Posted by Sarah Barnes on Tue, Feb 28, 2012 @ 09:04 AM
With their built-in targeted membership, professional societies have an opportunity to translate a collective career bond into philanthropic passion.
Years ago many professional societies organized fundraising efforts -- or hired a fundraising support person to oversee the activities. But most of these efforts lacked vision and were limited in staff size, budget and authority. Recently, however, we have seen a marked increase in more focused fundraising programs to support professional societies’ missions that embrace drafting donor-centered commitments. These societies are recruiting highly respected volunteer leaders, developing prospect identification and research systems, allocating funds to update operations and systems and hiring talented professional staff. A number of these professional societies have organized separate 501(c)(3) foundations that have contributed to improved and more sophisticated member engagement activities, and have enhanced the professional society’s visibility nationally or even internationally. Since foundations often have missions that are distinct from their parent societies, the challenge is to maintain a mutual intent between the two organizations.
This was the topic of a recent Campbell & Company webinar,
How to Build Philanthropic Partnerships with Your Society’s Members and Corporate Sponsors. Marc Hilton, Vice President of Campbell & Company, led the panel that included Steven Churchill, Executive Director of the American Medical Association (AMA) Foundation; and Peter Pangman, Director of the Society of Exploration Geophysicists (SEG) Foundation.
Foundations are organized as 501(c)(3) entities, independent but supportive of their parent organizations. Over time, successful foundations exhibit a number of key characteristics: responsiveness, focused missions, donor-centric activities and corporate partnerships.
Responsiveness to industry catalysts Because foundations are smaller, separate entities of larger organizations, they can respond easily to internal or external catalysts, like funding scholarships to encourage career choice in a shifting economy, or lending support to an international crisis. Often such programs are beyond the main society’s mission. Both the AMA and the SEG foundations fund several initiatives that would be out of scope of their parent organizations.
“Our members often come to us with programming requests. An example is our humanitarian effort,
Geoscientists Without Borders,” explained SEG’s Peter Pangman. By sending society members to developing countries, the program has direct impact on improving quality of life. Pangman adds, “This wouldn’t have developed under the umbrella of our parent organization.”
Similarly, the AMA Foundation looked at industry trends and saw that medical students with high debt loads were choosing lucrative specialties over family practices, leaving a gap in community service needs. Steven Churchill explained that the foundation is committed to providing
scholarships to medical students to help make this choice less obvious.
Focused missions separate from the parent Societies sometimes form foundations when a member donates a large sum to the organization, and it takes time to develop a clear purpose for that funding. So one of the challenges is identifying a separate but collaborative mission. Having a strong and compelling case for support from the parent organization can be challenging.
“The AMA Foundation has a mix between internal initiatives supporting the organization and external initiatives, like supporting public health programs that were out of scope of the parent group’s mission,” said Churchill. “We absolutely need to keep up with the priorities of each organization. Yet we have a pretty strong litmus test to make sure that we fund initiatives to meet our own mission.”
Pangman said of the SEG Foundation that its status as a 501(c)(3) organization with a separate mission protects the parent society from liabilities. “We realized the parent didn’t need to have certain legal exposures associated with grant-making functions. The foundation accepts those liabilities. We make sure we don’t have duplicate board members, to maintain transparency and eliminate conflicts of interest.”
Donor-centric activities With its focused mission and smaller staff, a foundation has an opportunity to improve oversight of funds, to engage members in philanthropic programming, and to sustain thoughtful communication and build relationships with key donors and prospects.
Being able to target programming that will appeal to this audience is just one benefit of separating a foundation from its parent. Perhaps a transitioning industry foresees gaps in competencies or shortages in next-generation staffing. A society’s foundation can address these specific challenges in ways that will resonate with its members.
Separate foundations further provide clarity with funds and programming oversight. Peter Pangman was frank in describing the SEG prior to the foundation. “We had members who made gifts to advance scholarships, but we didn’t do a very good job of honoring their requirements. Now that we have a focused foundation with a dedicated staff, we work hard to make sure that we fulfill our donors expectations and that their support is appropriately recognize and acknowledged,” said Pangman. This encourages engagement and leads to further giving.
Corporate partnerships When looking for sources of fundraising support, societies should leverage their members for potential contacts. A corporate partner is more likely to support a non-profit based on an employee’s suggestion. “Your members are a built-in network of advocates who can speak on your behalf,” said Marc Hilton.
And by targeting programming that is sensitive to member and community needs, foundations can foster an image of responsiveness that resonates with corporate partners. “But think in terms of short term partnerships, not seeking corporate funds that will support a program in perpetuity,” Marc added.
“Corporations are less and less willing to make long-term financial commitments,” Marc warned. “Foundations should encourage partnerships for four- or five-year financial commitments, where corporations can see the results of their funding.” With a staff that is focused strictly on foundation activities, it is easier to track outcomes and promote successes to benefactors.”
With the assistance of Campbell & Company’s counsel, this is precisely the strategy deployed by SEG Foundation in its campaign,
Investing in Geophysicists Today, Inspiring Geoscientists Tomorrow. Marc Hilton worked in tandem with Peter Pangman to develop tailored benefits and deliverables that convinced corporations of the merit of investing in the SEG Foundation campaign. Especially attractive were campaign opportunities that strengthened the workforce pipeline, to help assure an adequate supply of geoscientists to meet the demands anticipated in the coming years.
For more information on society foundations or how we can help, contact Marc Hilton at marc.hilton@campbellcompany.com Learn more about Campbell & Company’s webinar series.
Posted by Sarah Barnes on Tue, Feb 28, 2012 @ 09:04 AM
Today’s donors are savvy. They want to feel connected to the organization. And above all, they want to feel engaged.
A recent Campbell & Company webinar discussed some “new rules” of engagement, with additional tips from successful nonprofit leaders.
Donors for Life: Learn How to Keep Your Donors Engaged Through Good Times and Bad was presented to the Campbell & Company community in November.
Sharing insight during the webinar: Campbell & Company Chair and Chief Executive Officer Edith Falk; Greg Cameron, Chief Operating Officer for Chicago’s public television station
WTTW and sister classical radio station
WFMT; and E. Brooke Walters, Director of Institutional Advancement for the
Chicago Shakespeare Theater.
Because the webinar prompted much interest, we asked two other industry experts for additional insight: Amy Parrott, Associate Development Director of the
San Diego Zoo, and Jeffery McLain, Vice President of Development for the
LSU Foundation at Louisiana State University.
Economics of loyalty It costs five times as much to create a new donor relationship than to renew business with an existing donor. While it is important to continually expand your fundraising community, it
really pays to make sure your current contributors stay in your flock. But today’s long-term patronage must be earned. The harsh reality is that even your most loyal donors can “unfriend” you with a click of a mouse.
Field-tested idea: The San Diego Zoo offers reduced membership rates to those who are renewing. To retain loyalty, the Zoo calls entry-level members whose first-year memberships have lapsed, encouraging them to renew at the discounted rate.
Field-tested idea: Membership in the LSU Foundation is a lump-sum annual commitment but can be a gateway to other types of giving. The Foundation treats their member relationships with care, through “very thoughtful” communications like a hand-signed quarterly letter from the LSU Foundation president and a quarterly e-newsletter that highlights financial performance, campus achievements, a member profile and recent events.
Solidify a donor relationship with a personal touch Donors want to feel special. They want to know that their contributions are valued. Recognize a new membership as a burgeoning relationship with someone who shares your same passions.
Field-tested idea: Chicago Shakespeare Theater solidifies a new donor relationship with a personalized thank you note rather than a form letter. Beginning this season the theater is individually greeting all new donors when they arrive at a performance after initiating support.
Field-tested idea: WTTW makes personal phone calls thanking donors for their support.
Out with tchotchkes, in with experiences Mugs and T-shirts only go so far. Donors want to feel a part of the organization. And they want to know that their money is making an impact on an organization.
Experiential events bring donors into your world and provide a lasting impression that can be recalled when it is time to renew or increase a contribution. Event goers are treated to an “experience” like going behind
the scenes of a theater, or feeding animals at the zoo. The key is to target these events to those individuals most likely to move up the donor pyramid and to let them know this is a special event not open to all.
Field-tested idea: The LSU Foundation understands that its members are dedicated LSU enthusiasts. The Foundation offers members private tailgating events and access to meetings with the university chancellor.
Field-tested idea: Chicago Shakespeare Theater invites key supporters to sit alongside directors and artists during technical rehearsals.
Field-tested idea: WTTW recently sponsored a meet-and-greet with film producer Ken Burns for an invitational pre-screening of the PBS documentary
Prohibition. The station even secured a $50,000 contribution from a donor who was invited to a private luncheon with Ken Burns.
Utilize partnerships to expand donor base Find out what your donors are interested in and connect with them through their other activities. Use social media and community partnerships to target supporters with like-minded interests and values.
Field-tested idea: The San Diego Zoo partnered with the San Diego Symphony for a performance at the zoo. Crossover donors were encouraged to increase their support through a donation challenge that was split between the two organizations.
Field-tested idea: The LSU Foundation takes advantage of its close-knit community. New members are often recruited at other events through personal invitations from existing members and directors. It is a way of capitalizing on a network that already has a deep connection with the organization.
Field-tested idea: WTTW partnered with the Chicago Architecture Foundation and the Art Institute to promote a documentary on a tour of the Chicago Loop district. They were able to connect with people interested in architecture and urban planning who had never given to the station. The result: a $10,000 gift from a new donor.
Verse your mission throughout your organization Make sure everyone in your organization, at every level, understands your mission. Any personal contact is an opportunity to show why your organization deserves community support. Donors should feel the love every time they interact with your organization.
Field-tested idea: Chicago Shakespeare Theater develops three key talking points which it circulates to staff throughout the institution. When there is dialogue with current or potential supporters, the message is clear and consistent.
Field-tested idea: The LSU Foundation’s success lies in finessing personal relationships and listening for nuances to determine when a member might be ready to increase giving amounts. Role playing sessions at staff meetings help develop good communication skills. While some in the nonprofit industry might focus on “sales” skills when training fundraising staff, the LSU Foundation has found success by active listening focusing on donor needs.
Field-tested idea: The San Diego Zoo distributes cards with their six talking points to all employees and interns. Familiarity with the zoo’s “fast facts” list is required for those who deal with the public.
For more information on how we can help your donors "Feel the Love", contact Edith Falk at edith.falk@campbellcompany.com
Learn more about Campbell & Company’s webinar series
Posted by Sarah Barnes on Tue, Feb 28, 2012 @ 09:04 AM
So you’ve been tasked with introducing performance metrics into your organization’s planning process. Does the very idea seem daunting, overwhelming, or perhaps even futile? Successful implementation rides on two critical components: simplicity and communication.
We turned to
Carrie Dahlquist, Campbell & Company’s Director of Strategic Information Services, for her guidance in using performance metrics to manage up, down and out. Carrie has extensive experience in defining and implementing performance metrics across nonprofit organizations of varying size and scope. At Campbell & Company, she brings her expertise to a range of clients, helping tailor methodologies for tracking organizational, departmental and / or individual performance to maximize development efforts.
“Performance metrics are becoming increasingly important in the non-profit arena,” Carrie explains. “Funders want to know the impact of their gifts. Leadership wants to know how efficient and effective the organization is. Staff want to know how to be successful. But it’s difficult to decide where to begin.”
Get buy-in This is a critical, yet often overlooked, step in the process. Before you spend a lot of time and energy looking at specific metrics, think about the over-arching program goals and how performance metrics can support them. Then, communicate your objectives to senior leadership and ask for their support, acknowledging there may be a need for culture shift. Be clear about the role you will need them to play.
If you have leadership who is not on board, then you need to take a step back and re-educate, emphasizing the relationship between metrics and mission. “If you don’t get initial approval, you may have to track a select few metrics for a period to prove their value in managing staff, setting expectations of leadership, guiding the decision-making process, or informing constituents.” Carrie says. “If you can show more meaningful results, you will prove there is real value in process.”
Once you have commitment from leadership, carefully recruit a team that can inform metrics development. Some staff may be anxious, so bringing them into the process as active participants can help build trust and ultimately lead organizational buy-in. In addition, it’s important to have a variety of perspectives thinking through how different metrics may impact programs.
Keep it simple Carrie suggests starting with a well-defined and measurable objective. Say you have a budget office that automatically adds 3% (or more in some cases) onto last year’s goals as a target for the coming year. Perhaps you wish to shift strategic thinking toward budgeting with a view of pipeline potential. Start with three to five metrics that can inform the target, choosing leading and lagging indicators that can be tracked with existing (or easily created) reports.
Be thoughtful about the behaviors driving each metric and determine who will be responsible for them. Also, consider the behaviors you are incentivizing with the creation of a metric. For example, let’s say your organization wants to increase the number of transactions processed among gift processors. Sounds simple enough, right? But, Carrie cautions, “Make sure you are also tracking correcting entries as speed and accuracy may impact each other.”
Once you agree on a metric, be clear in its definition, who it applies to, and how it will be tracked. Teams can be tripped up when there is a misunderstanding about terminologies, and you don’t want this to lead to an uncertainty in the process.
Be consistent and communicate
Staff want to know that their efforts are well-placed and being reviewed on a consistent basis. It takes time to fully integrate metrics into management practice, but the goal is to include them as regular topics of discussions in team, management and board meetings.
Communicate regularly about what metrics are being tracked, why they are being tracked, and how they align with an institution’s goals. Translate individual success into team and organizational success. This is not only important for staff, but for executive and board leadership as well. Clear and consistent messaging around a core set of metrics will underscore their value as a means of promoting the vision of leadership.
Beta test and get feedback
Once you have a few months under your belt, take time for reflection and for gathering feedback. Are the metrics still in alignment with the program goals? Are they incentivizing the desired behavior? Are they manageable for staff and leadership? Does the process need to be streamlined?
Beta testing before a full introduction will help to design a final program that is thoughtful and replicable. Iron out the kinks in the testing phase so that, when it is implemented, users will clearly understand what is expected of them and see positive results.
Carrie adds, “It may take time for everyone to fully understand and appreciate the information that you have brought to the table. But if you get buy-in, keep it simple, communicate, and get feedback you can reinforce the value of metrics and have an end product that becomes a credible strategic tool.”
Want to learn more about performance metrics? View Campbell & Company’s
webinar on performance metrics. Download a performance metrics worksheet that can help! For more information on performance metrics or how we can help you, contact Carrie Dahlquist at carrie.dahlquist@campbellcompany.com
Posted by Sarah Barnes on Thu, Feb 16, 2012 @ 10:00 AM
Case Development 101
Wednesday, March 14 at 12:00 p.m. CT
A powerful case for support empowers you to speak to the values and passions that drive your donors and communicate the essence of your mission and plans. Yet many organizations struggle to see themselves from their donors’ perspectives. This session seeks to help you step outside your organizational mindset by beginning with a fundamental question: Who are your donors and what do they care about? From there, we will discuss how your organization can develop focused messages to reach your donors’ hearts and minds.
Presenters:Andrew Brommel, Director, Communications Consulting, Campbell & Company
Jeff Wilklow, Vice President, Campbell & Company
Learning Objectives: Perfect for Executive leaders, development leaders, marketing and communications staff and volunteer leaders.
We will answer the following key questions:
- What is the case for support?
- Who are your donors and what do they care about?
- How can you develop messages that reach your donors’ hearts and minds?
- How can you build consensus around your case?
- How can you make full use of your case for support?
- How can you craft powerful case language?
Registration: $75 / registrant; free for Campbell & Company Friends and Family (just contact us for a coupon code!)Register Now for Case Development 101!
Posted by Sarah Barnes on Wed, Jan 11, 2012 @ 02:52 PM
Join us on Wednesday, January 18, 12 - 1:00 p.m. CT for an interactive webinar on how to best use performics metrics.
Designed for CEOs, Executive Directors, and development staff at all levels, Attendees will learn how to incorporate key performance metrics into the decision-making process. Additionally, Attendees will have access to examples of management and leadership reports and learn effective communication strategies for implementing performance metrics across the organization.
Presenter:
Carrie Dahlquist, Director, Strategic Information Services, Campbell & Company
About Carrie Dahlquist:
Carrie Dahlquist leads Campbell & Company's strategic information services, with specialized expertise in advanced analytics, strategic planning, and campaign management.
Prior to joining Campbell & Company, Carrie worked at the University of Chicago in a variety of leadership roles in advancement, including strategic planning, campaign management, annual giving and major gifts. Earlier in her career, she served as the vice president of benchmarking and analysis for an international advancement consulting firm. Carrie began her career at Lincoln Park Zoo, focused on individual giving.
Carrie holds a Master of Business Administration degree from the University of Chicago's Booth School of Business with concentrations in econometrics, strategy, and economics, and a bachelor's degree in Human and Community Development from the University of Illinois at Urbana - Champaign.
Registration: $75 / registrant; free for Campbell & Company Friends and Family (just contact us for a coupon code!)
Posted by Sarah Barnes on Wed, Oct 26, 2011 @ 12:01 AM
Proposals to Cap Charitable Deduction, Raise Tax Rates Likely to Have Relatively Small Negative Impact on Overall Charitable Giving, Study Finds
Combined with recession’s effects, slow recovery and potential government funding cuts, changes could negatively affect charities
The Obama Administration’s proposals to reduce the charitable tax deduction for wealthy households and to increase the marginal income tax rates they pay would, by themselves, have a modest negative effect on itemized charitable giving, according to a new study conducted by the Center on Philanthropy at Indiana University and sponsored by Campbell & Company.
The first proposal would reduce the value of itemized charitable deductions from the current 35 percent to 28 percent in 2012 for taxpayers with an adjusted gross income over $250,000 for couples or $200,000 for individuals. The second proposal would raise the marginal income tax rate from 35 percent to 39.6 percent in 2013 for those taxpayers.
The study looks at how itemized charitable giving would have been affected in 2009 and 2010 (using historical tax data) if the proposals had been initiated in those years, respectively.
The complete study can be found by clicking here.
Click here to register the following webinar:
We want to know what you think. Click here to share your voice!
Questions? Please contact:
Sarah Barnes
312.896.8872
sarah.barnes@campbellcompany.com
Posted by Sarah Barnes on Tue, Mar 08, 2011 @ 09:00 AM
We summarize these trends below and hope that this article will serve as the basis for an ongoing conversation regarding changes in fundraising. Throughout the year, we will be engaging Campbell & Company consultants to discuss how these and other trends have affected nonprofit organizations across the country and share strategies for successfully adapting to the evolving philanthropic marketplace.
Individual Giving
While individual giving continues to represent approximately 88 percent of total philanthropic contributions, the nature of it has changed in the recent economic slowdown. Donors have increasingly focused their giving on the organizations with which they have the closest relationships, and many have been more deliberate in their decision-making process in order to weigh the timing, size and vehicle of their contributions.
Research has demonstrated that three personal factors affect individual philanthropy: income, household wealth and past giving, which strongly determines whether an individual will give in the future. While nonprofit organizations cannot control the first two factors, they shape giving experiences for all of their individual donors, and effective donor stewardship can foster a strong basis of philanthropic support.
The face of philanthropy is changing. Though donors tend to be middle-aged, married, well‑educated and employed, several key demographics have increasingly had an impact on philanthropy. Studies such as the Center of Philanthropy at Indiana University’s Women Give 2010 have revealed how, controlling for education and income, women give more generously than men. Women’s giving patterns also differ from men’s in significant ways. Women are more likely to research organizations before committing to gifts and typically give to organizations that have a positive impact on their families and larger communities. In addition, they tend to favor giving efforts that involve collaboration among women in support of an organization.
At the same time, Generation X (30- to 45-year-old) and Millenial (20- to 30-year-old) donors understand philanthropy in terms of its global impact and support causes that reach far beyond their communities. These segments concentrate their giving toward organizations where they and their friends are already involved; many require a longer period of cultivation before they trust an organization. Not surprisingly, individuals in these groups are best reached through multiple channels, which may include traditional direct mail and telemarketing vehicles in addition to e-mail, mobile phones and social networks.
As a whole, donors want to know how their gifts make a difference. Observers have frequently commented on this trend in the past, and it has rapidly become a permanent feature of the philanthropic landscape. Donors and prospects increasingly come to organizations with penetrating questions regarding their operating models, outcomes and the impact of contributions.
Still, despite this professed preference, Hope Consulting’s recent “Money for Good” report found that while 85 percent of donors identify an organization’s performance as one of the top criteria for their philanthropy, only 35 percent actually engaged in any research. Further findings showed that three-quarters of those individuals spent less than two hours researching and more than 60 percent only looked for basic facts and figures. This portion of the report concluded with the surprising statistic that only three percent of all donors ultimately give based on an organization’s relative performance.
Despite increasing strain on their assets, foundation giving in 2009 actually fell short of the severe drop that some analysts predicted. Many foundations cut their operating expenses and drew on their reserve funds, and these decisions allowed them to maintain a higher level of grants than expected. Foundations will not be able to sustain these measures, however, and so are likely to refrain from making new grants in the near term (while those that do will be less inclined to make multi-year gifts). Still, given recent conditions, foundations have increasingly been willing to support operating expenses at their beneficiaries.
Typically, foundations set their level of giving based on the market value of their assets on a three-year rolling basis. Given this window, we predict that foundation giving will begin to recover in the next 18 months.
Corporate giving has significantly declined from its 2005 high, when businesses demonstrated unprecedented generosity in response to various global disasters. Giving levels are tied to companies’ pretax profits, which have suffered during the recent recession. However, the business world’s increasing emphasis on social responsibility provides an opportunity for certain nonprofits to secure greater corporate support.
Going forward, corporations will continue to align their giving with their social responsibility goals, and many will use increasingly specific guidelines to direct their giving. On the ground, this trend means that companies may shift their giving from “backyard” initiatives in their communities to more focused social priorities.
As a result, we expect to see corporate giving concentrated among fewer nonprofits. Companies’ interactions with these organizations will grow increasingly diversified, including cause marketing efforts, donations of products or other gifts in kind, and skills-based volunteer partnerships. As their giving becomes more focused on specific issues and programs, companies will be less likely to provide outright support for operations. Many will likely be more hesitant to underwrite special events, as well.
IN WITH THE NEW
The New Year began with encouraging signs for the nonprofit world. A Chronicle of Philanthropy survey found that more than 62 percent of nonprofit organizations experienced an increase in giving compared to the previous year. As 2011 unfolds, we hope to see this upward trend continue. In the end, nonprofit organizations will need to continue learning about and engaging their donors. When organizations demonstrate the importance and impact of support to donors, they can build relationships that will last for years to come.
Posted by Sarah Barnes on Wed, Dec 15, 2010 @ 02:04 PM
Between 2001 and 2003, the Bush administration passed a series of tax cuts to reinvigorate the faltering economy. Featuring built-in “sunset” provisions, the reforms were set to expire on January 1, 2011 unless renewed by Congress. With that deadline rapidly approaching in an increasingly contentious political environment, the Obama administration has proposed a compromise plan, which recently passed a cloture vote in the Senate. Under the bill, many of the stipulations of the Bush tax cuts would remain in place until 2012; however, the plan faces opposition from some Republicans, as well as House Democrats.
Below, we have summarized the aspects of the planned legislation most likely to affect major gift donors, although we note that the final shape of the bill could easily change before its passage. While research has consistently shown that few individuals give primarily for tax reasons, nonprofits that understand tax laws can better meet their donors’ needs, ultimately strengthening relationships with these individuals.
Disclaimer: Please note that this article should not be construed as tax preparation advice. For information regarding how changes in legislation could affect you or your organization’s returns, consult a licensed tax professional.
A variety of provisions in the proposed legislation promote charitable giving, including:
- Maintaining the current tax extenders, which permit IRA owners over age 70 1/2 to arrange tax-free gifts from their accounts (a special provision moves the deadline for making 2010 IRA gifts to January 31, 2011)
- Repeal through 2012 of cutbacks in certain itemized deductions – including charitable deductions – for individuals with high incomes
- A two-year extension of low tax rates on long-term capital gains and qualified dividends, meaning people who receive income from charitable gift annuities and charitable remainder trusts will pay tax at only a 15% rate (0% in some cases)
- In 2010 and 2011, increased deductibility gifts of appreciated real estate for conservation purposes, gifts of food inventory by businesses, gifts of book inventories from C corporations to public schools and corporate gifts of computer equipment and software to public schools
- Favorable tax treatment of shareholders in S corporations that contribute property to charity in 2010 and 2011
The Estate Tax
Benjamin Franklin once wrote, “Nothing can be said to be certain but death and taxes;” however, the status of estate taxes—or, in the words of some pols, “death taxes”—remains slightly more ambiguous. Beginning with the 2001 Bush legislation, the estate tax gradually decreased each year before its repeal in 2010. Unless Congress updates the current law, estates valued at more than $1 million will be subject to taxes of up to 55 percent after 2011. Under the Obama plan, estates valued at more than $5 million would be taxed at a 35 percent rate. Democrats in the House of Representatives have proposed an amendment to the bill, based on earlier legislation, that would levy a 45 percent tax on estates more than $3.5 million.
Only a handful of estates would owe tax under a $5 million estate tax exemption, but estate tax savings will continue to be a motivating factor for wealthy individuals considering charitable bequests. All donors, regardless of wealth, should be reminded that estate planning goes far beyond estate taxes, and that they need to plan for a thoughtful distribution of their assets at death. Important considerations include the reduction of estate expenses such as probate, state estate taxes, income taxes on retirement accounts, as well as the donor’s legacy to future generations. In the final analysis, everyone needs a will and should be encouraged to consider bequests to the organizations they supported during life.
The compromise would extend the Bush-era tax cuts, effectively:
- Maintaining the current tax brackets (note that the table lists the maximum income in each bracket):
|
10%
|
15%
|
25%
|
28%
|
33%
|
35%
|
|
$8,375
|
$34,000
|
$82,400
|
$171,850
|
$373,650
|
Any greater
|
- Extend the modified child tax credit, which allows taxpayers with children to claim a $1,000 credit on their returns.“Child Tax Credit”
- Continue the marriage penalty relief policies, which double the income levels in each tax bracket for married couples. “Marriage Penalty”
Like income tax rates, taxes on long-term capital gains (which include income from the sale of stocks, bonds, real estate and other assets sold at a higher price than their initial cost) are also due to return to earlier levels, effectively increasing from 15 to 20 percent. Taxes on dividend income, also currently at 15 percent, would revert to the asset holder’s tax bracket rate. (For instance, if a stockholder fell in the 25 percent tax bracket, her dividends would also be taxed at 25 percent.)
Under the current compromise, both the capital gains and dividend income tax rates would remain at 15 percent.
Posted by Rebecca Falk on Fri, Oct 29, 2010 @ 05:29 PM
by Peter Fissinger, President
Although the Great Recession officially ended 15 months ago, the nonprofit world, along with the rest of the country, still feels uncertain about the prospects for a full economic recovery. As many nonprofits continue to feel the effects of the recession, they have questions about appropriate fundraising strategies. Campbell & Company President Peter Fissinger offers his perspective on the best fundraising approaches during a time of economic insecurity.
In addition to your work as a fundraising consultant, you have been a longtime market observer. What do you see in today’s economy?
I see the economy as being much more stable than last year, which makes my outlook fairly positive. Unemployment still represents an obstacle to recovery; however, if you look at a number of other market indicators over the past several years, you can see definite growth. For instance, in 2009, the Dow Jones Industrial Average fell to 6,500, but this year, it has consistently remained above 10,000. What’s lacking is confidence that the economy will keep growing without further difficulties, and this makes people nervous.
And obviously, the more pertinent question is how will current uncertain market conditions affect philanthropy?
It seems like everyone is asking the same question: when will things be stable again? And unfortunately, I do not think there is a clear answer. Donors, nonprofit leaders, board members all feel unsure about the current economy. They recognize that a recovery has begun in earnest, but, to them, progress seems slow enough to be a cause of concern.
Under these conditions, history is always helpful. People will give even under the worst conditions. So, with our improved and more stable economy, we know there are many capable donors out there deciding when to give and how much to give. They may give to fewer organizations, give fewer major gifts and limit their contributions to their favorite nonprofits—but they will give.
What challenges do organizations face during these times?
Many nonprofits have faced budget cuts or freezes for the past several years, which means they run the risk of being out-of-date with regard to best practices. They face the difficult challenge of needing to simultaneously reinvest in their future, plan for major campaigns and rebuild philanthropic revenue. That is a lot to do at once with a tight budget.
The larger challenge may be to remain optimistic under these circumstances and to keep presenting donors with meaningful opportunities to invest. Our clients, when persistent, are experiencing fundraising success.
What strategies do you recommend under these circumstances?
I think the best approach here is to undertake focused planning based on mission, fundamental values and potential to build philanthropic revenue. We need to do the important things as well as possible—and eliminate the rest. This means getting back to basics, sticking to the basics and getting better at the basics. In other words, every organization should focus on doing its essential work, connecting with its donors and stewarding its resources.
And how should nonprofit organizations approach their donors? Are there opportunities to find additional philanthropic support in this uncertain climate?
Nonprofits need to maintain strong relationships with their donors and friends. They need to thank their supporters and help them see the impact of their gifts on their mission. And despite the economy, they still need to actively draw on the generosity of their current donors.
I think it helps to ask a few fundamental questions about current donors: who are these people? What motivates them? With the incredible advances in analytics technology, we have opportunities to learn more about our current and potential donors than ever before.
Using this information, nonprofits can identify their next generation of donors. The best way to do this is to model future strategy on past success. They need to ask themselves: where can we find people like our current donors? What messages will resonate the most strongly with them? When the economy gets better—and it will get better—these new donors will have the potential to take organizations to new heights.
Out of everything you have just described, what step should nonprofits take first?
They need to assess where they’re spending their time, energy and money, and look at the results. If some activities have a low return on investment, they need to consider shifting their resources to more productive work.
And as we consider changing roles and hiring new staff, we need to ask: who will have the talent to be thoughtfully aggressive? Where can we find them?
Any final thoughts?
I think we are standing with one foot in the past and one foot in the future. Everyone is justifiably nervous about the current weak recovery; however, we have to remember that there will be growth. Right now, we need to find the courage to invest wisely in the future.
Posted by Rebecca Falk on Fri, Oct 01, 2010 @ 04:02 PM
by Jeff Wilklow, Senior Consultant As part of the continuing Advanced Executives Breakfast Series sponsored by Campbell & Company in conjunction with the Greater Washington DC chapter of the Association of Fundraising Professionals, we were pleased to host preeminent public policy expert,
Dr. Arthur Brooks on October 26. Dr. Brooks is professor of public administration at Syracuse University’s Maxwell School of Citizenship and Public Affairs, and has done extensive research and writing on the topic of charity and civic life. He offered many provocative revelations on the philanthropic nature of various groups on the political and ideological spectrum, as presented in his latest book,
Who Really Cares -- America’s Charity Divide - Who Gives, Who Doesn’t, and Why It Matters.
Dr. Brooks’ research has provided insights into the forces behind much of American charity. A self-professed social and political liberal, he was surprised to discover that the characteristics that motivate the most charitably inclined among us are more aligned with conservative values, including strong families, church attendance and the belief that individuals, not government, offer the best solution to social problems. The more thoroughly he reviewed the data in an attempt to discredit this thesis, the stronger it became. In the end he was forced to conclude that the preconception held by many, including himself, that the political Left is more compassionate than the Right, is a myt—and in fact the opposite is true.
Beyond showing us who the real philanthropists are and are not in our society, Dr. Brooks’ work takes an important look at why charity matters a great deal – to donors, to recipients, and to society as a whole. Through careful analysis of the data, Dr. Brooks makes a compelling case that people who are charitably inclined become more successful – that charitable behavior is financially rewarding to the donor. Even more importantly, he shows that giving is a critical aspect of our nation’s economic prosperity, and is fundamental to our happiness, health and ability to govern ourselves as a people.
Whether you are personally predisposed to agree or disagree with Dr. Brooks’ findings, his animated review of the data is persuasive and thoroughly engaging. Who Really Cares is a must read for anyone in the business of philanthropy, and should be required reading for architects of social policy as well.