| ARTICLES OF INTEREST Google+: Social Media for Entrepreneurs January 9, 2012; Source: Business2Community 2012 is looking like a great year for the social media platform Google+, which launched back in June and has already accumulated over 60 million users. In December, Google+ usage in the United States surged 55 percent, accumulating 49 million visits in the last month of 2011. Google has also integrated Google+ into the newest Android OS, giving them ample opportunity to grow and gain users through mobile devices. But what really sets Google+ apart from other social media sites like Facebook and Twitter? Facebook is still significantly dominating the social media world, with about 800 million users worldwide. Although Facebook is enormously popular, many users have voiced their concerns on privacy issues with its new changes, and their lack of trust with sharing their information. NPQ touched upon the possibility of Google+ being the “next big thing” in simplifying social media for its users when they launched brand pages last November. This streamlined design is proving to be more appealing to social entrepreneurs, and by the end of 2012 Google+ could be the preferred social network site for businesses and nonprofits. Google+’s social media tools seem to directly cater to entrepreneurs, organizations, and businesses. The Young Entrepreneur Council nonprofit organization published a blog piece on the five ways Google+ is beneficial for entrepreneurs: - The ability to segment your audiences;
- Share valuable content;
- “Hang out” with folks you’d like to meet or already know;
- Use Sparks to find helpful content related to your niche; and
- +1 others’ content from across the Web.
Google+ Hangout allows organizations to hold meetings online, provide customer service through video chat, and engage with up to ten Google+ users through video. Hangouts are already becoming huge among businesses, and nonprofits are already incorporating this new tool into grant proposals. Although Google+ was accused of arriving late in the social media game, they may have emerged at just the right time, when Facebook users are frustrated with the overwhelming constant changes and may be looking elsewhere for their social media fix. ========================== December 12, 2012; Source: USA Today USA Today is reporting that donations of homes—many of which have been foreclosed—have increased significantly in the past year. I am not sure whether we are supposed to be happy about this. For instance, Bank of America donated 150 homes in 2011, and plans to donate 1,200 next year. Wells Fargo is ahead of the curve, having donated 1,120 homes this year—up from 295 last year. These two paragons of charity were cited by the treasury department in June, along with JPMorgan Chase, for poor performance in the federal HAMP loan restructure program. In short, they made the process so unwieldy that people would be foreclosed on while still in a miasma of negotiations with the same bank that was foreclosing. Kafka anyone?
Still, once a home has been foreclosed, allowing it to remain vacant creates problems for the neighborhood, so there are a number of charities that have been receiving and making best use of the properties—sometimes razing them and rebuilding or transforming them into common space, and sometimes refurbishing and moving new families in. In Cleveland, Cuyahoga Land Bank receives 120 donated properties a month—up from 80 a year ago—but this is in the context of 22,000 abandoned single-family homes in the county. There are six million mortgages across the country that are late or already in foreclosure, so the numbers of donated homes pale relative to those. But many are expecting the numbers of donations to continue to rise, and where there is a trajectory like that there is an intermediary that sets up to handle the increase. Real Estate Donations in Illinois, for instance has handled 117 donated homes in more than a dozen states this year, in comparison to the 20 a year it handled previously. ======================= When Unmentionables Become Undiscussables in a Nonprofit, the Organization Is at Risk December 20, 2011; Source: Knowledge@Wharton When there is something really, seriously wrong in an organization—and obviously a number of people would have to have known about it—the failure to bring the issue to light and act is damaging beyond belief. As this Wharton article asks with the clarity of hindsight, “Why didn't somebody at Penn State do more to pursue allegations that former assistant football coach Jerry Sandusky was sexually abusing young boys? Didn't anybody at MF Global Holdings notice that something was wrong before $1.2 billion in customer cash disappeared?”
As Wharton management professor John R. Kimberly suggests, with respect to these and other scandals, “there [is] almost a conspiracy of silence,” with people “behav[ing] differently within an organization than they would on their own.” We all probably relate to the observation of Kristin Smith-Crowe, a management professor at the University of Utah, who suggests that people “find many ways to distance themselves from the moral implications of their behavior […] by convincing themselves that [the problem or scandal] is someone else’s job to solve […or] that the problem will resolve itself or nothing negative will result.” How many times have we failed to stand up and call out miscreants among our peers or superiors for just these reasons? University of Pennsylvania philosophy professor Cristina Bicchieri adds, "The cozier and the more close-knit the group, the less incentive you have to stir the waters."
Oftentimes, people cannot even talk about the problem, much less act on it, for fear of upsetting the organizational apple cart or appearing disloyal to the organization or to the boss. Los Angeles consultant Don Rossmore suggests, in essence, that the problem starts at the top. "When leaders do not want an issue discussed, it is not discussed," he says. "When an issue is undiscussable, it cannot be managed rationally." Wharton’s analysis is that “Most experts agree that leaders must set the tone for the entire organization, work to elicit discussion about taboo topics, and maintain transparency about how they respond to any concerns.” The alternative, suggests Wharton management professor Lawrence Hrebiniak, is not pleasant. He suggests that, "You need top management to react strongly. If they bury the stuff, they're dead."
======================== HOW TO BE A STRATEGIC PHILANTHROPIST - SOURCE: DENVER POST December 20, 2011
This is the season when many people make charitable donations. This generosity is acutely needed and greatly appreciated. Next year, however, consider approaching your charitable giving as a strategic philanthropist, rather than as a donor.
The difference between a donor and a philanthropist does not depend on how much time or money one gives to charity, but, rather, on one's approach to giving.
A donor reacts to needs and donates time and money, often to a wide spectrum of worthy and unrelated causes. A strategic philanthropist, however, engages in a thoughtful process of ascertaining and articulating clear philanthropic values and goals, develops a proactive strategy to achieve them, collaborates with others, makes a charitable investment, and evaluates the process to determine whether desired impacts and goals are being achieved. This process helps ensure that philanthropists will not only have a greater impact on the people, organizations, or causes they wish to benefit, but will derive more satisfaction from their charitable initiatives.
Recently, several excellent books on strategic philanthropy have been published offering insights into the journey from donor to philanthropist.
In "Give Smart: Philanthropy that Gets Results" (2011), authors Thomas Tierney and Joel Fleishman state that "Whether you're giving away your money or you are a steward of another's money, your philanthropy is fundamentally about your values, your life, and your legacy." Philanthropists, they suggest, should answer these questions:
What are my values and beliefs? What is "success" and how can it be achieved? What am I accountable for? What will it take to get the job done? How do I work with grantees? Am I getting better
In "Giving 2.0: Transform Your Giving and our World" (2011), author Laura Arrillaga-Andreessen asserts "to make the greatest impact, we must put our minds to work as well as our hearts. It is truly important to think beyond why and what you give to how you give. Turn your charity into strategic philanthropy. Turn reactive into proactive. By taking stock, equipping yourself with knowledge and experience, and thinking innovatively, you can make your giving an even more powerful force for good." The book describes many ways philanthropists can increase their effectiveness.
"Do More Than Give: The Six Practices of Donors Who Change the World" (2011), by Leslie Crutchfield, John Kania and Mark Kramer, advises that the first step of a philanthropic journey is to focus on a particular cause. "Donors who do pick a strategic focus are able to achieve more than donors who scatter their funding and attention across many disparate causes. . . . [B]y getting clear on what they aim to achieve, donors are suddenly able to see what they need to do — as well as what they need to stop doing." The authors recommend that after selecting a cause, philanthropists should:
Two other worthwhile books on strategic philanthropy are "The Art of Giving: Where the Soul Meets a Business Plan" (2009), by Charles Bronfman and Jeffrey Solomon, and "Inspired Philanthropy: Creating a Giving Plan and Leaving a Legacy" (2007), by Tracy Gary.
If you want to have more impact on both the causes you care about and on yourself, your family or your business — make the effort to become a strategic philanthropist. You'll achieve a better return on your social investments and experience more joy and meaning in your charitable efforts. Let's make 2012 "The Year of the Strategic Philanthropist"!
Bruce DeBoskey is a Colorado-based philanthropic adviser. Reach him at bruce@deboskeygroup.com. ==================================== THE QUEST FOR THE RIGHT BEQUEST – SOURCE: Wall Street Journal By RACHEL EMMA SILVERMAN Many people want to use part of their estate to help charities they believe in—leaving a legacy of helping out the less fortunate, nurturing the arts or supporting other important causes. But with estate-tax rules changing almost every year, and with President Barack Obama proposing to limit the value of charitable deductions for high-income earners, planning for charitable gifts has rarely been more confusing.
There are numerous ways to leave money for charity while still getting significant tax breaks, and in some cases generating income for you or your family while you are alive. One of the simplest—and often most overlooked—ways to make sure your charitable legacy lives on after you are gone is a "bequest," a gift to charity at your death, typically made through your will.
Cutting Estate Taxes
Making a bequest reduces the size of your estate, effectively leaving less money subject to estate taxes. Another advantage: You can change the provisions in your will, including how much to donate and to whom, anytime before your death. But because a bequest becomes effective after death, donors can't enjoy an income-tax deduction for the gift.
Giving to charity during one's lifetime, by contrast, can generate income-tax deductions—but the gifts are irrevocable. Many donors make substantial gifts during their lifetime as well as support their favorite charities in their wills.
Jon Krause
This year and in 2012, people can shield up to $5 million—$10 million for married couples—from federal estate tax. In 2013, the exemption will go back down to $1 million, unless Congress votes to raise it. Still, most people leave money to charity for reasons beyond tax savings. In 2010, when the federal estate tax disappeared for a year, charitable bequests nevertheless rose over 2009 by an estimated 16.9%, adjusted for inflation, to $22.83 billion, according to the Giving USA Foundation.
Bequests are still relatively uncommon. One study analyzed 20,000 Americans over the age of 50 from 1995 to 2006, and found that fewer than 9.5% of those who donated more than $500 a year planned to make a bequest, according to Russell N. James III, an associate professor in the division of personal financial planning at Texas Tech University, who conducted the study. People without children or grandchildren were far more likely to leave bequests to charity, Mr. James found.
One particularly tax-efficient way to make a bequest is to donate part or all of your regular individual retirement account to charity by designating a charity as a beneficiary. Bequeathing an IRA to charity can save your heirs income taxes that they otherwise might owe on an IRA's required minimum distributions, as well as reducing the size of your estate. (Rules governing IRAs, which aren't passed on through wills, are thorny, so be sure to seek tax counsel before bequeathing such an account.)
Estate Tax Calculator
Use SmartMoney's estate tax calculator to see how a charitable bequest might reduce your estate tax liability. When making a bequest, donors can attach strings, such as asking the charity to use the money to fund a certain project. For instance, Joan Kroc, the wife of McDonald's founder Ray Kroc, left some $1.5 billion to the Salvation Army upon her death in 2003. She specified that her gift was to be used for the development of community centers.
It's best for donors to discuss plans with the charity in advance, so it can be prepared for the money and make plans for how best to use it, say advisers. That is especially important if you plan to leave tangible objects, such as artwork to a museum; make sure the charity actually can accept the object before leaving it. Also, talking to the charity in advance about any restrictions to the donation can help prevent misunderstandings going forward.
It also is smart to talk with family members if you plan to make a bequest, so they understand why the money is going to the charity and not to them.
Generating Income
Some charitable vehicles, such as "charitable remainder trusts" and "charitable gift annuities," allow you to support a charity after your death while generating an income stream—and even income-tax deductions—during your lifetime. These tactics are particularly smart for donors worried about maintaining cash flow after making a gift.
In charitable remainder trusts, donors transfer assets to an irrevocable trust, which then pays the donor or his family income for a set period of time, or until the donor dies. At the end of the trust's term, whatever money is left goes to a charity designated by the donor. The donor receives an upfront tax deduction for the money expected to be received by the charity, while the income stream that donors receive is taxable.
Charitable gift annuities are similar, but are typically simpler. Donors can set them up directly with a charity, usually avoiding the legal fees necessary to create a trust. The charity promises to pay the donor a fixed amount regularly for life. Although a portion of the annuity payments is taxable, donors also receive an upfront income-tax deduction for the amount estimated to end up with the charity upon death.
—Rachel Emma Silverman is the author of "The Wall Street Journal Complete Estate Planning Guidebook" (Crown Business).
========================
Want to Live Long and Prosper? Donate More!
November 8, 2011; Source: Xperedon.com As debate rages in the United States about whether charitable giving will shrink if it’s no longer encouraged by a federal tax deduction, it begs the question of why we assume people make donations in the first place. There’s a growing body of research seeking to answer just that question, and the findings are rich with implications for the nonprofit sector. Among key findings is that generosity deeply aligns with our self-interests, because by nature it benefits donors in tangible ways.
This isn’t to say that pure altruism doesn’t exist. Psychologists observe that some people are better able to empathize with the plight of others. Generosity is also influenced by experiences, such as growing up in a charitable family, or having been personally affected by a tragedy or act of generosity. According to research with very young children, sponsored by the Science of Generosity Initiative at the University of Notre Dame, it’s thought that some people are even genetically predisposed to generosity.
Motives for giving are not always altruistic, however. People give, for example, to create a better public image or to feel better about themselves. And yes, perhaps they give to save money on their taxes.
No matter what the motive, research shows that generosity directly benefits the well-being of those who give. For example, several studies, including one sponsored by the University of British Columbia, provide evidence that people who give are happier than those who don’t. In the UBC study, donating as little as $5 helped people feel better. Another study sponsored by the University of Oregon demonstrated that for many participants, giving activates the same pleasure centers of the brain as receiving—which are also the same brain centers involved with addiction. Furthermore, people who leave money to charity in their wills live three years longer than those who don’t, according to a 2008 study by the U.K. based Fire Services National Benevolent Fund. Finally, several research studies suggest that generosity is associated with popularity. For example, in 2010 Newcastle University researchers created a game based on giving: the more generous participants also accumulated the most gifts back from others.
In other words, generosity brings happiness, longevity and popularity. ========================= Grassroots Effort Causes 650,000 to Transfer funds to Nonprofit Credit Unions in Month before Bank Transfer Day November 07, 2011 Nonprofit Newsware - Ruth McCambridge
Source: Wall Street Journal In what has to be one of the biggest consumer actions ever, 650,000 bank customers have transferred their accounts to nonprofit credit unions over the past four weeks leading up to Bank Transfer Day, which was held November 5th (Saturday). Bank Transfer Day was by all accounts a loosely coordinated grass roots effort.
While it will be several weeks before there will be anything near an accurate report of the number of accounts that moved on BTD itself, the numbers were clearly significant.
But this article from the Wall Street Journal suggests that some of those big banks may care little about the exodus, since the depositors in question are not big money makers. Their accounts, says the article, tend to be too small, and the number of products purchased too few, to make their business all that profitable—especially since new rules have been put in place to limit some of the surcharges that were previously levied. But while the assumption is that 7,200 Credit Unions in the country are small potatoes next to the big banks, they serve one in three Americans—or 91 million. Some banks are beginning to make noises about the nonprofit status of credit unions, and the credit unions are lobbying for the ability to make more business loans (the current cap on making such loans is 12.5 percent of assets). This will be an interesting situation to watch. ======================== Social Philanthropy - A Look at Large Charities on Social Media October 18, 2011,By Cody Switzer - Philanthropy.com
The Internet entrepreneur and philanthropist Craig Newmark has taken a look at how some of the nation’s largest charities are using social media to connect with their supporters. Mr. Newmark, founder of Craigslist and author of Craigconnects, a blog about nonprofit work, examined large organizations’ social-media habits and followers in August and September. (For more background about how big charities use social media to raise money, see this survey from The Chronicle.) Among his findings: • About 92 percent of charities included a link to their organization’s Facebook page on their Web sites. Another 90 percent of groups featured links to their Twitter feeds. • The YMCA, the group with the highest revenue included in the study, posted to Facebook infrequently, 19 times in two months. Nonetheless, the organization has more than 24,000 Facebook fans. • The Public Broadcasting Service had the most Twitter followers, Facebook fans, and Facebook comments of groups in the survey. • The American Red Cross was the first large charity to join Twitter, and it has accumulated more then 530,000 followers since it took that action in 2007. The latest to join—Father Flanagan’s Boys’ Home, which started in December 2010—has 134 followers. That’s not to say there’s a correlation between early adoption and followers, though. Operation Blessing International Relief, which joined in October 2007, has about 2,300 followers. ======================== Nonprofits Help, Not Burden, State and Local Governments October 24, 2011; Source: The Wall Street Journal
Straddled by chronic budget shortfalls, state and local governments have been desperate for new sources of revenue. Some are now eyeing nonprofits that have not only been long-term partners of governments but are struggling themselves with shrinking revenues and increasing demand.
Chicago Mayor Rahm Emanuel, for instance, is keeping his campaign promise to start charging nonprofits for water and sewage services. His proposed 2012 budget calls for a 25 percent increase in water and sewer fees and the elimination of water fee exemptions for non-profits. This move is projected to net the city $7 million in needed revenues.
This is nothing new. There are those who have been clamoring for nonprofits to pay their fair share, since they do not pay property taxes. Nonprofits are increasingly being asked for payments-in-lieu-of-taxes or PILOTs. Nonprofits however do pay back, arguably more than they get. Nonprofits help governments provide services and goods at a discount, employ people in the community, pay payroll and sales taxes, and by New York City’s experience, rent office space that would otherwise remain unoccupied.
The Wounded Warrior Project, an organization dedicated to assisting injured veterans returning from Afghanistan and Iraq, has doubled its space in midtown Manhattan to 9,400 square feet. The Roosevelt Institute, which helps run the FDR Presidential Library and Museum and manages the Four Freedoms Center, signed a major lease expansion of 10, 400 square feet.
As the Wall Street Journal points out, “nonprofit organizations have long been a mainstay of New York's office market especially in older buildings in Midtown South, downtown and side streets in Midtown.” This year, despite hard times, at least 10 nonprofits have signed leases for more space than under their expiring leases It is understandable that there are those who demand that nonprofits help carry the load, but perhaps they should be fair and tally as well how much these organizations give back. Nonprofits can also do a better job at tooting their horn and letting us all know how much they contribute to our collective well-being. – Erwin de Leon ==================================== October 19, 2011 - Crescendo Interactive, Inc.
Yesterday, the United States Senate held an important hearing on the subject of tax reform and charitable giving. Recent proposals have recommended changing the tax code to cap the deduction for charitable gifts. Many in the charitable community have expressed concern that these proposed changes could reduce incentives for charitable giving, thus hurting America's charities and ultimately the communities that these charities serve.
A broad-based group of charities, together with companies and individuals that work with charities, have come together to sign a petition asking Congress and the President to protect the important role that charities play in America by preserving the charitable deduction.
We wanted to make you aware of this petition and ask you to consider joining Crescendo, along with more than 59,000 others, in asking Congress and the President to help charities by preserving the charitable deduction. You can click here to sign the petition by going to:
http://www.thepetitionsite.com/takeaction/133/452/331/?roi=echo4-15869069813-13299553-c17832e9cc12c3a74c4361e26b8a0130&z00m=20076595
Thank you for your help in supporting the important work of America's charities!
Kristen K. Schultz, JD, LLM
Senior Vice President
Crescendo Interactive, Inc.
================================== October 7, 2011 - Limits on Charity Tax Breaks for Jobs Bill No Longer Likely Richard White/Chronicle of Philanthropy By Suzanne Perry, Washington President Obama’s plan to pay for a jobs bill by limiting the tax break wealthy people get for their itemized deductions, including charitable gifts, appears dead—at least for now. Senate Democrats have rejected that proposal, releasing legislation Thursday that outlines an alternate way to cover the bill’s $447-billion price tag—a 5.6-percent surtax on income that exceeds $1-million. Mr. Obama says he endorses the new approach. “We’ve always said we would be open to a variety of ways to pay for it,” Mr. Obama said at a news conference Thursday. He said he still wants to find ways to overhaul the tax code to make it “fair and just,” including closing loopholes. However, he said, “in terms of the immediate action of getting this jobs bill passed, I’m fine with the approach they’re taking.” As part of the jobs bill outlined in September, Mr. Obama proposed limiting to 28 percent the write-offs that high-income people can get for their itemized deductions—compared with today’s maximum of 35 percent. His plan would apply to people with adjusted gross incomes of at least $200,000 ($250,000 for married couples). Related Content But Sen. Harry Reid of Nevada, the majority leader, and Sen. Charles E. Schumer, Democrat of New York, said this week that they would rather have millionaires foot the bill. Senator Schumer said that in high-cost regions of the country, couples earning $250,000 should not be considered rich. Senator Reid has scheduled a vote on the jobs bill for Tuesday. Because Republicans have always rejected the idea of limiting the charitable tax break, it is highly unlikely that the Republican-led House will revive the idea when it votes on the bill. However, Mr. Obama has proposed curtailing the value of itemized deductions four times now, so nonprofit leaders who oppose the plan worry that it could re-emerge in another form. For example, the new Congressional “super committee” on deficit reduction must find a way to pay for at least $1.2-trillion in budget savings over 10 years. “Similar misguided attempts to cap or eliminate tax incentives for charitable giving could also surface as Congressional tax-reform efforts begin in earnest,” Diana Aviv, president of Independent Sector, a coalition of charities and foundations, said in an e-mail to supporters. =============================== Some examples of sports philanthropy are a little hard to fathom. In European football—known as soccer to us Statesiders—the Spanish champion and overall European champion as well is Futbol Club Barcelona. For its 112 years, FC Barcelona has refused to sell advertising space on the players’ uniforms. In fact, instead of the logo of an auto company, airline, or bank, Barcelona uniforms display the UNICEF logo, because the club gives UNICEF $2 million per year. But despite its success on the football pitch, the club is a financial mess. It lost $12.7 million last year and has a debt of almost $450 million. Now the UNICEF logo will be relocated to a less-visible position on the jersey in order to accommodate the logo of Barcelona’s first-ever commercial sponsor—the Qatar Foundation. A five-year deal between Barcelona and the Foundation, which will infuse $225 million to the team, is now pending. The Qatar Foundation's website offers a paean to FC Barcelona, describing the team as a symbol of Catalan culture and identity. The Foundation notes that FC Barcelona gives 0.7 percent of its income to charitable projects through the FC Barcelona Foundation, and the players donate 0.5 percent of their salaries. The actual deal for the Foundation, whose mission is “unlocking human potential” through “partnerships with elite institutions,” is a bit harder to grasp. The website offers this explanation: Both the FC Barcelona Foundation and the Qatar Foundation [QF] are committed to unlocking human potential among young people through various projects and programs. We see this new partnership as an opportunity for two organizations who share the same values to work together and develop joint programs aimed at helping to improve lives. Following a deal struck between FC Barcelona and Qatar Sports Investment (QSI) in December 2010, QF was nominated to be the beneficiary of this agreement, which will run for five-and-a-half years until 2016, through the placing of its name on FC Barcelona’s team shirts and training wear. What’s less than clear is the role of Qatar Sports Investment. The press describes the sponsorship deal as an “investment” by the Foundation in the team, so who or what is Qatar Sports Investment and why would it do this to benefit the Qatar Foundation? =============================== This Daily Caller article calls President Barack Obama’s proposal to cap itemized deductions as a way to raise revenue “a plan to raise taxes on charitable donations by the wealthy.” That negative characterization seems in line with the reaction of most of the nonprofit sector. Just about everyone assumes that this proposal isn’t likely to pass, given not only the opposition of charities, but of the real estate industry, which is adamantly against limiting the home mortgage interest deduction even though it benefits owners, not renters, and higher-income homeowners more than lower income ones. Nonetheless, the Caller says that “many nonprofit advocacy groups plan to rally against [the president’s tax proposal] regardless, for fear that Congress will eventually grab funds now donated to charities.” David Thompson, the vice president for public policy at the National Council of Nonprofits, acknowledges that this notion, first proposed by Obama in connection with health care reform, is unlikely to pass, but he suggests that “a large number of folks are growing concerned” about future pressures on nonprofit revenues. Essentially, the fear is that this proposal might be the tip of the iceberg in terms of the government’s desire to capture nonprofit resources for government purposes. Chris Dubay of the Heritage Foundation notes that even “nonprofits aligned with the Democratic Party . . . all object to it.” As a result, he said, “those organizations are seeing what everyone sees—this isn’t going anywhere.” Here’s what concerns us in this analysis: Experts at the Center on Budget and Policy Priorities say that the limit on itemized deductions would cut charitable donations by only 1.3 percent. The Center on Philanthropy at Indiana University predicted a reduction of 2.1 percent. But like many nonprofits, Thompson “worries the losses could be greater,” according to the Caller. Thompson is quoted describing this as a “big deal.” Moreover, he suggests that itemized-deduction caps would “greatly hurt charities' support for the poor.” Independent Sector reportedly also opposes the tax plan, but the Caller has IS boss Diana Aviv acknowledging that the proposed tax change would only affect wealthy donors earning $250,000 or more—people who typically give to large charities such as museums and universities and who typically don’t give to anti-poverty charities. In her words, “Very few [of those wealthy donors] are clothing poor people.” NPQ has written about President Obama’s tax proposal a few times now. Maybe the big ultra-wealthy charities that cater to the rich have something to worry about (because capping the deduction might reveal that the rich actually give because of the tax benefit, not out of pure generosity), but for the bulk of nonprofits, it’s kind of hard to imagine their donors being adversely affected by the president’s proposal. ============================== Twenty-seven-year-old Howard Warren Buffett, grandson of legendary investor Warren Buffett, recently stepped into the position of executive director of his father’s Howard G. Buffett Foundation (HGBF), and he is bringing some new business thinking and White House policy experience to the role. Following his grandfather’s proven business approach of investing in companies with successful track records, Howard intends to direct his family foundation’s resources to proven strategies in the nonprofit world. A recent interview with Fast Company reveals how “rather than doling out cash to independent, uncoordinated actors with the most heart-string-tugging story,” Buffett instead intends to take a more systematic approach, “lining up nonprofits to tackle each part of the causal chain.” Collaboration and cost-effectiveness, words that are already familiar in the nonprofit sector, will also be two important themes for Buffett. He says flatly, “If you are an NGO, doing the exact same thing as another NGO, and that other NGO is doing better than you’re doing it, then you are in business for the wrong reason.” He is also interested in developing new incentives and legal means for nonprofits to merge—or “acquire one another” as a for-profit business leader might say. As a way of evaluating potential impact and deciding which projects to fund, Buffett has designed a survey that assesses scope, relevancy, cost-efficiency, and risk. Following this framework, a proposal “gets 3 points for affecting [more than] 1 million people, 2 for greater than 100,000, and 1 for less than 100,000.” Projects that are determined to be “unique” and/or “cost efficient” also get special recognition in this ranking system, even if they don’t have an especially wide reach. As a 10-year-old organization, HGBF has an international focus and a mission to improve the standard of living and quality of life for the world’s most impoverished and marginalized populations. In its 2010 annual report, the organization listed total assets of about $200 million and an average grant size of about $800,000. HGBF has set December 31, 2045 as the date for the dissolution of its assets. ============================= Congress Considers Eliminating Reduced Rates for Nonprofit Mail (Aug. 16, 2011) The Alliance of Nonprofit Mailers is based in Washington, D.C. (www.nonprofitmailers.org) The U.S. Postal Service’s financial crisis has resulted in the introduction of four different bills in Congress to address the problem. One of those bills, H.R. 2309, the Postal Reform Act, introduced by Congressman Darrell Issa (R-CA), contains a provision that would wipe out reduced rates for nonprofit mail. The Alliance of Nonprofit Mailers, which AFP works with on nonprofit mailing issues, has asked the association and its members to contact Congressman Issa and other members of the House of Representatives to let them know of the devastating effect the elimination would have on nonprofits’ ability to serve American society. Attached is a fact sheet that frames the issue and provides an outline for correspondence to Congressman Issa and other congressmen. Please do not copy this fact sheet in a letter or send the fact sheet as an attachment. Instead, briefly lift important points, emphasizing the impact information on your organization in Section II. It’s also important to include positive comments about the bill that are outlined in Section IV, noting that we agree with the primary purpose of the bill which is to rein in out-of-control Postal Service costs. Please keep your letter to one page--the simpler and more direct the better. Here is an example of how to construct your letter: Date Honorable Darrell Issa
Chairman, Committee on Oversight and Government Reform
United States House of Representatives
Washington, DC 20515 Dear Chairman Issa: We are writing to express our opposition to the nonprofit provision in H.R. 2309, the Postal Reform Act. Special postage rates for qualified nonprofit organizations have existed since 1951, reflecting the sense of Congress that nonprofits strengthen our civil society. The virtual elimination of the nonprofit rate discount as proposed in Section 403 of H.R. 2309 would equate to rate increases in the order of 35 percent. (Explain briefly how this would impact your organization, as outlined in Section II) We do not disagree with most of H.R. 2309, as it proposes to rein in out of control Postal Service costs. We support most of those cost control measures, including Section 111 which would allow the Postal Service to end Saturday mail delivery. Phasing out the nonprofit rate discount, however, would punish nonprofit mailers and the people they serve. It is unfair to punish nonprofits for the Postal Service’s inability to control its own costs. Sincerely, Your name In addition to Congressman Issa, letters also should be sent to the following members of the Committee on Oversight and Government Reform: Congressman Dennis Ross (R-FL)
Congressman Justin Amash (R-MI)
Congressman Jim Jordan (R-OH)
Congressman Jason Chaffetz (R-UT)
Congressman Connie Mack (R-FL)
Congressman Tim Walberg (R-MI)
Congressman Trey Gowdy (R-SC) The letters to these congressmen would have the same address as the sample above, but instead of “Chairman” in the salutation print “Congressman.” These congressmen are members of the committee, Congressman Issa is the chairman. All letters should be faxed to 202-225-3974. ============================== August 15, 2011 After weeks of dire predictions from many quarters about the potential effects of the debt ceiling deal, Stateline now reports that budget experts are saying that “the damage to state budgets may not be so bad after all.” The elements of Stateline’s prognosis are as follows: - The immediate spending cuts in the budget deal are to “discretionary” programs. Not only are mandatory programs such as Medicare and Social Security unaffected, so is Medicaid, which states really care about because it has a direct impact on their budgets.
- To keep up with expected inflation the $917 billion cut in discretionary spending over 10 years is not quite as bad as it appears, because that $917 billion number is adjusted for inflation. In dollar terms, discretionary funding would actually rise over those 10 years, though not fast enough.
- For fiscal year 2012, the deal reduces federal non-security discretionary spending by only $2 billion. According to the National Council of State Legislatures, this will give states another 12 months of close-to-level funding.
The congressional “Super Committee” is supposed to cut another $1.2 trillion in spending over 10 years. This could come in part from Medicaid reductions, but experts are reasonably confident that the committee will be unable to bridge the gap between the two parties and end up doing nothing, or at least nothing that does much damage to Medicaid.
- If the committee stalls as expected, $1.2 trillion in automatic cuts are “triggered,” beginning in 2013. But most mandatory programs such as Medicaid, Children's Health Insurance Program, TANF, and food stamps are exempt.
It doesn't take much to see that while state budgets vulnerable to Medicaid cuts might be protected in both the negotiated and triggered budget scenarios, other discretionary funding could be cut deeply: education, Head Start, affordable housing assistance, child care, job training and placement, and a raft of other human service programs. Stateline notes, “Some of these cuts would significantly alter state budgets and would hurt beneficiaries of federally funded services, but would not necessarily throw a state’s budget out of balance.” Nonprofits that are tied to Medicare and Medicaid and other health-related federal programs are likely to remain in decent shape. But for those nonprofits who support the poor by providing or advocating for their non-health needs, the budget situation looks increasingly dire. ============================= The Association for Healthcare Philanthropy just released a report with a wealth of interesting information for the wise and wonky fundraiser. AHP reports that giving to hospitals was $8.2 million in 2010 - up by 8 percent over the 2009 levels. In 2009 giving had, however, dropped by 11 percent from the year before. More than 60 percent of the 2010 gifts were derived from individuals. What was the money to be used for? According to an AHP spokesperson, 22 percent will fund construction and renovation and 21 percent will go to new and upgraded equipment. Only 18 percent will go to fund general operations but this figure has grown significantly in the last ten years from 7 percent or 8 percent and is expected to grow more as Medicaid and Medicare reimbursements are cut placing more importance on health care groups’ fundraising capacity. Additionally the report says that the cost to raise a dollar is now approximately 33 cents and return on fundraising investment has declined by 4 percent in 2010. Bottom line says the report: “Fundraising has become more challenging and, therefore, more expensive. Additional resources are needed to raise the same amount of funds during difficult economic times.” AHP CEO William C. McGinly says that in the context of the slow recovery healthcare organizations with strong philanthropic programs – those that did not make cutbacks that damaged their capacity – will be best positioned to do well over the coming year when he expects the upswing to continue. In this author’s opinion these numbers are not overwhelmingly promising – with increases in money raised eaten up by decreases in reimbursements and greater costs for raising each dollar, it sounds a little like a Sisyphean situation. We’d love to hear your thoughts. U.S. charitable giving shows modest uptick in 2010 following two years of declines Donations of $290.89 billion reflect general slow rebound in American economy after Great Recession ============================== Release Date: Jun 20, 2011 - The Center on Philanthropy
CHICAGO, Ill. (June 20, 2011) – Giving USA Foundation™ and its research partner, the Center on Philanthropy at Indiana University, today announced that total charitable contributions from American individuals, corporations and foundations were an estimated $290.89 billion in 2010, up from a revised estimate of $280.30 billion for 2009. The 2010 estimate represents growth of 3.8 percent in current dollars and 2.1 percent in inflation-adjusted dollars. “Our revised estimates show that 2008 and 2009 saw the largest drops in giving in more than 40 years as a result of the Great Recession, exceeding previous recessions’ impact on giving,” said Edith H. Falk, chair of Giving USA Foundation™. “Despite the fragile economic recovery, though, Americans continued--and even increased--their support of organizations and causes that matter to them in 2010. The $10.59 billion increase in the estimated total suggests that giving is beginning to recover as the economy slowly climbs out of the recession.” As it does annually, Giving USA revised its 2008 and 2009 estimates as the IRS revised and released its 2008 and 2009 giving estimates, which are used in Giving USA's estimating process. IRS estimates show larger than usual decreases in itemized giving. Giving USA also refined its estimating model to more fully reflect the impact of the worst recession in 70 years. As a result of both changes, Giving USA revised downward its estimates for total giving in 2008 and 2009, which were originally estimated at $307.65 billion and $303.75 billion, respectively. “Giving could have been construed as an unnecessary expense in the average household budget last year,” said Thomas W. Mesaros, CFRE, chair of Giving Institute: Leading Consultants to Non-Profits. “Charitable donations of $290 billion are very significant in a still-uncertain economy. Our estimates indicate that people across the country continued to care deeply about philanthropy in 2010.” “Total giving grew by 2.1 percent last year after adjusting for inflation. That’s good news following a combined drop of over 13 percent in 2008 and 2009,” said Patrick M. Rooney, Ph.D., executive director of the Center on Philanthropy. “But the sobering reality is that many nonprofits are still hurting, and if giving continues to grow at that rate, it will take five to six more years just to return to the level of giving we saw before the Great Recession.” Giving USA has reported U.S. charitable contributions since 1956. The national results from Giving USA estimate all charitable giving to all charitable organizations in the United States. The national estimates do not show changes that any one organization or any one geographical region or city might have observed; they calculate total giving by about 75 million households across the United States, the approximately 1 to 1.5 million corporations that claim charitable deductions, an estimated 120,000 estates, and about 77,000 foundations. The gifts go to more than 1.2 million IRS-registered charities and an estimated additional 350,000 American religious congregations. Giving estimates by type of donorIndividual giving rose an estimated 2.7 percent in 2010, to $211.77 billion (this represents a 1.1 percent increase in inflation-adjusted dollars). In estimating individual giving for 2010, the model included a new variable for inflation-adjusted change from the previous year – personal consumption – as well as variables used in prior years, including inflation adjusted change in the S&P 500 from the year before (based on last trading day), lagged giving, and the tax price. Through 2009, personal income was used as one of the variables; for the time period of the Great Recession, personal consumption was found to be a better overall indicator of giving. Charitable bequests were estimated to be $22.83 billion, an increase of 18.8 percent in 2010 (16.9 percent in inflation-adjusted dollars). Because estate gifts and tax returns are usually completed one to two years after the donor's death, stock market changes and other asset growth have an important effect on the growth in estate giving. Foundation grant making by private, community and operating foundations was $41 billion in 2010, according to the Foundation Center. It fell by 0.2 percent in current dollars (a decline of 1.8 percent in inflation-adjusted dollars). Corporate giving rose to an estimated $15.29 billion, up 10.6 percent in current dollars (8.8 percent in inflation-adjusted dollars). Corporate giving continues to reflect gifts of in-kind donations on behalf of American companies, particularly in the pharmaceutical sector. Giving estimates by type of recipientGiving USA looks at nine subsectors, or types of charitable recipients, in its annual report. Giving to religion, at 35 percent of the total, remains the largest share of all contributions, with an estimated $100.63 billion. The estimated increase in 2010 was 0.8 percent in current dollars, with a small decline of the same amount, 0.8 percent, in inflation-adjusted dollars. Giving to education rose to an estimated $41.67 billion, an increase of 5.2 percent in current dollars (3.5 percent in inflation-adjusted dollars). This is the first year of an increase in giving after two years of declines. Educational organizations received an estimated 14 percent of the total. Giving to foundations rose slightly to $33 billion, an increase of 1.9 percent in current dollars (0.2 percent in inflation-adjusted dollars). The Foundation Center and the Center on Philanthropy jointly estimate contributions to this type of recipient. This includes private, community and operating foundations. This subsector received an estimated 11 percent of the total. Giving to human services is estimated to be $26.49 billion, an increase of 0.1 percent in current dollars but a decrease of 1.5 percent in inflation-adjusted dollars. This subsector received an estimated 9 percent of the total. Human services includes the majority of the $1.43 billion donated to Haiti disaster relief. The Center on Philanthropy's disaster giving research estimates that 75 percent ($1.07 billion) of those gifts were given to human services organizations. If giving to Haiti disaster relief were not included, giving to human services would have declined by 4 percent in current dollars. The other 25 percent of Haiti relief giving ($0.36 billion) was contributed to international relief organizations and is included in the international affairs subsector. Giving to health also shows an estimated increase, to $22.83 billion (1.3 percent in current dollars or a decline of 0.3 percent in inflation-adjusted dollars). This subsector received 8 percent of the total. Giving to public-society benefit organizations was an estimated $24.24 billion, an increase of 6.2 percent in current dollars (4.5 percent in inflation-adjusted dollars). This subsector, which includes certain types of donor-advised funds as well as umbrella organizations such as United Way, Combined Federal Campaign and United Jewish Appeal that collect donations and redistribute them to other charitable organizations, received 8 percent of the total. The increase in giving to this subsector can in part be attributed to growth in freestanding donor-advised funds; Fidelity® Charitable Gift Fund, for example, reported contributions above $1.6 billion in 2010, which was a 42 percent increase over 2009. Giving to arts, culture and humanities organizations rose an estimated 5.7 percent in current dollars (4.1 percent in inflation-adjusted dollars), to $13.28 billion. This subsector was 5 percent of the 2010 total. Giving to international affairs (which includes relief, development and public policy activities) increased an estimated 15.3 percent in current dollars (13.5 percent in inflation-adjusted dollars), reaching $15.77 billion. This was 5 percent of the total. Giving to environment/animal-related organizations declined 0.7 percent in current dollars (a decline of 2.3 percent in inflation-adjusted dollars), to an estimated $6.66 billion. This was 2 percent of the total. Giving to individuals includes grants from foundations to benefit named individuals. Most often, these are gifts of medications to patients in need and are made by operating foundations created by pharmaceutical manufacturers. These gifts are estimated to have remained relatively steady in 2010, at $4.20 billion or 2 percent of the total. Every year, Giving USA also calculates the unallocated piece of the giving “pie;” for 2010, it is estimated to be $2.12 billion, or 1 percent of all giving. These are dollars that cannot be attributed to any one particular sector. Summary of Giving USA methodsConsistent with Giving USA's established practice, Giving USA estimates for prior years are revised annually as updated information becomes available from such entities as the IRS and other data sources. Following extensive research, Giving USA has refined its methodology in order to better capture the effects of extreme economic volatility, such as that experienced during the Great Recession, on charitable giving. The refined model uses a combined forecasting approach that incorporates both the Giving USA time-tested methodology and, for the first time, preliminary estimates of giving from the IRS. In the past, Giving USA used only final IRS data, which is released about two years after the close of the tax year. The 2010 estimates of charitable giving and the revised estimates for 2009 reflect these changes in the methodology. The final estimates for 2008 are based on IRS final data for that year. The refinement in methodology is in keeping with Giving USA's commitment to improve the robustness and accuracy of its estimates on an ongoing basis. The new methodology will also allow Giving USA to be even more responsive to real-world changes. The Giving USA methodology was developed to measure the relationship between charitable giving and key economic variables such as total household consumption, tax rates, and the stock market, and then to provide a two-year-ahead forecast on how changes in macroeconomic variables affect charitable giving. It is also important to note that Giving USA relies on IRS data, which covers charitable deductions made by only the one-third of U.S. households that itemize deductions. In addition, Giving USA includes estimates on non-itemizing households based on the Center on Philanthropy Panel Study (COPPS), the largest, longest running panel study of household giving over time in the world. This is important because nearly two-thirds of American households donate something to charitable organizations annually. Giving USA’s annual estimates are based on econometric studies using tax data, government estimates for economic indicators, and information from other research institutions. Sources of data used in the estimates include the Internal Revenue Service, Bureau of Economic Analysis, Foundation Center, INDEPENDENT SECTOR, Council for Aid to Education, National Center for Charitable Statistics at the Urban Institute, and National Council of Churches of Christ. The Giving USA report estimates changes in giving to subsectors (health, arts, education, religion, etc.). Except for giving to religion and giving to foundations, the subsector estimates are based on econometric models. These models use historical data from IRS Form 990s as well as contemporaneous economic variables that have been found to be highly predictive of changes in the uses of giving. The Center on Philanthropy at Indiana University prepares all the estimates in Giving USA for Giving USA Foundation™. A Note about Inflation AdjustmentsInflation-adjusted rates of change are based on estimates calculated using a Bureau of Labor Statistics (BLS) inflation converter, which rounds to two decimal points. When comparing the inflation-adjusted rates of change to rates of change in current dollars, the difference between the two is not a constant 1.6 percentage points (the rate of inflation used in the BLS converter for 2009 to 2010). This is a by-product of the rounding and is not due to the use of a different measure of inflation or an error in calculation. Note that when 2010 = 100, the BLS convertor generates a value of 98.39 for 2009. This indicates a slight rate of inflation for 2010. NOTES TO EDITORSData for 1970 through 2010 are available upon request to media organizations. The data show sources of contributions by year in current- and inflation-adjusted dollars and allocation of gifts by type of recipient organization, also in current- and inflation-adjusted dollars. Data also are available showing total giving as a percentage of gross domestic product; individual giving as a percentage of personal income and as a percentage of disposable personal income; and corporate giving as a percentage of corporate pre-tax profits. The preferred citation for Giving USA is: Giving USA, a publication of Giving USA Foundation™, researched and written by the Center on Philanthropy at Indiana University. For scholarly citations, the preferred form is the American Psychological Association style as follows: Giving USA. (2011). About Giving USAGiving USA is a public outreach initiative of Giving USA Foundation™. The Foundation, established in 1985 by Giving Institute: Leading Consultants to Non-Profits, endeavors to advance philanthropy through research and education. It is headquartered in Chicago, Ill. Prior to 1985, the Institute published the annual compendium. For more information, visit www.givingusa.org. Nonprofit Hospitals Raise $8.26 Billion in Donations in FY2010, With Individual Donors the Majority of Pledges, AHP Reports. But Fundraising Costs More in Recession WASHINGTON, D.C. (June 13, 2011) -- Despite the poor economy, U.S. nonprofit hospitals and health care systems managed an eight percent increase in philanthropic donations last year, to over $8 billion, with individual donors contributing almost 60 percent of that total. But fundraising costs climbed and return on investment dipped, according to the fiscal year 2010 Report on Giving USA issued today by the Association for Healthcare Philanthropy (AHP).
The AHP’s annual survey showed that donations and grants to health care institutions in the not-for-profit sector totaled $8.264 billion in fiscal year 2010, up $620 million over the $7.644 billion raised in fiscal year 2009. While last year’s total was still short of the $8.588 billion raised in FY 2008 and the FY 2007 level of $8.347 billion, the eight percent growth rate was the healthiest rate of advance since FY 2006.
Annual giving was the largest source of funds raised in FY 2010, the AHP report noted, accounting for 20.0% of all funds raised followed by major gifts (17.1%), capital campaigns (15.4%) and special events (14.8%). Planned giving, which includes bequests, charitable gift annuities, charitable remainder trusts, and similar long-term philanthropic arrangements, accounted for 9.5 % of donations last year, similar to pre-recession levels.
“These outcomes for fiscal 2010 were not unexpected. They reflect the slow pace of our economic recovery and shifts in giving priorities that have resulted,” said William C. McGinly, Ph.D., CAE, president and chief executive officer of AHP. “Earlier studies AHP released this year also showed signs of progress beginning in 2010, but far from a full recovery from the recession.”
The donated funds were used to support a range of programs and functions. In FY 2010, as in previous years, health care organizations directed the largest single share of their donated dollars to fund construction and renovation projects; however, that portion has declined since FY 2009, 22.0% compared to 27.3%, respectively. New and upgraded equipment purchases constituted the second largest category, at 20.6%, followed by general operations at 17.6% - both up slightly from FY 2009. Community benefit programs remained constant at about 10.7%.
Over the past three years of the recession, foundations have experienced a falling return on investment (ROI). Likewise, costs to raise each dollar have climbed. At 33 cents in FY2010, the cost-to-raise-a-dollar through philanthropy remained stubbornly above 30 cents for the third year in a row, and return-on-investment declined, on average, more than four percent to just $3.05 raised for every dollar spent on fundraising. Taken together, these metrics indicate increased expenses associated with raising the same (or for some foundations, less), than previous years. The bottom line: Fundraising has become more challenging and, therefore, more expensive. Additional resources are needed to raise the same amount of funds during difficult economic times.
Higher than average success in obtaining donations was demonstrated by fundraising programs that help to sustain hospitals associated with academic institutions and children’s hospitals, by programs that have been in existence for 15 or more years, and by those with at least four professional fundraisers on staff.
“Last year’s success was largely due to the dedicated work of the volunteers and professionals who support these philanthropic efforts,” said Mary Anne Chern, FAHP, ACFRE, chair of the AHP board and president of White Memorial Medical Center Charitable Foundation in Los Angeles. “The fact that more than $8.2 billion was contributed despite less than ideal economic conditions is a tribute to the generosity of the individual donors, businesses, and foundations who understand the vital role nonprofit health care institutions play in their communities.”
A copy of the AHP Report on Giving Fact Sheet is available for free on the AHP website at www.ahp.org/reportongiving. The complete report is available for a fee, or for free to AHP members who completed the survey.
============================ June, 2011 - IRS Identifies Organizations that Have Lost Tax-Exempt Status; Announces Special Steps to Help Revoked Organizations WASHINGTON, D.C. IRS –– The Internal Revenue Service today announced that approximately 275,000 organizations under the law have automatically lost their tax-exempt status because they did not file legally required annual reports for three consecutive years. The IRS believes the vast majority of these organizations are defunct, but it also announced special steps to help any existing organizations to apply for reinstatement of their tax-exempt status. Congress passed the Pension Protection Act (PPA) in 2006, requiring most tax-exempt organizations to file an annual information return or notice with the IRS. For small organizations, the law imposed a filing requirement for the first time in 2007. In addition, the law automatically revokes the tax-exempt status of any organization that does not file required returns or notices for three consecutive years. For several years, the IRS has made an extensive effort to inform organizations of the changes in the law through multiple outreach and education avenues, including mailing more than 1 million notices to organizations that had not filed. In addition, last year the IRS published a list of at-risk groups and gave smaller organizations an additional five months to file required notices and come into compliance. About 50,000 organizations filed during this extension period. Overall, the IRS believes the vast majority of small tax-exempt organizations are now in compliance with the 2006 law. “During the past several years, the IRS has gone the extra mile to help make tax-exempt groups aware of their legal filing requirement and allow them additional time to file,” IRS Commissioner Doug Shulman said. “Still, we realize there may be some legitimate organizations, especially very small ones, that were unaware of their new filing requirement. We are taking additional steps for these groups to maintain their tax-exempt status without jeopardizing their operations or harming their donors.” As part of this, the IRS issued guidance today on how organizations can apply for reinstatement of their tax-exempt status, including retroactive reinstatement. In addition, the IRS announced transition relief for certain small tax-exempt organizations – those with annual gross receipts of $50,000 or less for 2010 – that were made subject to the new "postcard" filing under the PPA. The relief allows eligible small organizations to regain their tax-exempt status retroactive to the date of revocation and pay a reduced application fee of $100 rather than the typical $400 or $850 fee. Full details are available in Notice 2011-43, Notice 2011-44 and Revenue Procedure 2011-36, issued today. If an organization appears on the list of organizations whose tax-exempt status has been automatically revoked it is because IRS records indicate the organization had a filing requirement and did not file the required returns or notices for 2007, 2008 and 2009. The list of organizations whose tax-exempt status has been revoked for failing to meet their filing requirement, which will be available on the IRS website at www.IRS.gov, includes each organization’s name, Employer Identification Number (EIN) and last known address. It is searchable by state. It also includes the effective date of the automatic revocation and the date it was posted to the list. The IRS will update the list monthly to include additional organizations that lose their tax-exempt status. The vast majority of tax-exempt groups file their required returns and are unaffected by the revocation listing. In addition, the IRS believes the vast majority of the newly revoked groups are no longer in existence and need to be removed from the tax-exempt listing as the 2006 law requires. This listing should have little, if any, impact on donors who previously made deductible contributions to auto-revoked organizations because donations made prior to the publication of an organization’s name on the list remain tax-deductible. Going forward, however, organizations that are on the auto-revocation list that do not receive reinstatement are no longer eligible to receive tax-deductible contributions, and any income they receive may be taxable. Publication on the list of organizations whose tax-exempt status has been revoked serves as notice to donors and others that they may no longer rely on a prior listing in IRS Publication 78, Cumulative List of Organizations, as an indication of an organization’s tax-exempt status or its eligibility to receive tax-deductible contributions. An updated version of Publication 78 with current listings will be published on the IRS website later this week. Nor can donors rely on an IRS determination letter issued to the organization prior to the date of automatic revocation. Existing organizations that seek to have their tax-exempt status reinstated must complete an application and pay a user fee regardless of whether they were originally required to file such an application. More information on the reinstatement process, including retroactive reinstatement, can be found on IRS.gov. ============================== June 3, 2011; Source: Deloitte The big accounting firm Deloitte conducts an annual survey on corporate volunteerism, generally looking at volunteerism from the corporate employee’s perspective. In this year’s survey, conducted in February of 2011 with a sample size of 1,500 interviewees working at companies with 1,000 or more employees, the focus is on the perspectives of millennials (age 21 to 35) in corporate workplaces that offer volunteer activities and programs. Deloitte’s findings indicate that volunteerism programs make millennials feel better about their corporate employers.
· Millennials who frequently participate in their company’s volunteer activities are: · Twice as likely to rate their corporate culture as very positive, as compared to millennials who rarely or never volunteer (56 percent versus 28 percent) · More likely to be very proud to work for their company (55 percent versus 36 percent) · More likely to feel very loyal toward their company (52 percent versus 33 percent) · Nearly twice as likely to be very satisfied with the progression of their career (37 percent versus 21 percent) · More likely to be very satisfied with their employer (51 percent versus 32 percent) · More likely to recommend their company to a friend (57 percent versus 46 percent)
In other words, it’s good business for companies to support employee volunteerism, but the millennial volunteers have their own interest as well: “Half of millennials (51 percent) surveyed say they want volunteerism to benefit them professionally.” Deloitte recognizes that millennials often leave their jobs due to “lack of career progress” and suggests that “skilled volunteerism” opportunities can help millennials feel like they are being given professional development and leadership opportunities through their employer that might mitigate the impetus to change jobs.
In light of these findings, Deloitte thinks that corporate volunteerism should be thought of as more than simply nice, feel-good stuff, but as a strategic business initiative helping the corporation’s bottom line by reducing staff turnover and increasing staff satisfaction among millennials.
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While many nonprofits are focusing on the deep cuts that were made in domestic human services programs in the FY2011 budget compromise between the House of Representatives and the White House and Senate last week, another important cut has been made that threatens to reverse some of the advances made in government transparency of late. The budget deal cut 75 percent from funding for the Electronic Government Fund, from $34 million to $8 million. This funding goes to support sites that provide transparency in government. Apparently it could have been worse. The House proposal had been as low as $2 million. But still this is a huge cut that ProPublica says could be "crippl(ing)" to sites such as USASpending.gov, Data.gov, and IT Dashboard. It isn't known at this point which sites the federal government will cut back on or shut down to accommodate this reduction. At risk, according to advocates, is the U.S. government's commitment to open government. On the other hand, the debate is already starting about what is or isn't working in sites such as Data.gov or generating alternatives in the wake of hints that Data.gov will be the first of these sites to go dark. Of course, open government is not an issue of the left or right-nor is it, with such a puny budget number, a critical component of budget-balancing cuts. Both Democratic and Republican policy advocates use open government sites to find and eliminate program duplication and waste or identify programs that are underfunded and should be bolstered. In other words, open government sites like these actually pay for themselves over and over again. ==============================
April 1, 2011: Wall Street Journal
If you want to understand better why so many states-from New York to Wisconsin to California-are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.
It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?
Every state in America today except for two-Indiana and Wisconsin has more government workers on the payroll than people manufacturing industrial goods. Consider California, which has the highest budg t deficit in the history of the states. The not-so Golden State now has an incredible 2.4 million government employees-twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida's ratio is more than 3 to 1. So is New York's.
Even Michigan, at one time the auto capital of the world, and Pennsylvania, once the steel capital, have more government bureaucrats than people making things. The leaders in government hiring are Wyoming and New Mexico, which have hired more than six government workers for every
manufacturing worker.
Now it is certainly true that many states have not typically been home to traditional manufacturing operations. Iowa and Nebraska are farm states, for example. But in those states, there are at least five times more government workers than farmers. West Virginia is the mining capital of the world, yet
it has at least three times more government workers than miners. New York is the financial capital of the world-at least for now. That sector employs roughly 670,000 New Yorkers. That's less than half of the state's 1.48 million government employees.
Don't expect a reversal of this trend anytime soon. Surveys of college graduates are finding that more and more of our top minds want to work for the government. Why? Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly
valued in these times of economic turbulence. When 23-year-olds aren't willing to take career risks, we have a real problem on our hands. Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles.
The employment trends described here are explained in part by hugely beneficial productivity improvements in such traditional industries as farming, manufacturing, financial services and telecommunications. These produce far more output per worker than in the past. The typical farmer, for
example, is today at least three times more productive than in 1950.
Where are the productivity gains in government? Consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period,
public-school employment doubled per student, according to a study by researchers at the University of Washington. That is what economists call negative productivity.
But education is an industry where we measure performance backwards: We gauge school performance not by outputs, but by inputs. If quality falls, we say we didn't pay teachers enough or we need smaller class sizes or newer schools. If education had undergone the same productivity revolution that manufacturing has, we would have half as many educators, smaller school budgets, and higher graduation rates and test scores.
The same is true of almost all other government services. Mass transit spends more and more every year and yet a much smaller share of Americans use trains and buses today than in past decades. One way that private companies spur productivity is by firing underperforming employees and rewarding excellence. In government employment, tenure for teachers and near lifetime employment for other civil servants shields workers from this basic system of reward and punishment. It is a system that breeds mediocrity, which is what we've gotten.
Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many services-fire fighting, public transportation, garbage collection, administrative functions, even prison operations-through competitive contracting to private providers. But unions have blocked many of those efforts. Public employees maintain that they are underpaid relative to equally qualified private-sector workers, yet they are deathly afraid of competitive bidding for government services.
President Obama says we have to retool our economy to "win the future." The only way to do that is to grow the economy that makes things, not the sector that takes things.
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April 1, 2011; Source: State Journal - A recently released survey of 1,500 churches found that nearly half have seen an increase in donations between 2009 and 2010 despite the continuing ravages of the recession, while only 36 percent of churches have experienced an increase in donations the year before.
The State of the Plate survey, co-sponsored by Christianity Today magazine http://www.christianitytoday.com/, MAXIMUM Generosity, and the Evangelical Council for Financial Accountability http://www.ecfa.org/HomePage.aspx, also found that only 36 percent of churches have experienced an increase in donations between 2008 and 2009. Declines in giving were reported by 39 percent of the surveyed churches, with the largest decreases focused on churches in the Southeast and on smaller churches (with attendance of less than 250).
How reliable is this survey? Of the more than 300,000 churches in the U.S 1,500 responded to the survey. But rather than a random or stratified survey, the State of the Plate survey (PDF) reflected the constituents of the three partnering co-sponsors.
The religious demographics of the respondents were Mainline Protestant (13 percent), Evangelical (24 percent), Baptist (23 percent), Charismatic/Pentecostal (12 percent), Independent/Nondenominational (21 percent), Catholic/Orthodox (2 percent), and other (5 percent).
Most research suggests that giving to religion (accounting for roughly half of all charitable donations) is not significantly impacted by recessions (PDF). Has the Great Recession of 2008-2010 changed historical patterns of giving? It is difficult to reach hard and fast conclusions based on one constituency-based survey.
The State of the Plate executive summary is interesting reading, particularly for one additional finding: The survey told respondents that “in the new federal budget the government is looking at changing the rules regarding charitable deductions” and asked how donations would change “if the charitable deduction were significantly reduced or eliminated.”
It was an odd question, because the only change in the charitable deduction in the proposed FY2012 budget is a limitation on deductions by very wealthy individuals, not a reduction or elimination of all deductions or deductions aimed at religion. Ninety-one percent said that their churches would be “negatively affected.” One-fifth cited “slight” impacts, two-fifths “some”, and 30 percent said that a change in the charitable deduction would have a “significant” impact.
============================== March 20, 2011; Source: Denver Post The Colorado Health Foundation doesn't like the shape of the state's future. Literally. According to findings from its 2010 Colorado Health Report Card, released last week, the state is on a path to lose its bragging rights as the only one in the nation with an obesity rate under 20 percent.
Writing in the Denver Post, Anne Warhover, president and CEO of the Colorado Health Foundation, says that "distinction becomes more dubious with each passing year as statistics show adult Coloradans are getting heavier along with the rest of the country." She also notes that the study shows that not all of Colorado's children are in the pink of health. Some 14 percent of Colorado children are rated obese — ranking it No. 23 among states.
But other grim findings, says Warhover, suggest there's even more to be concerned about. "The Report Card shows that . . . Colorado lags far behind in prenatal health (No. 34); adults without insurance coverage (No. 30); and dental care for children (No. 38)." Warhover says the point in issuing the report card, along with its partner the Colorado Health Institute, wasn't meant to scold state residents. Instead, it is "to use data to evaluate objectively where Colorado succeeds and where it falls short so we can improve the overall health of our citizens."
She notes that for its part, the foundation made 306 grants to 227 organizations, totaling more than $88 million in 2009. That money went to support efforts to help make Colorado residents healthier, especially those living in communities where lifestyles and limited access to quality pose the greatest long-term risks. Grants were used to strengthen safety net clinics, build school-based health centers, promote healthy food and physical activity in schools, and support a program that covers the costs of student loans for health professionals in exchange for practicing in underserved communities. As with any report card, Warhover is hopeful that past performance isn't necessarily a definitive indicator of future results. That's why, despite her concerns, she also writes that: "With innovative state-wide initiatives and federal support, Colorado can move from being a gifted student with below-average grades to head of the class." Now that would be something to brag about. ============================= Fundraising for Japan Disaster Relief Surpasses $100 Million Mark (3/22/11)
Americans have donated more than $105 million to relief and recovery efforts in Japan, three-quarters of which has gone to the American Red Cross ( http://www.redcross.org/ ), the Chronicle of Philanthropy reports.
Donations for relief efforts after the March 11 quake and tsunami have been running below levels recorded in the wake of last year's earthquake in Haiti, which leveled large swaths of the
impoverished Caribbean nation and resulted in many more deaths. In addition, many charities, perhaps chastened by the criticism they received after the chaotic response to the Haiti quake, seem
to have been less aggressive in their fundraising appeals this time around.
Still, Japan and the Japanese people are facing significant challenges. Japanese police estimate that the death toll from the quake and tsunami will surpass 18,000, while the World Bank reports that it could take five years to rebuild, at a cost of up to $235 billion. A severe shortage of fuel in the affected
region also has emerged as a significant, albeit temporary, obstacle to the efforts of relief workers. Initially caused by quake-related damage to six oil refineries around the country, the shortages have been exacerbated by an insufficient number of fuel-transport vehicles, fuel hoarding, and traffic jams along key delivery routes. Japanese officials expect to resolve the situation within the week.
The situation at the Fukushima nuclear complex is less clear. While an official with the U.S. Nuclear Regulatory Commission said the complex is "on the verge of stabilizing," he also acknowledged that two reactors at the complex were too damaged for cooling systems to restart, even after electricity to the
complex has been restored. In addition, Japanese nuclear engineers have discovered critically damaged machinery that will take two or three days to repair.
Elsewhere, China, Japan's biggest trading partner, has ordered Japanese food imports to be tested for radiation contamination, and the World Health Organization has said the Japanese government will have to do more to assure its own people about food safety. "Walking outside for a day and eating food repeatedly are two different things," WHO spokesman Gregory Hartltold the Associated Press. "This is why they're going to have to take some decisions quickly in Japan to shut down and stop food being
used completely from zones that they feel might be affected."
Talmadge, Eric. Yamaguchi, Mari. "Workers Flee Japan Nuclear
Plant as Smoke Rises." Associated Press 3/21/11. ============================ March 15, 2011; Source: The Gazette With the eyes of the world focused on Japan, it's easy to forget or overlook serious problems that also need immediate attention here in the United States. Even when our focus isn't elsewhere, these problems frequently don't attract the kind of urgent support they need. That's not the case in Colorado, where the El Pomar Foundation has made its fourth distribution since 2008 of $1 million in emergency funds to help nonprofits struggling to serve people who themselves are struggling. Some 140 groups got the surprise news – delivered via phone calls – earlier this week about the unexpected grants. "Oh my gosh – it was totally out of the blue,” said Carey Adams, president of God's Pantry's Ministry, which provides free food and clothing to the needy. “I wasn’t expecting it and I didn’t ask for it, and those are always the best blessings. Times are hard, and we’re grateful.” According to The Gazette, "Demand for assistance with such basics as food and utilities remains strong three years after the start of the recession in late 2007 – something El Pomar trustees discovered when researching needs throughout the state. They heard from representatives of their nine advisory councils, which cover the state’s rural areas, and looked at a survey conducted late last year showing 95 percent of Colorado organizations saw increased demand for their services from the previous year." The foundation, which made the awards through its Colorado Assistance Fund, has made it clear that money must go directly to people their grantees serve. We monitor the CAF program to make sure they’re not buying automobiles or furniture for the office,” said El Pomar Chairman and CEO Bill Hybl. “This all has to go for direct services.” ============================= March 13, 2011; Source: The Denver Post In Colorado, Kaiser Permanente and Rocky Mountain Health Plans have built up enormous reserves even while raising premiums. All nonprofit insurers are required by state regulations to keep a minimum in reserves to cover themselves but in many states there is no maximum. In Michigan the maximum is set at 1000 percent of the minimum required, and in Pennsylvania the state says no more than 750 percent of the minimum should be kept aside. But in Colorado, Rocky Mountain HMO now boasts $110 million in reserves, which is approximately 1,743 percent of the required minimum, and Kaiser ended last year with $666 million – a more restrained 1,287 percent of the required minimum. This is not the first time that Colorado has seen excessive reserves. In 2008 the state required Kaiser to spend some of its reserves to benefit consumers, but now its reserves have risen to three times the size they were then. Pennsylvania, Maryland, Rhode Island, and the District of Columbia have rejected rate increases or called for community spending when surpluses have gotten too high. Colorado State Sen. Morgan Carroll, who sponsored a bill in 2008 directing insurance regulators to consider everything from executive pay to surplus levels when approving annual premium requests says, "An excessive and continually growing surplus is a good indicator that insurance rates should actually be decreased." ============================ March 7, 2011: Budget Proposal Includes Permanent Limit on Charitable Deduction President Obama submitted his Fiscal Year 2012 Budget to Congress, and it includes a permanent limit on the value of itemized deductions – including the charitable deduction – for certain tax payers. The proposal is similar to language included in last year’s budget plan and calls for a 28 percent cap on itemized deductions for individuals earning more than $200,000 a year and couples earning more than $250,000 a year. The new budget plan indicates that “savings from this proposal” will increase tax revenues by roughly $320 billion over 10 years and will be used to offset the cost of a three-year “patch” to the current Alternative Minimum Tax. ============================ PROPOSED BUDGET REDUCTED February 14, 2011: Source:Office of Management and Budget | In his proposed FY2012 budget, President Obama is calling for a 12.6 percent reduction in funding for the National Endowment for the Arts, one of the nation's main cultural grantmaking agencies. The combined grantmaking budget of the National Endowment for the Arts and its sister agency, the National Endowment for the Humanities, would be reduced by $22 million from $168 million to $146 million. The President's rationale is that the two agencies are working to better coordinate and consolidate some functions, which will result in overhead cost savings. But $22 million worth of savings? As a percentage of the proposed federal budget $3.73 trillion, the NEA and NEH appropriations don't even register. Even adding in the $861.5 million requested for the Smithsonian ($635.5 million for salaries and expenses and $225 million for facilities, including $125 million for the construction of the National Museum of African American History and Culture) is still is hardly more than a blip on the screen. Of course, the president's funding proposal might sound generous after Congressional budget cutters start whacking. Neither the Arts nor the Humanities agencies are on the agenda of conservative Republicans for saving, much less budget increases. This is much more than an issue for nonprofit arts organizations. It is a question about this nation's commitment to investing in the arts. =========================== Religious Donors Give More February 14, 2011: Source: beliefnet.com The study referenced in this blog post on beliefnet.com reinforces the fact that donors are definitely not a zero sum game. A study conducted by Grey Matter Research Consulting suggests that 50 percent of those that give to their houses of worship also give to other causes. Additionally, the more the donor gives to his or her church, the more he or she will give elsewhere. The study, based on a telephone and online survey of 2,005 people, found that “donors who gave less than $100 to a house of worship also donated an average of $208 to other charities. Those who gave between $100 and $499 to a congregation gave an average of $376 to others. Donors of between $500 and $999 to places of worship gave an average of $916 to others.”—Ruth McCambridge
============================ Most Donors Plan to Maintain Level of Charitable Giving Survey Finds conducted by Fidelity Charitable Gift (10/23/10) ( http://www.charitablegift.org/ ).
The majority of American donors plan to maintain their level of charitable giving in the near term, despite volatility in the financial markets and an uncertain economic outlook.
Fifty-five percent of those who responded to the survey said they planned to maintain their level of giving in the fourth quarter, while 8 percent said they would give more than in past years in response to growing needs. At the same time, more than a third (36 percent) of respondents said they planned to give less due to
financial limitations (30 percent) or the uncertain tax climate (6 percent); those respondents were split evenly between cutting back on donations across all the charitable causes they support and prioritizing their giving. In addition, of those who said they would give less, nearly 60 percent said they planned to volunteer their time and skills, while 21 percent said they planned to donate other types of assets.
According to the survey, 66 percent of donors -- and 81 percent of those with household incomes of more than $100,000 -- had planned all or most of their charitable giving for the year in advance. The survey also found that tax deductions were not an overriding factor in the giving plans of most donors, with only 31 percent saying it was a significant consideration and 88 per-cent saying they would not change their giving based on an
increase in the charitable tax deduction.
"There's no denying that it's been a challenging year for many Americans," said Sarah C. Libbey, president of the Fidelity Charitable Gift Fund. "Priorities and pocketbooks are stretched, while the call for charitable giving is greater than ever. Yet, it is clear that Americans are deeply committed to giving --whether money or time -- to the causes they care about, and that this commitment endures through both good and challenging times." =============================
WHAT OTHER STATES ARE DOING October 17, 2010 - Donations to the nation’s biggest charities dropped 11 percent last year (2009), a decline that was the worst in the two decades according to the Chronicle of Philanthropy’s Philanthropy 400 ranking. Worse, they do not expect to do any better in 2010.
The 400 charities surveyed raised $68.6-billion in 2009. The drop they suffered in contributions was nearly four times as great as the next biggest annual decrease—2.8 percent in 2001.
Six of the ten organizations that raised the most money in 2009 saw declines. Two of the hardest hit were, Food for the Poor (No. 6) saw contributions fall by more than 27 percent, while, reportedly, donations to the Fidelity Charitable Gift Fund (No. 7) plunged by 40.3 percent, this due to the fact that donations to the Fund are often made in stock and those were “not very popular” last year.
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Forty U.S. Families Take Giving Pledge Billionaires Pledge Majority of Wealth to Philanthropy
SEATTLE – Aug. 4, 2010 – Forty of the wealthiest families and individuals in the United States have committed to returning the majority of their wealth to charitable causes by taking the Giving Pledge. The announcement of this first group was made by Warren Buffett approximately six weeks after kicking off the long-term charitable project with Bill and Melinda Gates. “We’ve really just started, but already we’ve had a terrific response,” said Warren Buffett, pledge co-founder and chairman and CEO of Berkshire Hathaway. “At its core, the Giving Pledge is about asking wealthy families to have important conversations about their wealth and how it will be used. We’re delighted that so many people are doing just that – and that so many have decided to not only take this pledge but also to commit to sums far greater than the 50% minimum level.” Wealthy supporters from throughout the country have come forward to join the pledge, including the following 40 families and individuals. A full list of those taking the pledge and personal pledge letters by many of these supporters outlining their commitment to give is available online at www.givingpledge.org .
The Giving Pledge is an effort to help address society’s most pressing problems by inviting the wealthiest American families and individuals to commit to giving more than half of their wealth to philanthropy or charitable causes. The pledge is a moral commitment to give, not a legal contract, and it does not involve pooling money or supporting a particular set of causes or organizations. While it is specifically focused on billionaires, the idea takes its inspiration from other efforts that encourage and recognize givers of all financial means and backgrounds. Pledge Signatories California Eli and Edythe Broad Michele Chan and Patrick Soon-Shiong Ann and John Doerr Larry Ellison Barron Hilton Joan and Irwin Jacobs Lorry I. Lokey George Lucas Alfred E. Mann Nebraska Warren Buffett Walter Scott, Jr. New York Michael R. Bloomberg Barry Diller and Diane von Furstenberg Elaine and Ken Langone Ronald O. Perelman Peter G. Peterson Tashia and John Morgridge Bernard and Barbro Osher Herb and Marion Sandler Jeff Skoll Tom Steyer and Kat Taylor Julian H. Robertson, Jr. David Rockefeller Jim and Marilyn Simons Sanford and Joan Weill Shelby White Georgia Bernie and Billi Marcus Ted Turner Hawaii Pierre and Pam Omidyar Washington, D.C. / Maryland David M. Rubenstein Vicki and Roger Sant Michigan Thomas S. Monaghan Missouri Jim and Virginia Stowers Oklahoma George B. Kaiser Pennsylvania Gerry and Marguerite Lenfest Texas Laura and John Arnold T. Boone Pickens Utah Jon and Karen Huntsman Washington Paul G. Allen Bill and Melinda Gates Select Pledge Letter Excerpts The following excerpts have been taken from letters written by pledge signatories on their personal motivation to give. Please visit www.givingpledge.org to view these letters and others in their entirety. • Laura and John Arnold: “We view our wealth in this light – not as an end in itself, but as an instrument to effect positive and transformative change.” • Michael R. Bloomberg: “If you want to do something for your children and show how much you love them, the single best thing – by far – is to support organizations that will create a better world for them and their children. And by giving, we inspire others to give of themselves, whether their money or their time.” • Eli and Edythe Broad: “Those who have been blessed with extraordinary wealth have an opportunity, some would say a responsibility – we consider it a privilege – to give back to their communities, be they local, national or global.” • Warren Buffett: “Were we to use more than 1% of my claim checks (Berkshire Hathaway stock certificates) on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others.” • Bill and Melinda Gates: “We have been blessed with good fortune beyond our wildest
expectations, and we are profoundly grateful. But just as these gifts are great, so we feel a great responsibility to use them well. That is why we are so pleased to join in making an explicit commitment to the Giving Pledge.” • Barron Hilton: “It is my hope that others are inspired by my father’s story, and by our family’s steadfast adherence to his charitable philosophy.” • Jon and Karen Huntsman: “It has been clear to me since my earliest childhood memories that my reason for being was to help others.” • George B. Kaiser: “I had the advantage of both genetics (winning the “ovarian lottery”) and upbringing. As I looked around at those who did not have these advantages, it became clear to me that I had a moral obligation to direct my resources to help right that balance.” • Gerry and Marguerite Lenfest: “The ultimate achievement in life is how you feel about yourself. And giving your wealth away to have an impact for good does help with that feeling." • Lorry I. Lokey: “There’s an old saying about farmers putting back in to the ground via fertilizer what they take out. So it is with money. The larger the estate, the more important it is to revitalize the soil.” • George Lucas: “My pledge is to the process; as long as I have the resources at my disposal, I will seek to raise the bar for future generations of students of all ages. I am dedicating the majority of my wealth to improving education.” • Tashia and John Morgridge: “The more personally involved we have become with the causes we support the more effective we seem to be.” • Peter G. Peterson: “As I watched and learned from my father’s example, I noticed how much pleasure his giving to others gave him. Indeed, today, I get much more pleasure giving money to what I consider worthwhile causes than making the money in the first place.” • David Rockefeller: “Our family continues to be united in this belief. • Jeff Skoll: “The world is a vast and complicated place and it needs each of us doing all
we can to ensure a brighter tomorrow for future generations.” • Tom Steyer and Kat Taylor: “Surely the pleasure we derive from St. Francis’ active verbs of consoling, understanding, loving, giving and pardoning far outweigh any selfish and passive pleasures of owning, having, or possessing.” • Ted Turner: “I’m particularly thankful for my father’s advice to set goals so high that they can’t possibly be achieved during a lifetime and to give help where help is needed most. That inspiration keeps me energized and eager to keep working hard every day on giving back and making the world a better place for generations to come.” • Sanford and Joan Weill: “Our Pledge is this: We will continue to give away all of the wealth we have been so fortunate to make except for a very small percentage allocated to our children and grandchildren between now and the time we pass because we are firm believers that shrouds don’t have pockets.” ============================ Charity Navigator - August 2010 How Do We Measure Accountability and Transparency? What We're Looking For?We define accountability and transparency in assessing charities as follows: Accountability is an obligation or willingness by a charity to explain its actions to its stakeholders, including government, donors, beneficiaries, and the public at large.
We believe that charities that are accountable and transparent are more likely to act with integrity and learn from their mistakes because they want donors to know that they're trustworthy. Generally speaking, charities that follow best practices in governance, donor relations and related areas are less likely to engage in unethical or irresponsible activities. Therefore, the risk that charities would misuse donations should be lower than for charities that don't adopt such practices.
When examining accountability and transparency, Charity Navigator seeks to answer two basic questions:
- Does the charity follow ethical best practices?
- Does the charity make it easy for donors to find critical information about the organization?
What Data We UseWe consider two data sources when examining accountability and transparency: - A review of the organization’s website; and
- Additional information available from the newly expanded IRS Form 990.
Please note that, at this time, Charity Navigator isn’t able to make its own independent assessments of the information charities provide to donors. For now, our goal is to let donors know whether charities are making certain kinds of important information readily available to donors. We plan to further enhance our methodology and conduct our own reviews of that information starting in 2011. Here’s what information we collect from each source: ============================ Nearly 40 percent of nonprofit organizations lack adequate staff to deliver their programs and services, a new report from the Johns Hopkins University Listening Post Project finds.
According to the report, Recession Pressures on Nonprofit Jobs ( 17 pages, PDF: http://bit.ly/bXad7r ), almost a third of the 526 organizations surveyed by the project reported making work-force reductions over the preceding six months (October 2009 to March 2010), while only 23 percent reported employment gains over the same period and 46 percent reported no change in head count despite facing greater demand for their services.
In addition to workforce reductions, the survey found that nonprofits have taken other actions that impact staff and their ability to deliver critical programs and services; they include "refining" job descriptions (49 percent), often a euphemism for assigning the responsibilities of laid-off staff to remaining employees; salary freezes (39 percent); waiting to fill new positions (36 percent); increasing staff hours (23 percent); cutting or reducing benefits (23 percent); increasing non-program work for program staff (12 percent); and wage reductions (12 percent).
The survey also found that employment changes varied significantly by field. For instance, organizations in elderly servicesband community and economic development reported overall employment growth, while theater groups reported job reductions of 6 percent, orchestras 3 percent, museums 1 percent, and children and family service organizations 0.7 percent. Arts and culture organizations have been hit particularly hard by the recession, with 56 percent of nonprofit theaters and 53 percent of museums reporting inadequate staff to maintain their existing activities.
In response to a question about the impact of the recently enacted Federal HIRE Act, which provides exemptions from the employers' portion of payroll taxes (amounting to 6.2 percent of salaries), 15 percent of the respondents agreed that the act would encourage their organization to hire new workers in 2010, while 42 percent doubted that it would encourage their organizations to do so.
"The pressures on nonprofits have accelerated and are clearly taking their toll," said Johns Hopkins Center for Civil Society Studies director Lester Salamon, author of the survey. "Organizations have shown enormous resilience and commitment to their critical missions, but this has come at a price."
"Recession Taking a Toll on Nonprofit Workers and Programs." Johns Hopkins Center for Civil Society Studies Press Release 7/14/10. ===========================
June 24, 2010: Source: Bloomberg.com We know that giving is down generally in the U.S. but where are the 2.87 million millionaires of this country putting their money? According to the findings of The World Wealth Report released this week by Capgemini SA and Merrill Lynch & Co. millionaires are putting more into "tangible assets" in the form of luxury collectibles such as yachts, jets and high-end cars; art; jewelry, gems and watches; other collectibles such as wine and coins; sports investments, including teams and race horses, club memberships, musical instruments and other items. The report was compiled from a survey of 1200 wealth managers serving 150,000 clients across 71 countries. Spending on such “luxury collectible” items increased from 27 percent in 2008 to 30 percent in 2009. About the charitable behavior of the millionaires in question? According to this study, the charitably minded are looking more to wealth management firms. “It’s not just blanketing several charities and hoping for the best,” said Van der Linde. “They are now looking to wealth management firms for advice on how to make philanthropy part of their investment planning." =============================
Foundation Giving Declined by Record 8.4 Percent in 2009 a study finds.
Challenged by a prolonged economic downturn, the nation's grant-making foundations cut their giving by an estimated 8.4 percent in 2009, a new report from the Foundation Center finds. The decline is the steepest since the center began tracking the data in 1975.
Based on a survey of more than 1,200 large and midsize foundations, the 2010 edition of Foundation Growth and Giving Estimates found that grant dollars awarded fell from $46.8 billion in 2008 to $42.9 billion in 2009, and that the decline in giving totaled less than half the 17 percent loss in foundation assets recorded in 2008. The report also found that independent and family foundations, which represent nearly 90 percent of all foundations, reduced their giving by 8.9 percent, to $30.8 billion, in 2009; that corporate foundation giving decreased by 3.3 percent, to $4.4 billion; and that community foundation giving declined by 9.6 percent, to $4.1 billion.
Several factors helped to moderate the overall decline in foundation giving, including the decision of a significant number of funders to reduce their operating expenses and/or tap their endowments to shore up their giving; an increase in giving by the Bill & Melinda Gates Foundation; a continuation of gifts and bequests to new and existing foundations; and the practice of asset-averaging by some foundations, which reduces the impact on giving of year-to-year fluctuations in asset values.
Findings from the survey also suggest that foundation giving will remain flat in 2010 -- a less pessimistic view than respondents held a year ago. And should the economy and stock market continue to rebound, foundation giving may show positive, albeit modest, growth in 2011.
"The economic crisis has not ended for this country's nonprofits, and it will be some time before foundations are in a position tohelp them return to growth," said Foundation Center president Bradford K. Smith. "But funders have made exceptional efforts to lessen the pain faced by the nonprofit community."
"2009 Saw Record Decline in Foundation Giving." Foundation Center Press Release 4/16/10. =========================== 2009 Saw Record Decline in Foundation Giving - Foundation Center
(April 20, 2010) The recent economic crisis caused the more than 75,000 grantmaking foundations in the United States to cut their 2009 giving by an estimated 8.4 percent--by far the largest decline ever tracked by the Foundation Center. Grant dollars fell from $46.8 billion in 2008 to $42.9 billion in 2009.
Several factors helped to moderate the overall decline in 2009 foundation giving. Principal among them were the decision of a significant number of funders to reduce their operating expenses and/or draw upon their endowments to shore up their giving during the crisis; increased giving by the Bill & Melinda Gates Foundation and other grantmakers; continuing gifts and bequests from donors into new and existing foundations; and the practice of asset-averaging by some foundations, which reduces the impact on giving of year-to-year fluctuations in asset values.
Other key estimates for 2009 include:
- Independent and family foundations - which represent close to nine out of 10 foundations - reduced their giving 8.9 percent to $30.8 billion in 2009.
- Corporate foundation giving decreased 3.3 percent to $4.4 billion in 2009.
- Community foundation giving declined 9.6 percent to $4.1 billion in 2009, exceeding decreases by independent and corporate foundations.
Findings from the Foundation Center's annual "Foundation Giving Forecast Survey" suggest that 2010 foundation giving will remain flat - a less pessimistic outlook than respondents anticipated a year ago. Should the economic rebound not derail, foundation giving may show positive, though modest, growth in 2011. "The economic crisis has not ended for this country's nonprofits, and it will be some time before foundations are in a position to help them return to growth," said Bradford K. Smith, president of the Foundation Center. "But funders have made exceptional efforts to lessen the pain faced by the nonprofit community."
About the Foundation Giving Survey Giving projections for 2009 through 2011 reported in Foundation Growth and Giving Estimates are based on responses to the Foundation Center's 2010 "Foundation Giving Forecast Survey" from 1,248 large and mid-size foundations across the country, combined with year-end economic indicators. Final giving figures for 2009 will be available in early 2011. Foundation Growth and Giving Estimates also presents findings based on actual 2008 giving and assets tracked by the Foundation Center for the more than 75,000 independent, corporate, community, and grantmaking operating foundations in the United States.
About the Foundation and Corporate Response to the Economic Crisis The Foundation Center created a Focus on the Economic Crisis area of its website in 2008 that links to numerous resources to help grantmakers, nonprofits, and the general public understand the impact of the economic downturn on institutional philanthropy. Visit foundationcenter.org/focus/economy to access these resources. ============================ Gates Foundation Commits $10 Billion to Vaccine-Related Programs
The Bill & Melinda Gates Foundation ( http://www.gatesfoundation.org/) has announced a ten-year, $10 billion commitment to support the research, development, and delivery of vaccines for the world's poorest countries.
Announced at the annual meeting of the World Economic Forum in Davos, Switzerland, the commitment will fund a range of vaccine-related activities, from basic research to innovations in delivery. Using a model developed by a consortium led by the Institute for International Programs at the Johns Hopkins Bloomberg School of Public Health, the foundation projects that scaling up the delivery of life-saving vaccines for the world's children by 10 percent could prevent the deaths of some 7.6 million children under the age of five between 2010 and 2019. If a malaria vaccineis introduced by 2014, that number could reach 8.7 million, with even more lives saved if vaccines for diseases such as tubercu-
losis are developed and introduced in the coming decade.
Although the commitment is believed to be the largest pledge ever made by a grantmaker to a single cause, the Gates Foundation pointed out that billions more dollars will be needed from other funding sources -- foundations, governments, and the private sector -- to achieve the ambitious goal of vaccinating 90 percent of the world's children. Critical funding gaps exist in global polio and measles vaccination programs and at the GAVI Alliance, which was created ten years ago at Davos with $750 million from the Gates Foundation. In addition, more support is needed for the research and development necessary to produce new vaccines; the introduction of vaccines for pneumonia, severe diarrhea, and other diseases; and efforts to ensure a steady market for -- and an adequate supply of -- vaccines in developing countries.
The Gateses said their pledge was inspired by progress made in the area of vaccines in recent years. Global vaccination rates have reached an all-time high, rebounding from years of decline in the 1990s, according to the World Health Organization, while new vaccines for the two leading causes of global child deaths -- severe diarrhea and pneumonia -- are becoming available. To date, GAVI has reached 257 million children with new and under-used vaccines, preventing five million future deaths.
Before this most recent pledge, the Gates Foundation had already committed $4.5 billion to vaccine research, development, and delivery, making vaccines the highest-funded cause at the foundation, the New York Times reports. The foundation will not divert money from other projects to fund the new commitment; instead, Bill Gates and Warren Buffett will increase their annual gifts to the foundation, with the share of the foundation's overall spending that goes toward vaccines increasing from 20 percent to 30 percent.
"We must make this the decade of vaccines," said Gates. "Vaccines already save and improve millions of lives in developing countries. Innovation will make it possible to save more children than ever before."
============================ An Overview of the Nonprofit and Charitable Sector Charitable organizations are estimated to employ more than 7% of the U.S. workforce, while the broader nonprofit sector is estimated to employ 10% of the U.S. workforce. In 2009, the charities filing Form 990 with the Internal Revenue Service reported approximately $1.4 billion in revenue and reported holding nearly $2.6 billion in assets. Nonprofit institutions serving households (largely charities) constituted more than 5% of GDP in 2008. You can learn more from the 65 page report at: http://www.fas.org/sgp/crs/misc/R40919.pdf
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