Attracting and Stewarding Donor-Advised Fund Gifts

Donor Advised Fund

Not exactly sure what donor-advised funds (DAFs) are, how your organization can attract more gifts from these funds, or what to do when your organization receives a gift from one? Here’s a quick guide!

Why should you care about DAFs?

DAFs are now widely recognized as one of the fastest-growing forms of giving to the philanthropic sector.

According to National Philanthropic Trust’s annual Donor-Advised Fund Report, in FY 2022, grants made from DAFs to philanthropic organizations totaled over $52 billion, an increase of 9% from the year prior. In the past five years, grants from DAFs have more than doubled!

In addition, contributions to DAFs continue to rise. In FY 2022, contributions surpassed $85 billion, for an increase of 9% from the year prior as well.

Your organization likely has or will be receiving contributions from DAFs in the near future with this meteoric rise. If not, you are missing out on a major form of charitable giving.

What are DAFs, and how do they work?

A DAF is a charitable giving vehicle established at a public charity, such as a 501(c)(3) arm of an investment firm or community foundation. Some of the largest DAFs are managed by Fidelity, Charles Schwab, and Vanguard.

A donor makes a charitable contribution (cash, securities, or other assets) to their DAF and receives an immediate tax deduction. The contribution can then be invested to further grow the funds, tax-free.

While the donor no longer has legal control over the money in their DAF, they can recommend that grants be distributed from their fund to any public charity. Unlike foundations (public and private), DAFs are not required to disburse to nonprofits each year.

How can your organization attract more grants from DAFs?

  • Keep focusing your development efforts on individual donors. While the donor to a DAF doesn’t have legal control over their DAF funds, they do have significant influence over where the funds are distributed, so your one-on-one relationships with donors are still key to attracting these grants.
  • Make sure your donors know that your organization is ready and willing to accept grants from DAFs. Include this messaging on your website, in your annual report, in communications with donors, etc.
  • Ensure your organization’s public profiles are up to date on nonprofit data websites such as Guidestar.org, where DAF managers may look for information to vet your organization.

So, your organization received a gift from a DAF – congratulations! Now what?

1. What to expect.

When you receive a gift from a DAF, it will likely be accompanied by a letter that reads something like this:

It is a pleasure to present a $1,000 grant to ABC ORGANIZATION to be used for PURPOSE. This grant was made at the recommendation of a fund advisor through a donor-advised fund at the XYZ Foundation.

Fund Advisor: Jane Doe
Fund Name: Jane Doe Family Fund

Please note that it is not necessary to send the XYZ Foundation any tax receipt or acknowledgment letter, and we ask that you do not add the XYZ Foundation to your mailing list.

The check is made directly from the public charity, such as Fidelity Charitable, so you won’t see the individual donor’s name on the check.

2. Entering the gift in your database.

To record the gift, we recommend the following procedure as a best practice:

  • Enter the gift under the record of the DAF. Here’s why: While the individual donor made the recommendation to send this donation, the final decision and the distribution of the money are managed by the DAF.
  • Enter a soft credit on the record of the individual who made the recommendation to send the gift. Here’s why: A soft credit is used to track and steward supporters who may not make a gift directly but who have considerable influence over the decision to make a gift to your organization—as is the case with a DAF.
  • It’s important to note that IRS regulations prohibit a donor from receiving a benefit with a payment from a DAF, so event sponsorships and tickets, among other things, cannot be paid for from a donor’s DAF.

3. Acknowledging and stewarding the gift.

You do not need to send a tax receipt or acknowledgment letter to the DAF itself. It is important, however, that you express your gratitude to the person who recommended the grant. You can create a letter template that’s specifically used for this purpose while keeping the following in mind:

  • Do express your appreciation for the grant made through the DAF. This letter is your opportunity to thank and steward the person who recommended the grant.
  • Do not include tax-deductible language—the supporter received a tax deduction when they put the money into the donor-advised fund.

Here’s a quick example:

Thank you for recommending that we receive a generous grant of $1,000 through your donor-advised fund at XYZ Foundation. We have received the grant, and the funds will make a profound difference in the lives of homeless children in our community.

Thank you again for caring so deeply about the mission of ABC Organization. We are grateful for your support.

If the donor allows, you may also choose to recognize the donor publicly.

Stay in touch with your DAF donors and make sure they stay engaged with your organization – as a donor, volunteer, etc. Illustrate the power and impact of their gift to foster a relationship with them and encourage repeat and higher levels of giving.

4. What do you do if there is no identifying information about the donor?

If the gift is explicitly anonymous, we recommend sending a thank you note to the fiduciary, asking them to pass it along to the donor on your behalf.

However, if it’s not clearly anonymous, take time to review the documentation carefully to make sure you’re not missing anything. The donor’s name is not always in an obvious place!

Have further questions about DAFs or how to manage and steward gifts from these funds? Drop us a line at info@carter.global.

About the Author

Staci Headshot

Staci Lowell, JD - Director-Donor Information Management

With over 20 years of experience as an information professional, Staci Lowell has seen data transform how the world does business. As Director-Donor Information Management, Staci assists organizations in maximizing the use of their information resources to strengthen their donor base and improve fundraising outcomes. She provides support on a variety of donor database services and offers project management, training and documentation services. Learn more about Staci here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.

Podcast: Improving Volunteer Experiences & Raising More Funds with Kristina Carlson

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Are you wondering how you can cultivate deep commitment among your donors and volunteers to strengthen your organization and fundraising outcomes?

Then you won’t want to miss Carter Managing Director – Global Philanthropy Kristina Joy Carlson’s guest feature on the Volunteer Nation podcast, hosted by Tobi Johnson. In this episode, you’ll learn:

  • About the KIND method, a powerful tool for creating transformational change in your own life and for your organization and those who connect with your mission.
  • The importance of understanding where individuals’ passions, values, and interests overlap to make volunteer experiences enjoyable.
  • Practical strategies for strengthening your connections with volunteers and donors and, in turn, your impact.

Tune into the podcast below or at the following links to your preferred podcast platform.

 


Listen on Apple Podcasts

Listen on Spotify

Read the Transcript

About Kristina

Kristina Carlson

Kristina Carlson, CFRE - Managing Director - Global Philanthropy

For more than 30 years, Kristina Carlson, CFRE, has guided nonprofit institutions across the globe in their efforts to conduct transformational campaigns, secure up to eight-figure major gifts and bravely make the changes needed to make a significant impact. She is a proven leader, entrepreneur, author of the best-selling “Essential Principles for Fundraising Success,” and in-demand speaker at national and international conferences and workshops. Prior to joining Carter, Kristina served as President of Ketchum and founder and President of FundraisingINFO.com. Learn more about Kristina here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.

Bob Carter’s Crystal Ball: Predictions for Philanthropy in 2024

Crystal Ball

In this blog post, Bob Carter, CFRE, Chairman of Carter, shares his predictions for the world of philanthropy in 2024, primarily focused on the U.S., based on his decades-long and prominent career working alongside hundreds of nonprofits around the globe.

You’ve had time now to set goals for 2024, and you may be wondering, “How will current events and trends affect philanthropy, our philanthropic goals and my organization?”

Well, I’ve dusted off my (foggy) crystal ball and had some fun making predictions for the philanthropic sector in 2024. It’s free advice, and you get what you pay for…but here are my best guesses for our upcoming trip around the sun.

1. Philanthropic giving will slow prior to the U.S. presidential election but surge immediately following.

Traditionally, we see a lull in philanthropic giving just before a presidential election as the financial market and collective whole hold their breath to see which party will emerge victorious. But don’t be discouraged – a surge in giving usually follows for two reasons: (1) 50% of the country celebrates their win, feels optimistic and bumps the market back up, and (2) some of those in the losing party donate to causes that they feel may be ignored or mishandled by the party in power.

However, when we look at election years over time, historically, there is not much of a difference in overall giving compared with non-election years (see graph below). I recommend preparing your boards for what may be a small slowdown mid-year, coupled with the optimism of the surge that traditionally follows, and sharing this graph with them to illustrate the importance of staying the course and continuing your fundraising efforts.

Election Year

The main impact that elections can have on philanthropy is in the form of public policies that our elected leaders champion. I encourage every fundraiser to get involved and stay up to date with public policies that affect the philanthropic sector. The federal charitable tax deduction has been close to the chopping block before…it’s important for us all to pay attention!

2. The federal interest rate will hold or trend downward (I told you it was foggy). Either way, philanthropy will be positively impacted.

Corporations flourish and grow when it’s easier and cheaper to borrow money, and a portion of their success is shared with those who work for them. With more money in their pockets, individuals – who are responsible for 83% of philanthropic giving in the U.S. (when accounting for bequests, gifts from family foundations, etc.) – are more likely to make donations. (Corporations only make up 6% of philanthropic giving, so the majority of their success is given to nonprofit organizations through the generosity of individuals.)

3. Higher education institutions will benefit from more transparency as donor scrutiny heightens.

Following the congressional hearing with presidents from Harvard, the University of Pennsylvania and MIT regarding allegations of antisemitism on campus, we will see a significant effect on philanthropic giving to universities and colleges. Donors will more closely scrutinize schools before making a gift and will demand more information regarding how their funds are being used. Higher education can get ahead of this by providing greater transparency to donors about the precise ways their gifts benefit students and their education. 

Remember: Courage + Transparency = Trust!

4. The volunteer pool will decrease.

Retired citizens make up the majority of volunteers for nonprofits. Inflation is causing some retirees to return to work, depleting a portion of the volunteer pool. This not only affects programming. As we know, those involved with our organizations are more likely to donate, so it will be of utmost importance for nonprofit leaders to properly steward the volunteers that they do have.

5. Remote vs. in-office work models will start to be revisited.

During and post-pandemic, there was a meteoric rise in remote work, which offered numerous benefits and expanded the talent available to organizations and corporations around the world. However, we are now finding that nonprofits, larger ones in particular, are suffering a bit from this model. Their teams are less cohesive, and they struggle to create the synergy around their mission that is best accomplished when employees have direct contact with those the organization serves or are in a room with others working toward a common goal.

Remote vs. in-office work models will start to be revisited this year, with changes happening slowly over time. We may only see more drastic changes when new, younger leaders take the reins. (Millennials are currently the strongest advocates of remote work, while their Gen Z successors prefer at least some in-person office time. Source.)

6. Nonprofit leaders who embrace AI will experience more success.

Throughout human history, adaptive leaders were more likely to succeed. With limited resources, AI is a tool that nonprofits can leverage to save our most precious resource of all – time. Leaders should embrace AI in meaningful and ethical ways, guiding their teams to adapt the technology so they can work smarter, not harder.

I know I speak for the entire Carter team when I say we wish you all the very best in 2024. No matter what happens, keep moving forward, keep up your important work to improve humanity, and enjoy the ride. Should you ever need support or guidance, you know where to find us, and we would be honored to be your partner.

About the Author

Bob Carter

Bob Carter, CFRE - Chairman

Bob Carter, CFRE, is one of the world’s most respected, experienced and recognized experts in institutional strategy and philanthropy. During the past four decades, Bob has strengthened a variety of organizations throughout the world by helping them overcome challenges and capitalize on opportunities to be successful. Bob is currently serving as a member of the Board of the World Health Organization (WHO) Foundation, where he is a founding board member, and he is Chair Emeritus of the Association of Fundraising Professionals (AFP) International Board of Directors. Learn more about Bob here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.

Steve Higgins’ New Year’s Resolutions for Nonprofit Professionals

Writing resolutions

Making manageable and attainable New Year’s resolutions is hard. In fact, if you keep and follow your New Year’s resolution the whole year through, you are among the estimated 9% of Americans who do, and you likely have other superpowers!

With this in mind and based on my experience working alongside and learning from hundreds of organizations and sector leaders, I’ve compiled my recommended resolutions for nonprofit professionals. These are resolutions that I’ve made a habit of in my personal and professional life, and in my opinion, they are ones that (a) you can actually accomplish and (b) will truly enhance your individual performance. Consider customizing one or more of these resolutions, writing them down and taping your list to a wall by your desk for 2024. Enjoy the year, enjoy your work, and strive to be among the extraordinary 9%!


1.     Love your job

Working in the nonprofit sector is an honor and privilege. Nonprofits solve problems and capitalize on opportunities that no one else can address. Enjoying your job and profession is not always easy, but if you approach each day by authentically seeking out the positive attributes of your job, your exceptional attitude will contagiously spread to everyone you interact with and make you more effective in your work.

My recommended resolution: Take a few minutes at the end of each week to write down something you love about your job. This could include a cherished colleague, a donor or volunteer leader you are grateful for, or a recent success story that illustrates your organization’s mission at work. For you, this might look like a gratitude jar to collect weekly positive experiences to review at the end of the year. 


2.     Exercise

While this is a typical New Year’s resolution, as showcased by crowded fitness centers in early January, hear me out.

As nonprofit professionals, we have an incredible responsibility to support our important missions and those our organization serves – this responsibility can be overwhelming and quite stressful at times.

While I do not claim to resemble Hercules or Arnold Schwarzenegger, I do exercise regularly  three to five times per week. I find that my exercise routine allows me to reduce the daily stress that life and work can bring while also improving my self-confidence and mental well-being.

My recommended resolution: The biggest reason people cite that they do not exercise regularly is a lack of time. I suggest scheduling your workouts on your calendar just as you would any other appointment with a donor, colleague, etc. Do not cancel your workouts! Treat them as a sacred and important appointment, and you will see the benefits abound in your career and life. If you have staff, you can also make this part of your office culture, modeling this practice for your staff and helping ensure this time is uninterrupted for them as well. 


3.     Create healthy boundaries

Maintaining a healthy work/life balance comes down to creating healthy boundaries. At Carter, we subscribe to leaving our colleagues and partners (clients) alone during evenings and weekends. When we give ourselves and those we work with a break, we all are more likely to feel refreshed and energized during work hours.

My recommended resolutions: (1) I suggest that you attempt to turn off your phone and email during off-work hours so that you are fully “present” when spending time at home with your families. For those who live alone, it is still important to escape your work routine so that you are not a victim of time.

(2) If you are like me, you may enjoy working a few hours each weekend when things are quiet, in which case, I suggest scheduling your emails to be sent on Monday.


4.     Walk the nonprofit talk

Nonprofit professionals have an obligation to place the organization with which they work as their top priority. However, if you are not currently serving as a dedicated volunteer for any other nonprofits, I would encourage you to do so. Serving as a board member of another nonprofit whose mission you have a strong affinity toward will only make you a better nonprofit professional.

My recommended resolution: I suggest carefully engaging with a couple of organizations as a volunteer and active donor. This will give you greater purpose while also enhancing your skill set. It also allows you to model what it means to give back to your community. And it can then lead to being enlisted as a future board member. We must walk the talk as leaders in our sector.


5.     Be a mentor

We can all point to certain people in our lives who have shaped who we have become personally and professionally. I have been very blessed to have had numerous mentors in my life. My mentors still exist today. They may be family members, friends, former bosses and even those who work for me. I am certain that all of us have mentees we are unaware of. The behavior we model can go a long way to being an effective mentor.

My recommended resolution: A possible resolution could be to deliberately choose someone to mentor. Whether it is through a nonprofit organization that provides formal mentorship programs or simply taking someone from our profession under your wing as a mentee, I would encourage you to consider establishing an annual mentorship program with someone who can benefit from your experiences and expertise.


2024 provides a fresh start for each of us. Bloom where you are planted and make it a great year! Happy New Year to you all and thank you for dedicating another year to this important profession – you truly make the world a better place each and every day!

About the Author

Steve2color

Steve Higgins, CFRE - President & CEO

Steve Higgins, CFRE, is one of the most respected nonprofit consultants in the profession. He is a passionate, dynamic and accomplished leader who has advanced the missions of more than 200 organizations across the world, inspiring them to embrace transformational visions, guiding their work to strategically and successfully accomplish their aspirational goals, and providing them with the solutions they need to sustain their expanded impact. With nearly 30 years of combined consulting and nonprofit experience, Steve provides counsel in fundraising, governance, and organizational planning. Learn more about Steve here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.

Want Your Board to Be More Productive? Connect More!

Board Members Connection

This past spring, a Surgeon General’s report suggested that a national epidemic has emerged: loneliness. The report suggests that loneliness and isolation are emerging not in silos or quarantine but amid our everyday lives. We are linked to more humans than ever before – via screens, calendars, and tasks; linked but not connected.

Nonprofit organizations understand that meaningful impact is rooted in real connection, in developing “live and in-person” meaningful relationships. Yet, this emphasis on relational connection is often prioritized with major donors, those the organization serves, and the community, leaving a gap at the creative and executive tiers of the organization.

Far too often, we take for granted those who are leading the organization, who also deserve and need to be served by our organization. Deepening and enhancing their connection to your mission and to each other serves to validate their time and nourish their lives.

Prioritizing relational connection and community building at the board level isn’t just “the right thing to do” to best serve our board members. It also engages them at a much higher capacity, leading to a more agile, creative, and efficient board. This work is among the fastest routes you can take to a high-performing board.

A Journey, Not a Destination: Tips for Efficient Community Building on the Board

Incorporating community building into a board’s operations isn’t about creating one more task to check off a list; it’s about enriching and deepening the entire process. This effort must be seamlessly integrated into existing agendas to be both efficient and effective. By doing so, we will foster an atmosphere where connection and shared mission are continually nurtured without inflating our already-packed meeting schedules.

  • For boards that operate on a time-driven agenda—where each agenda item has an allotted time frame—it’s vital to allocate specific time limits for community-building activities. This sets expectations for how long each board member should contribute and implicitly underscores the importance of these exercises as integral parts of the board’s work and organizational mission.
  • Inviting/reminding board members to come prepared, having read all materials in advance, is one strategy for reclaiming the 10 to 15 minutes that can now be intentionally redirected toward fostering connections among board members.

By viewing community building as a continual journey rather than a one-off event, we encourage a sustainable culture of engagement, one that not only enriches board members but also enhances the overall efficacy of the organization.

Over the course of time, you will find an increase in your board’s consistency, creativity, and willingness to confront the critical conversations that must be had to ensure future success. Organizations that continuously hold meetings driven by agendas that are simply lists of checkboxes to complete may eventually find themselves in a cycle that’s hard to break.

10 Ways to Implement Connection

Most of our board members are not likely to want to go into the woods and sing together around a campfire. And those of us who would, more than likely, do not have the time. Here are 10 simple, non-invasive, and effective ways to create meaningful connections among your organization’s leadership that will, in turn, lead to higher performance and efficiency.

  1. Storytelling: Initiate board meetings with success stories, testimonials, or case studies that resonate with the organization’s mission.
  2. Mission Review: Periodically revisit the mission statement and evaluate board actions against it. This isn’t just a buzzword or a philosophy; it’s an operational plan. Your mission should be a living, breathing core of the organization, deeply felt and commonly shared by each board member. Are your strategies and tasks contributing to the greater goal?
  3. Board and Staff Social Events: Consider organizing a planned social event once or twice per year for the board AND staff to connect. When staff members learn more about board members and vice versa, everyone is given helpful context for the varying ideas and priorities that inevitably arise. This connection will make it easier to work as an effective team.
  4. Organized Icebreakers: Nobody “wants” to do them, but most are thankful they were done. Make sure your icebreaker is time-efficient, non-cumbersome and relevant to the gathering’s agenda.
  5. Committees with a Purpose: Establish sub-committees that are mission-aligned, enabling board members to connect over shared organizational goals. However, ensure board members understand their role on these committees is to provide oversight, not to engage in operations.
  6. Board Retreats: Consider annual board retreats that focus not just on strategic planning but also on trust-building activities.
  7. Mentoring: Pair new board members with seasoned veterans for mutual learning and relationship building.
  8. Open Dialogue: Encourage open discussion once or twice per year that is not just task-focused but also person-focused. Know each other’s strengths and weaknesses and what drives each individual.
  9. Unconventional Meetings: Participating together in occasional informal gatherings that align with your organizational culture can add a new dimension to board interactions. This can include attending a mission-related local event or even vision trips for large, global NGOs.
  10. Celebrate Together: Acknowledge both organizational and personal milestones. A board that celebrates together stays together.

Begin the Way You Finish

The heart of nonprofit work is about relationships. As you navigate the intricate balance between mission and resources, between service and stewardship, remember: we’re uniquely positioned to answer the call to action to fight the epidemic of loneliness, not only for those we serve but for those who serve alongside us.

The relational model isn’t a distraction from the real work; it is the real work. By fostering connections within your board, you don’t just create a governance structure; you create a community. And in that community, every individual—from the over-scheduled board member to the grateful service recipient—finds something far greater than a series of checkboxes. They find a shared mission, a sense of belonging, and a renewed spirit for the transformative power of good. Within these findings will come the commitment, creativity, and focus that will maximize your organization’s impact on your community and beyond.

If you’re ready to take your board’s engagement and performance to the next level, we’d love to have a conversation and learn about your organization and goals. We will always make ourselves available as a resource to you as you advance your mission and philanthropy. If you don’t already have a direct contact at Carter, please email info@carter.global, and we’ll put you in touch with a senior-level consultant specific to your needs.

About the Author

Neal Watkins

Neal Watkins - Director - Emerging Opportunities

A creative and dynamic consultant, Neal Watkins works with executive leaders, professional staff, trustees and volunteers to strengthen organizations and build effective partnerships. Neal is widely recognized for his ability to create authentic engagement and interactive discussions that foster innovation and optimize resources. As a nationally trained facilitator, his career has been dedicated to helping organizations explore their brand, mission and opportunities during changing and challenging times. Learn more about Neal here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.

Need a Strategic Plan? Don’t Skip the Planning!

Four individuals discussing and engaged in Strategic Planning Process

“Plans are worthless, but planning is everything.” former President Dwight D. Eisenhower

Does your organization struggle with maintaining focus? Is it difficult to get board members and leadership on the same page?

Having a strategic plan in place is great and often necessary, but if you don’t engage in an inclusive planning process to co-create a shared vision, you’re missing the point of creating a strategic plan in the first place, and your organization is more likely to struggle in achieving impact.

Before we get into the importance of the process, let’s go back to the basics. You might be wondering, “How do I know if our organization needs to invest in creating a strategic plan?”

If you’ve answered yes to any of the questions above, it is likely time for your organization to develop or refresh a strategic plan. Or it is an important exercise if…

  • Your organization has outgrown your current building and is exploring a capital campaign, but you can’t answer the question of “why?”, beyond that you need more space.
  • Your long-time Executive Director has recently retired, and the new staff leader needs to know where the board sees the organization going in the next five years.
  • After your first 10 years serving the community, your start-up organization wants to increase its annual support through grant funding. The foundations you approach will require a partner to have a board-approved strategic plan as part of your commitment to sustainability.


How Can a Strategic Plan Help You?

No matter your situation, organizations of every type, shape and size benefit from the process of creating and following the guidance of a strategic plan. A well-thought-out strategic plan will clearly articulate the following for your organization:

  • The mission and values (the plan may create, reaffirm, clarify, or refocus your mission and values).
  • An aspirational vision for the future (what the world will look like when your organization achieves its mission).
  • An organizational direction (how your organization and community will start to behave in five to 10 years as your work begins to move the needle on your aspirational vision).
  • Strategic goals and objectives to steer your organization’s work, usually for two to three years.

In practice, your strategic plan is a guiding beacon that:

  • Outlines a clear path and direction for organizational leadership.
  • Brings a sense of focus and creates alignment between activities, funding and outcomes.
  • Guides the board’s decision-making and investments.
  • Drives operational action planning for the staff.
  • Inspires and motivates your internal constituents.
  • Builds awareness and stakeholder engagement.
  • Demonstrates your impact and accountability.

Strategic plans look very different from organization to organization. One size does not fit all, but your plan does not have to be super complicated and overwhelming. In my 25 years of experience guiding boards and senior staff through creating strategic plans, I have found the process of creating the plan is just as important as the plan itself.


Leverage the Benefits of the Strategic Planning Process Beyond the Plan Itself

If your organization is getting ready to develop a strategic plan, I recommend weaving the following key essentials into your approach to maximize the work of the process and resulting plan.

  • Evaluate internal strengths and weaknesses and external opportunities and challenges.
    As a first step, I recommend conducting pre-planning research, including an internal scan of your organization and surveying/having conversations with key stakeholders to hear external perspectives. This understanding will act as the basis for developing goals and strategies to achieve objectives.
  • Take an inclusive approach.
    In an inclusive approach, all your important stakeholders will have a voice in the process. This includes staff, board members, volunteers, visitors, funders, partners, etc. Not all voices will be weighted equally or involved at every stage, but they are all important to creating a valuable strategic plan that addresses current and emerging needs, as well as known and unplanned barriers.
  • Use data to support focused decision-making.
    Analyze and utilize the information gleaned from pre-planning research to guide the board in identifying focused and specific strategic goals.
  • Ensure this process is a shared responsibility of the board and staff.
    Among the basic responsibilities of any board are to set the mission and vision and to ensure the organization is planning for the future. To this end, I have found the most critical component of any strategic planning initiative is the creation of an interactive facilitated discussion of the full board to discuss and gain consensus on the organization’s mission and values and determine its future vision, direction, priorities, goals, and potential strategies (at Carter, we call this a Strategic Framework).

    Staff leadership will then use this information to create a strategic, operational plan that outlines action steps the organization will take to reach those goals over the next two to three years. This strategic plan is reviewed and discussed with the board for their feedback, insights and approval.


    The following pyramid illustrates the building blocks for a strategic plan. The board is responsible for defining the bottom three sections of the pyramid, while staff leadership is responsible for the top section – the action plans. The organization’s core values – reaffirmed or reworked during the board retreat – inform the work throughout the process.

Strat Planning Pyramid Photo

  • Keep an open mind.
    If all involved keep an open mind and respect the opinions of others, the strategic planning process has the unique ability to develop or refresh camaraderie amongst board members and staff. These bonds will make your organization more effective when putting the plan into action.

    It’s also important to be open to learning from the experiences of others, where they have succeeded and failed…be willing to explore new approaches you may not have considered before as an organization.
  • Take time to develop the board’s work plan to align with and support the strategic plan.
    The most effective organizations I’ve worked with use their new or refreshed strategic plan as the impetus for creating stronger governance practices and a well-defined work plan for the board to support the organization in reaching the strategic objectives. Leave time and space in your planning process for the board to identify areas in which and take ownership of ways they can help the organization achieve these goals.
  • Stay patient.
    A strategic plan isn’t the result of a meeting or two. It isn’t just a fancy brochure or the final neat, clean document. It is a multi-month true team effort that requires in-depth research, a facilitated retreat, and follow-up meetings to develop and hone.

    Remember, the process of creating the strategic plan is just as important as the plan itself. The process may be slow, but as long as your board and leadership team are exploring and discussing issues, gaining new perspectives, and learning about the organization and one another, it can be incredibly powerful in changing the trajectory of the organization, regardless of what you write down in a plan.


    These days it’s hard to be concrete about the future. We must remain flexible to respond to situations and opportunities. This requires a great deal of trust and belief amongst board and staff members. The strategic planning process will promote this type of culture and environment that will serve the organization no matter what the future holds.

If you’re ready to embark on a strategic planning effort, refresh a current plan or learn more about the process, we’d love to have a conversation and learn about your organization and goals. We will always make ourselves available as a resource to you as you advance your mission and philanthropy. If you don’t already have a direct contact at Carter, please email info@carter.global, and we’ll put you in touch with a senior-level consultant specific to your needs.

About the Author

Kerry Bartlett

Kerry Bartlett, CFRE, MBA - Managing Director

With more than 25 years serving the philanthropic sector, Kerry Bartlett, CFRE, MBA, is recognized as a passionate and principled nonprofit leader with extensive experience in strategic planning, fundraising campaigns, planned giving, board development and organizational culture. As a leader of Carter’s strategic planning and governance work, she is highly regarded for her ability to build consensus amongst organizational leadership for future success and help them navigate complex cultural and structural change. Learn more about Kerry here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.

Lessons from Global Philanthropy: Charity vs. Philanthropy

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Does the same U.S.-style process work for an Australian NGO launching its first capital campaign? Can an organization in Sri Lanka that receives significant U.S.-based funding also raise major gifts in country? When U.S.-based organizations want to grow global support, do they use the same methods as they do with U.S. donors?

Our experience working with international NGOs, domestic organizations fundraising for global causes, and grassroots start-ups shows that the steps we take to build a successful resource development program can vary from country to country. Between cultural differences and varying political support and landscapes, we have found some nonprofit best practices require careful, nuanced adjustments, while others apply universally.

In the first blog post of this series, “Lessons from Global Philanthropy,” we’ll be sharing fundamental truths we have learned from our work in global philanthropy that can improve your organization, no matter the shape, size or location.

Charity vs. Philanthropy

Many organizations worldwide, even big-name international NGOs, are still chasing charity as opposed to focusing their efforts on building a culture of philanthropy. As a result, they’re leaving money on the table.

What’s the difference between charity and philanthropy, you might ask? The graphic below breaks down the key contrasts. 

Charity V Philanthropy

There is most certainly a need, time and place for charity-based work. For example, disaster relief requires fast emergency funding, and because human nature guides us to provide immediate relief to suffering, encouraging mass participation can help raise funds quickly.

But today’s donors are looking to be part of long-term solutions to systematic problems instead of contributing to short-term patches. They want to invest in organizations with proven results working toward exciting visions for a better future.

Across the globe, we have found consistent characteristics of all organizations that have successfully built upon charity-focused fundraising to grow a strong culture of philanthropy, work that invites significant gifts.

The Organization Has a Strong Program Brand and Philanthropic Brand

An organization’s program brand must be impeccable in that the programs they offer can show proven, measurable results. These programs must also work toward accomplishing a long-term solution to a problem and an inspirational vision of a better community, society, or world.

The philanthropic brand needs to be equally strong. For example, suppose an organization has primarily relied on direct response fundraising efforts and is now looking to invite major investments. They will likely need to rebrand their philanthropic program so that a major donor will look at the organization and say, “That is an institution I can give a $10 million gift to, and I know what it will be used for and that it will be used wisely.”

If your organization is in need of a philanthropic rebrand, it should start internally. Ensure that everyone within the organization understands the mission – the intended outcomes and impact – and what is needed to accelerate the mission. All staff, board members, and volunteers should be able to speak to what the organization would do with a significant gift and how that gift would move the needle in your work. This network, along with a strategically revised case for support, will help you communicate your strengthened philanthropic brand.

The Organization’s Leadership Values Building Relationships with Donors

Brochures and postcards aren’t raising major and mega gifts; people are. This is true for even the most prominent institutions across the world – no matter the scale of their direct response fundraising initiatives, etc. The organizations receiving significant gifts from major and mega donors have leadership dedicated to investing in relationship-building with past donors and donor prospects, which often requires more staff, time devoted to training volunteers, and an increased budget.

The Organization’s Volunteers Are Supported and Engaged and, in turn, Accelerate Fundraising

Trust is central to fundraising, especially major and mega gifts. Trained, supported and engaged volunteers who are willing to share why they support an organization are one of the fastest ways to validate the trustworthiness of an organization. Volunteers can also open a door that is otherwise closed to an organization and its staff, set an example and inspire higher levels of giving, and express gratitude to others for joining in an important mission.

Throughout the world, an organization’s volunteer base and people who have a relationship with the organization matter. Who walks in the door with you or makes the introduction matters and can significantly accelerate your major gift fundraising.

If you’re looking to enhance your fundraising or resource development efforts, no matter your situation or location, we would love to learn more about your organization and challenges. We will always make ourselves available as a resource to you as you advance your mission and philanthropy. If you don’t already have a direct contact at Carter, please email info@carter.global, and we’ll put you in touch with a senior-level consultant specific to your needs.

About the Authors

Bob Carter

Bob Carter, CFRE – Chairman

Bob Carter, CFRE, is one of the world’s most respected, experienced and recognized experts in institutional strategy and philanthropy. During the past four decades, Bob has strengthened a variety of organizations throughout the world by helping them overcome challenges and capitalize on opportunities to be successful. Bob is currently serving as a member of the Board of the World Health Organization (WHO) Foundation, where he is a founding board member, and he is Chair Emeritus of the Association of Fundraising Professionals (AFP) International Board of Directors. Learn more about Bob here.

Kristina Carlson

Kristina Carlson, CFRE – Managing Director - Global Philanthropy

For more than 30 years, Kristina Carlson, CFRE, has guided nonprofit institutions across the globe in their efforts to conduct transformational campaigns, secure up to eight-figure major gifts and bravely make the changes needed to make a significant impact. She is a proven leader, entrepreneur, author of the best-selling “Essential Principles for Fundraising Success,” and in-demand speaker at national and international conferences and workshops. Prior to joining Carter, Kristina served as President of Ketchum and founder and President of FundraisingINFO.com. Learn more about Kristina here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.

Four Donor Stewardship Plan Essentials

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We often hear, “We need new donors; we can’t keep going back to the same well.” As fundraising professionals, we know this is simply not true. Most of your prospects for major gifts are donors who have already given to your organization. However, raising more money from the same pool of donors requires properly stewarding those relationships over time.

So, how do you make sure you are properly stewarding your donors?

At the core of every successful fundraising program is a well-thought-out donor stewardship plan – a detailed outline of an organization’s processes and strategies for keeping a donor engaged, illustrating gift impact and building long-lasting relationships.

Whether you are looking to create a plan from scratch or check your current plan against best practices, in this blog post, I’ll cover four of the donor stewardship plan essentials.

SEGMENT YOUR DONORS

I recommend segmenting your donors by gift size, frequency and personalization preferences, starting with the basic pyramid below:Donor PyramidFor donors in the top three levels – Bequests, Major Donors and Recurring Donors – you should create different categories for those who are donating at different frequencies (i.e., once a year vs. three times per year). This can help ensure your thank-you messages do not feel canned or become stale. For example, you may write a thank you note to a donor who has given once in a year and follow up with the impact of their gift. For a donor that has given twice in one year, you may send a note and share the impact upon receiving the first gift and then invite them to see the impact of their gift first-hand upon receiving the second gift.

Donors in the first two levels of the pyramid – Bequests and Major Gifts – often already have personal relationships with senior staff or board members, as these gifts are usually the result of personal relationships that have been cultivated over longer periods of time. For these donors, your team should sit down and create a specific plan that is customized for each individual donor.

Personalization can be more challenging for donors in the bottom two tiers of the giving pyramid, where the numbers typically climb exponentially. So, how can you assure donors at this level feel their support is valued by your organization?

  • ALWAYS use their name, note the amount they gave, and how their donation will help your organization.
  • Write handwritten notes or include handwritten signatures from staff or board members.
  • Segment by age/generation – For example, according to research, Baby Boomers are more like to be appreciative of a handwritten note or phone call, while millennials or Gen Zers are more likely to be appreciative of recognition via social media.

DEVELOP A PROCESS FOR EACH SEGMENT

The process will have specific action steps depending on the donor’s gift size, frequency and personalization preferences, but should follow the following key steps:

  1. Donor gives to your organization – hooray!
  2. Thank the donor for their gift within 48 hours.
  3. Confirm the donor’s expectations for the gift (how the gift will be used and/or how the donor will be recognized).
  4. Recognize the donor accordingly.
  5. Repeat the gift’s impact to the donor.
  6. Begin the cultivation process.

GIVE STEWARDSHIP ROLES AND RESPONSIBILITIES TO VOLUNTEERS

Whether your institution is a well-oiled machine with a dedicated Director of Donor Relations, Stewardship Officer and/or Major Gifts Officer, or a grass-roots start-up with limited staff, your organization should enlist your board members and volunteers to help you with stewardship. Peer-to-peer-based fundraising always yields the highest gift, and by integrating your board and volunteers into your stewardship efforts, you are naturally integrating them into your fundraising efforts.

Give your board members and volunteers options for helping, and then highlight their preferred stewardship role in their board member or volunteer job description. This gives them the opportunity to choose how they engage and then clearly articulates the expectation.

Here are a few ways you can enlist volunteers to help you with stewarding donors:

  1. Host a donor appreciation event.
  2. Write or sign thank you notes.
  3. Lead or serve on a committee for a “Giving Society.”
  4. Call donors to express thanks.
  5. Create social media posts or personalized videos to thank a donor and showcase their gift’s impact.
  6. Take major donors to lunch or dinner to express thanks and discuss their gift’s impact.

CREATE A DONOR STEWARDSHIP MATRIX AND KEEP IT UPDATED

Once you’ve completed this legwork to build a stewardship plan, I recommend creating a donor stewardship matrix, which is an easy way to ensure staff and volunteers have a clear understanding of the established stewardship protocols. Your matrix will be a chart that provides a visual representation of when and how to engage with each donor segment based on specific behavior.

The stewardship matrix should be customized to your organization’s specific criteria and engagement opportunities, but typical elements include: donor segments or levels and frequency of gifts; methods of outreach; timeline for action; and responsible staff member or volunteer. 

You should be revisiting your matrix annually to ensure it’s the most efficient and effective system possible for your organization.

If you’re looking for counsel to enhance your donor stewardship plan and encourage your donors to give at the next level, we hope you will reach out to our team. We will always make ourselves available as a resource to you as you advance your mission and philanthropy. If you don’t already have a direct contact at Carter, please email info@carter.global, and we’ll put you in touch with a senior-level consultant specific to your needs.

About the Author

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Stephen Sokany, MBA – Managing Director

With over 30 years of nonprofit and fundraising experience, Steve Sokany, MBA, has held a variety of leadership positions in higher education and social service organizations. Prior to joining the Carter team, Steve spent two years helping to establish the West 117 Foundation, serving as its inaugural Executive Director. Additionally, he spent 27 years at Kent State University in a number of roles, culminating in his tenure as Vice President for Institutional Advancement and Executive Director of the Kent State University Foundation. Steve currently resides in Cleveland Heights, Ohio. Learn more about Steve here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.

A New Giving Opportunity: The Consolidated Appropriations Act of 2023

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The Consolidated Appropriations Act of 2023, passed in December 2022, includes a win for philanthropy! While this legislation will most likely be used by larger organizations and institutions, we wanted to be sure all of our partners, colleagues and friends were aware of a new giving opportunity presented by this Act.

Here’s what you need to know:*

First, what is a QCD?
This Act includes a provision that affects Qualified Charitable Deductions or QCDs, so let’s cover the basics:

  • A QCD is a tax-free transfer from an Individual Retirement Account (IRA) to a qualified 501(c)(3) organization. It can satisfy the taxpayer’s required minimum distribution, all while donating to a philanthropy.


    (Required Minimum Distribution: When a taxpayer reaches a certain age, the exact age being dependent on the taxpayer’s birth year, a required minimum distribution, or RMD, is an amount that must be withdrawn from their retirement account annually. Taxes must also be paid on this amount as it is considered taxable income.)

  • With a QCD, a person over 70 ½ can distribute an outright gift of up to $100,000 per year from their IRA to a 501(c)(3) organization. This distribution does not qualify as a charitable deduction on their income taxes, but they are not taxed on the transferred amount. Woo hoo!
  • Bottom line – in one fell swoop, a qualified taxpayer can satisfy a tax law requirement, donate to a charity, AND avoid income taxes – win, win, WIN!

How did the Act affect QCDs?

  • The Act added a new type of QCD that allows individuals to distribute up to $50,000 from an IRA toward funding a gift annuity, a charitable remainder annuity trust (CRAT) or a charitable remainder unitrust (CRUT).
  • These options allow donors to essentially make an (irrevocable) donation contract: the donor gives the charity a large donation, and in return, they receive a regular stream of income from the organization for the rest of their life. At the end of their life (and possibly their spouse’s life, depending on how it’s set up), the charity receives the remainder of the donation.  
  • The $50,000 IRA transfer for a life-income plan provision is only available for someone who is 70 ½ years and older. The transfer can be made in only one tax year, and as of now, Congress has only allowed for this provision to happen once in someone’s lifetime.

If you have any follow-up questions, we hope you will reach out to our team. We will always make ourselves available as a resource to you as you advance your mission and philanthropy. If you don’t already have a direct contact at Carter, please email info@carter.global, and we’ll put you in touch with a senior-level consultant specific to your needs.

*Fundraising professionals and individuals should confer with their tax accountant or financial advisor before making any decisions. This has been written for informational purposes only and should not be relied upon as professional advice.

About the Authors

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Steve Higgins, CFRE – President & CEO

Steve Higgins, CFRE, President & CEO of Carter, is one of the most respected consultants in the profession. He is well-known for his ability to help organizations embrace bold goals that lead to transformational gifts and impact. With over 25 years of combined consulting and nonprofit experience, his fundraising counsel focuses on major and mega gift strategies, leadership coaching, campaign counsel and readiness, capacity building, and organizational assessment. Steve resides in Vero Beach, Florida. Read more about Steve here.

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Andrea Glickman, JD – Managing Director

Andrea Glickman, JD, Managing Director of Carter, is an accomplished and strategic consultant with a commitment to community and capacity building through philanthropic efforts, combined with a legal, finance and accounting background. With over 17 years in the nonprofit sector, Andrea previously served as the inaugural Executive Director of the Shear Family Foundation, as well as the Executive Director of the National Council of Jewish Women, Pittsburgh Section. Andrea resides in Pittsburgh, Pennsylvania. Read more about Andrea here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.

Start the New Year Off with Solid Stewardship

Stewardship

Congratulations! You worked diligently to secure calendar year-end donations for your charitable organization and ended the year with increased support in terms of both donors and dollars. Take your team to lunch to celebrate, and then get ready to develop and implement a solid stewardship strategy for 2023. 

Stewardship is a critical element in the lifecycle of donor acquisition and retention, yet often we neglect to create a thoughtful plan for doing so. Stewardship makes donors feel valued and appreciated, and it is critical to retaining donors and increasing their financial support.

Follow these six key strategies to ensure your stewardship practices are the best they can be in the year ahead:

  1. Just like annual giving plans, a stewardship plan should be designed around a nonprofit’s fiscal year. Begin your stewardship planning by reviewing your schedule for fundraising and special events for the fiscal year—consider opportunities to use events and meetings already on the docket to emphasize stewarding your donors. For example, higher education institutions frequently host a luncheon or reception for donors who have created scholarships to meet their scholarship recipients. Or an environmental protection organization can take a donor out on the land or water to make a personal appeal, as opposed to sitting down for coffee. There is magic in this for donors! Who doesn’t want to meet an enthusiastic student they are helping or experience the beauty of the natural resources they are protecting?
  1. Ensure your organization has a well-documented stewardship matrix in place, or take this time to re-evaluate and improve your current matrix. Giving your team clarity on when and how they should be engaging each of your donor segments provides both focus and accountability for you and your team. This invaluable reference will solidify exactly how you should be stewarding donors at various gift levels throughout the year.
  1. Design one stewardship activity per month for your top-level donors and consider involving others outside of the development team. For example, ask board members to make thank-you calls to new donors. Create a simple script and ask each board member to call five donors. Donors appreciate hearing from board members, and remember—you can never thank your donors enough!
  1. Steward your emerging donors. For donors who may not be major donors yet, but are showing more interest in your organization, moving in a good trajectory professionally, etc., we recommend stewarding them as if they were already established major donors.
  1. Eliminate spending money on “giveaway items” for stewardship. In fact, most donors don’t want nonprofits using their financial resources on these giveaway items. Properly thanking your donors will be more effective.
  1. Pull together an ad hoc committee of donors to seek their input on what events and outreach would be most meaningful to them as you plan your stewardship. People love to provide advice and suggestions. These donors will feel valued by the mere act of you asking for their input. They may even be more likely to increase their donation as a result of feeling like they are part of your team by contributing to your strategy.

As you celebrate your fundraising success in 2022, remember the importance of retaining your donors through thoughtful stewardship. These practices will help guarantee you can build upon this success in 2023 and beyond.

About the Author

Kim Headshot

Kimberley Hammer, Esq. – Managing Director

With over 28 years of fundraising experience and executive leadership within the nonprofit sector, Kimberley (Kim) Hammer, Esq., is a thoughtful, collaborative professional who builds strong, productive relationships and focuses on results. Kim most recently served as Vice President for Advancement and Special Assistant to the President at Virginia Wesleyan University in Virginia Beach. Her experience also includes holding senior-level positions at Carlow University, Robert Morris University, The Pittsburgh Promise, UPMC Children’s Hospital Foundation, and The Pittsburgh Foundation. Read more about Kim here.

About Carter:
When it comes to transformational change, nonprofits are experts at knowing what they need to achieve but don’t always have the tools they need to get there. Carter makes the journey easier. Co-founded by Bob Carter and Steve Higgins in 2011, Carter gathered a select team of the nation’s most respected nonprofit professionals working to advance philanthropy worldwide in the areas of fundraising, governance and organizational planning. Each Carter consultant brings decades of executive-level development experience to serve as an extension of your team and help you maximize your organization’s potential and better serve your cause. For more information, visit www.carter.global.