Posts tagged ‘AFP’

December 19, 2014

Is Spelman College Unethical?

Spelman College has announced that it is suspending an endowed professorship in humanities that was funded by Bill and Camille Cosby. Spelman issued this one-paragraph statement:

December 14, 2014 — The William and Camille Olivia Hanks Cosby Endowed Professorship was established to bring positive attention and accomplished visiting scholars to Spelman College in order to enhance our intellectual, cultural and creative life; however, the current context prevents us from continuing to meet these objectives fully. Consequently, we will suspend the program until such time that the original goals can again be met.”

The Cosby family donated $20 million to Spelman in 1988. In 1996, Spelman opened the Camille Olivia Hanks Cosby EdD Academic Center. At that time, “an endowed professorship named for Drs. Cosby was also established to support visiting scholars in the fine arts, humanities and social sciences as well as Spelman College’s Museum of Fine Art,” according to a November 25 written statement by Beverly Daniel Tatum, Spelman’s president.

The November statement also explained:

The academic center and endowed professorship were funded through a philanthropic commitment from the Cosby family made more than 25 years ago, and at this time there are no discussions regarding changes to the terms of the gift.”

Just 19 days later, Spelman reversed its position and suspended the professorship. When contacted, several Spelman officials refused to comment. A representative for Cosby also declined to comment.

Bill Cosby by remolacha.net via Flickr

Bill Cosby

For the past several weeks, Bill Cosby has been the target of a large number of sexual assault allegations. However, no criminal charges have been filed against Cosby. Spelman knew this in November. It’s unclear why the College abruptly suspended the endowed professorship now. While additional allegations have been made in the intervening weeks, Cosby still has not been charged with a crime.

To paraphrase Tyler Perry, if Cosby did commit the sexual assaults, it’s a terrible situation. If Cosby did not commit the sexual assaults, it’s a terrible situation. I won’t comment on the Cosby situation beyond that. However, I do want to explore the Spelman news because it has broader implications for all nonprofit institutions.

Nonprofit organizations are ethically required to use a donor’s contribution in the way in which the donor intended. The applicable portions of the Donor Bill of Rights “declares that all donors have these rights”:

IV. To be assured their gifts will be used for the purposes for which they were given….

V. To receive appropriate acknowledgement and recognition….

VI. To be assured that information about their donations is handled with respect and with confidentiality to the extent provided by law.”

The relevant passages from the Association of Fundraising Professionals Code of Ethical Principles state:

December 12, 2014

Is the American Red Cross Hurting Your Fundraising Efforts?

The American Red Cross regularly touts how responsible it is with donors’ money. ‘We’re very proud of the fact that 91 cents of every dollar that’s donated goes to our services,’ Red Cross CEO Gail McGovern said in a speech in Baltimore last year. ‘That’s world class, obviously.’

“McGovern has often repeated that figure, which has also appeared on the charity’s website.

“The problem with that number: It isn’t true.”

That stunning revelation was made in a recently released investigative report by ProPublica and NPR.

National Red Cross HQ by NCinDC via Flickr

American Red Cross National Headquarters

The Red Cross is a great organization. My wife and I have been donors. I even did a blog post highlighting the effective stewardship practices at the Red Cross and encouraging readers to support the organization. The American Red Cross does not have to “serially mislead” the public.

Yet, that’s exactly what it has been doing according to the reporters. While the organization has told the public that 91 cents of every donated dollar goes to services, its fundraising cost to raise a dollar has been 17 cents on average. And that does not include organization overhead expenses. Clearly, the Red Cross has not been as efficient as its leader has claimed.

When reporters contacted Red Cross officials for more information, those officials were uncooperative. However, the organization did change the claim on its “website to another formulation it frequently uses: that 91 cents of every dollar the charity ‘spends’ goes to humanitarian services. But that too is misleading to donors,” states the investigative report.

Sadly, this is not the first time that the Red Cross has been accused by the media of misleading the public.

As a Red Cross supporter and a fundraising professional, I’m alarmed and disappointed by the behavior of the Red Cross. Misleading the public, either through lies or the clever manipulation of language, is unnecessary, unethical, and unacceptable.

Such inappropriate behavior erodes public trust, which makes fundraising more difficult. Perhaps this is one reason that the Red Cross has had trouble consistently raising more money. In 2009-10, the Red Cross raised $1.1 billion. In 2012-13, the Red Cross again raised $1.1 billion.

In a study that examined the relationship between trust and philanthropy, researchers Adrian Sargeant and Stephen Lee found, “there would appear to be a relationship between trust and a propensity to donate.” In addition, “there is some indication here that a relationship does exist between trust and amount donated, comparatively little increases in the former having a marked impact on the latter.”

December 7, 2014

Special Report: House of Representatives Approves IRA Rollover

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are usually not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

On Wednesday, Dec. 3, the US House of Representatives passed a short-term tax extenders bill. The bill extended certain tax provisions for 2014, including the IRA Rollover, a provision long supported by the nonprofit sector. The package would cover 2014 but NOT apply to 2015 or beyond. The bill now goes to the Senate.

US Capitol by Glyn Lowe Photoworks via FlickrSen. Harry Reid (D-NV) has questioned whether the Senate will have time to pass the House bill before the end of the year. However, Sen. Ron Wyden (D-OR), Chair of the Senate Finance Committee, and the White House have shown a willingness to move forward with this one-year retroactive fix, according to Jason Lee, General Counsel at the Association of Fundraising Professionals.

For more information about the bill, click through to:

The Hill“House Approves Slate of Tax Breaks”

The Hill“Reid Indicates Senate Might Not Pass House Tax-Extender Bill”

The sad reality is that even if the tax extenders bill passes the Congress and is signed by Pres. Obama, there is precious little time for charities to take advantage of the IRA Rollover provision in 2014.

February 23, 2014

Honoring Donor Intent: When it Works, When it Doesn’t

Donor-centered fundraising is smart fundraising. Part of being donor centric involves always honoring the donor’s intent.

The Association of Fundraising Professionals’ Code of Ethical Principles states:

[Fundraising professionals] recognize their responsibility to ensure that needed resources are vigorously and ethically sought and that the intent of the donor is honestly fulfilled.”

Honoring donor intent is essential for at least two reasons:

  1. It’s the right thing to do.
  2. It’s a fundamental way to earn and deserve trust. Without trust, fundraising would be virtually impossible.

To honor donor intent, you must first ensure that the contribution is received according to the donor’s specifications. This is particularly important for planned gifts when the donor is no longer around to make sure everything goes according to plan. The charity becomes the voice of the donor.

The next part of honoring donor intent requires that the organization use the gift for the purpose specified by the donor.

Unfortunately, honoring donor intent is not always an easy thing to do. Sometimes, it works the right way while other times it morphs into something ugly.

Let’s look at two examples.

The Pennsbury Scholarship Foundation learned of the passing of an elderly woman in the community. I first shared her story in my book, Donor-Centered Planned Gift Marketing. A member of the all-volunteer organization’s board knew the woman and knew the Foundation was in her will.

The woman’s attorney produced a copy of the will which included a nearly $1 million bequest for the Foundation and nearly nothing for her two estranged children. However, the children produced another version of the will where the charitable provision was whited-out, literally.

The attorney for the children approached the Foundation to negotiate a settlement agreement. The Foundation, under the advice of legal counsel, held firm and asked that the matter proceed to court as soon as possible.

The attorney for the children initiated a series of delaying tactics hoping that the Foundation would eventually negotiate rather than have the matter drag out. Under the advice of legal counsel, the Foundation held firm.

About one year later, surprisingly quickly given the circumstances, the court upheld the clean version of the will, and the Foundation received the full bequest.

In the Foundation’s case, the donor’s interest was in alignment with the charity’s. The Foundation was right to defend the donor’s wishes. By defending the donor’s interest, the Foundation ultimately benefited. More importantly, young people in the community will benefit for years to come as the Foundation provides scholarships that would not otherwise be possible to award.

Sadly, there are times when protecting the interests of the donor cross a line. In those cases, the organization goes from being donor centric to being self-centered, even greedy. This might be the case with the University of Texas.

Warhol's Farrah Fawcett portrait on exhibit at the UT Blanton Museum.

Warhol’s Farrah Fawcett portrait on exhibit at the UT Blanton Museum.

The University received a bequest from Farrah Fawcett. The Seventies icon left “all” her artwork to the University where she had studied art prior to the successful launch of her acting career. The collection included at least one portrait of Fawcett by famed artist Andy Warhol.

However, the Fawcett story is complicated. Warhol actually did two, almost identical pieces. According to Ryan O’Neal, the actor and on-again-off-again boyfriend of Fawcett, Warhol gave one portrait to Fawcett and the other to him.

January 17, 2014

Is it Ethical When an Ethicist Browbeats Prospective Donors?

Peter Singer, a professor of bioethics at Princeton University and founder of The Life You Can Save, not only thinks it is acceptable to browbeat prospective donors, it’s exactly what he did in an op-ed article published in The Washington Post.

In my opinion, Singer’s piece, “Heartwarming Causes are Nice, but Let’s Give to Charity with Our Heads,” contains a glaring ethical problem:

Coercive Manipulation. Singer suggests that people who donate to causes that he does not endorse, such as the Make-A-Wish Foundation, are guilty of murder.

Let’s look more closely at this issue before exploring other problems with Singer’s reasoning.

After pointing out that the Make-A-Wish Foundation does not save lives, Singer presents a variety of examples of how contributions to his select group of organizations, instead of Make-A-Wish, can actually preserve lives. Singer writes:

Yet we can still ask if these emotions are the best guide to what we ought to do. According to Make-A-Wish, the average cost of realizing the wish of a child with a life-threatening illness is $7,500. That sum, if donated to the Against Malaria Foundation and used to provide bed nets to families in malaria-prone regions, could save the lives of at least two or three children (and that’s a conservative estimate).”

Singer goes on to say:

It’s obvious, isn’t it, that saving a child’s life is better than fulfilling a child’s wish to be Batkid [referencing a child who benefitted from Make-A-Wish last year]?”

Such adolescent logic is harshly manipulative. The taking of a human life is widely considered the greatest possible sin. By accusing people of this sin, Singer is using guilt to coercively manipulate donor behavior.

Mosquito by Ibrahim Koc

Mosquito by Ibrahim Koc

Rather than offering an unbiased exploration of the roles of emotion v. intellect in the philanthropic process, Singer uses the forum to browbeat people to meet his own personal philanthropic standards.

I’m not sure why Singer thinks he is better qualified to judge which charities are worthy to exist or not. Nevertheless, it is certain that Singer feels he has a better moral compass than the rest of us. And, unless we want to be murderers, we should support his anointed causes.

What I find particularly interesting is that, while Singer appears concerned about saving lives, he seems little concerned with the quality of those lives saved.

What happens to the child who has been saved from Malaria? Would Singer oppose donations to build a school to educate those children? After all, the money otherwise could have gone to buy more mosquito nets.

Singer’s op-ed article provides an excellent example of what nonprofit organizations should not do when trying to attract people to a cause. Instead, here are some of the things that charities should do:

December 5, 2013

Special Report: No Tax Reform Bill in 2013

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

A tax reform bill will not be introduced in the US Congress before the close of 2013, House Ways and Means Chairman Dave Camp (R-MI) indicated to The Hill.

US Capitol by Kevin Burkett via FlickrGiven that this is the first week of December and that House Republicans plan to leave Washington at the end of next week for the holiday break, the news is not surprising, even while important.

As soon as one month from now, the House could resume wrangling over a possible tax reform bill, according to Jason Lee, General Counsel for the Association of Fundraising Professionals. However, while the issue will be on the table in 2014, it will be a major challenge for Congress to move something as significant as a tax reform bill with the mid-term elections looming in November.

November 22, 2013

Is CFRE Spinning Its Wheels?

I’m not sure. CFRE International is either spinning its wheels or it is poised for growth. Either way, it needs and welcomes our advice.

I see articles and postings that promote the Certified Fund-Raising Executive (CFRE) credential from time to time. Most recently, I saw:

 “New CFRE Website and Online App” posted by Garvin Maffett in the CFRE International Network Group on LinkedIn (Oct. 31, 2013)

“Are You Certified?” by F. Duke Haddad in FundRaising Success (Nov. 8, 2013)

As someone who has held the CFRE designation longer than 89 percent of all others, I care about and support the credential. So, I’m pleased to see that CFRE Spinning Wheels by cpaparcuri via FlickrInternational has a new, easier to use, more robust, more service-oriented website. I’m also pleased to see others promoting the CFRE designation.

However, despite my enthusiasm for the CFRE credential, I continue to be troubled. Two years ago on this site, I asked, “Does CFRE Have a Future?” My concerns persist. As of 2012, there were 5,630 CFRE holders worldwide, according to the CFRE International annual report. That’s just a 5.7 percent increase over the number of certified professionals in 2007.

That’s a miniscule five-year growth rate.

Depending on how you count larger (expenditures of $500,000 or more) and active public charities, the sector has seen growth of approximately 12 percent in the US since 2004/05.

That means the CFRE growth rate of 5.7 percent has not even kept pace with the growth rate of the nonprofit sector in the US. Every year, CFRE has been becoming less significant, relative to the market, despite its modest rate of growth.

The number of CFREs relative to the number of development professionals is modest at best. The number of CFREs in the US and Canada is about 17 percent of the number of members of the Association of Fundraising Professionals.

November 15, 2013

Prospect Research v. Invasion of Privacy

Edward Snowden became a worldwide “celebrity” when he leaked classified information about the US National Security Agency’s spying programs.

In the process, Snowden’s revelations have fueled discussions around the globe about privacy and access to information.

The Economist recently published a chart by the Boston Consulting Group that looks at how people around the world feel about the privacy of different types of information:

Privacy - The Economist 1113  

As you can see from the above chart, people around the world, particularly in the West, value their privacy. For example, the vast majority of Americans consider financial data and information about children to be “moderately or very private.”

That might explain why alumni from New York’s prestigious Dalton School were upset when volunteer solicitors were given information about the children of fundraising prospects. Specifically, solicitors were told about the children of prospects who had applied for admission to the School but who were rejected.

An alumna who had previously donated to the School described the situation to The New York Times as “horrible.” That’s the last thing you want someone to feel about your development program. It’s the last thing you want someone to say about your organization to a reporter.

The head of Dalton issued a public apology and a promise to do better.

It’s easy to understand the tension that exists between nonprofit organizations and their donor prospects. Organizations want to gather as much useful information as possible, and they want their professional and volunteer solicitors to know a great deal about the people they will approach in order to maximize success. However, this posture is often at odds with prospects who want and expect what they consider their personal information to remain private.

Charities face two issues when it comes to prospect research and privacy:

October 30, 2013

Special Report: Two New Books Acknowledge Rosen

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

We’re honored to report that two new scholarly books have acknowledged the assistance and helpful insights of Michael J. Rosen, CFRE.

American Charitable Bequest Demographics (1992-2012), by Russell James, JD, PhD of Texas Tech University, provideRussell James Books an extensive review of the changing nature of American charitable estate planning. The book presents over 50 charts and graphs in simple, visual fashion with each page containing one graph or chart, comments on the importance of the information, and details about the methodology behind the data.

With James’ book, you’ll learn about the estate planning trends that affect planned giving; you’ll discover how different demographic factors (i.e.: age, race, gender, family status, etc.) affect charitable estate planning; you’ll see the impact of giving and volunteering on charitable estate planning. You’ll also gain many other useful insights.

You can purchase a paperback version of James’ book at The Nonprofit Bookstore (powered by Amazon), Alternatively, thanks to the kindness of Russell James, readers of Michael Rosen Says…may download a FREE copy of the e-book version here, for a limited time.

October 4, 2013

New Pew Report Sheds Light on Tax Deductions and Philanthropy

[Publisher’s Note: Michael J. Rosen, CFRE will be interviewed by CausePlanet in a free webinar about his award-winning book, Donor-Centered Planned Gift Marketing. Learn more and register for the October 17 program by clicking HERE. If you need a speaker or trainer, contact Rosen today.]

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A new report issued by the Pew Charitable Trusts provides valuable insights into the effect that tax deductions and credits have on charitable giving. The report comes at a critical time as federal and state governments continue to look for additional sources of revenue including cuts to charitable-giving tax deductions.

The Pew report, written by Elaine S. Povich, looks at the impact of tinkering with tax write-offs for charitable giving in a number of states including Kansas, Michigan, Missouri, New York, North Carolina, and Vermont. The report nicely summarizes the impact of tax policy on philanthropy:

Tax incentives for charitable giving directly affect donations, particularly from high-income donors, according to Jon Bakija, an economics professor at Williams College. ‘Tax incentives for charitable donations in the US succeed in causing donations to increase, probably by about as much or more than they cost in terms of reduced tax revenue,’ he wrote in a paper published recently by the journal Social Research.”

Bakija went on to write:

This strengthens the case for the tax subsidies for donations.”

In an illuminating case study, the Pew report looks at what happened in Hawaii when the state government imposed a cap on the charitable giving tax deduction. According to Mallory Fujitani,Money Grab by Steve Wampler Photography via Flickr of the Hawaii Department of Taxation, the state expected the move to generate about $12 million to the state treasury. Unfortunately, the move cost charities $50 million to $60 million in lost donations, according to Tim Delaney, President and CEO of the National Council of Nonprofits.

In other words, Hawaii found that for every new dollar of tax revenue it generated from the cap on the charitable giving deduction, charities lost five dollars!

David L. Thompson, Vice President of Public Policy at the National Council of Nonprofits, summarized the experience of the various states that have tinkered with the charitable giving deduction:

What we learned in the states is that the charitable deduction is not just a nice thing for taxpayers, it’s vital to the communities. All politicians from across the political spectrum have come to the same conclusion that we are hurting our communities by discouraging giving to charities.”

Given the crystal clear Pew report, the experiences of various states, and the findings of academic research studies, a number of important questions come to mind:

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