Friday, December 23, 2011

Happy Holidays!

Wishing everybody a happy holidays!  I also wanted to note that there will be no blogging during the next week.  We will return as scheduled after the New Years.

Status Update Ideas For Facebook

Facebook, Facebook, Facebook.  It's what all the cool kids are talking about these days.  Anybody who's anybody has one.

In all seriousness, having a social media presence is pretty important these days, especially for nonprofits.  Not only can you find new supporters you might not have otherwise reached, it also is a place where your followers can converse, and get the latest updates on your mission.  Since Facebook is the big kahuna of social networking sites, it's important that it provides maximum engagement for your supporters.  One of the best ways to do this is to write great status updates.  In her book Social Media For Good, Heather Mansfield provides five ideas for status updates:
  • Success Stories: Supporters like to know that the dollars they are contributing are going towards successful causes.  Fill them in on how their contributions are helping to fund successful programs.
  • Photos: We live in a visual culture.  Post photos directly to Facebook of your organization's latest events or just show people what your office looks like.
  • Videos: Videos are also an effective visual tool for your Facebook.  Try sharing a new one at least two or three times a month.
  • Breaking News: The great thing about social media is it allows you to communicate with your followers instantly.  When something big happens, take advantage of this by letting people know.  The news can be summarized in a few sentences for your status update.
  • Call To Action: Have a fundraising campaign coming up?  Use your Facebook status to get your followers to participate.  You can also do this for petitions or other special events.

Thursday, December 22, 2011

National Philanthropic Trust: Donor-Advised Contributions Up

The Great Recession impacted nonprofits in a number of ways, no more so than donor-advised contributions.  According to a new report, recovery on that front is underway.

The NonProfit Times reported yesterday that The National Philanthropic Trust released its annual Donor-Advised Fund Report and it contained some great news.  According to the report, contributions to donor-advised funds increased by 25.5 percent in 2010, to a total of $7.7 billion.  Total assets from these funds accounted for $29.96 billion, which was a 12.3-percent increase over the $26.67 billion in 2009.  It was also closer to the pre-recession high of $30.2 billion.

The numbers look much better than they did during the height of the recession, from 2007-2009.  While the Dow Jones Industrial Average fell sharply from 2007-2009, it didn't affect donor-advised funds until 2008 and 2009.  There were some declines noted in the report.  For instance, the number of donor-advised funds decreased about 0.05 percent from 161,967 in 2009 to 161,873 last year.  A slight decline, but a decline nonetheless.  On the bright side, the average size of the funds exceeded $185,000, marking a sharp recovery from the $164,663 average in 2009.  It still remained lower than the $192,547 average in 2008 and $202,851 in 2007.

To read more on this story, check out NPT's website.

49ers Wide Receiver Gives Back

In 2005, Braylon Edwards, then a rookie wide receiver for the Cleveland Browns, gave a challenge to 100 local eighth-graders: If they could graduate high school with a 2.5 GPA and 15 hours of community service, they would each get $10,000 scholarships.  Years later, Edwards is still offering this chance to college students.

In 2007 Edwards, who now plays for the San Francisco 49ers, started the Advance 100 Program through the Braylon Edwards Foundation (BEF).  It's a continuation of the promise he made to those Cleveland-area kids, 79 of whom met the original criteria, according to Yahoo! Sports.  The program was developed by Edwards and his mother as a way to use their good fortunes to help others.  Even though they didn't expect many students to fit the criteria (only half of Cleveland public school students graduate), they went through with their commitment anyway.

Those 79 original students were provided with laptops and other supplies to help them once they arrived in college.  Edwards is paid a $1 million base salary for the year, which is about half what he'll pay the Advance 100 students to get through college.

Edwards is certainly not the only athlete to help those who are less fortunate.  A look at Pros Give Back, a site which tracks good deeds from athletes all over the sports world, will show many other acts of generosity like Edwards'.  We've also seen similar philanthropy from athletes like Jonathan Vilma and Craig Breslow.  In an age where we see athletes and owners squabbling over millions of dollars, it's good to read stories like the one coming out of the Advance 100 Program.

Wednesday, December 21, 2011

Eliminate Charitable Deduction?

Should charitable deduction be eliminated?  One former foundation president thinks so.

Jack Shakely, who ran the California Community Foundation for 25 years, recently wrote an opinion piece in The Los Angeles Times that is sure to cause some controversy in the nonprofit sector.  He proposes that the best way to reduce the national debt is to completely scrap the charitable-giving tax deduction.  If you've been following politics lately, you already know that capping charitable giving at 28% for the nation's highest earners has been a priority of the Obama administration.  They have tried it four times already, most recently in the American Jobs Act.  Each time it has failed after major backlash from nonprofits. 

Yet even with the administration's proposal, charitable deduction would remain in place.  If Shakely's suggestion was to be put into place, the deduction would completely disappear.  His reasoning comes down to this: After nearly a century of existence, nobody can say for sure whether it truly stimulates giving.  The argument has been put out there, most recently by Brian Gallagher of United Way of America, that capping charitable deduction for high earners at 28% would cause donors to "withhold the difference to cover the tax."  But is that really the case?

Shakely argues that it isn't.  He cites what happened when the cap on deductions for the top tax brackets was reduced in the past.  In 1980, it went from 70 percent to 50 percent, and then from 39 percent to the current 35 percent in 2003.  If stood to reason that giving should have declined as the cost of giving increased.  But according to the Giving USA Foundation, charitable donations over the last 25 years have remained consistent, staying around 1.7-percent and 1.95-percent of personal income.  If giving didn't decrease then, he argues, why would it decrease now?

All these examples are when the deduction was reduced.  Shakely's suggestion, however, is to get rid of it entirely.  Would that have any significant impact on giving?  It's hard to say because, as he argues, it's hard to pinpoint how much it really stimulates giving.  Regardless, the article is a great read, and we suggest you check it out if you have the time.

Tuesday, December 20, 2011

Creating A Start-Up Nonprofit Isn't Easy

If you were ever thinking of starting your own nonprofit, take a step back: It's not as easy as it sounds.

In a piece written for The Huffington Post, Marty Zwilling, a start-up expert, explains the complications of starting your own nonprofit.  He explains that although most people looking to create a start-up company see nonprofits as the easy route to success, there's a lot that goes into the process.  This includes a healthy business model, which was recently outlined in an article on The NonProfit Times website.  A nonprofit still has to make money on everything it sells in order to maintain its operating expenses.  This is true even if it relies totally on donations.

All this is not to say that you shouldn't try to make your own nonprofit.  You just need to be aware of some of the challenges that come with it.  Zwelling listed five reasons creating a start-up nonprofit can be a challenge.  Here are a few I found most compelling:
  • You know that 501(c) form you have to fill out to become tax-exempt?  It requires a lot more than just filling out a form, and it can take a long time to be approved.  The form has to be accompanied with a $850 fee, and it can take as long as two years to completely finish.
  • Start-ups require willing investors, and it can be a challenge to get them interested in a nonprofit since it will be hard to guarantee an excellent return on investment.
  • Private start-up companies don't have to disclose their salaries or spending practices to anyone other than the IRS.  Nonprofits, on the otherhand, undergo trememndous public scrutiny.
Make sure to read the rest of Zwelling's points on The Huffington Post.

World Giving Index Ranks U.S. Number One

People often claim that the United States is the most charitable country in the world.  Now there is some hard data to back that claim up.

The World Giving Index (WGI), a yearly report released by the United Kingdom-based Charities Aid Foundation, ranked the U.S. first overall for the first time, with an overall score of 60 percent.  It's quite a turnaround from last year, when it ranked behind Australia, New Zealand, Ireland, and Canada.  Here are the top 10 countries from this year's report:
  • United States
  • Ireland
  • Australia
  • New Zealand
  • United Kingdom
  • Netherlands
  • Canada
  • Sri Lanka
  • Thailand
  • Laos
And here are some highlights from the report:
  • The percentage giving money for the U.S. was 65 percent, tied for 10th with Malta.  Thailand was first with 85 percent.
  • 43 percent of respondents in the U.S. said they volunteered.
  • 73 percent of Americans said they helped a stranger this year, up from 65 percent last year.
  • Ireland increased its overall score from 56 percent to 59 percent.
The news from WGI is very consistent with what we learned from Giving USA's data for 2010.  Given the number of natural disasters that have happened over the past year, it isn't entirely surprising that Americans are giving more, even during this time of economic uncertainty.  To read the rest of the data from the report, check out our article on The NonProfit Times.

Monday, December 19, 2011

Should You Use A Prospect Database?

Looking for fundraising prospects is a lot like looking for gold: It's better to have a systematic process in place to find it rather than just hoping you find it where you look.

Part of that systematic process involves using something called a prospect database.  This technology is a virtual warehouse in which data is linked and aggregated to help enhance your campaign.  It contains an organization's own donor data, compiled data, transactional data, prior mail history and response lists in their entirety  Not all nonprofits use them, but the ones that do have experienced success. 

One of these organizations is Smile Train, a children's charity based in New York City.  Priscilla Ma, executive director of the organization, spoke about their use of the prospect database at the DMA Nonprofit Federation conference.  The NonProfit Times recorded her suggestions on what types of organizations should use a prospect database.  You should consider using one if:
  • You’re a high-volume mailer, and your costs are increasing.
  • You want to be a high-volume mailer and you need to cut your costs to get there.
  • Direct mail drives your revenue. 
  • You use a wide variety of lists.
You can read the rest of Ma's suggestions on our website.