Archive for ‘Current Events’

October 8, 2019

It’s All Up to You Now

It’s that time of year once again. It’s the season when most charities raise the most amount of money, perhaps because that’s when most fundraising activity happens. However, how tough will it be to raise money as the end of 2019 approaches?

You might be concerned about a recession on the horizon. You should be. We’re experiencing a record for sustained economic growth that quite simply can’t go on forever. A recession is bound to hit eventually even without factoring in trade wars, political turmoil, disruptions to the global oil supply, and the threat of foreign wars.

Among ultra-wealthy Americans, those with an average worth of $1.2 billion, 55 percent believe the US will enter a recession within the next year, according to the UBS Global Family Office Report. About 45 percent of respondents are sufficiently concerned that they are boosting their cash reserves, and 45 percent are realigning their investment strategies to mitigate risk.

While recession fears loom, a major economic downturn has yet to take shape. In other words, the economic climate is currently good from a fundraiser’s perspective. Could it be better? Sure. Always. But, it’s plenty good enough for you to anticipate a successful year-end fundraising effort. Consider some of the following six economic factors (as of Oct 4, 2019):

Gross Domestic Product. GDP is growing at a rate of 2.0 percent. Overall philanthropy historically correlates closely with GDP. So, if GDP goes up, we can anticipate that philanthropic giving will also increase.

Unemployment. The national unemployment rate is 3.5 percent, the lowest since 1969. If more people are working, more people will likely have funds with which they can donate.

Wages. Wages have increased 2.9 percent over 2018. Individual giving closely correlates to personal income. So, if personal income is rising, we can anticipate a rise in individual philanthropy.

Stock Market. The stock market, while volatile, has been performing well. This year, the Dow is up 13.92 percent, the NASDAQ is up 20.30 percent, and the S&P is up 17.76 percent. This is good for fundraising for two important reasons worth mentioning here. First, stock growth means that foundations and donor-advised funds will have more money with which to donate. Second, many individuals own stocks that have appreciated in value. When donating appreciated stocks, individual donors can avoid capital gains tax. In other words, even if someone can’t claim a charitable gift deduction under the current tax code, they can still derive a tax benefit by contributing appreciated securities.

read more »

September 13, 2019

An 11-Year-Old Boy Responds to Gun Violence

While the most recent data show that the number of gun-related murders remains well below the 1993 peak, gun violence continues to be a serious problem in the USA, a Pew Research Center report reveals. Over the past several years, as the number of murders has been trending back upward, so have the number of mass shootings.

Ruben Martinez

One such recent mass attack happened in El Paso, Texas where 22 people were killed and dozens wounded. A grand jury formally indicted the suspect on September 12. However, well before the indictments were handed down, just one day after the massacre, Ruben Martinez went into action. With a philanthropic heart, the 11-year-old created and launched the “#ElPasoChallenge.”

Martinez is asking people to commit 22 good deeds, one for each of the deceased victims. He says that acts of kindness can include things such as “mowing someone’s lawn, visiting a nursing home, donating for families in need, taking flowers to the hospital, or writing a letter to someone telling them how great they are.”

Rose Gandarilla tweeted about her son’s #ElPasoChallenge:

https://platform.twitter.com/widgets.js

Gandarilla told CNN why her son developed the #ElPasoChallenge:

He was having some trouble dealing with what happened. I explained to him that we could not live in fear and that people in our community are caring and loving. I told him to try and think of something he could do to make El Paso a little better.”

To consider his mom’s suggestion, Martinez went to his room, brainstormed some ideas, and settled on the #ElPasoChallenge. He also came up with an idea for his first act of kindness. He told his mom that he wanted to pick up and deliver dinner to the first responders who were still at the crime scene. That’s exactly what they did.

Martinez’s mom said, “He seems to be doing better and says that hopefully, the world will be a better place with all these random acts of kindness.”

The word “philanthropy” means love of humankind. Ruben Martinez is a true philanthropist.

Philanthropy is a learned behavior. Thanks to good parenting, Martinez learned some valuable lessons:

read more »

September 10, 2019

Congratulations! You Achieved Something Kind of Cool.

You probably don’t know that you’ve achieved something kind of cool. So, let me congratulate you and explain.

Because you read my blog posts and, perhaps, follow me on social media, you’ve managed to have me included on the list of “Top 100 Charity Industry Influencers” that has been compiled by Onalytica using its proprietary technology platform. I’m honored to be ranked number 16!

While I’m certainly pleased to appear on the influencer list, I’m also humbled. The reality is that I would not be on the list without the support, readership, and engagement of thousands of people around the world. If it weren’t for you, I’d just be some solitary guy talking to himself.

You inspire me to strive to be even more relevant. I want to help nonprofit managers and fundraising professionals explore important issues, achieve greater results, and build a better world. To keep me on track, be sure to let me know how I can assist you. Ask questions. Share your challenges and successes. Suggest blog topics. Tell me the issues that are of most concern to you.

But, I’m not the only one here for you. There are 99 other folks on the influencer list. They’re fundraisers, consultants, journalists, donors, and more. I encourage you to checkout the Onalytica list, and consider following some or all of the people you’re not currently following.

Here are five additional things you might consider doing:

read more »

August 28, 2019

Would You Have Accepted Money from Jeffrey Epstein?

A reporter for The Miami Herald interviewed me recently about whether charities should have rejected charitable contributions from Jeffrey Epstein, an admitted child sex trafficker who faced new accusations prior to his suicide earlier this month.

Now, I’ll ask you, would you have accepted a donation from Epstein?

Your knee-jerk response might be, “No!” Or, you might have a more emphatic and colorful response. It’s even possible that you would have accepted a charitable contribution from Epstein. You certainly wouldn’t be alone. Many nonprofit organizations have accepted substantial gifts from Epstein including Harvard University, the Ohio State University, the Palm Beach Police Scholarship Fund, Verse Video Inc. (a nonprofit that funds the PBS series Poetry in America), Ballet Florida, and other nonprofit organizations. Some nonprofits accepted Epstein’s money before his legal troubles, some after his initial plea deal on prostitution charges, and some around the time of the swirling accusations of child sex trafficking this year.

So, once again, would you have accepted a donation from Epstein?

As I told the reporter from the Herald, it’s not a simple question. It’s complex. It’s nuanced.

One factor is timing. Some might consider donations made before Epstein’s legal troubles to be completely problem-free. On the other hand, some charities might have more of an issue with an Epstein contribution made after his 2008 plea deal. However, after Epstein served his sentence, some charities would have been willing to accept an Epstein contribution once again.

Another timing issue involves whether a nonprofit had already spent Epstein’s donation prior to his legal difficulties. For example, Harvard says it spent Epstein’s donation by that time. In other words, there was nothing left to return.

Another factor to consider is the type of recipient charity. For example, a university might have been more willing to accept an Epstein donation than a child welfare charity would be.

Consideration of Epstein’s philanthropy gets even more complicated when we consider broader cultural issues. For example, in our society, we believe that ex-felons have paid their debt to society and, therefore, should be free to live life as full citizens including having the right to be philanthropic. Furthermore, we believe in a presumption of innocence. Epstein was not convicted of any new charges prior to his death.

More broadly, we must consider whether charities are supposed to investigate and pass judgment on donors before deciding whether to accept a gift. Many major donors, I dare say, have done something that they probably would prefer you didn’t know about, even if not rising to a criminal level. When does due diligence turn into snooping? Do you want your organization to have a reputation of hyper-scrutinizing prospective donors? Would major donors want to submit to that kind of treatment or would they simply take their money elsewhere?

When doing your due diligence, keep in mind that some of this nation’s greatest philanthropists were also troubling figures such as Andrew Carnegie, John Rockefeller, Henry Ford, and others. Charities are not in business to turn away contributions. They exist to take donations and use the funds to enhance communities and the world.

For example, I know of an order of nuns who accepts donations from known Mafia figures. They believe that they can take the funds and do more good with it than would be done if the money were left in the hands of the mobsters.

Having said that, the issues surrounding Epstein are certainly complex. I’ve only touched on some of the issues. The Miami Herald did a great job exploring some of the complications. You can read the article by clicking here.

To navigate a complex ethical dilemma, charities should consider all possible courses of action from multiple perspectives. In my article in the International Journal of Nonprofit and Voluntary Sector Marketing, I wrote:

read more »

August 19, 2019

High Fundraiser Turnover Rate Remains a Problem

Here we go again. There is yet another report about the high turnover rate among fundraising professionals.

According to a Harris Poll study conducted for The Chronicle of Philanthropy and the Association of Fundraising Professionals, more than half of the fundraising professionals in Canada and the USA that were surveyed say they plan to leave their job within the next two years. Among respondents, 30 percent say they plan to leave the fundraising profession altogether by 2021.

The ongoing high turnover rate among fundraising professionals is costly to nonprofit organizations. There is the cost of hiring and training new staff. There is also the enormous cost associated with the loss of continuity and the abandonment of relationships with prospects and donors.

Social media and the blogosphere have been reacting to the new report. For example, Roger Craver, at The Agitator, offers a well-done summary of the data and shares some additional resources exploring the problem. Unfortunately, much of the discussion I’ve seen overlooks what I view to be the real problem that allows high fundraising staff turnover to continue. Let me explain.

Soon after becoming a fundraiser, I began hearing talk about the problem of high staff turnover. That was back in 1980. Many causes were identified. Many solutions were offered. Sadly, nothing substantive has changed over the intervening four decades. Nothing! NOTHING! N-O-T-H-I-N-G!

I’m fine with surveys that continue to point to the turnover issue. I’m fine with many proposed solutions to the situation. However, do not expect me to believe anything will actually change.

read more »

August 1, 2019

How Fundraisers Can Avoid 5 Big Mistakes Made by Capital One

Don’t worry. This post really is not about data security. It’s about much more. And I’ve written it for you, a fundraising professional.

But first, here’s some background:

Capital One, the tenth largest banking institution in the USA, announced it has experienced a major data breach involving the personal information of credit applicants and customers. In its official statement, the bank disclosed, “Based on our analysis to date, this event affected approximately 100 million individuals in the United States and approximately 6 million in Canada….This information included personal information Capital One routinely collects at the time it receives credit card applications, including names, addresses, zip codes/postal codes, phone numbers, email addresses, dates of birth, and self-reported income.” In addition, about 140,000 Social Security numbers were compromised. One million of Capital One’s Canadian customers had their Social Insurance Numbers compromised.

The Capital One story presents the nonprofit sector with an opportunity to learn from someone else’s problem. Every charity should learn from the five mistakes made by the bank:

1. Inadequate Data Protection

While Capital One works with Amazon Web Services, AWS says it was not compromised. The hacker exploited Capital One’s own system. The US Federal Bureau of Investigation has a former AWS employee, Paige A. Thompson, in custody. The investigation is likely continuing. What we know for certain at this point is that Capital One’s data protection systems were not up to the task.

As a fundraising professional, I don’t have any idea about what sophisticated data protection tools exist. I suspect you don’t either. However, you have an obligation to make sure that your organization seeks out the expertise to safeguard the organization’s data. Furthermore, you need to make sure your organization has a policy about who has access to data and under what circumstances. I know you won’t have the security systems of a bank, but you do have an obligation to have reasonably robust security protocols in place.

2. Lack of Timely Reporting

The personal data of Capital One credit applicants and customers was compromised from March 22-23, 2019. The company didn’t learn of the breach until July 19. The bank did not reveal this information to the public until July 29. We do not know if the FBI requested that the bank withhold news of the event pending an arrest. If so, the reporting delay is understandable. Nevertheless, the delay from the date of the incident to the date of disclosure was significant, even if it wasn’t the result of an actual mistake.

Fine wine improves with age. Problems do not. Whenever bad news is likely to become public or should be made public, it’s important to do so as soon as possible. This is true for both for-profit and nonprofit organizations. Getting the information out quickly and fully will help the organization preserve or, perhaps, even enhance its credibility.

3. Not Getting Out in Front of the Story

Once Capital One released the news, it did so haphazardly, despite having had 10 days to plan the disclosure roll-out. It issued a press release at 7:11 PM ET on July 29. By 7:41 PM ET, The Wall Street Journal website carried the news story. Other media outlets ran the story around the same the time. However, Capital One did not tweet the news until 8:43 PM ET. Therefore, when I first checked the Capital One Twitter feed, there was no mention of the story.

Even once the company addressed the general public, rather than just the news media, it did so with a bland tweet that simply read, “If you want to learn more about the Capital One cyber incident, please visit” along with a link to its press release and Frequently Asked Questions page.

The company did not issue an eye-catching alert. The company did not disclose the nature of the “incident.” The innocuous language and low-key look was also used at the top of the Capital One homepage. Assuming they actually spotted the mention, readers had to click through to the press release to find out what happened and, then, to the Frequently Asked Question page for additional information.

If something goes wrong at your organization, make sure you deliver your message on all the communication platforms your organization uses. Make it easy for folks to spot the information. Furthermore, make it easy for them to get more information by giving them a number to call or an email address, perhaps setting up both as hotlines for the occasion.

Capital One could have provided the public with the news without forcing folks to click through to the press release and then click over to the FAQ page. The bank could have also tweeted out tips for how its customers can protect themselves. Instead, the company is making people work a bit for the information. Don’t make the same mistake. Get people the information they need when they need it, and make it easy for them.

When something goes wrong involving your organization, whether or not it is to blame, you need to get out in front of the story in as coordinated a way as possible. At the point you alert the media, be prepared to take your message directly to the general public at the same time.

read more »

July 26, 2019

All You Need to Know about Decrease in Itemized Charitable Deductions

When it comes to philanthropic trends, recent media reports have left many fundraising professionals lost in the weeds and confused by misleading analysis. So, I’m going to give you the most important insights about individual giving that you need to know now along with three practical tips.

First, here’s some quick background. Overall, charitable giving reached an historic high in 2018 with $427.71 billion contributed, according to Giving USA 2019. Despite this great news, individual giving, excluding bequests, fell 1.1 percent to $292.02 billion. There are many reasons for the slight dip, which you can read about in one of my prior posts. One of the factors that may have played a role is the new tax code. With it, we saw a dramatic increase in the number of taxpayers taking the standard deduction and a drop in the number choosing to itemize their deductions.

That brings us to a big takeaway that almost no one is talking about:

The charitable tax-deduction is not a substitute for a solid case for support.

This was true prior to passage of the Tax Cut and Jobs Act; it’s even more true today. Before the new tax code went into effect, less than one-third of taxpayers itemized their returns, and less than one-quarter of taxpayers claimed a charitable tax-deduction. Now, only about 10 percent itemize and 8.5 percent claim a charitable deduction, according to the Tax Policy Center. To put things another way, for the majority of donors, tax issues were never a viable consideration when it came to charitable giving. Today, tax considerations are an issue for even fewer people.

This all means that the classic, but foolish, year-end appeals touting the tax benefit of giving before December 31 are even more irrelevant than ever. Furthermore, it means that the relevance of the idea of year-end giving itself has been diminished. If someone doesn’t need to do year-end tax planning, why would they need to wait until year-end to donate? The reality is most people can give at any time with the same effect on their finances.

In light of all of this, here are the three things you should do:

read more »

July 12, 2019

Do Not Fall for Newsweek’s Fake News!

You might have seen it recently. Sophie Penney, PhD, President of i5 Fundraising, saw it and then asked me what I thought. So, thank you for the question, Sophie; here goes…

Newsweek posted an article with this headline: “Trump Tax Plan Leads to $54 Billion Decline in Charitable Giving.”

There’s only one problem: IT IS NOT TRUE!

Shockingly, not even the body of the article supports the headline. Instead, the writer talks briefly about a $54 billion drop in itemized donations NOT a $54 billion drop in giving. This does NOT mean there was a $54 billion drop in actual giving. With fewer people itemizing their taxes, of course there would be fewer itemized donations. However, that does not mean fewer donations. Many donors will continue to give and continue to give generously despite not being able to itemize. By the way, the writer provided no source for the $54 billion figure.

The article furthers its doom-and-gloom theme by asserting that there was a 1.7 percent decline in overall charitable giving. However, the writer did not mention that that figure was for inflation-adjusted dollars. In real dollars, giving actually went up $2.97 billion (0.7 percent) between 2017 and 2018, and now stands at $427.71 billion, the highest level of all time, according to Giving USA 2019. Even if we look at inflation-adjusted dollars, giving in 2018 was the second highest in recorded history. Not bad.

If we want to understand the current philanthropy environment, we need to have an honest conversation using real information. In a previous post, I identified several factors affecting charitable giving:

read more »

June 20, 2019

I Told You So: Charitable Giving is Up!

Most charity pundits, mainstream media, and press serving the nonprofit sector got it wrong. Sadly, none of them is admitting their mistake, and many are continuing to advance a false narrative. However, I always told you the truth, and I’ll continue to do so.

I’ve often encouraged you not to overuse statistics in your appeals. But, we can all certainly benefit from reading lots of illuminating statistics.

In 2017 and 2018, most pundits and the media were convinced that the Tax Cut and Jobs Act would result in up to a $21 billion decrease in philanthropic giving. In January 2018, I joined a tiny group of professionals who predicted the decrease in giving would be far less than that and giving might actually increase. This was not a guess on our part, but a well-educated expectation based on research, experience, and observation.

Now, with the release of Giving USA 2019, we know who was correct.

Overall, philanthropic giving in constant dollars INCREASED by $2.97 billion (0.7 percent) between 2017 and 2018, and now stands at $427.71 billion, the highest level of all time. Relative to Gross Domestic Product, giving remained at 2.1 percent, which is greater than the 40-year average of 2.0 percent.

Despite the generally good news, the philanthropy scene is not entirely positive. When adjusting for inflation, giving in 2018 did decline by 1.7 percent, though that was much less than the doom and gloom estimates. Furthermore, giving by individuals as a share of overall philanthropy accounted for 68 percent; this is the first time since at least 1954 that it has fallen below 70 percent. In 2018, individual giving fell by 1.1 percent in constant dollars.

While the new tax code likely had an effect on charitable giving, we need to be careful not to overstate its impact. A number of factors have influenced giving:

New Tax Code. All or part of the decline in individual giving in 2018 could be due to donors taking action in advance of the tax law change. We saw this in 1986 when there was a spike in charitable giving in advance of the Reagan tax cuts in 1987.

In 2017, many donors likely front-loaded their philanthropic giving since they would no longer be able to deduct gifts beginning in 2018. In addition, many donors chose to bundle their philanthropy by contributing to Donor-Advised Funds at record levels in 2017. Together, these two factors might explain the 1.1 percent decrease in individual giving in 2018 compared to a 5.7 percent increase in 2017. If not for the new tax rules going into effect in 2018, some of those 2017 donations might have been made in 2018 instead.

The tax code might also affect giving in other ways that we just don’t see clearly at this point. Just as we had to wait until 1988 to see giving normalize following the Reagan tax cuts, we may need to wait another year or two to understand the full effect of the current tax code.

Decline in the Number of Donors. Since 2001, the percentage of US households contributing to charity has fallen steadily from a high of 67.63 percent to 55.51 percent in 2014, according to data from the Indiana University Lilly Family School of Philanthropy’s Philanthropy Panel Study. In other words, the new tax code is not responsible for a sudden decline in the number of donors. This trend has been going on for years.

read more »

June 14, 2019

What is the Biggest Obstacle to Fundraising Success?

Have you ever wondered what is the biggest obstacle to fundraising success?

Is it the new tax code?

Is it the economy?

Is it the decline of religious affiliation?

Is it fewer donors?

Is it an underfunded fundraising budget?

Any or all of those might be obstacles. However, none of them is the biggest obstacle. So, what is?

You are the biggest obstacle to fundraising success.

Before you fire off a blistering comment to me, let me explain.

I know you’ve dedicated yourself to a noble profession. If you’re like many fundraisers I know, you continue to enhance your skills by studying books, reading blogs (wink, wink), participating in webinars, and attending conferences. I applaud you.

Unfortunately, none of that matters if you don’t take proper care of yourself, both physically and mentally. You can’t do your best if you’re not at your best. If you want to be the most successful fundraiser you can be, you must first take care of you. That begins with recognizing that workplace burnout is a real thing.

Recently, the World Health Organization announced, “Burn-out is included in the 11th Revision of the International Classification of Diseases (ICD-11) as an occupational phenomenon.” WHO explains:

Burn-out is a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed. It is characterized by three dimensions:

      • feelings of energy depletion or exhaustion;
      • increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job;
      • and reduced professional efficacy.”

Sound familiar? You’re not alone. Furthermore, a number of scientific studies demonstrate that overwork can lead to real health problems.

Business Insider reports:

  • People who work more than 55 hours a week are 33 percent more likely to suffer a stroke and have a 13 percent greater risk of heart attack than those who work 35-40 hours weekly.
  • It gets progressively harder to relax if you don’t periodically get away from external stresses like a heavy workload. Even a 24-hour timeout can have health benefits.
  • Taking fewer vacations can shorten your life expectancy.

Fortunately, there are things you can do to prevent or overcome job burnout. Using your allotted vacation time each year and taking a spontaneous day off can be enormously therapeutic.

My wife and I did just that when we recently played hooky for a day. It was a gorgeous Monday. So, at the last minute, we decided to push all of our responsibilities aside. We jumped in our car, and visited the Philadelphia Zoo. Founded in 1859, the Zoo is in a beautiful, park-like setting. We had a relaxing stroll, and even saw something we’ve never seen before. Whenever we’ve visited in the past, the hippos were always cooling off in their pond. However, on this trip, the weather was so perfect that we got to see the hippos walking around their enclosure. It made a special day just a bit more memorable.

Just our one day away from work, communing with nature a bit, was enough to recharge our batteries. We were much more relaxed and productive the rest of the week. Now, I know you might be thinking, “That’s nice, but that’s just one person’s anecdote.” Rest assured, though, that there’s plenty of scientific evidence backing me up.

Inc. magazine cites studies that show time away from the office:

  • Reduces stress,
  • Prevents heart disease,
  • Enhances sleep,
  • Improves productivity.

Business Insider reports:

  • Even planning a vacation makes people happier before they actually go.
  • Vacations and hooky days can provide greater life perspective and enhanced motivation.
  • Relaxing time off can keep your nerve cells healthy and your mind sharp.
  • Time off can make you more productive when you’re in the office.

Mental Floss reveals 11 hidden benefits of taking time off from work:

read more »

%d bloggers like this: