As if charities needed another one, a change in the estate tax could prove to be a possible roadblock to fundraising.

Here’s why: the estate tax meant that wealthy Americans, upon their demise, could leave their money to their children or to charity. When left to their heirs, the US Government took 45% and the heirs got 55%. If left to charity, the full amount of their pretax estate could be donated.

As of January 1, 2010, the estate tax is repealed for a full year. Now, that giving to heirs choice looks better—because the 45% tax has vanished—disappeared—poof!  Whether or not wealthy will continue to give, it’s clear that a reason for them to do so has been eliminated.

The impact on nonprofit organizations might depend on a philosophical question: is philanthropy based in goodness, or in tax savings?

The opportunity for charities is to make a real connection with their donors—all of them, but especially the wealthy. Give donors a reason to feel that the money is secondary to the benefits they will receive. Help them feel a part of your organization, of something bigger than themselves.

But how?

• Stay in touch with well-written newsletters.
• Produce a simple video and post in on your website. Feature clients if possible. Show, rather than tell, what good your organization is doing.
• Show the video at your next fundraising event.
• Introduce donors to the people your organization serves, and tell the success stories they are helping to make happen.

Stay tuned for updates on this issue; Congress can decide to reinstate the estate tax and make it retroactive to January 1. We’ll keep you posted!