?  What if poverty starvation is a serious possibility in your life?  Well then yes, greed would be a good thing to have.  What if material wealth is the big thing that makes you happy?  The only thing that makes you happy?  What if greed is your only motivator, the only thing that gets you out of bed and drives you to accomplish?  Then yes, having greed would be good in relation to your goals.  You might get better results though from examining your priorities and possibly changing your goals.

So in general, I would say that a little greed is good; it’s nature’s way of getting you to take care of your self-interests.  It’s also one of the major forces that keep societies progressing past the survival point.  Too much greed though poisons you.  There are countless examples of callous damage done to the world by the business community, and the only cause we can point to is human greed.

Bottom Line: I believe greed is ‘good’ only to the extent that it can be channeled productively.  Most of modern greed leads to people skimming money off of the productive and creative members of society; it results in many people with enormous intelligence and capability dedicating their lives to essentially worthless endeavors (such as predicting minor movements in stocks, bonds, currencies, etc.).  It also leads to frivolous lawsuits, ‘gaming the system’, overcharging and overbilling, etc.  It also leads individuals to steal and engage in other criminal activities.  Greed – when it leads one to invent, create, increase productivity, work harder, etc. can be good.  But it doesn’t always or even rarely has that effect.

I have no problem with people that amass large amounts of wealth — but if it pools up, it leads to problems. Wealth, like water, needs to move. Ideally that motion through society will be generated by the heavenly virtue that is classically contrasted with the deadly sin of greed.

Share your thoughts…

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Monetizing your Knowledge – Convert Knowledge into Money

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It is amazing the number of people  I meet on a daily basis who have all kinds of knowledge stored in their brains but still have not figured out yet how to convert all this knowledge into money.

Can this be achieved? … Well, here are my personal thoughts.

  1. Knowledge does not convert into money. Knowledge is the multiplier for work. Work converts into money. It is only challenging to say the least to convert knowledge into money if one is not willing to put any work to support their knowledge with. So for all the day dreamers out there, it all starts with “smart work”.
  2. Work is not translated into dollars until you find people willing to embrace your product or service. In other words, unless you have knowledge that others 1) need in its raw form, 2) cannot acquire on their own, and 3) are willing to pay for, then knowledge by itself is just potential. Like a car with no gas. Combine knowledge with the energy/effort needed to apply it to a purpose, you might get somewhere.
  3. Stop thinking and start doing. Most people would rather talk and not perform any actual work. They’re thinkers, not doers. Or, it could be that they are scared to fail, or find out that their knowledge isn’t all that unique or important.  Start executing and lose the fear.
  4. Be realistic. One cannot expect to make it rich by writing a book on the fact that the earth is egg-shaped, or photosynthesis. People know that already. So unless you write very well, or become a teacher, or something of the kind, you will not convert knowledge into money.
  5. Master networking. At the end of the day, unless you have an insane amount of practical knowledge, you’re going to be less successful than the people who are really good at networking. Big businesses these days are shifting towards looking for people who can network, rather than people with theoretical knowledge about their business, because they figure that when you’re doing a degree in higher education you don’t actually learn to work for someone, and you don’t necessarily learn the skills that you’ll need for the job they want you to do; so the idea is that they take someone who has a personality suited to generating contacts and networking between businesses (which is not something you can easily teach) and teach them the skills they’ll need to work the job (which is something that is easily taught).

Bottom Line: Knowledge is the application of intelligence.  There are some smart people who can rattle off facts and figures but can’t think their way out of a wet paper bag.  Most investors have the facts and figures of the stock market which are readily available but how do you put that together to formulate a winning strategy and do so more often than not?  That takes knowledge of the broader environment to understand how a product might be received in the general buying public and take off when the raw numbers might indicate just a so-so reaction.  That kind of knowledge comes with time and experience.  You need to learn from those that possess such knowledge and learn the skills yourself.

Every type of knowledge is not born equal. Their value fluctuate according to the times, and according to each situation. You may either flow towards areas of knowledge which are known to generate money or figure out a niche where your knowledge is considered to be of value to other people.

Money is only one of the values knowledge can be turned into, either directly or indirectly, through monetizable activities. Those activities which bring material wealth are mostly of concern to the poor or greedy, because they depend so much on it. Once our basic needs are taken care of, most of us will be on the lookout for those values which have little to do with money, but can sometimes be acquired in exchange of it. Since material wealth is a socially constructed phenomena, knowledge ought to be subjected to market trends, as a tool, a service or a product, in order to be transformed into numbers in a bank account. (Oddly so, money can be one of the less tangible and most fictional of values created by knowledge. Such monkeys we are…)

To sum it up, look around you. Ask yourself how you and your knowledge can be of service to others. Develop a business model around an area of activity which can sustain itself through the value it brings to others. Learn to enjoy knowledge for itself and never forget why people are willing to pay for it.

Share your thoughts…

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Raising Money For Non-Profit Organization – Ziad K Abdelnour

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I am frequently asked if there is a better way to raise money for non-profits than having to constantly ask for repeated contributions.

Well … I believe there are many ways to do so. Some are very non-traditional. Of course, if you are trying to raise millions or hundreds of thousands, you have a very limited number of things you can do because few sources have that much.

But if you are ok with raising smaller amounts, you can get loans, donations, grants, and do various side hustle things or a large number of other simple money-generating things.

The best way to pull your non-profit out of the rut of having to make a million small asks, run a million small events, and send out monthly fundraising letters is to develop a strong annual giving program.

Annual giving programs focus on small and medium sized donors, with the goal of building a core group of recurring donors — donors who give year after year.  Each year, some donors fall off the radar, and others come on board, but the end result is that your non-profit has a base amount of revenue that can be banked on each year.  Ideally, with work from your development office, this base amount will grow year in and year out.

As you cultivate individual givers for your annual giving program, you will want to try to get a number of them to sign up for multi-year (3 or 5 year) commitments.

Of course, no fundraising method is work-free.  Your development office will need to work hard to build this annual giving program through the standard channels:  building a prospect universe, introducing donors to your organization, cultivating them, getting them involved, and moving them to a one-year or multi-year gift.  The benefit with the annual giving model is that this program is scalable, and you can build upon previous year’s efforts with a stable of recurring donors.

Repeated requests for contributions is the marketing function of a charity.  You will always need to ask repeatedly, and your goal should be to do this well.  Just like a commercial enterprise must do.  Your donors are your stakeholders, and must have a vested interest in the quality of work you are doing.  The best way to not have to ‘ask’ for contributions is to be so excellent at what you do, that they ask you to please take their money.

Anyone involved in fundraising nowadays should realize that it is one of the most dynamic, exciting professions that exists. What makes it special is that it has a unique ‘win win’ dynamic built in philanthropically.  The charity asks and then proves worthwhile to be supported and when the donor decides to give their money they get as much reward for doing so as does the charity.  Many people live lives filled with ‘quiet desperation’.  Giving to a cause that is special to them brings happiness, a sense of renewal and pride in their affiliation that rejuvenates them towards feeling that indeed they are have a worthwhile purpose beyond their dull comfortable lives.

Yes, you can avoid all these ‘asks’ by coming up with some sort of commercial enterprise that will support your work…. or you can bring your supporters on their own individual ‘donor journey’ . . . creating commitment to the cause, engaging them as volunteers and directly in the work.  You can bring them along from the occasional donor, to the committed regular giver by direct monthly payment, to securing corporate support at the office, to become a major donor when their children leave home, and then planned giving and/or a legacy upon their death.  Aim for the long term investment of stakeholders who are passionate about your cause — the money will follow.  It’s an exciting experience to watch their lives transformed.

You don’t always have to be focused on “asking for money.” People who are connected to your organization (especially volunteers) and who have an abiding and deep interest in it will be the ones most interested in, and committed to, sustaining it. (But don’t stick your volunteers with the jobs you don’t want to do, like calling to ask for money, or stuffing envelopes, because they won’t want to do them either.) You won’t have to do much asking of people who are already involved.

Make it easy to actually get involved. Ask a friend to ask another friend for their help and advice (genuinely ask – not just as a means of raising money from them) and you’ll build supporters who will be committed to you. Create ripples of engagement and interest in the community by bringing people together to help you figure out how to keep your organization going. You’re interested in it, right? So other people should be, too. They’ll be your front line of supporters.

And think creative. Keep those ripples spreading. Let other people do the asking. Get other people involved.

The answers that advocate recurring donations are exactly right: the recurring donation, even each gift seems relatively smaller, adds up over time, and is significantly more efficient than having to return to the donor again and again to ask for a new gift.

I’d add that for “person to person” style giving , the monthly recurring gift is king, as opposed to the annual.

Monthly giving engages the donor on a loyalty and relational basis, allowing opportunity for regular touches throughout the year instead of risking the collapse of vision over a year. And donors tend to give monthly amounts out of their budget rather than their wealth (or tax-related gifts), which can be significantly more reliable.

One very important step your nonprofit can take to move away from repeated asks is to invest in a sustainer giving program where a donor gives a monthly, or quarterly, recurring gift on a credit or debit card.  Once the recurring gift is in place my experience is that donors let the gift continue for a long period of time.  I suggest branding the giving circle, and address the members in a different way, such as with a special newsletter or branded email series, to let them know how important they are to the organization.

Also, here again, suggest to donors that they consider a multi-year pledge.  This allows the nonprofit to save time and resources by not having to  re-solicit the donor each year, and can allow a donor a bigger naming opportunity then they might be able to do over one year, and helps the nonprofit with revenue forecasting.

Ziggedy is a brand new fundraising option for non profits or charities. As a user you simply have to shop on Ziggedy

through partnered businesses and 50% of this referral commission goes to the charity of your choice. If you are already shopping online I think it is a great option to raise money at no cost to you.

There are other creative ways too such as raising money through hosting annual dinner events which include silent auctions and dancing. If possible, solicit from client base the products that are auctioned off – contributions which are also great ways of a company showing support for the non-profit, as well as getting those products in front of friendly audience.
Hope all of this helps.
Please share your thoughts.

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