Posts tagged ‘civil society’

April 15, 2016

Will #CharitableGiving Suffer Because of the Election?

[Publisher’s Note: This post is part of a series highlighting some of the sessions from the 2016 Association of Fundraising Professionals International Fundraising Conference. This week, I focus on “Giving in an Election Year – How Political Giving Impacts Nonprofit Support” which was presented by Chuck Longfield, Senior Vice President and Chief Scientist at Blackbaud, and Sally Ehrenfried, Blackbaud’s Community Relations Manager.]

 

Since the end of February 2016, the US Presidential candidates and their allied Super PACs have raised close to $1 billion. Some pundits believe that the candidates could spend up to $5 billion before the November General Election. And that’s just looking at the Presidential candidates. Candidates for other offices will also raise enormous sums of money.

The question for the nonprofit sector is this: Will charitable giving suffer because of the election this year?

Democratic Donkey and Republican Elephant by DonkeyHotey via FlickrBlackbaud researched the question and presented the findings of its report in the session “Giving in an Election Year – How Political Giving Impacts Nonprofit Support” at the 2016 AFP International Fundraising Conference.

The study examined the giving behavior of over 400,000 donors during the 2012 campaign year when Barack Obama and Mitt Romney battled for The White House. Researchers looked at giving data about those who did and did not contribute to political campaigns in 2012 and compared the information with charitable giving information from 2011.

Chuck Longfield, Senior Vice President and Chief Scientist at Blackbaud, observes:

Fundraisers have long debated whether or not political fundraising affects charitable giving and, for decades, important fundraising decisions in election years have been based largely on the conventional belief of a fixed giving pie. The study’s overall assertion is that political giving during the 2012 election did not, in fact, suppress charitable giving. Donors to political campaigns continued their support of charitable causes.”

According to the study, donors who gave to federal political campaigns in 2012 gave 0.9 percent more to charitable organizations in 2012 compared to 2011. By contrast, donors who did not give to political campaigns reduced their giving to charities in 2012 by 2.1 percent. These data findings held true across all sub-sectors as well as the demographic segments of age range, household income, and head of household gender.

The report acknowledges that the data paints a picture of 2012 without providing a prediction for 2016. More research is needed. Nevertheless, based on the Blackbaud report and multi-decade data from Giving USA, it’s likely that political giving will not negatively affect the nonprofit sector this year.

In the Foreword to the report, Andrew Watt, President and CEO of AFP, wrote:

What we are looking at is the giving of individuals who prize [civic] engagement — who see community action as a positive and who are interested in the full political and social spectrum of how we go about achieving change.”

The report supports Watts’ point:

We would expect that nonprofits involved in missions and programs touched by prominent campaign issues would benefit from political discourse on those themes. We would also expect that nonprofits focused on public policy advocacy would benefit most. These expectations are fulfilled in the increased giving to Public and Society Benefit, and Environment sub-sectors.”

However, increased giving was not limited to those two sub-sectors. Most other sub-sectors also saw gains, though those gains were not as large. This is a positive sign for the nonprofit sector in general.

For 2016, the report offers five key recommendations for the nonprofit sector:

April 1, 2016

3 Insights that will Change the Way You Do #Nonprofit Work

[Publisher’s Note: This is the first of a number of posts kindly contributed by guest authors who attended the 2016 AFP International Fundraising Conference. These posts share valuable insights from the Conference. This week, I thank Nancy Racette, CFRE, Principal and Chief Operating Officer at DRi, for highlighting the “Rebels, Renegades & Pioneers” education track.]

 

What if you could hear from some of the nonprofit world’s leading provocateurs, innovators, and big thinkers about the glories, the failures, and the future of the charity sector?

If you had attended the recent Association of Fundraising Professionals International Fundraising Conference, you could have. If you were unable to attend the program, don’t worry. I’m about to share some highlights with you.

Rebels logoDevelopment Resources Inc. (DRi) sponsored the new education track called “Rebels, Renegades & Pioneers. The track was designed to engage attendees in thought-provoking conversations about the nature and ultimate purpose of the nonprofit sector, in addition to providing tactical guidance. Business leaders, fundraisers, researchers, and activists who have spent their lives fostering these conversations shared their thoughts at the Conference.

Nancy Racette, CFRE, DRi Principal and Chief Operating Officer, attended the program. DRi is an executive search and consulting firm that builds nonprofit capacity through Board and leadership recruitment, strategic planning, and resource development both across the country and around the world. Here are some of the important insights Racette found:

 

What if social justice were a form of donor cultivation?

What if fundraisers used studies testing such propositions when they designed philanthropic programs?

How would the lessons of this research change participation in the nonprofit world?

The experts gathered for the “Rebels, Renegades & Pioneers” education track addressed these and other provocative questions. Here are three of the most significant ideas we heard:

1.  You’re not a fundraiser. You’re a catalyst for change.

The Rebels track opened with an inspiring call for fundraisers of all stripes to see themselves as agents of large-scale social change.

The fundraising vision of Roger CraverJennie Thompson,  and Daryl Upsall created a new model of social movement in the 20th century, one in which membership-based nonprofits made themselves central actors in some of the world’s greatest social transformations, from AIDS to apartheid, from voting rights to human rights.

Today, though, the challenge is to recognize that you don’t have to be a c(4) organization with a national membership to be an agent of social change. Fundraising is an inevitably activist enterprise, one that calls on people to remake the world — and that’s as true of art museums and homeless shelters as it is of Planned Parenthood and the Sierra Club.

Art isn’t a luxury for the leisured; it’s a revolutionary prism through which humans re-imagine themselves and bring their new visions to life. That’s why the Urban Institute released a 2008 report on making the case for the arts as a space of collective community action. What’s more activist than that?

And we know that engaging people in social action ultimately creates new donors. People who see themselves as actors in a movement want to invest in that movement.

We got a live demonstration at AFP, when a woman who identified herself as a South American refugee stood up to say that the help she had received from Planned Parenthood had brought her to the Conference to learn how to raise money for the causes she believes in. If we see all the fundraising we do as a movement for social change, how would it help us engage people like that?

September 1, 2015

A Charity Scandal with a Surprising Twist

Yet another charity scandal has made headlines. What makes this ongoing situation startling is that the charities involved are the victims while government is the offender.

“Nearly $10 million in charitable donations by California taxpayers sat unspent in government accounts at the end of last year, The Associated Press has found, and the Senate Governance and Finance Committee chairman said Thursday that he wants a review of state accounts and will hold a hearing to find out why the money hasn’t been spent.”

Since 2005, California has collected $35 million for 29 funds. The state’s taxpayers donated the money when filing their tax returns. The money was supposed to go to a variety of charitable organizations ranging from cancer research to wildlife protection.

“’This is just embarrassing. It’s unacceptable. People expect their money to be spent for these important purposes and these delays, you know, they’re not explainable to me,’ said Sen. Bob Hertzberg, D-Van Nuys. ‘So I just learned about it, but I’m going to jump on it,’” according to the AP report.

Sadly, California is not alone in mishandling taxpayer donations to charity. For example, “New York’s top financial officer found donations languishing in its tax checkoff funds,” according to the AP.

While well intentioned, the government’s efforts to help charities have not always been efficiently or properly managed. I’m reminded of a famous quote from a former California Governor, President Ronald Reagan:

In 1986, Reagan famously said, “The nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’”

While Democratic administrations in both California and New York have mishandled money meant for charities, Democrats do not have a monopoly on making life difficult for nonprofit organizations.

While it initially looked like the Republican controlled US Congress might quickly enact certain charitable giving incentives including the IRA Charitable Rollover, the body failed to act before the summer recess. With a full legislative calendar awaiting the return of lawmakers, it’s unclear if or when the matter of charitable giving incentives will be addressed. This means that even if Congress passes measures that would benefit charities, nonprofit organizations will once again have very little time to promote those opportunities to donors prior to the end of the year.

While government can and should take steps to help the nonprofit sector, charities should not wait expectantly for assistance. Furthermore, even when assistance is promised, charities should not expect such assistance to be delivered in a timely or efficient manner.

As Doug White, Director for the Master of Science in Fundraising Management program at Columbia University, told the AP, “They are not in the business of charity. The government has its own issues.”

Another way in which government hurts the nonprofit sector is through burdensome, costly regulation that does little or nothing to protect the public interest. Such regulations divert donor funds away from the fulfillment of charitable missions.

While government action and in-action has a direct cost for nonprofits, the problem could be much greater. For example, in California, donors may now distrust the government to such a degree that they will no longer bother to designate funds for charities. Time will tell.

So, what can you do?:

August 17, 2015

Urgent Alert: Immediate Action Needed to Defend Nonprofits

There is an alarming issue you need to be aware of.

While I do not use this blogsite to engage in partisan politics, that does not mean that I avoid politics and government relations altogether. I consider myself a bi-partisan, vigorous defender of the nonprofit sector.

CA State House by David Grant via Flickr

California State House

Over the years, I’ve worked with both Democrats and Republicans in my capacity as Chairman of the Association of Fundraising Professionals Political Action Committee, Chairman of the AFP Greater Philadelphia Chapter Government Relations Committee, and a member of the AFP US Government Relations Committee. I’ve even represented AFP in testimony before the Federal Trade Commission.

As a passionate defender to the nonprofit sector and a cheerleader for voluntary philanthropy, I took notice of a recent post on The Agitator blog. Fundraising legend Roger Craver sounded an alert and issued a call to action over a dangerous move by the California Attorney General.

Never before have I reprinted a blog post. However, this issue is so important that, with Roger’s permission, I am sharing his post with you now:

 

If you’re willing to turn over the list of your top donors to the government then you need read no further.

However, if you’re not sure, or you’re absolutely certain you’d be unwilling to give up the donor list, then take this post to your CEO and General Counsel. Immediately.

Why? Because right now the Attorney General of California is set on requiring that any nonprofit seeking a license to solicit funds in the nation’s largest state first turn over their lists of top donors that are filed with the IRS on a supposedly “confidential” schedule of your tax return.

This dangerous and unconstitutional power grab in the name of ‘fundraising regulation’ and ‘consumer protection’ must be stopped.

And it’s up to all of us—nonprofits and the companies that serve them to stand up now and take action.

Whether or not your organization or one you serve solicits funds in California the battle ahead will affect the freedom of speech and privacy rights of every nonprofit in the U.S. and their donors.

In a moment I’ll outline the steps you can take immediately to head off this threat. But first some background.

A year ago this week The Agitator warned about a sinister move by the Oklahoma Attorney General and his special interest contributors to silence the Humane Society of United States (HSUS) using that state’s fundraising regulations.

HSUS has boldly and, so far, successfully fought back.

As I pointed out last August there have been relatively few occasions in modern history where politicians have blatantly sought to use the power of their office to silence nonprofits that opposed them or whose views and ideology they disagreed with.

At the end of the day, Americans and the U.S. Supreme Court have shown little tolerance for political zealots and bullies who abuse U.S. Constitution’s guarantees of free speech and due process.

NOW …The Intimidators At It Again. And We Must Make Sure They Lose. Again.

August 10, 2015

Special Report: Hillary Clinton Wants to Limit Charitable Deduction, Could Cost Charities Billions

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

 

Hillary Clinton, the current frontrunner for the Democratic Party nomination for President of the USA, put forward a plan that could cost the nonprofit sector billions of dollars in voluntary donations.

Hillary Clinton

Hillary Clinton

Like President Barack Obama, Clinton announced that she would seek to impose a cap on tax deductions, including the deduction for charitable giving.

On the campaign trail, Clinton proposed the “new college compact.” At a town hall meeting in New Hampshire on Monday, August 10, Clinton announced a plan to reduce the cost of four-year public schools, make two-year community colleges tuition-free, and cut student loan interest rates.

To pay for the $350 billion plan, Clinton would seek to impose the same 28 percent cap on itemized deductions that we have seen in Obama’s proposed budgets. Charitable deductions are not exempt from this plan. Currently, taxpayers may claim up to a 35 percent charitable deduction.

When Obama proposed a similar tax policy, the Charitable Giving Coalition issued the following statement:

Any caps or limits on charitable giving will have a devastating impact on charities and nonprofits. If donors have less incentive to give to charities — donations will decline, impeding the important work nonprofits do for the millions of Americans who rely on them. For example, up to $5.6 billion in charitable giving would be lost each year if the President’s proposal to cut the charitable deduction were enacted.”

Like the Obama plan, the Clinton proposal would also negatively affect charitable giving. Nevertheless, “Clinton aides believe their plan will help build enthusiasm for her candidacy with younger voters,” according to an Associated Press report.

The cynical effort of the Clinton campaign to buy the youth vote reminds me of two quotes from Alexis de Tocqueville, the 19th century philosopher and historian:

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:

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.

March 23, 2015

Discover What Company CSR Executives are Thinking

Over the years, I’ve actually heard nonprofit managers and development professionals say:

“[That company] should give more.”

“I can’t believe [that company] is not giving. They certainly can afford to.”

“Corporations should do more to support their local communities.”

“Corporations should give back!”

The last one is my personal favorite because it’s complete nonsense. A corporation exists to produce a product or service and generate a profit for its shareholders. That’s it.

CSR Boat by Jack Temple via FlickrAs for “giving back,” corporations do so everyday even if they never donate a dime to charity or sponsor a charity program or event. Corporations meet a public need or desire by producing products or services. They employ people. They buy or rent from other businesses. They pay taxes. Their employees pay taxes and buy or rent things, which further stimulates the economy.

In a previous post, I wrote, “There’s No Such Thing as Corporate Philanthropy!” I explained, “Corporate Philanthropy does not, or at least should not exist. While corporations may give to charitable causes, it is not or should not be out of an altruistic sense of Corporate Social Responsibility.”

If corporations make donations, those grants should enhance shareholder value in some way. A contribution might have a direct impact on profitability or the effect might be indirect. Either way, the donation or sponsorship should strengthen the corporation, say many corporate executives.

Marc Gunther, a senior writer for Fortune Magazine, wrote, “I’m not a big fan of corporate philanthropy. Too often, it’s a feel-good exercise, generating little value for a company’s shareholders. At its worst, it allows CEOs to use other people’s money to glorify themselves.”

As corporate philanthropy, as a term if not a practice, began to fall out of favor, it was replaced with Corporate Social Responsibility. But, what is CSR?

Harvard University defines CSR strategically:

January 9, 2015

Are You Ready for the Coming Storm?

A storm is coming. It will affect the entire US economy. It will likely affect the global economy.

The nonprofit sector will not escape the impact. You need to prepare now.

Koyasan Umbrellas 3 by Andrea Williams via FlickrAs 2014 began to wind down, the US National Debt surpassed the $18 trillion mark! That’s over $154,000 of Federal government debt per taxpayer or more than $56,000 per citizen. During the six years of the Obama Administration, the US National Debt increased by nearly $7 trillion, representing 67 percent growth. And it’s still growing.

As if that’s not bad enough, the US Unfunded Liabilities total more than $92.5 trillion dollars, or more than $789,000 per taxpayer! It, too, continues to grow.

President Barack Obama, former-President George W. Bush, and the US Congress are all responsible for the rapid growth in the US National Debt since 2009 as well as the growth in the Unfunded Liabilities. So, I’m not going to engage in specific finger pointing, policy debates, or politics.

Instead, I want to focus on what this means for the charity sector looking forward.

The rapid growth of national debt is not sustainable. We should no longer ignore it. Here are some of the reasons why:

• While our enormous national debt is not significantly affecting the nonprofit sector at the moment, the day is coming when it will. Prudent organizations will prepare for the storm before it hits.

• At some point, failure to address the massive debt issue will lead to a downgrade in America’s credit rating. Think it can’t happen? It already has. In 2011, Standard and Poor’s cut the US credit rating to AA+ because the government “fell short” of taming the nation’s debt. In 2012, Egan-Jones cut America’s credit rating to AA for the same reason. While these downgrades have had a mostly symbolic effect, they foreshadow what is likely to happen unless the government brings the national debt under control.

• Eventually, future credit rating downgrades will make it more expensive for the government to borrow money. Interest rates will rise. That will take more money out of the economy.

• In addition to becoming increasingly costly to borrow, lending sources will be harder to find. Some of those lenders might also use the lender-debtor relationship to force US policy changes. We’ve already seen this with the China relationship. By the way, China, no longer the US, is the world’s largest economy in “real” terms of goods and services produced.

• To deal with the debt, the federal government has four possible courses of action (or some combination of these): 1) pay more to borrow more which will add to the debt and take more money out of the economy, 2) print more money which would be inflationary, 3) cut spending which would likely mean less money for the social safety net and nonprofit organizations, and 4) raise taxes which will reduce individual disposable income. So, even if the government does address the debt situation, it could have a short-term negative impact on the nonprofit sector before it has a positive effect.

• A massive, growing national debt will make it more difficult for the US economy to experience strong growth in Gross Domestic Product. Philanthropy correlates closely with GDP; it’s been about two percent of GDP for decades. If the economy doesn’t grow rapidly, philanthropy is not likely to do so. If the economy truly falters, we might even see a drop in year-to-year philanthropy as we did during the Great Recession.

We’re already beginning to see some of the effects I’ve described above. If nothing is done to tame the national debt, these effects will be magnified and could eventually become catastrophic.

There are some things that nonprofits can do to prepare:

January 7, 2015

#JeSuisCharlie — I am Charlie

Those of us who work in or for, volunteer with, and/or donate to the charity, nonprofit, NGO, or community benefit sector do so to make the world a better place. Sadly, today, our world has been diminished by the murderous attack on the French satirical magazine Charlie Hebdo. The terrorists, shouting “Allahu akbar,” killed 12 people including the publication’s editor.

Charlie Hebdo is a satirical, weekly publication. It’s cartoons and articles are often juvenile and tasteless. In the past, the publication has poked fun at Christians, Muslims, government officials, and others. Slate has published an article explaining the magazine’s most controversial religious covers.

While I don’t necessarily agree with everything the magazine has published, I nevertheless recognize that a society can never be truly free without freedom of speech and the press. As a citizen journalist and as someone who has devoted his life to making the world a better place, I stand with my brothers and sisters in France.

With anger, with sadness, with defiance, I proclaim:

I am Charlie!

I am Charlie!

Please join me in standing up for freedom. There are many ways you can take action. Here are some of the simplest things you can do:

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