Archive for July, 2015

July 29, 2015

Update: Spelman College Returns Gift from Bill Cosby

Seven months ago, I first reported that Spelman College announced the suspension of an endowed professorship in humanities that was funded by Bill and Camille Cosby. At that time, I called on the College to either renegotiate the gift or return it to the Cosby family.

Post No Bills by Jon Mannion via FlickrOn July 26, 2015, the College revealed its decision to terminate The William and Camille Olivia Hanks Cosby Endowed Professorship and to return the donation to the Clara Elizabeth Jackson Carter Foundation, established by Camille Cosby.

Last December, 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.”

Amid mounting accusations of sexual assault involving Bill Cosby, the College decided to terminate the endowed professorship. As of this publication date, Cosby has not been charged with any related crime.

As I stated in my December post, 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:

14. Members shall take care to ensure that contributions are used in accordance with donors’ intentions….

16. Members shall obtain explicit consent by donors before altering the conditions of financial transactions.”

By returning the gift after deciding not to use it for the intended purpose, the College acted ethically. However, a number of other ethical questions remain unanswered:

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July 28, 2015

Lawsuit Seeks to Win $5 Million on Donor’s Pledge

The St. John’s Health Center Foundation, which supports the hospital of the same name in Santa Monica, CA, has filed a lawsuit to collect $5 million that Paula Kent Meehan had pledged.

The legal action raises questions about whether charities can and should sue to collect on unfilled pledges.

Giant Gavel by Sam Howzit via FlickrMeehan made her fortune after founding the Redken hair-care products company in the 1960s. In 2007, she made the pledge to St. John’s, according to a report in the Los Angeles Times. Rather than simply including St. John’s in her will (a revocable gift commitment), Meehan also signed an “estate pledge commitment” that said her pledge would be “legally binding on me and my heirs, executors, administrators, personal representatives and assigns.”

In recognition of the irrevocable gift commitment, the Foundation planted a tree in Meehan’s honor and placed her name on a donor wall in the lobby of the hospital.

Unfortunately, “in 2013, Meehan revoked her pledge to the St. John’s Foundation after the ouster of the hospital’s top executives and the proposed sale of the nonprofit Catholic hospital,” says the Times report. When Meehan died last year, the Foundation contacted Meehan’s representatives to seek fulfillment of the pledge. When they refused to pay, “the Foundation sued the executors of her estate for breach of contract for $5 million.”

Let’s look at three of the obvious questions this case raises:

1. Can a nonprofit organization sue a donor?

The answer to this question is simple: Yes. The St. John’s Foundation has already done just that. Pledges, whether verbal or written, are contracts that can be enforced under the rules of contract law.

2. Can the Foundation win its lawsuit?

To answer this question, we would need more information. For example, we do not know the complete and precise language of the estate pledge commitment. The commitment might have been conditional allowing Meehan to change her mind if certain conditions were not met. Or, the commitment might have been ironclad without any provision for altering its terms. Undoubtedly, this will be one of the key issues decided by the Los Angeles County Superior Court.

3. Should a charity sue one of its donors?

This is the most challenging question. Clearly, the St. John’s Foundation believes it should. However, just because a charity can sue a donor does not necessarily mean it should.

Filing a lawsuit against a donor could dissuade others from making a pledge commitment or giving at all.

“‘From a practical or public relations perspective, I couldn’t imagine a worse strategy,’ said Doug White, director of the master’s in fundraising management program at Columbia University. ‘This is not the way an organization should behave with a donor. It sends a very bad message,’” reports the Times.

On the other hand, Howie Pearson, a Stanford University attorney and professor of estate planning at its law school, told the Times, “The charity is caught: On the one hand, you want to be donor friendly; on the other hand, the charity does have a fiduciary obligation to protect its assets.”

The St. John’s Foundation lawsuit isn’t just a messy situation for that particular organization. The public relations fallout from it could affect other charities working with philanthropists who might get cold feet as a result.

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July 24, 2015

Soccer Star’s 3 Tips will Make You a Champion Fundraiser

As fundraising professionals, we strive to be the most effective we can be. But, what does it take to be better than a good fundraiser? What does it take to be a champion fundraising professional?

To become a champion, it’s wise to seek the advice of champions. Recently, soccer star Carli Lloyd shared three fundamental tips for success with young athletes. Her advice is just as meaningful for fundraisers.

Soccer Ball by Tasayu Tasnaphun via FlickrBefore I share Lloyd’s tips with you, let me highlight why I think it’s worth paying attention to what she has to say. (I also want to point out, for my international readers, that “soccer” is how Americans refer to what you call “football.”

Carli Lloyd is a soccer superstar. She was a member of the US national women’s soccer team that won the 2015 FIFA Women’s World Cup Championship. In the final FIFA game, Lloyd scored three goals leading Team USA to a 5 – 2 victory over Japan. In addition, Lloyd is a two-time Olympic gold medalist who scored the winning goals in the finals of both the 2008 and 2012 Summer Olympic Games.

Lloyd knows what it takes to win. And she recently shared her knowledge with 200 young athletes at the Universal Soccer Academy in Lumberton, NJ where she had trained for a dozen years. Lloyd has taught young girls at the camp on eight occasions.

Here are three of her key tips:

1. “Practice.” Since Lloyd is an Olympic and World Cup champion, you might think she no longer needs to practice hard. After all, she’s already at the top of her game. Well, to get and stay at the top, Lloyd still practices between two and six hours a day to learn new techniques and hone her skills.

Just as there’s no such thing as a natural-born soccer player, there’s no such thing as a natural-born fundraiser. You have to learn the necessary skills, gain experience, and practice what you’ve learned.

Reading professional books, publications, and blogs; participating in webinars, workshops, and conferences; and working with a mentor are just some of the ways fundraisers can build their skills. Writing appeal letters or proposals and having them critiqued by a senior professional is one way to hone your skills. Role-playing a major donor visit is also a great way to enhance your skills before sitting down with an important prospect.

The key to being a champion is to always seek new knowledge and practice your skills no matter how good you are already. You can always improve.

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July 23, 2015

IRA Rollover Poised to Make a Comeback

I have some good news.

The US Congress has begun the process to revive the Charitable IRA Rollover which expired at the end of 2014. Now, it’s time for you to take action.

On Tuesday, July 21, 2015, the Senate Finance Committee approved a number of tax extender provisions including the IRA Rollover. While the Committee considered making the IRA Rollover provision permanent, it ultimately settled on a two-year extension.

US CapitolFinance Committee Chairman Orrin Hatch (R-UT) said, “This markup [of the bill] will give the Committee a timely opportunity to act on extending a number of expired provisions in the tax code that help families, individuals and small businesses. This is the first time in 20 years where a new Congress has started with extenders legislation having already expired, and given that these provisions are meant to be incentives, we need to advance a package as soon as possible.”

Ranking Committee Member Ron Wyden (D-OR) said, “The tax code should work for, not against, Americans. We need to extend these tax provisions now in order to provide greater certainty and predictability for middle class families and businesses alike. However, as we look beyond next week, it’s critical we all recognize and take action to end this stop and go approach to tax policy through extenders.”

The House of Representatives has yet to take action though Rep. Paul Ryan (R-WI), Chairman of the Ways and Means Committee, remains interested in legislation that would make the IRA Rollover permanent. However, ultimately, the House might bring its thinking into alignment with the Senate Finance Committee. The House is expected to take up the issue as early as September.

When Democrats controlled the Congress, the IRA Rollover extensions were done a year at a time and often very late in the year. This made it challenging for both donors and nonprofit organizations to plan and to take full advantage of the provision.

With Republicans in full control of Congress, the House and Senate are considering the IRA Rollover provision earlier in the year and are considering a longer extension term. These are both good things for donors and charities.

It remains to be seen when final action will be taken and what that action will look like. It’s also unclear whether the Obama Administration will support the measure.

The Charitable Giving Coalition has long advocated for the IRA Rollover and other provisions that provide incentives for charitable giving. In addition to encouraging Congress to take action, the Coalition has sent the following letter to all Presidential candidates:

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July 13, 2015

Perfect is the Enemy of Good

The 18th century French writer and philosopher Voltaire wrote, “Perfect is the enemy of good.” Whether he originated the sentiment or was referencing an earlier Italian proverb, Voltaire’s powerful observation is one that remains relevant for today’s fundraising professionals.

While it’s certainly understandable that fundraisers strive for perfection in cultivation, solicitation, and acknowledgement, the reality is that that quest is problematic for several reasons, including:

1.  Perfection is unattainable. There is good. There is excellent. However, perfect does not exist. W. Edwards Deming, the father of Total Quality Management, believed in a process of never-ending improvement. Seeking improvement is very different from seeking unattainable perfection.

2.  If you wait until you have developed the mythical perfect cultivation piece, appeal, or acknowledgement, the reality is you will never deploy your message. Sir Robert Watson-Watt, who developed early warning radar in Britain to counter the rapid growth of the German Luftwaffe during World War II, stated, “Give them the third best to go on with; the second best comes too late; the best never comes.” Releasing a good or excellent message is far better than never releasing a near-perfect communication.

3.  Seemingly near-perfect communications do not necessarily work any more effectively than less ideal messaging. Let me explain.

The way to cut grass perfectly is not exactly the best way to a nice lawn.

The way to cut grass perfectly is not exactly the best way to a nice lawn.

I have a client, an international social service agency. A few months ago, one of the organization’s fundraisers traveled to Central America to meet with an affiliate agency and see, first-hand, how services were being delivered. Immediately upon returning to headquarters, the fundraiser sent emails to her key major and planned gift donors and prospects. Attached to the emails were a few snapshots she took during her trip.

In response to the cultivation emails, the fundraiser received a number of thank-you messages from recipients. How often do your donors and prospects thank you for cultivating them?

I believe that the emails and snapshots were effective for a number reasons including:

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July 8, 2015

Nonprofit Sector is a Powerful Force for Freedom

This past weekend, my fellow Americans and I celebrated our nation’s Independence Day. On July 4, 1776, representatives from the colonies gathered in Philadelphia to declare independence from Great Britain. The Declaration of Independence, in part, states:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

Around the world where democracies have flourished, we see a robust nonprofit sector. Under dictatorial regimes, charities are either not permitted to exist, operate under government control, or function underground.

Independence Hall by Michael RosenDemocracy and the right to vote are not the same thing. While voting is certainly an essential element of a democracy, the term means so much more. Among other things, true democracies maintain an independent judiciary, ensure the rights of all citizens, and protect the most vulnerable members of society.

Charities contribute to freedom by diffusing power throughout society, encouraging expression, securing individual rights, meeting unmet needs, and in many other ways.

Brazil provides a good example of what I mean. When Brazil ended military rule and adopted a democratic system, the government maintained central control and limited the formation of charities. That democratic experiment ended relatively quickly with another military coup. When Brazil once again ended military rule, the new democratically elected government allowed the formation of charities and worked cooperatively with the sector.

Today, Brazil has a robust democracy, a reasonably healthy economy, and an effective nonprofit sector. Charities are indeed an essential part of civil society. You can read my article “Brazil: Two Countries Becoming One” by clicking here.

In the USA, charities are also an essential component of civil society. One of my favorite charities is the Philadelphia Children’s Alliance. PCA brings justice and healing to the victims of child sex abuse, protecting the most vulnerable members of our society.

Unfortunately, much more needs to be done to free children from the oppression of sexual abuse. In America, one in four girls and one in six boys are sexually abused. Sexual abuse knows no racial, ethnic, religious, geographic, or economic boundaries. Sadly, though, many people choose to ignore the problem or rationalize it away rather than engaging to protect our nation’s vulnerable young ones.

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