A study released today from a foundation watchdog group says that advocacy efforts by charities can pay off, to the tune of billions of dollars to communities.
The National Committee for Responsive Philanthropy study examined 110 charities in 13 states and found that work such as pushing for more aid to schools and housing for the poor resulted in $26.6-billion in benefits to communities over five years. Money for the campaigns came from foundations and other donors.
The study comes as the watchdog group is urging foundations to step up their spending on efforts to influence public policy and running a campaign called Philanthropy’s Promise, which asks grant makers to commit to devoting at least 25 percent of their grants each year to advocacy.
Altogether, the report said, the charities spent $231-million on efforts to influence policy makers and the public, meaning every $1 spent led to a $115 benefit to communities, the report says.
Some philanthropy experts say the estimates are not a reliable measure of what charities can achieve. William Schambra, director of the Bradley Center for Philanthropy and Civic Renewal at the Hudson Institute says it’s too hard to say that it was precisely the work of the charities that led to the policy changes.
“Any time you try to relate a very specific cause to a very large effect, you’re running into trouble,” Mr. Schambra says. “The notion that a foundation investing X amount of dollars led to this incredible piece of legislation overlooks a few other things, like most of politics, most of economics, and most of culture.”
The report combines the findings of seven studies by the National Committee for Responsive Philanthropy. The three-year project was paid for by $1-million in grants provided by many foundations.
Written by Holly Hall
This fall, the Jewelers’ Building, an imposing Art Deco building here, was bathed in orange light to mark Hunger Action Month and call attention to the mission of one of its tenants, a national network of more than 200 food banks.
For Feeding America, the umbrella group that represents food banks, the first-time display of color was a coming-out party of sorts, as the once-quiet organization has transformed itself into a fund-raising powerhouse.
Behind those efforts is a new leader, Vickie B. Escarra, who left the top marketing job at Delta Airlines to take over the charity in 2006.
Food-bank leaders nationwide say Ms. Escarra’s leadership is a key reason that even amid the economic downturn, Feeding America will manage to increase contributions to nearly $115-million in the fiscal year that ends in June, compared with $33-million in her first year.
What’s more, the group has raised nearly half of the $500-million it hopes to garner in a five-year drive that started in 2009.
The organization has also increased pounds of donated food by 57 percent.
Such gains enabled food banks to aid 37 million people last year, a number that has grown by 46 percent in the past five years.
To be sure, the economic turmoil the nation has endured during Ms. Escarra’s tenure has made it easier for groups that provide basic necessities to make their case for donations.
But food-bank veterans say her decisions to transform the charity’s image, restructure its fund-raising staff, and make other changes has enabled the nonprofit organization to reach out to a broad range of national companies and wealthy Americans who had never previously paid much attention to food banks.
A Better Name
One of Ms. Escarra’s first and boldest moves was to champion a name change at the group, which had been known by some variation of the name Second Harvest for more than 30 years.
Anne Goodman, president of the Cleveland Foodbank, says that Ms. Escarra realized right away that Second Harvest’s name was a stumbling block to fund raising because it doesn’t say what the group does.
“It takes guts to say, 'I’m going to invest the assets of a charity in marketing,’ but she had the vision to do it, and it paid off,” Ms. Goodman says.
The new name helped persuade many companies that they wanted to be associated with an organization providing relief from the growing hunger problem in the United States.
More than 70 companies now give at least $150,000 annually in cash support, up from 31 before the name change. Today companies donate more than $33-million in cash annually, up from nearly $7-million.
Beyond promoting the new name, Ms. Escarra has worked to help food banks become more efficient and expand their services to vulnerable Americans.
Many of those efforts have been underwritten by big corporate gifts, including a five-year pledge by Wal-Mart last year to provide 1.1 billion pounds of donated food.
Wal-Mart has also given $20-million this year to pay for refrigerated trucks and other efforts to help food banks better distribute products.
The retail giant Target is another big supporter, providing millions of pounds of food and $4.5-million to help local food banks feed children.
The Maryland Food Bank, in Baltimore, has received three Target grants totaling $200,000 to expand the food pantries it operates in public schools, where needy parents can choose grocery items when they pick up their children.
“As parents come to access food, they are also connecting with their kids’ education,” says Deborah Flateman, chief executive of the Maryland Food Bank.
With the Target grants, the food bank now operates pantries in 140 schools, up from 40. The expansion has helped persuade other donors to give because they like the combination of pushing education and nutrition, says Ms. Flateman.
While Wal-Mart, Target, and other companies that sell food have long supported food banks, Ms. Escarra has managed to greatly expand donations from other types of businesses, including pharmaceutical, insurance, and financial-services companies.
She helped persuade Morgan Stanley last year to commit more than $5-million in support over two years to expand a Feeding America program that fills the backpacks of needy kids with nutritious food before they leave school and return home for the weekend.
Morgan Stanley also helped Feeding America raise its profile by paying $1.2-million for a series of advertisements that appeared on the front page of The Wall Street Journal during the last three months of 2010.
“We wanted to bring attention to this issue among an audience where Feeding America traditionally has not had an opportunity to promote its work,” says Joan Steinberg, president of the Morgan Stanley Foundation.
Ms. Escarra also actively helps food banks raise money from local donors.
She says she spends nearly 70 percent of her working hours traveling outside Chicago, largely to work on fund raising. For instance, she hopped a flight to Tulsa last month to attend a dinner to honor Sara Waggoner, the outgoing chief executive at the Community Food Bank of Eastern Oklahoma.
In her two hours in Tulsa, Ms. Escarra spent half the time doing interviews with local reporters and the rest of the evening wooing donors at the dinner.
Just before the event, the food bank had raised $167,000, says Ms. Waggoner. “Vicki asked folks to make an additional gift, and we raised $223,000, the biggest amount we’ve ever raised with a single event.”
Ms. Escarra has also worked with local food banks to identify donors who might be interested in supporting national hunger-fighting efforts.
For example, the charity successfully appealed to Dennis L. Jilot, chairman of STR Holdings, an Enfield, Conn., company that makes solar products, for a $2.5-million gift to be split among Feeding America and food banks in Nevada and Wisconsin, where his family has roots.
One reason Feeding America has been able to pull off such big increases in corporate gifts and donations from wealthy people is that it is spending a lot more money to seek donations than ever before.
Soon after Ms. Escarra’s arrival, a board member was so impressed, he mentioned the new chief executive’s work to the Lincy Foundation, the billionaire Kirk Kerkorian’s philanthropy.
One day Ms. Escarra received a call from three Lincy officials who invited her to submit a multimillion-dollar proposal to improve the food-bank network over the next five years.
Since then, Feeding America has gotten $62-million from Lincy, some of which has been used to hire more fund raisers.
After getting the infusion, Ms. Escarra says, “we began a strategy of fund raising rather than it being an afterthought.”
A key change was reorganizing the way Feeding America seeks corporate support.
The charity previously assigned one group of staff members to seek outright corporate gifts and another to handle marketing deals with businesses that wanted to tie donations to product sales. But that “drove companies crazy,” says Amy Franze, Feeding America’s chief philanthropy officer.
Ms. Franze combined the two corporate divisions into one and assigned several fund raisers to serve as the primary contact for a handful of corporate supporters. As a result, Ms. Franze says, “corporate satisfaction is now much higher.”
Feeding America has expanded the overall fund-raising staff from five to 30, including several new major gift officers, one person to focus on bequests, and three to conduct research on potential donors, a job that had been handled by one person in the past.
With help from a fund-raising consultant, Feeding America has also started a new project to help fund raisers form personal contacts with donors who give $1,000 or more.
Worries About Cuts
While Feeding America has achieved record increases in private donations in the past five years, Ms. Escarra and other food-bank leaders worry about cuts in government support.
Food banks get about a quarter of their fruits, vegetables, and other items through a federal program that buys excess goods from farmers and manufacturers, but the U.S. Department of Agriculture says the program isn’t needed now to meet its original purpose: making up for low food prices.
The Atlanta Community Food Bank, which has received more than 30 percent of its food from the federal program in recent years, is already feeling the pinch.
“We are down right now by about 40 percent in commodities, and we are working twice as hard because demand is still high,” says Bill Bolling, the executive director. “It’s harder now than it was early in the recession.”
To Ms. Escarra, such challenges are just one more illustration of how complicated it is to run Feeding America.
At Delta, she says, she faced many big challenges, especially after the 2001 terrorist attacks, when a third of the company’s planes were grounded and “we were bleeding money.” But this job is tougher.
“It is a misnomer that the nonprofit sector is easier,” says Ms. Escarra. “It’s more rewarding than the corporate sector but every bit as challenging.”
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Toshiba, the electronics company, is using Facebook to give away a $100,000 technology makeover to one U.S. nonprofit and smaller prizes to four other charities.
The company is asking nonprofits to “like” its Toshiba for Good page, then submit a short video explaining why their organization would benefit from a technology makeover. The $100,000 prize includes consulting services, printers, computers, video equipment, televisions, and more. Four other groups will receive technology packages worth $28,500.
The deadline to submit a video is January 7. Winners will be announced February 20.
By Derek Lieu
Zombies often get a bad rap for their ghoulish ways. But it turns out that they also have a penchant for giving.
A growing number of nonprofits are taking advantage of the recent popular fascination with zombies by playing host to “Zombie Walks”—events in which horror fans dress up in their undead best and gather for fund-raising walks that raise money for their favorite causes.
In some cases, they are raising significant money. For example, Friends for Life, a nonprofit animal shelter in Houston, raised $8,100 earlier this month from a horde of ghouls ambling through a suburb in West Houston.
“The way that we tied it in to our mission and what we do, is that we’re a no-kill shelter,” says Kim Domerofski, communications manager at Friends For Life. “Zombies are undead, so for us, we’re trying to keep as many undead animals, undead.”
The Houston event began when Amy Lewis, an information-technology specialist who volunteers at the group, heard about a similar undead walk in Australia. She had hosted other fund-raising events before but had trouble attracting interest. That changed when Ms. Lewis decided to give zombies a try.
“It really picked up,” she says. “Every year we get more zombies, more photographers, more vendors.”
She estimates that 1,200 zombies attended the most recent walk, now in its fourth year. The suggested donation was $15, but people were also asked just to give what they could afford. In previous years, Ms. Lewis used the walk to raise money for a local food bank and an organization that supports U.S. soldiers.
Other groups have had success raising food donations through zombie crawls. The Food Bank of Northwest Louisiana, in Shreveport, for example, collected 1,460 pounds of food and $330 in donations at its recent zombie walk. Last year, a similar event produced 851 pounds of food for the organization.
“That’s been kind of the whole tongue-in-cheek thing about it—zombies are always hungry,” says Michelle McCary, a b-movie lover who has organized the Shreveport walk for four years. She estimates that 500 people, including many families with children, came out to walk this year.
The crawl, which in years past took place in a local mall, moved to downtown Shreveport this year. Ms. McCary said the organization received a lot of free publicity from the city’s tourism office, which advertised it on digital billboards, and from a local radio station.
“Even people who don’t normally like that kind of stuff come out of the woodwork,” she says. “It’s become a monster of its own.”
And if the trend continues, charities may soon face an interesting question: Do undead donors prefer an e-mail or handwritten thank-you notes?
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The founders of Washington Shakespeare Company chose the troupe’s name 22 years ago to signify civic pride: This would be a group of homegrown professional actors, not the New York pros who filled the stages of other local productions.
In the intervening years, the nonprofit theater company gained attention for its cutting-edge versions of the classics. In one notorious 2007 production, “Macbeth” was tweaked to emphasize the primitive passions of its characters. To make it seem as though the murderous Scots had “emerged from the primordial ooze,” says Christopher Henley, the artistic director, actors performed clad only in body paint, which gave the production a reputation as “the all-nude 'Macbeth.’”
With such daring as its calling card, Washington Shakespeare Company seemed to have outgrown its plainly descriptive name. Also, it sometimes found itself confused with a similarly named local troupe. So, its leaders sought a new name: something that described the nonprofit’s mission yet also was singular and unforgettable.
In August, the Washington Shakespeare Company rechristened itself WSC Avant Bard.
Response to the new name has been mostly positive, says Mr. Henley, though sometimes listeners “groan like you would at a bad pun.”
But then, he adds, “they go and tell it to their friends.”
A 'Sense of Identity’
In recent years, organizations with a variety of missions have renamed themselves—or, if they haven’t legally changed their name, they have “rebranded” it for common usage. In one high-profile case, YMCA of the USA has neither renamed nor rebranded itself officially but has simply embraced its nickname, the Y, in a more public fashion this year, says a spokeswoman.
Nonprofit officials who have been through the renaming process say that the experience can benefit an organization if the new name is chosen with care and if it is unveiled in a way that intrigues potential supporters without alienating existing ones.
Renaming a charity can provide a group with “a renewed sense of identity and an opportunity to deepen a relationship among staff, the board, partner organizations, clients, donors, and so forth,” says Howard Adam Levy, principal of the Red Rooster Group, a branding consultant in New York that works extensively with nonprofit clients.
Mr. Levy adds, “It starts a process: What is the organization all about? What are our values? What is our history? Why did we start doing this, and why are we doing this now?” (For advice on carrying out that process, see below.)
Inspire and Galvanize
The burden of bearing a name that has outlived its usefulness, Mr. Levy says, “is like walking around with a limp leg. When the pain gets unbearable enough, then an organization will say, 'Hey, we can correct this. We can run now, we can sprint, we can compete better.’”
Because nonprofits rarely have the resources to devote to marketing that for-profit companies do, he adds, a charity’s name bears a lot of weight. It has to convey the group’s mission but also “excite and inspire and galvanize people,” Mr. Levy says. “It has to have positive connotations and avoid jargon. It can’t be too long or people will wind up abbreviating it. It does a lot.” And, in a tough economy, when marketing resources are even scarcer than usual, nonprofits may have less tolerance for an imperfect name.
Charities change their names for many reasons. Some groups, like WSC Avant Bard, say the original name no longer fully represents what the organization does or is too similar to another group’s name. Sometimes a nonprofit seeks a more streamlined name because its original moniker is simply too long, clunky, or vague.
Sometimes the original name uses antiquated or politically loaded words that make the group seem out of step with modern times. United Negro College Fund, for instance, founded in 1944, commonly goes by UNCF now.
In July, Campus Crusade for Christ International announced that it will simplify its name early next year to Cru.
The 60-year-old charity’s own surveys found that 20 percent of people who said they were open to the group’s Christian message were less interested in the organization itself when they heard its original name. And further study revealed that the words “campus” and “crusade” were hindering its mission, according to a statement on the group’s Web site.
“Campus” signaled an exclusive interest in ministering to college students, which didn’t fully describe the group’s work. And, said the statement, “the word 'crusade’—while common and acceptable in 1951 when we were founded—now carries negative associations.”
The charity chose Cru, a common nickname for its campus chapters, from a list of 1,600 alternatives in an effort to “accomplish a greater level of effectiveness in ministry,” says Steve Sellers, vice president for the United States operations of the Orlando, Fla., group, in a written statement. (The group declined The Chronicle’s request for an interview because, it said, its name-change process is still under way.)
United Jewish Communities, which was named following the merger of three groups in 1999, had a different problem: Potential supporters had little familiarity with the name.
Research commissioned by the New York umbrella association of Jewish philanthropies in 2008 found that while about 50 percent of those polled were likely to have heard of their local Jewish federation, only about 10 percent recognized United Jewish Communities and its mission.
The results were similar for respondents of both genders and all generations, adding up to a “dismal” verdict, says Adam Smolyar, the group’s senior vice president for strategic marketing.
To give the group a more defined identity, United Jewish Communities became the Jewish Federations of North America in 2009.
“There’s beauty in its simplicity,” says Mr. Smolyar. “It tells you everything you need to know: We’re Jewish, we’re a federation, we’re from North America. It’s not a convoluted, acronym-like name. By being descriptive, it needs a lot less explanation and therefore a lot less marketing behind it.”
But getting to that beautiful simplicity can be a long and winding road, and it’s a journey that won’t benefit every organization, says Julie Chapman, president of 501cTech, a nonprofit in Washington. The group changed its name last month from NPower Greater DC Region, to solve trademark issues and better signify its mission of offering technology help to charities.
“If it’s something you don’t need to do, I probably wouldn’t do it,” she says. “It’s very time-consuming. And, at the end of the day, these jobs are all about achieving the mission. And does that rename or that rebrand really help you deliver better on the real work of your organization?”
She advises charity leaders not to look to a name change as a cure for a group’s deeper problems. “Changing your name and having a new logo isn’t going to save an organization that’s in trouble,” she says. “But for one that is operating well and is effective, it can help sharpen the focus.”
President Obama’s effort to limit deductions for wealthy people, including those for charitable gifts, in his jobs bill may have died last week, but charitable deductions will be front and center in a Capitol Hill hearing next week.
The Senate’s powerful Finance Committee will host a hearing next week that will discuss how some key proposals to change the federal tax code would affect nonprofits.
Testifying at the hearing will be Brian Gallagher, president of United Way Worldwide, and Dallin H. Oaks, a leader of the Church of Jesus Christ of Latter-day Saints. Other witnesses include government and college scholars who have examined the charitable deduction.
The hearing will take place Tuesday at 10 a.m. Eastern time and will be broadcast online.
To see more about the charitable deduction, go to this special section of The Chronicle’s Web site.
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New T-shirts that declare “Welcome to Brownbackistan” are popping up in Kansas to protest Gov. Sam Brownback’s decision to eliminate all state aid to nonprofit arts groups.
The governor’s action has set off a struggle for donations, especially because he created a new fund-raising arm, the Kansas Arts Foundation, to seek private support.
The foundation will seek $1.2-million annually to replace government subsidies—not just the state aid but also matching federal funds that were lost when Kansas eliminated arts from its budget.
The fund-raising competition angers Emily Eakes, the Lawrence artist who created the T-shirts.
“Arts organizations that were supportive of one another and trying to enhance the arts in Kansas will now be fighting for the limited amount of private support that is available,” she says.
Such competition is growing more intense around the country, as state and local governments face historic shortfalls and stiff resistance to raising taxes.
The budgetary squeeze is resulting in ambitious fund-raising drives run by governments or designed to support their work.
Among the big-ticket items is a campaign in New York to raise $1-billion for state parks over the next decade. The effort was begun after New York slashed $35-million from the public Office of Parks, Recreation, and Historic Preservation. Those budget cuts closed several parks for the first time in the New York park system’s 125-year history.
While private groups have long raised money to help parks, libraries, and other government entities, what’s different now is both the scale of the campaigns and the fact that they are asking donors to provide basic operating support rather than money for special projects and other extras.
Donors may have a tough time saying no to those requests. And that could force them to make hard calls about whether to increase their overall charitable giving or cut back on the money they provide to other causes, all at a time when charitable giving has yet to recover to prerecession levels.
“Originally such groups added value by raising money over and above what would normally be paid for,” says Doug Sauer, chief executive of the New York Council of Nonprofits, in Albany. “More and more they are raising money to replace cuts, but that is taking money away from other important services.”
Mr. Sauer points to public universities, which have been forced by dwindling government appropriations over the past several years to mount large, sophisticated fund-raising operations, as an example of a trend now expanding to other government entities. “We represent small to medium-sized nonprofit organizations. and it is hard for them to compete,” he says.
In other places, governments are turning to nonprofits to raise money:
- In California, the legislature has passed a measure to enable nonprofit organizations to manage public parks, a last-minute bid by lawmakers to save at least a few of the 70 state parks doomed for closure by budget cuts exceeding $20-million. And county fairs have started new fund-raising arms after the state abolished subsidies that had been in place since the 1930s.
- In Virginia, after the Federal Emergency Management Agency denied disaster-relief funds to the state after tornadoes there in April, Gov. Bob McDonnell established a new Virginia Disaster Relief Fund to raise private contributions. In August alone, it raised $1.1-million.
- In Florida, new efforts are under way to raise private money after the city of Jacksonville sought to eliminate middle- and high-school sports programs in public schools.
- In Georgia, the 15-branch Gwinnett County Public Library plans to seek corporate sponsors and money from individuals to keep Atlanta libraries open after the county cut its library budget by $2.8-million, or 15 percent, on top of a $138,000 loss in state funds.
More Cuts Coming
Given the current economy, states will probably continue to make cuts that put pressure on private philanthropy to make up the difference, says Steve Seleznow, president of the Arizona Community Foundation.
“Government cuts are nowhere near the bottom,” he said, “and we have to be prepared for some very difficult times ahead.”
Arizona charities are already facing a tough time raising money, even without competition from government.
For the third year in a row, most of the state’s charities saw a drop in revenue last year, according to a report by the Alliance of Arizona Nonprofits. In addition to losing gifts from corporations, foundations, and individuals, more than half of Arizona nonprofits also reported a drop in government support, with an average decline of 23 percent.
Yet elected officials continue to turn to private donors to fill the gaps left by government cutbacks for basic services such as food, shelter, and child care for the needy, as well as public resources such as parks, libraries, and schools, says Patrick McWhorter, president of the Alliance of Arizona Nonprofits.
“The idea that nonprofits can just pick up these programs is ludicrous.”
Still, some Arizona charities are trying to help pay for public services. The Tubac Historical Society, for example, has organized volunteers and raised money to keep the Tubac Presidio State Historic Park open after state shortfalls threatened to close the facility; such organizations have raised more than $800,000 for the cash-strapped Arizona State Parks department.
Some Arizona charities are even getting a bit of unexpected help from their local governments as they seek gifts to provide services that municipal agencies previously provided.
Last year, after the city of Phoenix discontinued programs and services in a dozen recreational buildings, visitor centers, and other facilities, it started to lease those buildings rent-free to nonprofit groups with similar missions. City officials have agreed to maintain the grounds around the properties and share the cost of utilities.
So far, the city has placed nonprofit groups in eight of the 12 properties and said they could stay for at least five years. “We were looking to find nonprofits who could restore services similar to those lost,” says Ann Wheat, a Phoenix recreation supervisor. “To start to bring those services back is very exciting.”
'Making It Worse’
But the growing efforts by governments to seek private money to pay for basic public services puts charities in a difficult position, nonprofit officials say. Charities want to help their communities, but they could easily become saddled with services they aren’t prepared to offer or sustain, particularly over the long term.
Charities “could be making it worse by accepting the extra burden of things the government cannot or won’t do,” says Rena Coughlin, chief executive of the Nonprofit Center of Northeast Florida, in Jacksonville, where the school district is cutting athletic programs.
Ms. Coughlin says that the threat of this year’s sports activities being cut prompted a flurry of frenzied fund-raising activity by groups of parents and nonprofit organizations that scurried to raise enough money over the summer to “save” tennis, cross country, and other sports from elimination this fall. But, she says, the fate of the athletics programs next year and beyond is uncertain at best.
Emmett D. Carson, president of the Silicon Valley Community Foundation, in California, says charities should speak up about the competition and added burdens they are being asked to take on as governments make cuts.
“We’re at a juncture in our country and in local communities where we are re-evaluating the social contract between the government and its people,” says Mr. Carson.
The attitude is “we want parks, but don’t tax me to have parks,” he says. “There was the old deal that said there should be public amenities, and we ought to provide for seniors and help the mentally ill,” says Mr. Carson. “Now there is a new deal that says, 'We can’t afford those things anymore, so if it is important to you as private citizens, provide it yourself.’”
Like other charity officials, Mr. Carson says that nonprofit organizations have failed to articulate what the role of governments and charities should be in a time of sharply constrained resources.
“There will be enormous consequences for the next 10 to 20 years in terms of how government functions and responds to the neediest, but we have been incredibly passive,” he says. “The tragedy of the moment is that we are silent.”
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By Lisa Chiu
President Obama’s proposed $447-billion jobs bill would be financed mainly by limiting the percentage of income wealthy donors could write off, including tax breaks for charitable gifts.
Mr. Obama, who today released the details of the plan he outlined to Congress last week, suggested limiting write-offs for itemized deductions to 28 percent. The nation’s most affluent people are currently allowed to write off 35 cents of every $1 they spend on charitable giving, housing, medical expenses, and other deductible items.
In effect, Mr. Obama’s plan means that a donation of $100,000 would save a donor $28,000 in taxes, $7,000 less than he or she would save today. The plan, which would take effect in 2013, would apply to married couples with an adjusted gross income of at least $250,000 ($200,000 for individuals) and would provide roughly $400-billion for the federal government over 10 years, the White House said. It would not affect the deduction taken by people who earn less.
Opposition From Charities
The president, who has proposed similar changes to the charitable deduction several times throughout his presidency, has faced stiff opposition from nonprofit leaders. They say that limiting the value of the tax break would cause wealthy people to reduce their giving.
Today’s announcement quickly drew a similar outcry among nonprofit leaders, many of whom said the idea would force job cuts at charities just as the president is seeking to increase employment.
“Limiting the itemized deduction would certainly lead to a significant decrease in charitable contributions. If charities have less resources, they’ll be forced to choose between laying off employees or cutting needed services,” said William C. Daroff, vice president for Public Policy at the Jewish Federations of North America. “Nonprofits employ almost 10 percent of the work force nationwide, and in many states nonprofits are the largest employers. In our view, cutting the deduction is like cutting your nose to spite your face.”
Hurting the Needy
Sandra Swirski, executive director of the Alliance for Charitable Reform, a coalition of grant makers and donors, said the president’s effort to limit tax deductions would harm his goal of creating more jobs.
“That’s exactly the wrong direction to go in,” said Ms. Swirski.
She also said that it goes against another goal Mr. Obama outlined when he spoke to Congress last week. He said that policy makers need to make sure the neediest are not neglected, she said. “And at the end of the day, limiting the charitable deduction is going to hurt those folks the most.”
Proponents of the plan, however, say the White House's proposal will help charities.
"Charitable organizations need to look at both sides of the ledger," said Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, a liberal think tank in Washington. "Getting out of the recession would be a big benefit for charitable organizations of every sort. If the economy doesn't recover, the effect of the weak economy on charitable giving is going to be much more severe than the modest effect of this particular proposal."
Today’s proposal is the same plan that President Obama outlined in the spring as a way to cut the budget deficit and earlier in his presidency as a way to pay for the health-care bill.
Nonprofit groups said they are prepared for a similar fight in the face of the latest plan.
“We have seen this proposal before and we were able to defeat it,” Mr. Daroff said. “And while we don’t look forward to the fight ahead, we are up to the challenge.”
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President Obama’s new jobs bill, released yesterday, offers tax credits to nonprofits that hire veterans and long-term unemployed people.
When Mr. Obama outlined his plans last week, it was not clear whether those credits would apply to tax-exempt organizations.
But the bill specifically mentions that they would be available to nonprofits and public universities—applying to payroll taxes, which nonprofit employers pay, instead of to income taxes.
An employer could get a tax credit of $2,400 for hiring a veteran who has been unemployed for at least four weeks and $5,600 for a veteran who has been out of work for at least six months. It could get a tax credit of up to $4,000 for hiring any other individual who has been unemployed for at least six months.
Noting that nonprofit employees make up 10 percent of the work force, Diana Aviv, president of Independent Sector, a coalition of charities and foundations, praised the bill in a statement for recognizing “the importance of including all employers in their effort to increase the number of jobs.”
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By Maria Di Mento
Chronicle of Philanthropy
Female nonprofit executives continue to make less money than their male counterparts, even though the percentage of women in executive roles at nonprofits has increased since 1999, says a new report.
Meanwhile, the struggling economy is continuing to exert downward pressure on nonprofit salaries for both men and women, according to the report by GuideStar, an organization in Washington that collects the informational tax returns that charities file with the Internal Revenue Service.
Median increases in compensation for chief executives at nonprofits stood at about 2 percent or less in 2009, compared with the 4 percent increases provided the previous year. Forty-two percent of CEO’s in the study saw their compensation either decline or stay the same in the last few years. Chuck McLean, GuideStar’s vice president for research and the author of the report, said the economy’s effect on these increases is a clear sign that nonprofits are worried about their finances as never before.
“It’s my impression that organizations have sort of stayed hunkered down waiting for the other shoe to drop, and I wouldn’t be surprised if the increases aren’t relatively low when we do this again next year,” he said.
The GuideStar study analyzed data on 131,473 individual jobs at more than 87,000 nonprofit organizations.
Gap Biggest at Big Groups
While the discrepancy in pay between male and female executives is closing at some kinds of charities, it is most pronounced at the nation’s biggest nonprofits, GuideStar said.
In 2009 the median compensation for female chief executives at nonprofits with annual budgets of more than $50-million was 26.4 percent lower than for male chief executives. (A median figure means that half of the executives in the study earned more and half less.) At the smallest groups in the survey, those with budgets of $250,000 to $500,000, the 2009 median pay earned by female CEO’s was 13.4 percent lower than their male counterparts.
Both cases, however, represent an improvement over a decade ago. In 1999 the median salary for female executives at organizations with budgets of more than $50-million was 55 percent less than for men at comparable nonprofits, and the median salary of women at groups with budgets between $250,000 to $500,000 was 18 percent less.
The size of an organization’s budget affects the compensation gap for a number of reasons, said Mr. McLean. “But probably the main reason is women have had such a difficult time getting into the larger organizations like colleges and universities, health-care institutions, and big-name nonprofits, so the penetration of women into those roles continues to go very slowly,” he said. “I think that there is still an old boys’ network out there.”
Over all, the discrepancies between compensation of male and female nonprofit executives can amount to a significant loss of income for women leading nonprofits. At organizations with budgets of more than $50-million in 2009, for example, female executives were earning salaries of slightly less than $350,000 a year while their male counterparts were earning slightly more than $400,000 annually.
More Women CEO’s
Other findings in the study:
• The percentage of women holding chief-executive posts at nonprofits of all sizes grew from 1999 to 2009, though men were still more likely to lead the largest groups. Only 16 percent of nonprofits with budgets of more than $50-million have female chief executives, while 64 percent of organizations with budgets of under $250,000 are led by women.
• Median salaries at health and science organizations were the highest among nonprofits with different program areas with food, agriculture, and religious-related organizations at the lower end.
• For the sixth consecutive year, overall median compensation was highest at nonprofits in the Washington metropolitan area. Organizations in Riverside and San Bernardino counties, in California, had the lowest median compensation.
“The 2011 GuideStar Nonprofit Compensation Report” can be purchased through the GuideStar Web site for $349.
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