Archive for ‘Current Events’

September 18, 2020

Should You Forget about Planned Giving as 2020 Closes?

Garvin Maffett, EdD, a strategic consultant in the nonprofit sector, recently asked the members of the CFRE International Network on LinkedIn:

What’s on the horizon for Gift Planning during this uncertain time in our economy?”

It’s a good question, and I thank Maffett for starting a needed discussion. Some fundraising professionals have wondered whether they should rollback planned gift marketing during the pandemic, or whether they should boldly engage in more robust charitable gift planning efforts.

My simple answer is this: You should definitely NOT forget about planned giving as 2020 draws to a close. While the economic future is definitely uncertain, now is a fantastic time for charitable gift planning. Let me explain.

The stock market, while volatile, continues on an upward trajectory. Most Americans own stock. Many of those who own stock have seen appreciation this year. This means there is a great opportunity for you to secure gifts of appreciated stock for your organization.

Motivated by the coronavirus pandemic, many more people have chosen to write a Will. With more people making end-of-life plans, there is an opportunity to encourage them to include a gift to your charity in their Wills.

As the COVID-19 pandemic has people contemplating their own mortality, life insurance sales have increased. This presents you with an opportunity to encourage beneficiary designations for your nonprofit.

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August 14, 2020

Will Move to Dissolve the NRA Hurt Your Nonprofit?

This post is about the attempt of New York’s Attorney General to dissolve the National Rifle Association. However, this is NOT a political post. Whether or not you support the NRA, the legal fight over its future has potential implications for your nonprofit organization. Let’s take a closer look.

Doug White, a philanthropy advisor, author, and teacher, writes:

In a 169-page document made public earlier today (you can read the entire lawsuit here), [New York Attorney General] Letitia James alleges that NRA insiders have violated New York’s nonprofit laws by illegally diverting tens of millions of dollars from the group through excessive expenses and contracts that benefited relatives or close associates. The suit alleges that longtime CEO Wayne LaPierre and three other top officials ‘instituted a culture of self-dealing, mismanagement, and negligent oversight at the NRA,’ failed to properly manage the organization’s money and violated numerous state and federal laws.

The lawsuit asks for a dozen measures to be taken. The first one: ‘Dissolving the NRA and directing that its remaining assets and any future assets be applied to charitable uses consistent with the mission set forth in the NRA’s certificate of incorporation.’”

White further notes that the legal action has been filed against the 501 (c)(4) organization, and not against any 501 (c)(3) organizations related to the NRA.

So, how could the case of the NRA affect your nonprofit organization?

Erosion of Public Trust: The mere accusations against the NRA, whether or not they are ultimately proven in court, have the power to not only erode confidence in the NRA, they have the potential to erode trust in all nonprofit organizations. If that happens, it could make fundraising more difficult. A special report in 2018 from the Better Business Bureau’s Give.org found:

While the majority of respondents (73 percent) say it is very important to trust a charity before giving, only a small portion of respondents (19 percent) say they highly trust charities and an even smaller portion (10 percent) are optimistic about the sector becoming more trustworthy over time.”

Enhancement of the Public Trust: On the other hand, New York’s action could enhance the level of trust people have in the nonprofit sector. If the Attorney General can prove her case, it would show the public that government officials are exercising appropriate oversight of the nonprofit sector which could elevate the public’s confidence that their donations to any nonprofit will be used appropriately. We know there is a correlation between the level of trust people have and the likelihood they will give as well as the amount of their giving.

Impact on Support to Controversial Organizations: If New York succeeds in liquidating the NRA, it will have the power to disburse the organization’s assets as it sees fit. How will this affect support to other controversial nonprofits if donors know that their donations could be redistributed by the state? It’s possible that this could result in more cautious behavior by donors.

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August 11, 2020

What Can You Learn from the Moral Failing of the NAACP?

While the recent moral failing of the National Association for the Advancement of Colored People (NAACP) is distressing to all who oppose bigotry, the situation offers seven important lessons for every nonprofit organization.

Before I get to those critical lessons, let me offer you some background.

It’s been 75 years since the liberation of Auschwitz-Birkenau as well as the other concentration and extermination camps run by the Nazis to murder Europe’s Jewish population and others. Now, three-quarters of a century later, liberals and conservatives continue to find common ground by embracing anti-Semitism.

For its part, the NAACP has failed to fire Rodney Muhammad, President of the NAACP Philadelphia chapter, following his anti-Jewish social media posting in defense of anti-Semitism. The NAACP headquarters has not apologized for Muhammad’s comments, nor has it insisted that he apologize. Nationally, the NAACP’s inaction shows it condones anti-Jewish rhetoric while, at the local level, Muhammad and his board have turned the Philadelphia chapter into a hate group.

On July 24, 2020, the news website BillyPenn first reported on Muhammad’s anti-Semitic Facebook post from July 23:

[On] Muhammad’s public Facebook page, the meme referenced the backlash against Eagles wide receiver DeSean Jackson, actor/rapper Ice Cube and comedian/TV host Nick Cannon, who have all attracted attention recently for advancing theories that blame Jewish people for the plight of Black Americans. Cannon and Jackson have since apologized for their recent posts, while Ice Cube doubled down.”

Muhammad shared the meme as a defense of sorts on behalf of Jackson, Cannon, and Ice Cube:

The post included a caricature of a Jewish man wearing a yarmulke and pressing a large, bejeweled hand down on a faceless mass of people. Similar caricatures trace back to before the Holocaust, and were often used to depict Jews as a force of greed and oppression. Next to the image was a quote falsely attributed to French philosopher Voltaire: ‘To learn who rules over you, simply find out who you are not allowed to criticize.’”

After being questioned by a BillyPenn reporter, Muhammad removed the post while denying any memory of having shared it. Later, he issued defensive statements that were devoid of apology. The closest he came was an expression of “regret.”

In the meantime, a number of community and religious leaders have called for Muhammad to either resign or be removed from his position. For example, Gov. Tom Wolf, Attorney General Josh Shapiro, and State Sen. Anthony Williams joined the calls for Muhammad’s removal. While the Pennsylvania NAACP condemned Muhammad’s action, Kenneth Huston, President of the state conference, said that he was powerless to take any action which would have to come, instead, from national headquarters.

Unfortunately, the NAACP national office delayed its response by more than a week. Furthermore, its tepid statement supported Muhammad. Making matters worse, the NAACP headquarters has apparently failed to provide any direction to the Philadelphia chapter, according to WHYY:

Bishop J. Louis Felton, first vice president of the Philadelphia branch, said in an email that local leadership has not gotten any direction from the NAACP national office on the issue. ‘Congratulations on actually getting a response from the National office, as we certainly could not,’ said Felton.”

The Jewish Exponent reported on some of the community reaction:

‘We are truly saddened,’ the Pennsylvania Jewish Coalition said in a statement, ‘by such a prominent leader’s rejection of this alliance and inexcusable failure to recognize his own role in perpetuating racist stereotypes.’ The Philadelphia Muslim Jewish Circle of Friends, convened by the American Jewish Committee, asserted that Muhammad’s actions were ‘in direct violation of the very principles upon which the NAACP was founded.’”

So, what can we learn from the NAACP’s moral failing?

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July 28, 2020

You Do Not Want to Miss This

I want to let you know about a great opportunity.

Every summer, the Association of Fundraising Professionals Greater Tampa Bay Chapter and the Charitable Gift Planners of Tampa Bay join forces to host a planned giving symposium. Unfortunately, due to the COVID-19 pandemic, this year’s in-person conference on August 18 is being replaced with an online symposium. While this is disappointing for the good people of the Tampa Bay region, it’s great news for fundraisers around the world who will now be able to participate in the program.

Philanthropy researcher Dr. Russell N. James III, JD, CFP® and I are honored to be the featured presenters for the conference. Here are the details:

2020 VIRTUAL PLANNED GIVING SYMPOSIUM ~ THE ART AND SCIENCE OF PLANNED GIVING

TUESDAY, AUGUST 18, 2020

9:00 AM – 11:30 AM (EDT)

SESSION 1: Legacy Fundraising — The Best of Times or the Worst of Times?

PRESENTER: Michael J. Rosen

Pandemic. Protests. Riots, Looting. Unemployment. Recession. Those are some of the words that we can use to describe much of 2020. So, considering this chaotic environment, can you seek legacy gifts now or should you wait? Rosen, a consultant and author, will share the research-based risks and opportunities. He’ll examine a real world case of what not to do. In addition, he’ll provide useful, easy to implement tips on what you can do to help reach your planned giving objectives even during challenging times.

SESSION 2: Using Storytelling in Legacy Fundraising — New Findings, Ancient Origins and Practical Tips

PRESENTER: Russell N. James III, JD, PhD, CFP®

Connecting with the donor’s life story in the right way can be a powerful trigger for legacy giving. But, how do we do that? Professor James shows how understanding the ancient origins and the latest research findings leads to simple, effective, practical techniques that anyone can use to more effectively encourage gifts in wills.

SESSION 3: An Open Conversation with the Planned Giving Experts James and Rosen

In an informal conversation, James and Rosen will answer your questions about planned giving. This interactive session gives you the opportunity to ask the experts for insights and tips to help you enhance your gift planning efforts.

FEE: For members of AFP-GTBC or CGP-TB, the symposium fee is $10. For all others, the fee is $15.

REGISTRATION: For more information and to register, you can go to the AFP-GTBC website or the CGP-TB website.

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June 5, 2020

Avoid the 7 Deadly Sins of Fundraising [WEBINAR]

I don’t have to tell you that these are troubling times. We’ve had to cope with coronavirus (COVID-19), the economic fallout from the pandemic and, now, the heart-wrenching killing of George “Perry” Floyd at the hands of Minneapolis police officers.

As nonprofit managers and fundraising professionals, we have a choice: We can allow ourselves to be overwhelmed by the horrible events of 2020, or we can continue to do what we always do and help those who depend on us. While the suffering around us pains me, I take some solace in knowing that. like you, I am a member of a noble profession that seeks to make the world a better place. We are needed now more than ever.

That’s why I want to invite you to join me and your nonprofit colleagues for a webinar to help you be more of the fundraising professional you aspire to be. The program is hosted by the Association Fundraising Professionals – Greater Philadelphia Chapter. Here are the details so you can register now:

Avoid the Seven Deadly Fundraising Sins and Raise More Money

Date: Tuesday, June 9, 2020

Time: 1:00 – 2:30 PM (EDT)

Description: Surveys show that the public’s trust in the nonprofit sector has been on a steady decline for years. At the same time, the number of charity donors has been on the decline and, in 2018, total giving fell by 1.7% in inflation-adjusted dollars.

This webinar will use real-world examples cited by the Association of Fundraising Professionals and pulled from news headlines to illustrate seven deadly fundraising sins involving: conflicts of interest, gift restrictions, accountability, tainted money, donor privacy, compensation, and cooking the books. By reviewing these examples, you’ll be better able to avoid making the same mistakes.

Because there are more than seven sins to avoid, you’ll also get a decision-making model to help you sidestep blunders, build trust, and raise more money.

Tickets: $15 (members), $40 (non-members)

Registration: Webinar seating is limited, so register now by clicking here.

As I have written previously:

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May 20, 2020

Your Charity’s Greatest Opportunity is the Rising Need of Donors to Connect

The coronavirus (COVID-19) pandemic has presented fundraising professionals with a large number of significant difficulties. One of those challenges is trying to figure out where to get solid, actionable information to help nonprofit organizations raise much-needed funds.

Now, Prof. Jen Shang, Co-Director of the Institute for Sustainable Philanthropy, comes to our rescue. On Friday, May 22, 2020, she will be presenting a special webinar: “How to Love Your Donors During COVID-19.” I recently received an email from Prof. Shang, along with three tips, that she is kindly allowing me to share with you.

Prof. Shang, the world’s only philanthropic psychologist, has found that the pandemic is causing donors to feel a lack of wellbeing. This is due in large part to a decrease in the sense of connection that people feel during the lockdown. Interestingly, this presents an opportunity for your charity.

When you help your donors feel a sense of real connection, you will help them feel a greater sense of wellbeing. When they associate that greater sense of wellbeing with your nonprofit organization, they will be more likely to renew and increase their support now and well into the future. In other words, by taking care of your donors, you will be taking care of your charity.

One of the things that will make this webinar a valuable experience for you is that it is based on scientific research rather than simply relying on war stories or opinion. In other words, the many bright ideas you’ll learn will be solid and safely actionable. As someone who has taken Prof. Shang’s Philanthropic Psychology course, I can personally assure you that you will get meaningful information that will help you enhance your fundraising efforts.

Here is Prof. Shang’s message:

 

COVID-19 has created such uncertainty in our lives that many are wondering how and when life will ever get back to normal and how we will survive it all in the meantime.

At the Institute for Sustainable Philanthropy, we have not stopped collecting data since the first country locked down at the beginning of this pandemic. And we have been collecting data on how good people feel every other week since.

This [post] will give you a first sneak peak of the findings, and three tips on what to do NOW that you’ll find at the end.

We will release the full results of these studies in a webinar that we will host twice this Friday, May 22 at 6:00 am UK time and again at 3:00 pm UK time.

We studied over 4,000 adults in the US and other countries.

We measured about 30 feelings that people experienced on a daily basis. We found that people’s feelings significantly worsened during the first six weeks of the pandemic. As the lockdown continued, people felt progressively worse.

Specifically, people felt less connected to others.

Psychologists have known for decades that feeling connected to others is one of the three most fundamental needs we have as humans. Our need to have this fulfilled cannot be changed. It is as certain as our life exists. Our sense of connectedness declines when we are isolated in lockdown, when we cannot physically see anyone or talk to anyone, and when we cannot hug anyone or kiss anyone. We have seen our connectedness score declining for over six weeks now.

There is no uncertainty in any of it. When humans are locked down, their need to connect rises. With data, we also know what they need and in what quantity.

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April 28, 2020

Warning Signs You Need to Know About

While the nonprofit sector continues to raise massive amounts of money, danger lies ahead for fundraising professionals as the coronavirus health crisis leads us further into an economic calamity.

As the COVID-19 pandemic gained traction, individuals, corporations, and foundations have responded with robust giving. For example, individual giving revenue through direct mail, processed by Merkle RMG, has increased 5.8 percent year-over-year even while the volume of donations dropped by 15.5 percent, according to Merkle RMG’s Impact Report, COVID-19: How the Coronavirus Pandemic is Impacting Direct Mail Fundraising (transactions through April 19, 2020).

The initial philanthropic response to the pandemic is not surprising for those who have experienced major challenges in the past. Giving lags changes in economic conditions. For instance, during the Great Recession (2007-09), we also saw a similar philanthropic pattern with revenue initially increasing while the number of donors declined. The following graph from Target Analytics, a Blackbaud company, illustrates the point:

Now, let me just mention that no one has a crystal ball or time machine. Therefore, no one, including me, can precisely predict what will happen and when it will happen. Nevertheless, we do know that during past crises, we saw that charitable giving fell after an initial surge.

The overall economy has a profound effect on philanthropic giving. We know that overall philanthropy correlates with Gross Domestic Product at the rate of about two percent. Furthermore, historical data shows that individual giving correlates with personal income at the rate of roughly two percent. In other words, when the economy is strong, giving will be strong; when the economy falters, giving will slow.

Because the coronavirus pandemic has caused a major global economic disruption, we can anticipate that this will eventually have a negative effect on philanthropic giving. Consider these warning signs:

As corporations see profits eroded, as foundations see investments decimated, as individuals see personal income slashed, charitable giving will likely decrease. However, there are some mitigating factors in play:

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April 22, 2020

Do You Want to Take a Walk on the Wild Side?

This post is a bit unusual. Okay, it’s a lot unusual.

I recently discovered that some of my most viewed tweets are pictures of flowers. That’s right. Not puppies. Not kittens. Not a pizza-eating groundhog. Flowers!

I guess I shouldn’t be too surprised. After all, most of us are living under stay-at-home orders due to the coronavirus (COVID-19) pandemic. We don’t get outside nearly as much as we normally would during springtime. Furthermore, we’re inundated with non-stop, doom-and-gloom news coverage. Even the nonprofit and fundraising media have been reporting extensively about the impact of coronavirus. You’ve certainly read a number of such posts here.

So, after thinking about all of this, I realized that, like me, you could probably use a bit of a break. A break from the scary news. A break from a stressful life. A break from being mostly trapped indoors.

Because self-care is so important if we’re going to remain able to help others, I thought I’d give you a short escape. Experiencing nature is said to make us feel happier. It also improves our health in a number of ways, including boosting the immune system. That’s why I decided to share some simple snapshots I’ve taken with my cell phone while out on walks with my wife. I took most of the photos at our neighborhood garden at Pennsylvania Hospital, the nation’s first hospital. I’m also sharing a daffodil photo from the historic Hill-Physick House, and cherry blossom pictures from in front of my home.

I hope you enjoy this walk on the wild side:

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April 21, 2020

Free Help to Protect Children During a Crisis

Almost every April, I devote one blog post to stopping child sexual abuse. It’s a significant departure from the nonprofit and fundraising topics I typically write about. So, let me tell you why I do it.

First, April is Child Abuse Prevention Month, and I want to support that initiative.

Second, many years ago, I served on a jury that heard a child sex abuse case involving a little boy and his step-grandfather. I’ll spare you the horrifying, nightmarish details. Suffice it to say, we found the step-grandfather guilty. When my jury service was completed, what I had heard continued to haunt me.

Before the trial, I assumed that child molesters and rapists were either priests or trench-coat wearing guys in vans. I also believed that incidents of such abuse were relatively rare. The news media coverage at the time would lead most people to a similar belief. However, during the trial, I learned differently:

  • 1 in 10 children will be sexually abused before turning 18;
  • 1 in 7 girls, and 1 in 25 boys are sexually abused before turning 18;
  • 20 percent of sexually abused children are under age 8;
  • 90 percent of children know their abuser (in other words, the abuser is not a stranger);
  • 50 percent of sexually abused children under the age of 6 were abused by a family member (the younger the child the more likely the abuser is a member of the family).

As I continued to process my jury experience, I researched the organizations that were addressing the issue. As a result, I became closely involved with the work of the Philadelphia Children’s Alliance, a regional child advocacy center. PCA does fantastic work bringing justice and healing to sexually abused children.

I also became acquainted with Darkness to Light®, which provides superb training programs and funds scholarly research related to the issue of child sexual abuse. Now, I want to make you aware of one particular FREE, 30-minute online training that D2L is offering: Protecting Children During a Crisis.

As the D2L website says:

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April 14, 2020

10 Fundraising Strategies for Complex & Major Gifts During COVID-19

The following guest blog post is from philanthropy researcher Russell N. James III, JD, PhD, CFP®. He originally posted it on LinkedIn, and I’m reposting it here with Russell’s kind permission. I’m reposting the piece because of the enormous importance of the subject and the valuable information it contains.

Engaging donors in planned-giving conversations is still possible during the coronavirus pandemic. Last week, Russell and I shared our FREE whitepaper “Legacy Giving: The Best of Times or the Worst of Times?” Now, I want to share Russell’s 10 charitable planning strategies you should keep in mind when seeking complex and major gifts during these challenging times:

 

The market went down. A lot. The economy is temporarily frozen. Unemployment may increase dramatically. In the past, all of these things have been bad for charitable giving. We can’t control that. So, what can we control? What strategies make sense for fundraising, in particular for complex and major gifts?

Here are ten charitable planning concepts to keep in mind.

1.    Crisis is the time to show support

A social/friendship/family relationship encourages sharing. A transactional/market/exchange relationship does not. We see this in fundraising experiments where family language (simple words and stories) consistently outperforms formal language (technical words and contract language). One of the defining moments that identifies a friendship relationship, rather than a transactional relationship, is during a crisis.

In our personal lives, we know this. When you might be in trouble, a good friend is one who reaches out to help. A friend visits you in the hospital. A friend comes to the funeral with you. A friend listens whenever trouble strikes. In time of crisis, reaching out with concern, help, or even a relevant gift reinforces this social/friendship/family type of relationship.

Ideally, the first contact with donors in a time such as this should begin with concern. Are you OK? Do you need anything? Can we help? Later, we can return to the typical donor-charity dynamic. (If you represent a cause related to public health or COVID-related assistance, that return may happen more quickly.) But, first we want to show friendship-like support during a time of crisis.

2.    The first giving conversations should be with DAF-holders

Requests made to donors with funded Donor Advised Funds will be successful earlier than requests made to others. During times of downturn and uncertainty, people are more likely to hold tightly to their wealth. This drives down charitable giving. But distributing funds already in a DAF doesn’t affect personal financial security.

During the last major economic downturn, many private foundations temporarily increased their distributions to help soften the blow for their grantees. The same reasoning can apply to individual donors who have already funded their DAFs. Due to tax planning strategies, many may have placed multiple years’ worth of future expected donations into a DAF. Given the current crisis, it makes sense to consider this as a time to empty those accounts earlier than originally planned.

3.    One-time special requests work, but be careful with a crisis

In fundraising experiments, people are more willing to donate in response to a special, one-time need than for ongoing needs. An appeal for one-time needs that arise as a result of the current turbulence may be particularly effective. In experiments, people respond more to appeals during a time of crisis. We are all sharing this experience together. We can work together to help overcome the effects of this hit.

However, it is important in such appeals to identify the crisis as a crisis for beneficiaries or for the cause, but not an organizational crisis. Projecting organizational instability might help get the $50 gift today, but it will come at the cost of the major donation later down the road. Major philanthropic investments don’t go to unstable organizations.

4.    Use planned gifts as your “Plan B”

During times of downturn and uncertainty, people are more likely to hold tightly to their wealth. Planned giving opportunities can help “lean into” this uncertainty.

Estate gifts take place only after the donor no longer needs the money personally. They can also be revocable. They can be a percentage of the estate, and thus can vary in size with financial ups and downs. These percentage gifts are actually much better for charities because they usually end up being much larger. (Fixed dollar gifts tend not to get updated for inflation.)

Irrevocable planned gifts can also help with financial uncertainty. These typically give the donor lifetime income or lifetime use of the donated property. Thus, the gift can be made while still protecting the financial security of the donor.

If a donor needs to back away from a commitment or feels that a future ask is too daunting, consider planned gifts as a “Plan B”. A response to such a refusal might include revocable or irrevocable planned gift options.

I certainly understand your concerns. I know others in your same situation who have decided to move their commitment into an estate gift instead. This provides flexibility with no upfront cost. There are even ways to do it that provide tax benefits. Would you be interested in learning more about these options?”

[This is followed by discussion of: 1) Gift in a will. 2) Beneficiary designation on an IRA/401(k), avoiding income taxes that heirs would otherwise have to pay. 3) Retained life estate, creating an immediate income tax deduction, discussed below.]

I certainly understand your concerns. I know others like you who have decided instead to make a gift that gives them lifetime income. With interest rates being so low and the market being so volatile, many people like the fixed payments coming from a charitable gift annuity. Would you like to learn more about this?”

5.    A charitable gift annuity as a two-stage gift

For those representing stable institutions offering Charitable Gift Annuities (CGAs), this may become a particularly attractive gift. A CGA usually trades a gift for annual lifetime payments to the donor (or donor and spouse). During times of uncertainty, the guarantee of fixed payments from a stable institution can be attractive. Following the last dramatic drop in the market in 2008, some large, stable organizations reported receiving exceptionally large CGAs. These very large gifts would normally have been structured as a Charitable Remainder Trust. But during extreme volatility, donors instead preferred the certainty and stability of payments guaranteed by the organization rather than payments tied to investment returns.

A charitable gift annuity can sometimes be presented as a two-stage alternative when uncertainty prevents a normal gift from being made.

I certainly understand your concerns. Another donor like you was in your same situation and she decided to protect against all this volatility by making the gift in two stages. First, she made a gift that gave her annual payments for life. If things go downhill, she has that income. But, if everything turns around and she ends up not needing the extra money, then she can donate those future payments as a second gift.”

Section II: Wonky Charitable Tax Planning Opportunities

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