Archive for ‘Current Events’

January 5, 2018

How Bad is the New Tax Code for Your Charity?

If you’ve been reading the mainstream press, or even some of the industry media, you might believe that the future is all doom and gloom for charitable giving thanks to the Tax Cut and Jobs Act. But, how bad will things really be for you and your nonprofit organization?

As a former newspaper editor, I know that the media lives by the axiom: If it bleeds, it leads. In other words, negativity attracts readers and viewers, which in turn attracts advertising dollars. So, it’s no surprise that the media have put the new tax code in the most negative light when it comes to charitable giving.

Fortunately, reality is something quite a bit different. Let me explain, using figures from 2016 (the most current numbers available).

Overall, charitable giving totaled $390.05 billion. US Gross Domestic Product totaled $18.6 trillion. Therefore, total philanthropy in 2016 equaled 2.1 percent of GDP.

As a result of the new tax code, charitable giving could decline by approximately $21 billion, according to Patrick Rooney, PhD, Executive Associate Dean for Academic Programs and Professor of Economics and Philanthropic Studies at Indiana University-Purdue University.

However, is that number accurate? Unfortunately, we have no way of truly knowing as Rooney himself states.

For example, the estimated philanthropic decline of $21 billion does not take into account the impact of a likely increase in Gross Domestic Product.

Because philanthropy closely correlates to GDP at the rate of approximately two percent, we can expect a rise in GDP to result in a rise in giving.

So, how much will GDP rise? Again, no one knows for certain. The estimates vary greatly from 0.08 to 0.35 percentage points. The Tax Foundation provided the latter estimate. Applying that percentage to the 2016 GDP, we would see GDP increase by $651 billion. If two percent of that increase goes to charitable giving, that would be approximately $13 billion. So, Rooney’s prediction of a $21 billion decline in philanthropy could be mitigated partially by GDP growth resulting in just an $8 billion drop in giving. However, even that number could be further offset by growth in foundation giving resulting from robust growth in the stock market.

Simply put, the new tax code could increase GDP and stock values leading to more charitable giving that could, at least partially, offset any potential decline in giving resulting from the new tax policy.

For the sake of discussion, however, let’s assume a $21 billion drop in giving, as Rooney outlined. That would take philanthropy as a percentage of GDP from 2.1 percent to 1.9 percent, using 2016 numbers. This is still within the 40+ year historical range.

The bottom line is that the new tax law could result in a decline in charitable giving. However, we don’t know for certain if that will be the case and, if it is, how much the dip will be. Even if there is a dip, giving will still remain at historically typical levels, around two percent of GDP. Furthermore, there is the possibility that the pundits are mistaken and that charitable giving will actually increase. Time will tell.

While the new tax code may change how and when people donate, history teaches us that changes in the tax code have only a short-term impact on the amount of giving though the methods and timing may vary. For example, the Reagan tax cuts resulted in greater year-end giving in 1986 before giving normalized thereafter. Furthermore, while a dip of billions of dollars is a big number, the reality is that it is not massive in the context of overall philanthropy.

Here are some of the relevant items you need to know from the 500+ page Tax Cut and Jobs Act signed into law on December 22, 2017 by President Donald Trump:

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December 8, 2017

5 Mistakes that Could Cost You Year-End Donations

As year-end approaches, you are probably working feverishly to raise as much money as possible for your nonprofit organization. Unfortunately, you might be making some mistakes that could cost your charity enormous sums of potential donations.

Here are just five common ways you might unknowingly short-change your organization at this special time of year:

1.  Appeals by the Numbers.

Many of the year-end appeals that I receive focus on numbers. Often, the number is “31,” as in December 31. Other numbers tout the volume of people served or the amount of a challenge grant. As I wrote last week, numbers can tell part of an organization’s story; however, numbers can’t tell the full story.

For the most effective appeals, you will want to engage hearts and minds. While some numbers can be meaningful, telling an individual story makes your nonprofit’s work more relatable and easier to understand. Individual stories are also far more likely to engender an emotional response.

The Wounded Warrior Project is a great example of what I mean. The organization could tell us how many veterans suffer from PTSD and medical issues. The charity could simply tell us how many veterans they serve each year. Instead, the Wounded Warrior Project tells the story of a single veteran. The organization’s television appeals are mini-movies that tell us of a veteran’s war experience, the problem he or she came home with, and how the Wounded Warrior Project is improving the veteran’s life. You can watch one of the organization’s television spots by clicking here.

2.  Not Asking for Gifts of Stock and Other Planned Gifts.

If you want to maximize year-end giving, you must seek planned gifts. Planned giving allows donors to make more gifts and larger gifts than they might otherwise be able to do simply from their checkbook. This is great news for your charity. Even better news is that not all planned gifts are deferred gifts. Here are some types of planned gifts that will result in immediate cash for your organization:

Gifts of Stock. With the stock market in record territory, many Americans own appreciated securities. By contributing stock shares to your organization, a donor can make a generous gift, realize a charitable gift deduction, and avoid capital gains tax.

Gifts of Appreciated Property. As with stock, many individuals own appreciated real December 31st by TransGriot via Flickrestate, art, and collectibles that they can donate. Your organization can either use the item for mission fulfillment (i.e., a museum can accept a work of art for its collection), or the organization can sell the item and put the cash to good use. You’ll just need to be clear with your donor about which option you intend to exercise.

Gifts from Donor Advised Funds. An increasing number of Americans have established a DAF. Be sure to remind your donors that they can advise that a gift be made to your charity from their DAF account.

IRA Charitable Rollover. Since the U.S. Congress has made the IRA Charitable Rollover permanent, individuals who are age 70.5 or older can donate up to $100,000 from their IRA each year without having to recognize it as income.

Year-end is also a good time to ask for deferred planned gifts such as Gifts in a Will, Beneficiary Designations, and Trusts.

You can read more about planned giving options by clicking here.

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November 30, 2017

Do the Numbers Tell the Full Story?

I’m back! I haven’t written a new blog post in nearly eight months due to serious health issues. Now, as my recovery progresses, I feel compelled to return to my blog as I have much to share with you. Thank you for your support and patience.

I want to take this opportunity to update you about what the past several months have been like for me while making a useful fundraising point that I believe will be of benefit to you.

Like you, as the end of the year approaches, I’ve been inundated with direct mail, e-mail, and telephone fundraising appeals. Many of these appeals focus on numbers. For example, I’ve read about how one organization won several awards for its theater productions, how another has a $10,000 challenge grant, how another needs to raise an additional $50,000 to meet its goal, and how yet another has helped feed over 500 people during Thanksgiving.

On the other hand, I also received an appeal from the Philadelphia Children’s Alliance, which brings justice and healing to the survivors of child sexual abuse. The appeal, which stood out from the pack, told the story of one child, 5-year-old Sarah. Reading about Sarah’s situation, I learned how PCA helped her. In addition to Sarah’s compelling story, the appeal mentioned that PCA also provided services to over 3,500 other children in need over the past year.

Which charity do you think I’m most likely to support? If you guessed PCA, you’re right.

While numbers can tell part of the story, they can’t convey the whole story the way that sharing the experience of one individual can. Sharing someone’s personal story can make a cause relatable, more real, and more compelling. Stories tap into emotions that statistics simply cannot.

Now, let me try to do a bit of both. I want to update you about my personal situation while using some numbers.

Regular readers of my blog know that I have suffered from the exceedingly rare Appendicial Carcinoma with Pseudomyxoma Peritonei (PMP). I’ve been open about my situation for three years so that readers would understand when I stepped away temporarily and so that others suffering with PMP would know that I am willing to be a resource for them. If you want to learn more about my journey, just search “Pseudomyxoma Peritonei” on this site.

I was diagnosed with late-stage PMP in 2014. My doctors suspect it had been growing in me undetected for nearly a decade. Two months after diagnosis, I underwent successful major surgery. Unfortunately, the cancer came back in 2015. While chemotherapy kept it in check for several months, surgery was again required in April 2017.

This time around, my primary surgery in April was 14 hours long. My follow-up surgery in June was two hours.

I was in the hospital for a combined total of 40 days from April to June. That includes my initial hospital stay, two readmissions for complications, and one follow-up surgery stay.

During my three-month treatment period from April through June, I read 10 books. Hey, I couldn’t always rely on television for good entertainment. I would have read even more books if it wasn’t for the painkillers.

Lisa, my wife, and I spent nearly one-quarter of the year in Pittsburgh, home to the University of Pittsburgh Medical Center’s Shadyside Hospital where I received expert treatment.

I went into the hospital weighing an already diminished 146 pounds. I exited at about 112 pounds. I’m now over 130 pounds and gaining toward my goal of 150 or more. (If anyone wants to help fatten me up, I’m available for lunches. 🙂 )

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April 4, 2017

What to Do If You Suspect Child Sex Abuse

At some point in your life, you might encounter someone you suspect of child sex abuse. Sadly, it’s not that much of a long-shot. One-in-four girls and one-in-six boys are sexually abused in the USA. It’s a horrible and relatively common crime.

So, what should you do if you suspect someone of child sex abuse?

Before I answer my own question, let me answer a question you might be asking: Why is a fundraising blog talking about child sex abuse?

Well, April is National Child Abuse Prevention Month. To mark the occasion every year, I devote one blog post that will help you protect your loved ones and others from a nightmare crime. Fortunately, we can do something about this national tragedy. First, we need to educate ourselves about the problem. Then, we need to understand what action to take.

Because I’m not a lawyer, a member of law enforcement, a social worker, or a child-welfare worker, I contacted an expert to help me understand what we should do if we ever suspect an individual of child sex abuse.

First, in certain jurisdictions, you may have a legal obligation to report your suspicions if you hold a particular job such as teacher or healthcare professional. Furthermore, your organization might have reporting requirements as part of its employee policies. So, be sure to know the legal and policy obligations that come with your job.

Second, even if you’re not required by law or policy to report suspicions of child sex abuse, you are most definitely morally obligated to do so. Children are largely defenseless. It’s up to adults, any adult, to provide protection when needed.

Unfortunately, protecting children is sometimes easier said than done. For example, you may have a vague gut-feeling that a teacher is up to no good. But, with no evidence or even a concrete suspicion involving a particular child, it’s doubtful the authorities would do anything with a report.

However, if you do suspect that an adult is sexually abusing a particular child, particularly if you have any evidence (e.g., you’ve witnessed the adult taking the child away to a private room), then you need to take immediate action.

When you have a valid suspicion, contact your local police department, local child protective services agency, or your local child advocacy center (an independent social service agency). Or, better yet, contact them all.

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March 17, 2017

Delivering More of My Own Bad News

If you’re a longtime reader of my blog, you know that I’ve been in an ongoing battle with cancer since 2014. If you’re a relatively new reader here, I want you to know that I have an exceedingly rare form of cancer known as Appendicial Carcinoma with Pseudomyxoma Peritonei (PMP).

So, why am I once again writing about my health?

The reason is that I’ll soon be undergoing another extensive surgery. That means that for now, and for at least the next few months, I need to focus 100 percent of my energy on preparing for surgery and focusing on my recovery. So, I’ll be taking an indefinite leave-of-absence from my blog, professional life, and most social media activity. I look forward to re-engaging as soon as I am able.

Meantime, if you want to learn more about my situation, just search “Pseudomyxoma Peritonei” on this site using the search bar at the right.

I also want to thank you for being a loyal blog reader and for being supportive of my various efforts, in various ways. I’m already looking forward to the day when we can re-engage.

Finally, I want you to know that I recognize that we all face challenges. So, I’m going to share with you just some of the quotes that have lifted my spirits during my darkest hours; I hope some of them will inspire you as well:

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March 10, 2017

In the News…

Over the past few months, I’ve been able to share my views about philanthropy with media outlets beyond my own blog. This will continue in the coming months. To make sure you don’t miss anything, I thought I’d share some highlights with you.

MarketWatch:

As 2016 drew to a close, MarketWatch interviewed me. In the article, I addressed the issue of philanthropy in the Trump Era and shared my optimistic prediction for philanthropic growth in 2017. You can read my detailed thoughts on these subjects in my following posts:

The Non-Profit Fundraising Digest:

At the start of the year, I was honored to be included on the list of “The Best Fundraising Blogs of 2017” published by The Non-Profit Fundraising Digest. Here’s what the Digest has to say:

There are thousands of blogs and websites out there dealing with non-profit fundraising. Every week, I get e-mails about new fundraising sites run by consultants, non-profits, universities, companies and trade associations.  It can be hard for fundraisers to keep up, and difficult to know which sites are worth reading on a regular basis.

Our goal here at The Non-Profit Fundraising Digest is to make sure that you have all of the information you need to successfully raise funds for your non-profit. As part of that mission, we are proud to present our list of the best fundraising blogs of 2017.  Each of these blogs and websites were handpicked by our editors because they are sites we trust… run by people we trust… and each is chock full of fundraising strategy, tactics and tips that you can use at your organization.”

The front page of the Digest is updated daily to provide links to a variety of must-read articles. It’s a terrific resource to help nonprofit manager and fundraising professionals easily find information that is relevant and useful. You can find the front page by clicking here.

Bloomerang:

The Non-Profit Fundraising Digest was not the only site to take notice of my blog at the start of the year. The good folks at Bloomerang included my blog on its list of “100+ Fundraising Blogs You Should Be Reading in 2017.” Here’s what Bloomerang says:

Keeping up with every quality piece of content published by and for fundraisers on the web every day would be a full time job in and of itself. There’s absolutely no way you could read it all.

While there are many very well-known speakers and writers who boast tens of thousands of daily readers and followers, we wanted to highlight some lesser-known hidden gems – as well as some long-established publishers – that may change the way you think about and perform your job.”

Productive Fundraising with Chad Barger, CFRE:

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March 3, 2017

5 Tips for Raising More Money in a Difficult News Environment

Nonprofit organizations already face many challenges when it comes to raising money. So, it’s unfortunate that numerous charities must now deal with a fresh, difficult situation.

In a recent article in The Chronicle of Philanthropy, reporter Rebecca Koenig explains:

Charities always find it difficult to capture attention, but some nonprofits fear that their donors are distracted by President Trump’s policies. ‘Backlash philanthropy,’ the trend of donating money to express frustration with the new administration, has benefited select organizations like Planned Parenthood and the American Civil Liberties Union but not necessarily nonprofits as a whole.”

If Trump Administration policies directly affect your organization’s mission, fundraising can be relatively easy. Indeed, some charities have benefitted microphone-by-yat-fai-ooi-via-flickerfrom record philanthropy since Election Day. However, what can you do if your organization’s mission has little or nothing to do with the debates capturing media attention?

Koenig’s report provides great tips, insights from nonprofit professionals, and helpful detail. If you’re a Chronicle subscriber, you can find the article by clicking here. I thank Koenig for interviewing me for her article. If you’re not a subscriber, fear not. I’m about to share some highlights with you.

As I told the Chronicle:

The most important advice I could give an organization not directly impacted by the current political environment is to embrace fundamental practice and keep moving forward.”

So, in that spirit, here are five tips to help guide you along with my comments, in quotations, from the article:

Tip 1: Avoid obvious attempts to connect your organization to causes that don’t relate to your mission.

“If it’s a stretch, then the recipient of the appeal is going to see through it and see it as a gimmick, It’s not going to be particularly effective.” Instead, think of what has been motivating your donors all along, and continue to tap into those feelings.

Tip 2: Maintain good relationships with current donors.

Steadily declining donor-retention rates over the past several years suggest that the nonprofit sector has been doing a terrible job of building relationships with donors. Now, perhaps more than ever, it’s essential for charities to do a better job in this area. This is particularly true for organizations over-shadowed by news events. You can search this site for donor relations to find posts with helpful advice. However, here’s one useful idea: Report to donors how their contributions have been and will be used.

“The more specific an organization can be with a donor, the more that donor will feel like they’re making a difference, If a donor feels he or she is bringing about change, this will help drive further philanthropy to that organization.”

You also want to ensure that your prospects and donors understand that the challenges you’re working on are not going away even if the media spotlight may not be on your cause.

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February 24, 2017

What is the Special Ingredient that Leads to #Fundraising Success?

Do you know the special ingredient for creating fundraising success?

You’ll notice I didn’t say “secret ingredient.” That’s because it’s not a secret. It’s actually common sense. The reason I’m writing about it is that it is not yet common practice to the degree it should be.

The special ingredient is: building relationships.

Gerry Lenfest, 21st century philanthropist and Giving Pledge member, explained the importance of developing relationships when writing the Foreword to my book, Donor-Centered Planned Gift Marketing:

Knowing your prospects and understanding what motivates them are two critical steps in the [philanthropic] process. Quite simply, you cannot skip cultivation and relationship building and expect a successful outcome…. Do not make the mistake of forgetting about us once you receive our gift commitment. We may truly appreciate how efficiently and effectively you handle contributed funds so much that we entrust you with another planned gift. We are also in a position to influence others to do the same…”

While Lenfest’s comments were about planned giving, they certainly apply to any type of fundraising. Strong relationships are the key ingredient to a successful philanthropic process. By building meaningful relationships, you will:

  • Acquire more donors
  • Retain more donors
  • Upgrade more donors
  • Acquire more planned gifts
  • Generate more major gifts
  • Inspire donors to become ambassadors for your organization

Unfortunately, the nonprofit sector in general is terrible at building relationships. This is one major reason that donor-retention rates have been steadily falling for years, according to the Fundraising Effectiveness Project. While there is no shortage of great how-to material out there, charities are still failing to grasp the importance of embracing a robust stewardship program as part of the philanthropic process. You can search this site for donor retention to get some great tips.

For now, however, I want to share a heartwarming story of what can happen when you establish strong relationships with donors and inspire them to be ambassadors.

John’s Roast Pork is a destination sandwich stand in Philadelphia. John Bucci’s family-owned establishment has been around since 1930 serving the best roast pork sandwiches in the city. (Hey, Philly is about more than john-bucci-of-johns-roast-porkcheese steak sandwiches, though they serve those, too.) The James Beard Foundation designated the establishment as an “American Classic” for roast pork.

Unfortunately, earlier this month, John’s was burglarized. The perpetrator(s) got away with a few thousand dollars. The burglary also shut down the business until repairs could be made. The stolen sum included $1,500 that had been collected to benefit Be the Match, operated by the National Marrow Donor Program. The charity maintains the world’s largest and most diverse bone marrow donor registry.

Be the Match is important to Bucci. Several years ago, he fought a fierce battle with leukemia and was ultimately successfully treated with a bone marrow transplant. Since then, Bucci has been a supporter. At one point when he contacted the organization, he requested to meet his marrow donor so he could thank the person. However, he was told that the organization’s guidelines did not permit this. Here’s what Bucci told Philly.com he did instead:

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February 3, 2017

Urgent: Join #Fundraising Colleagues for Advocacy Day on Capitol Hill

President Trump’s tax plan would reduce charitable giving by 4.5 to 9 percent, according to the nonpartisan Tax Policy Center. Analysis from the American Enterprise Institute estimates that Trump’s current tax proposal could eliminate more than $17 billion in annual giving.

It’s time to join the fight against any efforts to reduce charitable-giving incentives. As the US Congress drafts tax-reform legislation and negotiates with the Trump Administration, The Charitable Giving Coalition, Chaired by the Association of Fundraising Professionals, is hosting an advocacy day on Capitol Hill in Washington, DC on Feb. 16, 2017.

capitol-hill-by-elliott-p-via-flickrTo participate, you must email Ali Davidson (adavidson[at]urbanswirski.com) to register by the end of business on Wednesday, Feb. 8, 2017. When you register, provide your name, organization, state, and Congressional district. There is no charge to participate, but you will be responsible for your own travel and lodging expenses.

The “100 Years of Giving Fly-In” advocacy event is a great chance to meet with policymakers and their staff to advocate for maintaining the full value of the charitable deduction, as well as its possible expansion.

Over the years, I’ve participated in a number of advocacy events with AFP. They are fun and interesting. Moreover, it’s exciting to help make an important difference for the entire nonprofit sector. But, to make a difference, our sector needs to show up. You need to show up.

The Charitable Giving Coalition says:

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February 1, 2017

What are the Obstacles to Improving Donor-Retention Rates?

I’m disgusted and frustrated. You should be, too.

Once again, the already horrible existing-donor and new-donor retention rates in the USA have further declined, according to the 2016 Donor Retention Report issued recently as part of the Association of Fundraising Professionals and Urban Institute Fundraising Effective Project.

Among new donors, the report says:

An alarming finding in this research is that the New Donor Retention rate has been steadily declining since 2008, averaging a reduction of -3.4% year over year.”

The new-donor retention rate in 2008 was a terrible 29.35 percent. By 2015, that dropped to an even more pitiful 22.93 percent!

red-alert-by-bash-linx-via-flickr

Red Alert time for the nonprofit sector!

Among existing donors, the retention rate has dropped by an average of 1.68 percent since 2008. In 2008, the existing-donor retention rate was 67.88 percent compared to just 60.23 percent in 2015.

I’m puzzled. Since 2008, there have been books written about how to effectively retain more donors. There have also been seminars, workshops, webinars, articles, and blog posts offering superb advice on the subject. Yet, despite the wealth of available information, the numbers are steadily declining.

In the past, when I’ve been confronted by poor retention data, I’ve offered helpful tips. You can search my site for “donor retention.” However, for now, I’m too fed up to offer more tips here. I don’t even believe you need more information to retain more donors. Something else is going on, and I want to understand it. I hope you’ll help me.

It’s your turn now. Please tell me, as a comment below or via email:

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