MADE OFF

Has your Budget, Audit, Investment Committee asked itself whether your organization could suffer the fraud allegedly perpetrated by investment manager Bernard Madoff? What controls do they have in place?

SYBNTS

Follow up to a party conversation: When identifying prospective donors, oodles of data sure helps!

On the hot, warm and lukewarm spectrum, after you have appealed to current donors and to the LYBNTs (Lie-bunts -- donors who gave “Last Year But Not This”), you still have SYBNTs, donors who gave “Several Years But Not This.” Peruse your donor history records to identify those you may have purged from previous appeals, people who already know who you are, what you do and once cared enough to make a contribution. Fashion a stirring appeal to persuade them to renew. Don’t allow your previous supporters to get lost in the shuffle.

Feel free to call: 847.227.7174

DARK ENERGY

Last night my sweetheart spent an inordinate amount of time explaining dark energy to a cosmology dummy – me. It has something to do with increasing the rate of expansion of the universe, supernovas, Einstein and possibly Obama’s energy appointee from Lawrence Berkeley Laboratory. I thought dark energy was that negative force being emitted by the economy!

All types of assets are being affected by the recession; even the wealthiest people are taking losses. Psychologically people are anxious about the future, which is affecting philanthropy.

In times like these, weaker organizations tend to panic -- cancel their programs, stop spending, freeze hiring of fundraisers (the profitmakers). Organizations that are better prepared, however, can make a substantial case for support.

As George Will pointed out, nearly 94 percent of Americans are still working. People want to help their favorite charities make a difference and will continue to give. But, they must be more selective. With donors’ finances tightening, now is the time to do more, not less -- buckle down, reassess priorities, have a strategic development plan -- and do it!

Eileen Heisman, CEO of the National Philanthropic Trust, a $725 million-asset public charity based in the Philadelphia area that has raised more than $1.3 billion in charitable assets since it was formed in 1996 and granted over $715 million to more than 25,000 nonprofits, advises nonprofits to keep working to generate contributions.

“You cannot stop asking,” she says. “There are going to be loyal donors who continue to give. People still get their paychecks. A lot of annual giving comes out of paychecks.”

If the sky is falling, pick up your pieces!

As a fundraiser or nonprofit leader, it is your job to assure your organization remains financially strong. Present a logical, urgent, airtight case for why the work of your organization is so important. Do you address needs made even more urgent by the economy? If so, say so. Weaker organizations don’t want to ask right now, but if your group needs the money, then ask for it. If you have cultivated your donors effectively, they will respond. They may need you to be more flexible – try offering more long-term options or combinations of giving methods that fit their financial realities. In hard times, planned giving and estate giving can be very effective options.

In his victory speech in Chicago, Barack Obama said, “So let us summon a new spirit of patriotism, of service, and responsibility where each of us resolves to pitch in and work harder and look after not only ourselves, but each other.” You are going to hear that echoed in his inaugural speech. Be ready. Have your envelopes in the hands of your donors…or someone else will.

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In February PIF will convene local nonprofits to talk about fundraising in the current economic climate, offer ideas and brainstorm options. Watch this spot or call for info: 847.227.7174.

IRA NOW

I used to think of IRA as the Irish Republican Army. (Until my late teens I had no idea there were Protestants in Ireland!) What does it say now that my frame of reference is Individual Retirement Account?

Fortunately, the IRA Charitable Rollover is back! Congress extended it to the end of 2009 as part of the recent Emergency Economic Stabilization Act. This provision allows donors age 70½ to “roll over” funds up to $100,000 annually from their traditional IRA or Roth IRA and contribute them tax-free directly to a charity.

This could mean up to $1 billion or more in new charitable giving from IRAs. The fact that not all non-profits are marketing this opportunity to their donors makes me sick.

Larry Stelter, President of The Stelter Company, reports on a web-based survey they did in August and September 2007 in which 652 nonprofits participated. Among the 18% of respondents who said they did NOT market the IRA Rollover promotion, the most common reason for failing to do so was lack of staff or time. As Mr. Stelter points out, “That may have been a costly failure, however, because the organizations that did promote the law change...closed an average of eight gifts each. The average size of a gift was $28,278, which means that the organizations promoting the change brought in an average of more than $200,000 each as a result of their efforts to spread the word about the change in the law.”

The Stetler findings offer helpful information on how non-profits can market this opportunity. Their survey revealed that “universities were among the most successful organizations in raising more money and in reaching new donors, primarily because they were nearly twice as likely (38 percent) as other nonprofits (18 percent) to use multiple methods of promotion. Another reason was that universities started their promotions early. Nearly three out of five of those that responded (58 percent) sent out promotional materials before November 2006, compared to less than half (46 percent) of the other organizations.”

So: Use at least two methods of promotion – whether letter, newsletter, postcard, email blast -- and do it now! Organizations reported receiving more responses, closing more gifts, raising more funds and reaching more first-time donors. (Stetler advises that if you can do only one of these things, using multiple methods of promotion is more significant in producing stronger numbers than early promotion.) Do it now! Plug catch phrases into everything you print!

IRA ROLLOVER EXTENDED

MAKE A TAX-WISE AND GENEROUS GIFT USING YOUR IRA!

TRANSFER UP TO $100,000 FROM YOUR IRA DIRECTLY TO US WITHOUT INCREASING ANNUAL GROSS FEDERAL INCOME TAXES.

NOTE:

The new Act applies only to gifts made in 2008 and 2009, so time is of the essence!

To qualify for IRA rollover treatment, the donor must direct the IRA manager to transfer funds directly to a charity (not cash out and issue a check).

The donor must be at least age 70 ½ at the time of the gift.

Donor-advised funds and creation of life income agreements are not eligible.

The distribution will count toward the mandatory withdrawal amount.

Each spouse may make a transfer of the full amount.

Non-profits that plan to use this incentive in their fundraising efforts should advise their donors to consult with their own professional tax or legal counsel to ensure that their gifts will qualify under this new provision.

The information in this blog is for general guidance and should not be a substitute for professional advice.

For more information visit the National Committee on Planned Giving: http://www.ncpg.org/gov_relations/hr4_center.asp?section=8

SECRET MILLIONAIRE

Last night we were treated to – or subjected to depending upon your point of view – Fox network’s new Secret Millionaire reality show. This is a twist on what Oprah did earlier. On last night's premiere a rich father and son in CA and a wealthy married couple in Louisiana went “undercover” in impoverished neighborhoods to live for 10 days on a meager welfare budget and work among financially destitute people. At the show's conclusion, the millionaires revealed their true identity and gave a minimum of $100,000 of personal money to deserving people.

I may have been uncomfortable with the cameras, but the vicarious experience of giving brought me to tears. This is a contemporary “Christmas Carol" of the privileged learning how the Bob Cratchits of America live. It is no surprise to those of us in fundraising for nonprofit organizations that wealthy people are deeply concerned about their own physical, spiritual, intellectual and emotional health and that of their community.

This show comes on the heels of a conversation I had the other day with organization leaders about the wisdom of investing time and money in making sure the donor and volunteer experiences at our charities are rewarding for those who help us do what we do best. Here are a few items to put on the year end checklist:

Our donors and volunteers must regularly be assured in meaningful ways that they are wanted, needed and appreciated!

Be sure those donors who do have to withdraw their support for economic reasons are still in the communications loop, as a common courtesy and so they will return when times are better.

Regular, top notch, active communication with your donors about your work, impact and achievements fosters confidence and loyalty.

Engage potential donors in non-financial ways (advocacy, hands on help, enewsletters, etc.); tap their volunteer spirit and expertise. Their solidarity may grow stronger and the enthusiasm you generate for your cause may lead them to consider your organization as their new social investment opportunity.

For more on Public Interest Fundraising’s January symposium on fundraising in this economy, email KatMiller1000@aol.com