Fundraising Strategies That Work!
Insights and Updates from Picasso Strategic Solutions, LLC
....from professionals with a proven track record of raising more money.
www.picassostrategicsolutions.com
Inaugural Issue: Fall 2009
In this issue
Prepare For Successful End-of-Year Solicitations
New Affordable, Results-Oriented Coaching Programs
Lectures to Empower Your Board and Staff
Prepare For Successful End-of-Year Solicitations
Before You Solicit Your Donors, Thank Them!
Mid-November, a few weeks you solicit your donors, is a perfect time to thank them for their past gifts. Everyone loves to be thanked. A telephone call is better than an email or letter since it invites interaction; a thank you call is likely to evoke warm and fuzzy feelings towards your organization. Most donors are making fewer gifts than usual this year, and when it comes to end-of-year giving decisions, they are likely to think of those organizations with which they've recently been in contact.
Board members are particularly well suited to make these thank you calls. Donors feel honored to receive calls from board members. And since the calls don't involve asking for money, this is a great first step for board members who might be nervous about fundraising. Furthermore, board member/solicitors likely will give bigger gifts by virtue of cognitive dissonance, i.e., the natural tendency of people to reduce internal conflict by reconciling their beliefs and behaviors. Once a director tells donors about your organization's valuable work, he himself is likely to give at a level that reflects his own endorsement.
The elements of a thank you call:
1. Thank the donor enthusiastically for all she has done to impact ______________ [your client population].
Keep in mind that the donor's goal is to change the world, not to make your organization a success.
2. Mention something specific that the donor's gift helped to make possible.
3. If appropriate, invite the donor to be more involved, perhaps by volunteering.
4. Thank the donor again.
Let us know how this strategy works for you!
To Your Fundraising Success,
Lisa and Amy
New!
Affordable Results-Oriented Coaching Program
Completed in About Two Weeks
Introducing
THOSE FUNDRAISERS
A Division of Picasso Strategic Solutions
JumpStart™
For new nonprofit organizations.
It's all about the message!
MaxImpact™
For established nonprofits.
Prepare for maximum impact in 2010!
Special introductory offer! From now through December 2009, JumpStart and MaxImpact are specially priced at $1600.
www.thosefundraisers.com
Contact Amy to schedule your coaching services.
480.215.2710
amy@thosefundraisers.com
2010 Lecture Topics
90-Minute Lectures Customized to Meet Your Organization's Needs
Special Introductory Pricing
An Introduction to Best Practices
Case Statement - the most important document on your desk
Development Plan - a roadmap for raising more money
Board - recruiting directors who are "on board" with your mission
Social Media - using technology to reach new donors
The Foundations of a Relationship: Securing Major Charitable Gifts™
Raising Lifetime Donors: Valuing the Donor More Than the Dollar™
The Case For Philanthropic Support: One Message, One Voice™
Bill Gates Has Money, Let's Ask Him: A Primer on Prospect Research™
It's the Plan, Stupid: The Integrated Development Plan™
Getting To The Core Of The Matter™
Contact Lisa to schedule your lectures.
602.354.3535 or lbenson@picassostrategicsolutions.com
Talk to us!
Now is the time to ensure your 2010 fundraising success!
We can help you raise more money .... as we have helped organizations worldwide.
Ask us about our track record.
Call today to schedule your free consultation!
Lisa Benson, CEO
lbenson@picassostrategicsolutions.com
602.354.3535
Amy H Laff, Of Counsel
alaff@picassostrategicsolutions.com
480.215.2710
Tuesday, November 17, 2009
Monday, October 19, 2009
BRAGGING 101
Bragging does not always come easy. Sometimes we brag about the wrong things, but when it comes to the promotion of a charitable organization and the writing of a year-end appeal letter, one cannot brag too much. This is profoundly true when you need to brag on how you spent other people’s money the year prior. After all, a nonprofit is a public trust and the money you spent to increase capacity this year comes from the public, and therefore, they have a right know how the organization spent it.
Most often, the annual report illustrates to the board, and the community at large, the financial well-being of an organization.
There is one other time in the course of the year that you can exhibit bragging rights and use it for fundraising purposes….
…and that time is NOW…..
The year-end appeal letter is most often neglected as a public relations tool. It should be sent to your past donors, as well as prospect donors.
Here are some points that you should include:
• The beginning paragraph should thank the past donors and wish them a happy holiday season. Without their benevolence, there would be no organization. Thank them in the beginning, thank them in the middle and thank them at the end of the letter.
• If the letter is going to a prospect donor, explain how you obtained their name.
• Explain how in 2009 the organization weathered a great challenge (as most did this year) and that regardless of the recession, the charitable organization delivered xyz services to the community. In short order, what was the IMPACT in specific and measurable terms.
• Position the organization to catapult to a new level and explain what the plans are for 2010.
• Finally, ask for a specific amount. Don’t leave it to chance. If your organization has a goal to reach by the end of the calendar year, be specific on how it will be used.
“Your donation of $75 will enable us to start to plan
for 2010 with enthusiasm and optimism.”
Remember, donors NEVER give to distress; they give to success. Make your case for support upbeat and compelling enough that someone will write a check on the spot. It would be too easy to write about how difficult things are this year. PLEASE DON’T DO THAT! Be positive as no one wants one more piece of bad news; your letter will end up in the trash can if it is not motivating.
Your year-end letter must be in the mail by November 1st. It is already getting late as this year we expect a deluge of requests going to donors on behalf of charitable organizations.
If you need help writing a year-end letter, Picasso Strategic Solutions has a staff of writers that can help you.
Don’t miss out on this important fundraising and public relations tool.
BRAG AND BRAG SOME MORE………THERE IS ALWAYS SOMETHING TO BRAG ABOUT IF YOU ARE SERVING THE COMMUNITY.
Next blog will tell a bit more on how to enhance your website to receive gifts.
For now,
Lisa E. Benson
President & CEO
Picasso Strategic Solutions, LLC
Most often, the annual report illustrates to the board, and the community at large, the financial well-being of an organization.
There is one other time in the course of the year that you can exhibit bragging rights and use it for fundraising purposes….
…and that time is NOW…..
The year-end appeal letter is most often neglected as a public relations tool. It should be sent to your past donors, as well as prospect donors.
Here are some points that you should include:
• The beginning paragraph should thank the past donors and wish them a happy holiday season. Without their benevolence, there would be no organization. Thank them in the beginning, thank them in the middle and thank them at the end of the letter.
• If the letter is going to a prospect donor, explain how you obtained their name.
• Explain how in 2009 the organization weathered a great challenge (as most did this year) and that regardless of the recession, the charitable organization delivered xyz services to the community. In short order, what was the IMPACT in specific and measurable terms.
• Position the organization to catapult to a new level and explain what the plans are for 2010.
• Finally, ask for a specific amount. Don’t leave it to chance. If your organization has a goal to reach by the end of the calendar year, be specific on how it will be used.
“Your donation of $75 will enable us to start to plan
for 2010 with enthusiasm and optimism.”
Remember, donors NEVER give to distress; they give to success. Make your case for support upbeat and compelling enough that someone will write a check on the spot. It would be too easy to write about how difficult things are this year. PLEASE DON’T DO THAT! Be positive as no one wants one more piece of bad news; your letter will end up in the trash can if it is not motivating.
Your year-end letter must be in the mail by November 1st. It is already getting late as this year we expect a deluge of requests going to donors on behalf of charitable organizations.
If you need help writing a year-end letter, Picasso Strategic Solutions has a staff of writers that can help you.
Don’t miss out on this important fundraising and public relations tool.
BRAG AND BRAG SOME MORE………THERE IS ALWAYS SOMETHING TO BRAG ABOUT IF YOU ARE SERVING THE COMMUNITY.
Next blog will tell a bit more on how to enhance your website to receive gifts.
For now,
Lisa E. Benson
President & CEO
Picasso Strategic Solutions, LLC
Thursday, October 1, 2009
Raise Your Voice For Nonprofit Success
If you are in the business of nonprofit institutional advancement you are concerned if not downright worried that your organization may not survive the economic tsunami.
…and you are not alone.
It is estimated that there are more than 1.5 million nonprofit organizations in the United States. Prof. Paul Light, NYU, has estimated that as many as 200,000 nonprofit organizations will be forced to close their doors!
If you are involved in a nonprofit organization WE WOULD LIKE TO HEAR FROM YOU!
What are your concerns? What do you need to stay engaged in your mission?
Nonprofit organizations are most often getting by on a shoe string budget and there is little margin for such things as a massive global recession.
Here are a few reasons why organizations fail to succeed regardless of a sluggish economy:
1. They don’t have a compelling message
2. They don’t articulate their impact on the community or nation. Only 2% of nonprofit organizations are objectively measuring their impact.
3. They don’t have stated goals
4. They don’t have stated objectives to reach goals
5. They don’t self evaluate themselves or their programs
6. They don’t ask for money
7. Their mission statements do not tell “why” they exist
8. They don’t collaborate and are territorial; mergers don’t seem palatable
9. The organization’s founder is set in his/her ways and won’t change strategy
10. The organization has no clue what governance and compliance is; however it will
soon be evident with the new Form 990.
Let us help you by helping us…
Picasso Strategic Solutions will be facilitating several seminars in your local communities on the issues that YOU want to hear regarding nonprofit advancement.
Please write us and let us know what topics you would be most interested in discussing.
With more than 30 years in nonprofit institutional advancement, I/we hope to help you formulate a strategy to maximize your impact in 2010.
Raise Your Voices and Be Heard! We look forward to hearing from you.
For now,
Lisa Benson
…and you are not alone.
It is estimated that there are more than 1.5 million nonprofit organizations in the United States. Prof. Paul Light, NYU, has estimated that as many as 200,000 nonprofit organizations will be forced to close their doors!
If you are involved in a nonprofit organization WE WOULD LIKE TO HEAR FROM YOU!
What are your concerns? What do you need to stay engaged in your mission?
Nonprofit organizations are most often getting by on a shoe string budget and there is little margin for such things as a massive global recession.
Here are a few reasons why organizations fail to succeed regardless of a sluggish economy:
1. They don’t have a compelling message
2. They don’t articulate their impact on the community or nation. Only 2% of nonprofit organizations are objectively measuring their impact.
3. They don’t have stated goals
4. They don’t have stated objectives to reach goals
5. They don’t self evaluate themselves or their programs
6. They don’t ask for money
7. Their mission statements do not tell “why” they exist
8. They don’t collaborate and are territorial; mergers don’t seem palatable
9. The organization’s founder is set in his/her ways and won’t change strategy
10. The organization has no clue what governance and compliance is; however it will
soon be evident with the new Form 990.
Let us help you by helping us…
Picasso Strategic Solutions will be facilitating several seminars in your local communities on the issues that YOU want to hear regarding nonprofit advancement.
Please write us and let us know what topics you would be most interested in discussing.
With more than 30 years in nonprofit institutional advancement, I/we hope to help you formulate a strategy to maximize your impact in 2010.
Raise Your Voices and Be Heard! We look forward to hearing from you.
For now,
Lisa Benson
Monday, September 14, 2009
RAISING MORE MONEY ...THE CORE ISSUES
This is a reprint from E-Jewish Philanthropy authored by Kay Sprinkel Grace
Excellent piece for those who manage Nonprofit/Nongovernment organizations.
An important read for raising more money in competitive times....
As philanthropy matures globally there is an increased desire on the part of organizations in all locations to increase the number and commitment of volunteer leaders involved in fund raising, advocacy and other activities that will benefit the organization and the community. Whether the organization is volunteer-run and in need of more volunteers, or staff-run and wanting to engage community people in its programs, the goal is the same – to find ways to effectively recruit, enlist and continually inspire volunteers.
The three critical factors that attract, inspire and continually motivate volunteers are already at the heart of all successful nonprofits – mission, vision and values.
Working as both a volunteer and a professional with a wide variety of organizations, I have observed that continually communicating the organization’s mission, vision and values easily distinguishes those organizations whose volunteers remain loyal and motivated from those that are continually frustrated by the lack of volunteer engagement. To effectively communicate mission, vision and values you need to understand what each is, and why each is so important.
Mission
Most organizations have a mission statement. And, most mission statements describe what an organization does. While this is important, it is not the first message you need to communicate. First – to inspire giving and volunteering – you have to communicate why you exist.
What is the need you are meeting? Without an understanding of why you exist, it is more difficult to be inspired by what you are doing. Your “what” lacks passion and reason without the “why” – particularly when volunteers or donors are attempting to assess the many options presented to them for involvement.
The preparation or review of mission statements provides opportunities for volunteers to see the why and to understand the what. The process gets them involved. And, once the statement has been affirmed or revised, communicate the statement in speeches, materials and on your Website to get others inspired.
An example from Vector Health Programs of Eureka, California, makes the point. Their original mission statement simply described what the organization does – provide medical programs for people with injuries or other problems with their hands. When the Executive Director read the original mission statement to a class at The Fund Raising School, I listened and then said, “Why?”
She was startled. To her, the reasons why you would have a medical program for injured hands were apparent. She said, “Because people need their hands”. I said, “Why?”. Then she was really startled. “Because people do things with their hands,” she said.
I responded, “Write a mission statement that tells me why.” This is what she wrote:
“Next to the human face, hands are our most expressive feature. We talk with them. We work with them. We play with them. We comfort and love with them. An injury to the hand affects a person professionally and personally. At Vector Health Programs, we give people back the use of their hands.”
The class – and subsequent classes where I have shared this – got the point immediately. This mission statement inspires and motivates.
Vision
Aligned with mission is vision. If the mission is the expression of why the organization exists, the vision is the expression of what the community and the organization would look like and be like if that need were met.
To have a vision is to be visionary; to share a vision is to be a leader. Whatever vision you have for your organization, share it with others. A vision is very inspiring to all volunteers – it lets them know where the organization is going and provides them with a motivating message that can be shared with others.
When recruiting volunteers, cultivating donors, or asking for gifts, there is no substitute for the ability to communicate and enroll others in the achievement of your vision. It is the platform for conveying outcomes to donor-investors and also a strong motivator for maintaining volunteer commitment.
Values
Values are the basis of philanthropy, and fund raising is how we provide opportunities for people to act on their values. Values are reflected in the mission (why you exist) and surround the vision. Values come from leadership and attract leadership. Staying true to your organizational values is the measure of your integrity; values are the filter through which volunteers view us, join us, support us and get others to invest in us.
It is a good exercise to have an organization identify its own values. Volunteers and staff, seated at a boardroom or other meeting table, when asked to write down the three values they feel are the most important to the organization, will surprise themselves and each other – and find a common meeting ground – when they share those values. Without exception, they will find that the values they identify are nearly the same. They have been drawn to the organization because they understand its values-inspired focus on issues that matter to them.
People will respond because your organization’s values resonate with theirs. When we recruit and enlist volunteers, it is important to find out what they value and then connect them with the people and programs where their values will be most appreciated.
With potential donors, we need to spend much more time uncovering shared values and less time focusing on fund raising. Without knowing what a potential funder’s values are, fund raising can be an ineffectual process for the volunteer or staff person. When the values are known, it is an easier and often joyful process to show the person how their investment is a lasting way to communicate their values in the community.
Look at your marketing materials: do you communicate your values in such a way that those who share your values will be drawn to you? Or, do you focus on the organization and its attributes only?
Tying Mission, Vision and Values Together
Mission, vision and values are clearly related. Together, they comprise the center core of effective development/fundraising and volunteer programs. Be sure these three things are present in all training you do with volunteers, in all your marketing materials both to the community and inside your organization, and that your board members and staff leaders can communicate them clearly, easily and constantly.
In your board, staff or other volunteer meetings, work to ensure that they are not “bored” meetings – too focused on the organizational issues. Better to emphasize why you exist, the impact you are having, and why your values are critical to the health of your community.
Have a “mission moment” at every board meeting – give five to ten minutes of your meeting to invite a person from the community who has benefited from your program, to tell you why your organization is important, and why he or she is grateful for its work and the investment of the donors. There is no substitute for the impact of this in keeping the mission, vision and values fresh and vital.
If this sounds like lots of work, think to the future. While it may take extra effort to get the program started – to identify and communicate the mission, vision and values effectively – you will find the benefits overwhelm the time required.
You will find that you have expanded your outreach and impact. More people will be telling your story, and you will be having more impact because of the leveraging of resources. By unleashing the passion people feel about their values, the shared vision, and the why of your organization, they will pass that passion along to others. There will be greater commitment (sustained passion) and a greater number of advocates working for you out in the community reaching more constituencies than ever before.
Committed volunteers are engaged, not just involved. They are solid investors of their time, and also their money, and they are interested in enhancing their investment and keeping it strong. Volunteers want to see the transformation of donors into donor-investors, and they become more articulate advocates as they grow more closely involved with the vision and mission.
And, the Result?
Ultimately, more money is raised from the community because the mission and values are more visible. More people are asking, and they are more enthused while they are asking. They realize they are asking people to give not because they are a needy organization, but because they are an organization that is meeting needs.
As leadership of your organization embraces this new model, it, too, will grow stronger. The new attitude and the spirit of innovation will also attract new leadership – a challenge with which many organizations continually wrestle. The heightened level of community advocacy that comes from focusing on the issues your organization is addressing will also connect your leaders with other leaders who are concerned with the same issues, and will raise your visibility in the community.
Like all formulas for moving an organization forward, you will have to decide what will work and what will not, and just how fast you can go. If you need to, start small. Determine where you can begin, and just get started. You will find even the smallest change makes a measurable difference.
Posted by Lisa Benson
President & Principal Counsel
Picasso Strategic Counsel
www.picassostrategicsolutions.com
lbenson@picassostrategicsolutions.com
602-790-6418
Excellent piece for those who manage Nonprofit/Nongovernment organizations.
An important read for raising more money in competitive times....
As philanthropy matures globally there is an increased desire on the part of organizations in all locations to increase the number and commitment of volunteer leaders involved in fund raising, advocacy and other activities that will benefit the organization and the community. Whether the organization is volunteer-run and in need of more volunteers, or staff-run and wanting to engage community people in its programs, the goal is the same – to find ways to effectively recruit, enlist and continually inspire volunteers.
The three critical factors that attract, inspire and continually motivate volunteers are already at the heart of all successful nonprofits – mission, vision and values.
Working as both a volunteer and a professional with a wide variety of organizations, I have observed that continually communicating the organization’s mission, vision and values easily distinguishes those organizations whose volunteers remain loyal and motivated from those that are continually frustrated by the lack of volunteer engagement. To effectively communicate mission, vision and values you need to understand what each is, and why each is so important.
Mission
Most organizations have a mission statement. And, most mission statements describe what an organization does. While this is important, it is not the first message you need to communicate. First – to inspire giving and volunteering – you have to communicate why you exist.
What is the need you are meeting? Without an understanding of why you exist, it is more difficult to be inspired by what you are doing. Your “what” lacks passion and reason without the “why” – particularly when volunteers or donors are attempting to assess the many options presented to them for involvement.
The preparation or review of mission statements provides opportunities for volunteers to see the why and to understand the what. The process gets them involved. And, once the statement has been affirmed or revised, communicate the statement in speeches, materials and on your Website to get others inspired.
An example from Vector Health Programs of Eureka, California, makes the point. Their original mission statement simply described what the organization does – provide medical programs for people with injuries or other problems with their hands. When the Executive Director read the original mission statement to a class at The Fund Raising School, I listened and then said, “Why?”
She was startled. To her, the reasons why you would have a medical program for injured hands were apparent. She said, “Because people need their hands”. I said, “Why?”. Then she was really startled. “Because people do things with their hands,” she said.
I responded, “Write a mission statement that tells me why.” This is what she wrote:
“Next to the human face, hands are our most expressive feature. We talk with them. We work with them. We play with them. We comfort and love with them. An injury to the hand affects a person professionally and personally. At Vector Health Programs, we give people back the use of their hands.”
The class – and subsequent classes where I have shared this – got the point immediately. This mission statement inspires and motivates.
Vision
Aligned with mission is vision. If the mission is the expression of why the organization exists, the vision is the expression of what the community and the organization would look like and be like if that need were met.
To have a vision is to be visionary; to share a vision is to be a leader. Whatever vision you have for your organization, share it with others. A vision is very inspiring to all volunteers – it lets them know where the organization is going and provides them with a motivating message that can be shared with others.
When recruiting volunteers, cultivating donors, or asking for gifts, there is no substitute for the ability to communicate and enroll others in the achievement of your vision. It is the platform for conveying outcomes to donor-investors and also a strong motivator for maintaining volunteer commitment.
Values
Values are the basis of philanthropy, and fund raising is how we provide opportunities for people to act on their values. Values are reflected in the mission (why you exist) and surround the vision. Values come from leadership and attract leadership. Staying true to your organizational values is the measure of your integrity; values are the filter through which volunteers view us, join us, support us and get others to invest in us.
It is a good exercise to have an organization identify its own values. Volunteers and staff, seated at a boardroom or other meeting table, when asked to write down the three values they feel are the most important to the organization, will surprise themselves and each other – and find a common meeting ground – when they share those values. Without exception, they will find that the values they identify are nearly the same. They have been drawn to the organization because they understand its values-inspired focus on issues that matter to them.
People will respond because your organization’s values resonate with theirs. When we recruit and enlist volunteers, it is important to find out what they value and then connect them with the people and programs where their values will be most appreciated.
With potential donors, we need to spend much more time uncovering shared values and less time focusing on fund raising. Without knowing what a potential funder’s values are, fund raising can be an ineffectual process for the volunteer or staff person. When the values are known, it is an easier and often joyful process to show the person how their investment is a lasting way to communicate their values in the community.
Look at your marketing materials: do you communicate your values in such a way that those who share your values will be drawn to you? Or, do you focus on the organization and its attributes only?
Tying Mission, Vision and Values Together
Mission, vision and values are clearly related. Together, they comprise the center core of effective development/fundraising and volunteer programs. Be sure these three things are present in all training you do with volunteers, in all your marketing materials both to the community and inside your organization, and that your board members and staff leaders can communicate them clearly, easily and constantly.
In your board, staff or other volunteer meetings, work to ensure that they are not “bored” meetings – too focused on the organizational issues. Better to emphasize why you exist, the impact you are having, and why your values are critical to the health of your community.
Have a “mission moment” at every board meeting – give five to ten minutes of your meeting to invite a person from the community who has benefited from your program, to tell you why your organization is important, and why he or she is grateful for its work and the investment of the donors. There is no substitute for the impact of this in keeping the mission, vision and values fresh and vital.
If this sounds like lots of work, think to the future. While it may take extra effort to get the program started – to identify and communicate the mission, vision and values effectively – you will find the benefits overwhelm the time required.
You will find that you have expanded your outreach and impact. More people will be telling your story, and you will be having more impact because of the leveraging of resources. By unleashing the passion people feel about their values, the shared vision, and the why of your organization, they will pass that passion along to others. There will be greater commitment (sustained passion) and a greater number of advocates working for you out in the community reaching more constituencies than ever before.
Committed volunteers are engaged, not just involved. They are solid investors of their time, and also their money, and they are interested in enhancing their investment and keeping it strong. Volunteers want to see the transformation of donors into donor-investors, and they become more articulate advocates as they grow more closely involved with the vision and mission.
And, the Result?
Ultimately, more money is raised from the community because the mission and values are more visible. More people are asking, and they are more enthused while they are asking. They realize they are asking people to give not because they are a needy organization, but because they are an organization that is meeting needs.
As leadership of your organization embraces this new model, it, too, will grow stronger. The new attitude and the spirit of innovation will also attract new leadership – a challenge with which many organizations continually wrestle. The heightened level of community advocacy that comes from focusing on the issues your organization is addressing will also connect your leaders with other leaders who are concerned with the same issues, and will raise your visibility in the community.
Like all formulas for moving an organization forward, you will have to decide what will work and what will not, and just how fast you can go. If you need to, start small. Determine where you can begin, and just get started. You will find even the smallest change makes a measurable difference.
Posted by Lisa Benson
President & Principal Counsel
Picasso Strategic Counsel
www.picassostrategicsolutions.com
lbenson@picassostrategicsolutions.com
602-790-6418
Wednesday, June 10, 2009
GETTING TO THE CORE OF THE MATTER
Today, Giving USA reported charitable giving statistics for 2008. Not to anyone’s surprise, donations to charitable organizations fell by 5.7 percent (after adjustment for inflation).
The release was heralded in by a webinar hosted by the Chronicle of Philanthropy.
Does the decline in funding surprise you?
Of course not!
Those of us in the fundraising trenches fully comprehend the difficulties facing nonprofit organizations today….
But wait a minute here….Americans still contributed $307.7 billion to charities last year.
What does $300 billion look at?
Not until America started discussing the $700 billion bailout did we all start contemplating the enormity of billions and billions of dollars. In short order, $300 billion of dollars could make every resident in Buffalo, New York a millionaire; it also equals 40 years of profit for Exxon. It is a lot of money!
The Sky Is Not Falling…..
Yes, it is true that we have a struggling nonprofit sector. However, there are organizations making money. They are the nonprofit organizations that have integrated annual campaign plans, a fully engaged board of directors, and a compelling case for philanthropic support.
I posted a comment on the webinar stating the following:
“I am a consultant to several organizations. What I am seeing is that compelling issues ARE being funded. If the case for support is articulated well, and the campaign is integrated, the organizations are being funded. Those that are not being funded are those who had poor campaign plans in the first place. Are we not seeing a “weeding out” of the weakest organizations as a result of this recession?”
The Moderator Responded:
“Yes, I agree with you. Over the last few years, many other nonprofit organizations have adopted the fund raising practices of the more sophisticated and celebrated universities, hospitals, and UJA-Federations. They have made the investment and now they are able to use their cases, integrated campaigns, and management practices to their benefit. Also, organizations with strong and engaged boards are also doing well.”
Getting to the core of the matter…
If an organization has one funding stream, it will not be able to withstand an economic tsunami. If the organization has been dependent on foundation funding, and does not have a cadre of financially invested donors, it will have difficulty withstanding the recession. If an organization has a board of directors that comes to meetings, votes, and leaves without giving a charitable gift and not getting a charitable gift, it will be feeling the pain of this recession.
We heard today that foundation funding declined by 66% in 2008; however, foundations will continue funding their existing projects. This is very good news.
The decrease in overall giving for 2008, much less than some experts had expected.
Key Finding Include:
· Individuals donated $229.3-billion last year; $22.7-billion was contributed through people’s wills (a 6.4 percent decline).
· Corporate donations totaled $14.5-billion
· Foundation grants declined only slightly, 0.8 percent.
Regardless of what is reported as a decline in giving, Americans dug deep into their pockets and funded urgent needs to the tune of $229.3-billion as individuals.
Thank you, America!
We are the land of the free, the home of the brave, and the source of comfort to millions of Americans in need.
We can be proud of ourselves.
For more information on integrated campaign development, board enhancement strategies and annual campaign implementation, please contact me.
Lisa E. Benson
President, Picasso Strategic Solutions, LLC
www.picassostrategicsolutions.com
602-790-6418
Today, Giving USA reported charitable giving statistics for 2008. Not to anyone’s surprise, donations to charitable organizations fell by 5.7 percent (after adjustment for inflation).
The release was heralded in by a webinar hosted by the Chronicle of Philanthropy.
Does the decline in funding surprise you?
Of course not!
Those of us in the fundraising trenches fully comprehend the difficulties facing nonprofit organizations today….
But wait a minute here….Americans still contributed $307.7 billion to charities last year.
What does $300 billion look at?
Not until America started discussing the $700 billion bailout did we all start contemplating the enormity of billions and billions of dollars. In short order, $300 billion of dollars could make every resident in Buffalo, New York a millionaire; it also equals 40 years of profit for Exxon. It is a lot of money!
The Sky Is Not Falling…..
Yes, it is true that we have a struggling nonprofit sector. However, there are organizations making money. They are the nonprofit organizations that have integrated annual campaign plans, a fully engaged board of directors, and a compelling case for philanthropic support.
I posted a comment on the webinar stating the following:
“I am a consultant to several organizations. What I am seeing is that compelling issues ARE being funded. If the case for support is articulated well, and the campaign is integrated, the organizations are being funded. Those that are not being funded are those who had poor campaign plans in the first place. Are we not seeing a “weeding out” of the weakest organizations as a result of this recession?”
The Moderator Responded:
“Yes, I agree with you. Over the last few years, many other nonprofit organizations have adopted the fund raising practices of the more sophisticated and celebrated universities, hospitals, and UJA-Federations. They have made the investment and now they are able to use their cases, integrated campaigns, and management practices to their benefit. Also, organizations with strong and engaged boards are also doing well.”
Getting to the core of the matter…
If an organization has one funding stream, it will not be able to withstand an economic tsunami. If the organization has been dependent on foundation funding, and does not have a cadre of financially invested donors, it will have difficulty withstanding the recession. If an organization has a board of directors that comes to meetings, votes, and leaves without giving a charitable gift and not getting a charitable gift, it will be feeling the pain of this recession.
We heard today that foundation funding declined by 66% in 2008; however, foundations will continue funding their existing projects. This is very good news.
The decrease in overall giving for 2008, much less than some experts had expected.
Key Finding Include:
· Individuals donated $229.3-billion last year; $22.7-billion was contributed through people’s wills (a 6.4 percent decline).
· Corporate donations totaled $14.5-billion
· Foundation grants declined only slightly, 0.8 percent.
Regardless of what is reported as a decline in giving, Americans dug deep into their pockets and funded urgent needs to the tune of $229.3-billion as individuals.
Thank you, America!
We are the land of the free, the home of the brave, and the source of comfort to millions of Americans in need.
We can be proud of ourselves.
For more information on integrated campaign development, board enhancement strategies and annual campaign implementation, please contact me.
Lisa E. Benson
President, Picasso Strategic Solutions, LLC
www.picassostrategicsolutions.com
602-790-6418
Thursday, March 12, 2009
FROM THE FRONT LINES
I invite you to come to my office and sit in at my desk for a few hours. I promise you it would not be boring. If you are seeking a “thrill ride,” this is the place “to be.”
No, this is not the desk of an investment banker, Wall Street trader, or that of a bankruptcy attorney. The task I take on each and every day is to understand what is happening to America’s money and how to create a “win-win” approach for both donors and charitable causes.
I AM A FUNDRAISER…….often, I refer to myself as a Development Strategist, but really, what I do is raise money and lots of it…and lately it is a monumental task and not one I suggest for the faint of heart.
The need is urgent …there is little time to wait when families are living on the streets.
My projects vary from month to month; however, lately they are focused on two central issues: 1) national security; and 2) the well-being of homeless families. In Phoenix, Arizona that would equate to OVER 20,000 families, a night, living on the streets of just the City of Phoenix …this does not include outlining areas.
Recently, a school teacher friend remarked that several of her students have stopped coming to school. Efforts to reach the families have resulted in learning of disconnected home and/or cell phones, and in some cases, school teachers have gone out to the homes to find them abandoned.
It is horrific to imagine families living in cars or under bridges.
Certainly this cannot be happening in America, but it is.
The United States is a beacon of democracy where every child should have a safe place to sleep, a warm meal, and a place to learn where they can dream and work toward becoming doctors, scientists, lawyers, congressmen, presidents, and school teachers, bus drivers, home builders and soldiers.
I want to direct your attention to three organizations, all in Phoenix, that are working tirelessly to eradicate poverty, help homeless families, and school homeless children.
They are:
UMOM – United Methodist Outreach Ministries/New Day Centers
www.UMOM.org
Children’s First Academy
http://www.childrenfirstacademy.blogspot.com/
My Sister, My Friend
http://www.mysistermyfriendaz.org/home.html
These three organizations are making a difference in the lives of men, women and children by either providing food boxes, emergency housing, schooling homeless children. They are providing a “hands-up” to hundreds of individuals daily; however we need to help THOUSANDS.
Please consider a tax-deductible contribution to these nonprofit organizations.
The nonprofit professional journals have endless articles on how deep the current crisis is for the human service sector. Unfortunately, they do not address how to create a sustainable fundraising stream of revenue. Pundits, professionals are long on rhetoric and short on advice.
I think I know how to raise money at this time…or at least, I have an idea that is taking root which may change the way we look at fundrising.
And trust me; it is a departure from what I would have recommended six months ago.
From the front lines, I will continue to report to you on the change needed in nonprofit fundraising (and development) in order for our sector to survive.
Lisa E. Benson
President
Picasso Strategic Solutions, LLC
No, this is not the desk of an investment banker, Wall Street trader, or that of a bankruptcy attorney. The task I take on each and every day is to understand what is happening to America’s money and how to create a “win-win” approach for both donors and charitable causes.
I AM A FUNDRAISER…….often, I refer to myself as a Development Strategist, but really, what I do is raise money and lots of it…and lately it is a monumental task and not one I suggest for the faint of heart.
The need is urgent …there is little time to wait when families are living on the streets.
My projects vary from month to month; however, lately they are focused on two central issues: 1) national security; and 2) the well-being of homeless families. In Phoenix, Arizona that would equate to OVER 20,000 families, a night, living on the streets of just the City of Phoenix …this does not include outlining areas.
Recently, a school teacher friend remarked that several of her students have stopped coming to school. Efforts to reach the families have resulted in learning of disconnected home and/or cell phones, and in some cases, school teachers have gone out to the homes to find them abandoned.
It is horrific to imagine families living in cars or under bridges.
Certainly this cannot be happening in America, but it is.
The United States is a beacon of democracy where every child should have a safe place to sleep, a warm meal, and a place to learn where they can dream and work toward becoming doctors, scientists, lawyers, congressmen, presidents, and school teachers, bus drivers, home builders and soldiers.
I want to direct your attention to three organizations, all in Phoenix, that are working tirelessly to eradicate poverty, help homeless families, and school homeless children.
They are:
UMOM – United Methodist Outreach Ministries/New Day Centers
www.UMOM.org
Children’s First Academy
http://www.childrenfirstacademy.blogspot.com/
My Sister, My Friend
http://www.mysistermyfriendaz.org/home.html
These three organizations are making a difference in the lives of men, women and children by either providing food boxes, emergency housing, schooling homeless children. They are providing a “hands-up” to hundreds of individuals daily; however we need to help THOUSANDS.
Please consider a tax-deductible contribution to these nonprofit organizations.
The nonprofit professional journals have endless articles on how deep the current crisis is for the human service sector. Unfortunately, they do not address how to create a sustainable fundraising stream of revenue. Pundits, professionals are long on rhetoric and short on advice.
I think I know how to raise money at this time…or at least, I have an idea that is taking root which may change the way we look at fundrising.
And trust me; it is a departure from what I would have recommended six months ago.
From the front lines, I will continue to report to you on the change needed in nonprofit fundraising (and development) in order for our sector to survive.
Lisa E. Benson
President
Picasso Strategic Solutions, LLC
Friday, February 13, 2009
Play By The Rules Or Else....
When people ask me what I do for a living, I often hesitate before answering. If I say “fundraiser” it sounds as though I run church bake sales. If I say “development professional,” I see blank stares as who knows what that is all about? With nearly $100 million raised, trust me, I didn't do it with bake sales.
In plain English, I am a nonprofit specialist whose expertise spans more than 22 years and for most of that time, I have been accruing information regarding every aspect of nonprofit development. Each and every day, I learn something new; hence, that is why this profession resonates with me – I love to learn and bask in the challenge of strategic decisions based on institutional knowledge.
Although, I have raised millions of dollars for worthy organizations worldwide, I find myself having to qualify my insistence of good governance and best business practices. The Picasso Strategic Solutions (www. picassostrategicsolutions.com) website is full of articles explaining the intense oversight that is ensuing by the Internal Revenue Service of nonprofit organizations.
I will continue to write more about compliance in my blogs and articles because “if you don’t play by the rules, your organization may be either heavily fined or closed down.”
For those foundations that invested with ponzi mastermind, Bernard Madoff, not only did they lose their funding, but now, they may also be facing a huge tax levy as a result of not having acute oversight of their investments.
The article below explains this further.
Not a day goes by that I don’t receive a call from a prospective client that says, “Lisa, I don’t care about compliance, I want you to raise money.”
Nothing could be more ridiculous of a statement.
The public, as well as the government, insists that measures be taken to protect the interest of those who have “invested” their resources with the charity. No trust; No money will be raised.
If nonprofits do not recognize that oversight matters, they are wasting their time by engaging in any effort to fundraise as a “public trust.”
Under an obscure tax rule, private foundations can be heavily penalized for failing to vet their investments properly; heed the red flags nonprofit managers, you either play by the rules, or you too will face dire consequences.
Next week, I will be highlighting an Arizona charity that is flourishing, not folding, in these difficult economic times. You will learn why some organizations can exceed financial expectations, and why others fail, in good times and in bad.
I want you all to succeed and continue to provide the services that our respective communities urgently need.
Have a restful weekend.
Lisa E. Benson
FROM: "The New York Times"
February 11, 2009
By LYNNLEY BROWNING
Published: February 11, 2009
Foundations that lost billions of dollars investing with Bernard L. Madoff have another reason to fret: they could be socked with sizable fines for failing to exercise sound judgment.
Under an obscure tax rule, private foundations can be penalized for failing to vet their investments properly, to heed red flags or to diversify prudently. While foundations are exempt from federal income taxes, they are subject to this excise tax, intended to keep them from taking outsize risks that could threaten their very survival.
“The I.R.S. could well assert these taxes,” said Marcus S. Owens, a tax lawyer and partner at Caplin & Drysdale in Washington, who headed the agency’s exempt-organizations division for 10 years.
The penalty can equal 10 percent of the amount invested during the tax year in question. If the foundation fails to try to recover the funds, there is an additional 25 percent penalty.
The foundation’s officers, directors and trustees also face a 10 percent penalty, and a 5 percent additional penalty if they ignored red flags or did not thoroughly vet Mr. Madoff’s investments and proposals. While the fines for individual managers are capped at $10,000 and $20,000, respectively, they are levied per investment.
At least 147 private foundations invested with Mr. Madoff, according to an analysis by Daniel E. Smith, the president of Benefit Technology Inc., a software company in Miami. Some of them, according the analysis, bet the farm — which some tax lawyers say could signal the lack of due diligence and fiduciary responsibility that the tax provision is meant to ensure.
Mr. Owens estimated the potential penalties at around $1 billion for all those invested with Madoff.
Though the I.R.S. has taken a gentle approach to pursuing tax penalties on charities, he suggested that might change with the Madoff case. “It’s pretty rare for a private foundation to make bad investments of this sort,” Mr. Owens said of the agency’s track record. “Most transgressions deal with excessive compensation or grants used for a noncharitable purpose.”
A spokesman for the I.R.S. declined to comment.
Among private foundations, the Picower Foundation, of Palm Beach, Fla., appears to have had the largest exposure to Mr. Madoff, investing virtually all its assets, more than $958 million. Others include the Carl and Ruth Shapiro Family Foundation, also of Palm Beach, which put its entire $199 million with Mr. Madoff; the Betty and Norman F. Levy Foundation of New York, which put in nearly all its assets, more than $244 million, and the Chais Family Foundation, of Encino, Calif., which appears to have lost all its $178 million.
Many, if not all, of the foundations would probably assert that they were fleeced in what prosecutors say is the world’s largest Ponzi scheme. As proof, they might point out that many of their donors also lost considerable personal money investing in this manner.
Still investors of all types, ranging from nonprofits to individuals to corporations, appear to have relied heavily on Mr. Madoff’s reputation and word-of-mouth referrals, which could suggest a lack of fiduciary responsibility.
Private foundations are typically created by a single family or donor, and exist to make grants. The other big piece of the nonprofit world is public charities — college endowments, hospitals and the like — with a broad array of donors.
Because private foundations have a limited base of donor funding, they have been subject for decades to the penalty excise tax, which is intended to encourage prudent investing decisions.
In plain English, I am a nonprofit specialist whose expertise spans more than 22 years and for most of that time, I have been accruing information regarding every aspect of nonprofit development. Each and every day, I learn something new; hence, that is why this profession resonates with me – I love to learn and bask in the challenge of strategic decisions based on institutional knowledge.
Although, I have raised millions of dollars for worthy organizations worldwide, I find myself having to qualify my insistence of good governance and best business practices. The Picasso Strategic Solutions (www. picassostrategicsolutions.com) website is full of articles explaining the intense oversight that is ensuing by the Internal Revenue Service of nonprofit organizations.
I will continue to write more about compliance in my blogs and articles because “if you don’t play by the rules, your organization may be either heavily fined or closed down.”
For those foundations that invested with ponzi mastermind, Bernard Madoff, not only did they lose their funding, but now, they may also be facing a huge tax levy as a result of not having acute oversight of their investments.
The article below explains this further.
Not a day goes by that I don’t receive a call from a prospective client that says, “Lisa, I don’t care about compliance, I want you to raise money.”
Nothing could be more ridiculous of a statement.
The public, as well as the government, insists that measures be taken to protect the interest of those who have “invested” their resources with the charity. No trust; No money will be raised.
If nonprofits do not recognize that oversight matters, they are wasting their time by engaging in any effort to fundraise as a “public trust.”
Under an obscure tax rule, private foundations can be heavily penalized for failing to vet their investments properly; heed the red flags nonprofit managers, you either play by the rules, or you too will face dire consequences.
Next week, I will be highlighting an Arizona charity that is flourishing, not folding, in these difficult economic times. You will learn why some organizations can exceed financial expectations, and why others fail, in good times and in bad.
I want you all to succeed and continue to provide the services that our respective communities urgently need.
Have a restful weekend.
Lisa E. Benson
FROM: "The New York Times"
February 11, 2009
By LYNNLEY BROWNING
Published: February 11, 2009
Foundations that lost billions of dollars investing with Bernard L. Madoff have another reason to fret: they could be socked with sizable fines for failing to exercise sound judgment.
Under an obscure tax rule, private foundations can be penalized for failing to vet their investments properly, to heed red flags or to diversify prudently. While foundations are exempt from federal income taxes, they are subject to this excise tax, intended to keep them from taking outsize risks that could threaten their very survival.
“The I.R.S. could well assert these taxes,” said Marcus S. Owens, a tax lawyer and partner at Caplin & Drysdale in Washington, who headed the agency’s exempt-organizations division for 10 years.
The penalty can equal 10 percent of the amount invested during the tax year in question. If the foundation fails to try to recover the funds, there is an additional 25 percent penalty.
The foundation’s officers, directors and trustees also face a 10 percent penalty, and a 5 percent additional penalty if they ignored red flags or did not thoroughly vet Mr. Madoff’s investments and proposals. While the fines for individual managers are capped at $10,000 and $20,000, respectively, they are levied per investment.
At least 147 private foundations invested with Mr. Madoff, according to an analysis by Daniel E. Smith, the president of Benefit Technology Inc., a software company in Miami. Some of them, according the analysis, bet the farm — which some tax lawyers say could signal the lack of due diligence and fiduciary responsibility that the tax provision is meant to ensure.
Mr. Owens estimated the potential penalties at around $1 billion for all those invested with Madoff.
Though the I.R.S. has taken a gentle approach to pursuing tax penalties on charities, he suggested that might change with the Madoff case. “It’s pretty rare for a private foundation to make bad investments of this sort,” Mr. Owens said of the agency’s track record. “Most transgressions deal with excessive compensation or grants used for a noncharitable purpose.”
A spokesman for the I.R.S. declined to comment.
Among private foundations, the Picower Foundation, of Palm Beach, Fla., appears to have had the largest exposure to Mr. Madoff, investing virtually all its assets, more than $958 million. Others include the Carl and Ruth Shapiro Family Foundation, also of Palm Beach, which put its entire $199 million with Mr. Madoff; the Betty and Norman F. Levy Foundation of New York, which put in nearly all its assets, more than $244 million, and the Chais Family Foundation, of Encino, Calif., which appears to have lost all its $178 million.
Many, if not all, of the foundations would probably assert that they were fleeced in what prosecutors say is the world’s largest Ponzi scheme. As proof, they might point out that many of their donors also lost considerable personal money investing in this manner.
Still investors of all types, ranging from nonprofits to individuals to corporations, appear to have relied heavily on Mr. Madoff’s reputation and word-of-mouth referrals, which could suggest a lack of fiduciary responsibility.
Private foundations are typically created by a single family or donor, and exist to make grants. The other big piece of the nonprofit world is public charities — college endowments, hospitals and the like — with a broad array of donors.
Because private foundations have a limited base of donor funding, they have been subject for decades to the penalty excise tax, which is intended to encourage prudent investing decisions.
Wednesday, February 4, 2009
Hedging with Giving Annuities
For many months, I have been advising my clients to promote life income plans to donors. The article below reinforces my instincts that donors are seeking to make charitable gifts while receiving regular income vis-a-vie Charitable Gift Annuities. I hear from my colleagues who are fundraising at university centers that gift annuities are "flying out the door."
Please contact Picasso Strategic Solutions, LLC if you would like to have life income while at the same time making a gift to charity giving to charity. We can direct you to financial advisors who can help you.
Likewise, if you are a charity and would like to set up a Charitable Gift Annuity program, we are happy to offer strategic advice.
From: The Wall Street Journal
February 3, 2009
Charitable annuities are the gifts that keep giving.
These vehicles allow individuals to support a charity, reduce their tax bill and secure a steady stream of payments for life.
The rates paid to annuity beneficiaries are scheduled to decrease in February, but they're still attractive in today's depressed market.
The American Council on Gift Annuities, a nonprofit that sets the rates that guide annuity payments, cut its recommended rates by .4% to .7% for annuities funded after Feb. 1.
But with guaranteed rates of 5.3% to 9.5% for individuals 65 and older, gift annuities compare favorably with cash-like investments. Five-year certificates of deposit are yielding 2.78%, for example, and the yield on 10-year Treasurys is 2.67%.
For someone seeking a fixed payment, "in the midst of a recession, those rates still look pretty good," says Tony Martignetti, managing director of Martignetti Planned Giving Advisors.
The annuity rate reductions are a result of deep declines in both long and short-term interest rates -- markers used in calculating rates, says Cam Kelly, assistant vice president for principal gift programs at Duke University, who chairs the council's rates committee. Lower rates will help charities preserve their assets.
Charities aren't required to adopt the recommended rates but most will, Kelly said.
Under the new rates, a 70-year-old donor making a charitable gift of $100,000 would receive $5,700 a year, down from $6,100 under the current rates. Tax advantages vary with an individual's specific circumstances.
People with existing contracts aren't affected by the lower annuity rates.
Annuity rates are set with an eye toward the nonprofit receiving about half the donor's initial contribution.
Those concerned with maximizing their payments in retirement can typically receive higher payments from commercial annuities.
"You have to have a charitable intent to create one of these," said Jonathan Lander, vice president and senior wealth planner with PNC Financial Services Group Inc.'s wealth management business.
Tax Benefits
When funding a charitable gift annuity, donors make a gift of cash, securities or other assets to a charity. In return charities pay donors a fixed amount for their lifetime. The remainder goes to the charity.
Most organizations don't charge fees and a document can be drawn up fairly easily, planned giving experts say.
A portion of the annuity payments are tax-free and donors can take an upfront income tax deduction on the gift.
You can also recognize taxable gains on appreciated property, such as stock, over your life expectancy instead of paying capital gains tax all at once, as you would if you sold the property and purchased a commercial annuity.
Charitable annuities can be appealing for investors looking to avoid market risks, ACGA's Kelly says. With markets that are "going up, down and all over the place, donors can use charitable gift annuities to transfer the market risk to the charity and assure a fixed dividend for life," she says.
The flip side of a fixed rate is its inability to keep up with rising interest rates or inflation.
Since annuities are backed by the charity's assets, Kelly suggests thoroughly vetting the institution's financial strength before funding an annuity. Ask organizations about their total asset levels and for records of any defaulted annuities.
Gift annuity defaults, due to an organization's insolvency, are rare, said Frank Minton, senior adviser at charitable consultancy PG Calc and former chairman of the ACGA.
Donors should be wary of a charity that doesn't use the ACGA's rates and ask why, said Jere Doyle, senior vice president at Bank of New York Mellon Corp.'s wealth management division.
Donors can also consult their financial adviser, accountant or attorney to make sure a charitable gift annuity is best for their particular financial situation.
Remember that gift annuities involve an irrevocable transfer of assets, Minton says. You can't get your assets back once you fund an annuity.
When funding a gift annuity, donors can choose to receive payments immediately or defer them to a later date. The older you are, the higher the rate you receive. Some charities enforce a minimum age, such as 60 years old, to begin receiving payments.
Rates for immediate gift annuities are based on the beneficiary's age at the time the annuity is established. Rates for deferred gift annuities, which are less common, take into consideration both the compound interest on the contribution during the deferral period and the annuity rate for the age at which payments begin, Minton says.
A gift annuity is typically structured with funds of at least $10,000.
Payments can go to one person for the individual's lifetime, or for a slightly reduced rate, to two people in succession. For example, if a husband and wife fund a charitable annuity the charity would continue to make payments until both spouses pass on. Donors may also fund a charitable gift annuity for another family member, such as a parent or ill sibling.
Parents or grandparents may consider funding a tuition annuity, whereby a gift annuity is created for a young child, with the donor deferring the payments until age 18, or when the child is expected to go to college. Some states such as New York do not permit this type of annuity.
Write to Shelly Banjo at shelly.banjo@dowjones.com and Kristen McNamara at kristen.mcnamara@dowjones.com
Please contact Picasso Strategic Solutions, LLC if you would like to have life income while at the same time making a gift to charity giving to charity. We can direct you to financial advisors who can help you.
Likewise, if you are a charity and would like to set up a Charitable Gift Annuity program, we are happy to offer strategic advice.
From: The Wall Street Journal
February 3, 2009
Charitable annuities are the gifts that keep giving.
These vehicles allow individuals to support a charity, reduce their tax bill and secure a steady stream of payments for life.
The rates paid to annuity beneficiaries are scheduled to decrease in February, but they're still attractive in today's depressed market.
The American Council on Gift Annuities, a nonprofit that sets the rates that guide annuity payments, cut its recommended rates by .4% to .7% for annuities funded after Feb. 1.
But with guaranteed rates of 5.3% to 9.5% for individuals 65 and older, gift annuities compare favorably with cash-like investments. Five-year certificates of deposit are yielding 2.78%, for example, and the yield on 10-year Treasurys is 2.67%.
For someone seeking a fixed payment, "in the midst of a recession, those rates still look pretty good," says Tony Martignetti, managing director of Martignetti Planned Giving Advisors.
The annuity rate reductions are a result of deep declines in both long and short-term interest rates -- markers used in calculating rates, says Cam Kelly, assistant vice president for principal gift programs at Duke University, who chairs the council's rates committee. Lower rates will help charities preserve their assets.
Charities aren't required to adopt the recommended rates but most will, Kelly said.
Under the new rates, a 70-year-old donor making a charitable gift of $100,000 would receive $5,700 a year, down from $6,100 under the current rates. Tax advantages vary with an individual's specific circumstances.
People with existing contracts aren't affected by the lower annuity rates.
Annuity rates are set with an eye toward the nonprofit receiving about half the donor's initial contribution.
Those concerned with maximizing their payments in retirement can typically receive higher payments from commercial annuities.
"You have to have a charitable intent to create one of these," said Jonathan Lander, vice president and senior wealth planner with PNC Financial Services Group Inc.'s wealth management business.
Tax Benefits
When funding a charitable gift annuity, donors make a gift of cash, securities or other assets to a charity. In return charities pay donors a fixed amount for their lifetime. The remainder goes to the charity.
Most organizations don't charge fees and a document can be drawn up fairly easily, planned giving experts say.
A portion of the annuity payments are tax-free and donors can take an upfront income tax deduction on the gift.
You can also recognize taxable gains on appreciated property, such as stock, over your life expectancy instead of paying capital gains tax all at once, as you would if you sold the property and purchased a commercial annuity.
Charitable annuities can be appealing for investors looking to avoid market risks, ACGA's Kelly says. With markets that are "going up, down and all over the place, donors can use charitable gift annuities to transfer the market risk to the charity and assure a fixed dividend for life," she says.
The flip side of a fixed rate is its inability to keep up with rising interest rates or inflation.
Since annuities are backed by the charity's assets, Kelly suggests thoroughly vetting the institution's financial strength before funding an annuity. Ask organizations about their total asset levels and for records of any defaulted annuities.
Gift annuity defaults, due to an organization's insolvency, are rare, said Frank Minton, senior adviser at charitable consultancy PG Calc and former chairman of the ACGA.
Donors should be wary of a charity that doesn't use the ACGA's rates and ask why, said Jere Doyle, senior vice president at Bank of New York Mellon Corp.'s wealth management division.
Donors can also consult their financial adviser, accountant or attorney to make sure a charitable gift annuity is best for their particular financial situation.
Remember that gift annuities involve an irrevocable transfer of assets, Minton says. You can't get your assets back once you fund an annuity.
When funding a gift annuity, donors can choose to receive payments immediately or defer them to a later date. The older you are, the higher the rate you receive. Some charities enforce a minimum age, such as 60 years old, to begin receiving payments.
Rates for immediate gift annuities are based on the beneficiary's age at the time the annuity is established. Rates for deferred gift annuities, which are less common, take into consideration both the compound interest on the contribution during the deferral period and the annuity rate for the age at which payments begin, Minton says.
A gift annuity is typically structured with funds of at least $10,000.
Payments can go to one person for the individual's lifetime, or for a slightly reduced rate, to two people in succession. For example, if a husband and wife fund a charitable annuity the charity would continue to make payments until both spouses pass on. Donors may also fund a charitable gift annuity for another family member, such as a parent or ill sibling.
Parents or grandparents may consider funding a tuition annuity, whereby a gift annuity is created for a young child, with the donor deferring the payments until age 18, or when the child is expected to go to college. Some states such as New York do not permit this type of annuity.
Write to Shelly Banjo at shelly.banjo@dowjones.com and Kristen McNamara at kristen.mcnamara@dowjones.com
Monday, February 2, 2009
GLOBAL MELTDOWN
From: The Jerusalem Post
February 3, 2009
Some 30 non-profit organizations called on the government Monday to immediately create an emergency plan to help keep hundreds of local charities and grass-roots organizations from closing down due to economic burdens, The Jerusalem Post has learned.
"If something is not done soon to help these organizations, then we will likely see more than 20 thousand people joining the unemployment lines," representatives of the organizations wrote in a statement. The groups were set to meet with government representatives late on Monday to discuss the matter.
"Just like everyone else, we pay our taxes [and] social welfare packages, and support tens of thousands of families," continued the statement. "Firing workers will eventually cost the state much more in unemployment benefits than a comprehensive rescue package."
Eran Klein, project manager at Shatil, the New Israel Fund's empowerment and training center and one of the organizations belonging to the umbrella body, said it was not only a matter of employees losing their jobs.
"We are also talking about many charities being forced to close due to the economic crisis and that, in turn, means some of society's weakest segments not getting essential services," he said.
Klein, who was to be at Monday evening's meeting, said he was not optimistic that the government would agree to a relief package on the scale needed to protect the non-profit sector from the recession. His assumptions were based on the conclusions of previous meetings held between the Prime Minister's Office and the Treasury.
He said the charities were asking the government to address four central issues as part of an aid package: the cancellation of a seven percent tax on non-profit organizations; the establishment of a comprehensive program to slow down recession-induced layoffs; a drive to increase donor bases, including those for grassroots donors; and a new fund to provide emergency aid to organizations on the verge of closing down.
"If the government expects the third sector to continue in the same way it's been operating up until now, it will be extremely disappointed," Klein said.
He added that the situation had become dire for many non-profits over the past few months, and that even if the government refused to implement an immediate bail-out program similar to initiatives for the business sector, "we will continue to push them to tackle this problem."
Meanwhile, speaking at the Herzliya Interdisciplinary Center's annual conference on Monday, Minister of Welfare and Social Services Isaac Herzog addressed the challenges faced by the third sector during the economic crisis.
"The non-profit sector is falling apart, with many organizations closing down completely," Herzog said in his speech. "Due to the situation, we have to think twice about privatizing our social welfare activities."
Herzog's director-general, Nachum Itzkovitz, told a conference panel that 90% of the ministry's operations were currently being outsourced to non-profit organizations. He also warned that further increases in unemployment would most certainly put a strain on the entire social welfare system.
February 3, 2009
Some 30 non-profit organizations called on the government Monday to immediately create an emergency plan to help keep hundreds of local charities and grass-roots organizations from closing down due to economic burdens, The Jerusalem Post has learned.
"If something is not done soon to help these organizations, then we will likely see more than 20 thousand people joining the unemployment lines," representatives of the organizations wrote in a statement. The groups were set to meet with government representatives late on Monday to discuss the matter.
"Just like everyone else, we pay our taxes [and] social welfare packages, and support tens of thousands of families," continued the statement. "Firing workers will eventually cost the state much more in unemployment benefits than a comprehensive rescue package."
Eran Klein, project manager at Shatil, the New Israel Fund's empowerment and training center and one of the organizations belonging to the umbrella body, said it was not only a matter of employees losing their jobs.
"We are also talking about many charities being forced to close due to the economic crisis and that, in turn, means some of society's weakest segments not getting essential services," he said.
Klein, who was to be at Monday evening's meeting, said he was not optimistic that the government would agree to a relief package on the scale needed to protect the non-profit sector from the recession. His assumptions were based on the conclusions of previous meetings held between the Prime Minister's Office and the Treasury.
He said the charities were asking the government to address four central issues as part of an aid package: the cancellation of a seven percent tax on non-profit organizations; the establishment of a comprehensive program to slow down recession-induced layoffs; a drive to increase donor bases, including those for grassroots donors; and a new fund to provide emergency aid to organizations on the verge of closing down.
"If the government expects the third sector to continue in the same way it's been operating up until now, it will be extremely disappointed," Klein said.
He added that the situation had become dire for many non-profits over the past few months, and that even if the government refused to implement an immediate bail-out program similar to initiatives for the business sector, "we will continue to push them to tackle this problem."
Meanwhile, speaking at the Herzliya Interdisciplinary Center's annual conference on Monday, Minister of Welfare and Social Services Isaac Herzog addressed the challenges faced by the third sector during the economic crisis.
"The non-profit sector is falling apart, with many organizations closing down completely," Herzog said in his speech. "Due to the situation, we have to think twice about privatizing our social welfare activities."
Herzog's director-general, Nachum Itzkovitz, told a conference panel that 90% of the ministry's operations were currently being outsourced to non-profit organizations. He also warned that further increases in unemployment would most certainly put a strain on the entire social welfare system.
Monday, January 26, 2009
THE EROSION OF CONFIDENCE
I start my day by going to 1) Wall Street Journal; 2) The Daily Alert from Israel; 3) Philanthropy blogs. Most mornings, I shutter and look at the computer with one eye open. "Can all this really be happening?" Can sociopaths be so charismatic that they con their friends out of life-long savings? The shocking truth is "YES!"
Therefore, it should not surprise the nonprofit sector to have a 40 page Form 990 to fill out each and every year......the IRS is making strong recommendations for audit committes, conflict of interest statements, and whistleblower policies.
Are these recommendation or legal requirements?
The IRS is making strong recommendations, but these are not legal requirements. However, if your organization is political in nature (not a lobbying entitiy, obviously), or controversial in some way, I highly suggest you put your ducks in a row and follow the recommendations to the letter.
The last thing a nonprofit needs right now is to be side tracked by an IRS audit.
See the article below.
In the coming weeks, Picasso Strategic Solutions, LLC will be initiating a new endeavor to help fledging organizations through this economic turmoil.
Our mission is to make sure worthy causes have the tools to succeed.
Stay tuned for an announcement in the coming weeks.
FROM: PHILANTHROPY TODAY
January 26, 2009
Fireman: Adviser looted $25m
Suit says foundation, firm missing funds
By Beth Healy
Globe Staff / January 24, 2009
Paul Fireman, the former chief executive of Reebok International Ltd., says his longtime investment manager looted more than $25 million from his business and charitable foundation, according to a complaint filed yesterday in a Florida court.
Arnold Mullen, an accountant and investment adviser who worked for Fireman for 20 years, transferred millions of dollars from Fireman's business, PFP Associates, and the Paul & Phyllis Fireman Charitable Foundation to various partnerships and business entities for his own benefit, the complaint alleges.
The lawsuit, filed in Palm Beach County where Fireman's business and foundation are based, accuses Mullen of theft, racketeering, fraud, and other charges. Fireman is seeking unspecified damages, as well as interest and attorney's fees. Mullen could not be reached for comment late yesterday. He has paid some of the money back, according to the lawsuit.
A lawyer for Fireman said law enforcement officials were conducting a criminal investigation of the matter. The lawyer, G. Joseph Curley, said in a statement, "Arnold Mullen was seen as a trusted advisor and friend for almost 25 years while he systematically stole more than $25 million from the Fireman family and their charitable foundation. His brazen theft was a terrible betrayal of the trust Paul Fireman placed in him."
Fireman was not available for comment. The Brockton native sold Reebok for $3.8 billion to Adidas-Salomon AG in 2006. He and his wife, Phyllis, stood to make nearly $800 million for selling the Canton sneaker and apparel company.
According to the complaint, Fireman hired Mullen in 1985 to help manage PFP Associates, a company that oversees Fireman's "investments and business activities." Fireman said in the complaint that he hired Mullen, an experienced accountant and investment manager, on a referral from another wealthy South Florida family.
Over the years, Fireman placed increasing trust in Mullen, and Mullen ultimately advised him on investments, including private equity deals. Fireman paid him $800,000 a year, plus bonuses based on investment performance. However Mullen was not authorized to make any investments without Fireman's approval, the complaint says.
It appears that Mullen set up numerous business entities and partnerships through which he laundered funds wired from Fireman's business or foundation. In one case, Mullen allegedly created a partnership using his name and Fireman's, called Forum Partners. In December 2007, he moved $2.4 million of Fireman's money to the partnership, the complaint says. The next day, Mullen moved the money to an account of his own at Fidelity Investments, the complaint says.
In other instances, Mullen allegedly wired funds of Fireman's from Fidelity to entities controlled by Mullen. Fidelity spokeswoman Anne Crowley, reached late yesterday, said, "We have no knowledge of the matter or the lawsuit."
Fireman's foundation is based in Palm Beach Gardens, Fla., and had $228 million in assets at the end of 2006, according to its latest tax filing. The foundation gave $14 million to charities that year, mostly to Boston-area nonprofits. Grants included $5.5 million to Fidelity Investments' Charitable Gift Fund, $1 million to the Institute of Contemporary Art, and $300,000 to Massachusetts General Hospital.
News of another scandal in Palm Beach comes as that community is still reeling over Bernard L. Madoff's alleged $50 billion Ponzi scheme, which since December has wiped out hundreds of millions of charitable dollars - and billions in personal wealth - from Boston to Palm Beach and beyond.
The alleged fraud involving Fireman's foundation and business appeared to have continued into recent weeks. The Florida Department of State's Division of Corporations has on file an application for "registration of a fictitious name," made on Dec. 31, 2008, for a Waterfall Associates Group. According to the filing, the owner of that name is Paul Fireman. Waterfall is one of the entities to which Mullen allegedly transferred Fireman's money.
It wasn't until Nov. 12, 2008, that Fireman learned he had something to worry about. According to the complaint, a story in the South Florida Daily Business Review detailed a lawsuit filed against Mullen and others alleging a fraudulent land deal in Utah. According to that report, Mullen had defrauded several investors out of millions of dollars, by falsely promising he was raising funds to build a ski resort.
Fireman started an internal audit after that, according to the lawsuit, and began finding the improper money wires. Fireman confronted Mullen about a number of the instances; in some cases, Mullen repaid the money.
Also named in the lawsuit are Geoffrey Mullen, the son of Arnold Mullen; Waterfall Associates, a Florida company owned and controlled by Mullen's family; and another company, Esperanza, which is part-owned by Mullen and was also used in the alleged fraud. The complaint also names Lennard Kligler, a business partner of Arnold Mullen.
None of the named individuals could be reached for comment late yesterday.
Beth Healy can be reached at bhealy@globe.com. Jenn Abelson of
Wednesday, January 14, 2009
ACCOUNTABILITY MATTERS
When the Bernie Madoff scandal broke, I was one of the first fundraising professionals to call for the resignation of the trustees who were overseeing the millions of dollars for the charitable organizations who had invested with Madoff.
I was quite shocked to receive comments/emails in return telling me "it was not the fault of the trustees, they just look at the statements for favorable results on investment."
I kid you not; I did receive several emails with similar sentiments.
My response has been the following: 1) nonprofit organizations are held accountable by the Internal Revenue Service to have an investment committee that functions as the fiscal agents of the organization. In short order: The buck stops with the trustees; 2) trustees need to be held accountable both legally and by the organization(s).
Governance and Compliance are the basic tenants of any good running nonprofit. It is the public trust, after all. So, why should the trustees get away with not being held accountable?
THEY SHOULD NOT!
Please read the article (below) that appeared this morning on
BLOOMBERG.COM
I encourage discussion. My entire career has focused on building the endowments of nonprofit organizations. This sad story just makes me sick.
Cuomo Probing Charity Fraud Tied to Madoff Scandal (Update1)
By Andrew Harris and Karen Freifeld
Jan. 13 (Bloomberg) -- New York Attorney General Andrew Cuomo is investigating “people who defrauded charities” in connection with Bernard Madoff’s alleged $50 billion Ponzi scheme.
Cuomo, whose office oversees nonprofit entities in New York, said today “a number of charities” were defrauded by the alleged scam. “We are looking at frauds in charities and people who defrauded” them, Cuomo said after a press conference on an unrelated issue.
The attorney general said he isn’t investigating Madoff, 70, who was charged last month by federal prosecutors with bilking investors by using money from new investors to pay old ones. Madoff’s lawyer, Ira Sorkin, declined to comment on Cuomo’s statement.
Yeshiva University, a not-for-profit New York school, sustained about $110 million in losses related to the scandal, a spokesman has said. Most of those losses were allegedly invested through hedge funds controlled by J. Ezra Merkin, a Yeshiva trustee and chairman of the school’s investment committee, the spokesman, Bill Anderson, said last month. Merkin has denied any wrongdoing.
Private School
A 122-year-old private school that combines academic and religious education, Yeshiva has an endowment of about $1.2 billion remaining. Yeshiva spokesman William Burgos didn’t immediately return a call and e-mail seeking comment.
U.S. Senator Frank Lautenberg’s foundation was also among the charitable groups that invested with Madoff, who allegedly told his sons he committed a $50 billion fraud, according to an FBI criminal complaint.
The foundation run by Lautenberg, a New Jersey Democrat, invested $12.8 million of its $13.8 million in assets with Bernard L. Madoff Investment Securities at the end of 2006, according to a tax return for the organization.
Scott Mulhauser, a staff member for the senator, declined to comment on Cuomo’s announcement, referring calls to the senator’s attorney, Michael Griffinger of Newark, New Jersey’s Gibbons law firm. He didn’t immediately return a call seeking comment.
Brandeis University
The Carl and Ruth Shapiro Family Foundation had about 45 percent of its $345 million in assets invested with Madoff, a spokeswoman previously said. The foundation, a major donor to Brandeis University and Boston’s Museum of Fine Arts, was funded by Carl Shapiro, who sold his Kay Windsor Inc. women’s clothing business to VF Corp. in 1971.
Jean Whitney, executive director for the Boston-based charity, didn’t immediately return a call seeking comment.
The case is U.S. v. Madoff, 08-mag-2735, U.S. District Court, Southern District of New York (Manhattan).
I was quite shocked to receive comments/emails in return telling me "it was not the fault of the trustees, they just look at the statements for favorable results on investment."
I kid you not; I did receive several emails with similar sentiments.
My response has been the following: 1) nonprofit organizations are held accountable by the Internal Revenue Service to have an investment committee that functions as the fiscal agents of the organization. In short order: The buck stops with the trustees; 2) trustees need to be held accountable both legally and by the organization(s).
Governance and Compliance are the basic tenants of any good running nonprofit. It is the public trust, after all. So, why should the trustees get away with not being held accountable?
THEY SHOULD NOT!
Please read the article (below) that appeared this morning on
BLOOMBERG.COM
I encourage discussion. My entire career has focused on building the endowments of nonprofit organizations. This sad story just makes me sick.
Cuomo Probing Charity Fraud Tied to Madoff Scandal (Update1)
By Andrew Harris and Karen Freifeld
Jan. 13 (Bloomberg) -- New York Attorney General Andrew Cuomo is investigating “people who defrauded charities” in connection with Bernard Madoff’s alleged $50 billion Ponzi scheme.
Cuomo, whose office oversees nonprofit entities in New York, said today “a number of charities” were defrauded by the alleged scam. “We are looking at frauds in charities and people who defrauded” them, Cuomo said after a press conference on an unrelated issue.
The attorney general said he isn’t investigating Madoff, 70, who was charged last month by federal prosecutors with bilking investors by using money from new investors to pay old ones. Madoff’s lawyer, Ira Sorkin, declined to comment on Cuomo’s statement.
Yeshiva University, a not-for-profit New York school, sustained about $110 million in losses related to the scandal, a spokesman has said. Most of those losses were allegedly invested through hedge funds controlled by J. Ezra Merkin, a Yeshiva trustee and chairman of the school’s investment committee, the spokesman, Bill Anderson, said last month. Merkin has denied any wrongdoing.
Private School
A 122-year-old private school that combines academic and religious education, Yeshiva has an endowment of about $1.2 billion remaining. Yeshiva spokesman William Burgos didn’t immediately return a call and e-mail seeking comment.
U.S. Senator Frank Lautenberg’s foundation was also among the charitable groups that invested with Madoff, who allegedly told his sons he committed a $50 billion fraud, according to an FBI criminal complaint.
The foundation run by Lautenberg, a New Jersey Democrat, invested $12.8 million of its $13.8 million in assets with Bernard L. Madoff Investment Securities at the end of 2006, according to a tax return for the organization.
Scott Mulhauser, a staff member for the senator, declined to comment on Cuomo’s announcement, referring calls to the senator’s attorney, Michael Griffinger of Newark, New Jersey’s Gibbons law firm. He didn’t immediately return a call seeking comment.
Brandeis University
The Carl and Ruth Shapiro Family Foundation had about 45 percent of its $345 million in assets invested with Madoff, a spokeswoman previously said. The foundation, a major donor to Brandeis University and Boston’s Museum of Fine Arts, was funded by Carl Shapiro, who sold his Kay Windsor Inc. women’s clothing business to VF Corp. in 1971.
Jean Whitney, executive director for the Boston-based charity, didn’t immediately return a call seeking comment.
The case is U.S. v. Madoff, 08-mag-2735, U.S. District Court, Southern District of New York (Manhattan).
Tuesday, January 13, 2009
Social Networking Not So Social....A Place For Post and Passion
Facebook Users Go to War Over Gaza
FROM: www. TIME.COM
January 13, 2009
By Deena Guzder Tuesday, Jan. 13, 2009
While Hamas rockets pummel southern Israel and Israeli bombs decimate Gaza, a parallel war is being fought in virtual communities. On Dec. 27, two hours after Israel began its military operation, Joel Leyden created a Facebook group called "I Support the Israel Defense Forces in Preventing Terror Attacks from Gaza." Leyden, an American who served with the Israeli military, says he has since received dozens of death threats via his Facebook inbox. "People were not just saying 'I hope you die!' but also asking 'How do you want to die?' " says Leyden, who uses Facebook to alert people about potential attacks on synagogues.
Meanwhile, Hamzeh Abu-Abed, who created a Facebook group titled "Let's collect 500,000 signatures to support the Palestinians in Gaza," says he has received similar hate mail. "They said I am a terrorist who should die," says Abu-Abed, an accountant from Jordan. "We have been harassed by Zionists who hacked our group and called themselves the Jewish Internet Defense Force."
Of course, Internet users have complained for years that the anonymity of electronic communication breeds incivility. But some say the Gaza conflict is a lightning rod for particularly vitriolic exchanges. An example from one group forum on Facebook: "Israel = killers" wrote one contributor. That drew a response from another user: "Maybe I'll wrap a towel around my head and beat my wife for peace in the name of Allah." Rahel Aima, an undergraduate student at Columbia University who frequents several social-networking sites, says she has been "shocked by some of the hyper-distilled hatred and racism that I've seen in the past few days. I've only really seen such a flurry of polarizing sentiments with this current Gaza situation."
The online debate merely reflects real-world hostility and passion. The Gaza conflict has sparked heated and sometimes violent demonstrations around the world. But for site operators, the war of words is raising fresh questions about free speech and censorship online. Facebook, which has 150 million active users, does not remove members or groups that speak out against countries, political entities, or ideas. "Our goal is to strike a very delicate balance between giving Facebook users the freedom to express their opinions and beliefs, while also ensuring that individuals and groups of people do not feel threatened or endangered," says Facebook spokeswoman Elizabeth Linder. "We've taken action on groups promoting both sides of the current conflict, but do not typically provide details on such instances."
Rita King, who studies online communities as a Senior Fellow at the Carnegie Council for Ethics in International Affairs, says the heightened level of hostility since Israel began its military operation is troubling. "Learning how to navigate this potentially dangerous new twist in human interaction is complicated, particularly with regard to issues of security," King says. According to Lea Bishop Shaver, a lecturer at Yale Law School, threatening to kill someone through an online forum "can land you in jail for assault, even if you never touch the person." But she added that making empty threats over the Internet rarely results in prosecution. "To trigger criminal prosecution, the threat has to be a serious one," Shaver says.
In fact, because online forum participants rarely know each other and often live on different continents, threats are rarely serious. Partly for that reason, King maintains online exchanges — even ugly ones — facilitate communication and understanding. "The Internet removes the threat of physical harm and thus offers an unprecedented opportunity for the development of new ideas for conflict mediation," says King.
Certainly governments see value in talking directly to the public through online communities. On Dec. 30, The Israeli consulate in New York hosted a press conference on Twitter, a social-messaging service, to respond to questions from the public about Gaza. For Facebook and other social networks, "the struggle ... is to find ways to create an environment that encourages truly meaningful dialogue," says Amy Bruckman, an Associate Professor at the College of Computing at Georgia Tech. Until that happens, there will likely be no ceasefire in the virtual world.
FROM: www. TIME.COM
January 13, 2009
By Deena Guzder Tuesday, Jan. 13, 2009
While Hamas rockets pummel southern Israel and Israeli bombs decimate Gaza, a parallel war is being fought in virtual communities. On Dec. 27, two hours after Israel began its military operation, Joel Leyden created a Facebook group called "I Support the Israel Defense Forces in Preventing Terror Attacks from Gaza." Leyden, an American who served with the Israeli military, says he has since received dozens of death threats via his Facebook inbox. "People were not just saying 'I hope you die!' but also asking 'How do you want to die?' " says Leyden, who uses Facebook to alert people about potential attacks on synagogues.
Meanwhile, Hamzeh Abu-Abed, who created a Facebook group titled "Let's collect 500,000 signatures to support the Palestinians in Gaza," says he has received similar hate mail. "They said I am a terrorist who should die," says Abu-Abed, an accountant from Jordan. "We have been harassed by Zionists who hacked our group and called themselves the Jewish Internet Defense Force."
Of course, Internet users have complained for years that the anonymity of electronic communication breeds incivility. But some say the Gaza conflict is a lightning rod for particularly vitriolic exchanges. An example from one group forum on Facebook: "Israel = killers" wrote one contributor. That drew a response from another user: "Maybe I'll wrap a towel around my head and beat my wife for peace in the name of Allah." Rahel Aima, an undergraduate student at Columbia University who frequents several social-networking sites, says she has been "shocked by some of the hyper-distilled hatred and racism that I've seen in the past few days. I've only really seen such a flurry of polarizing sentiments with this current Gaza situation."
The online debate merely reflects real-world hostility and passion. The Gaza conflict has sparked heated and sometimes violent demonstrations around the world. But for site operators, the war of words is raising fresh questions about free speech and censorship online. Facebook, which has 150 million active users, does not remove members or groups that speak out against countries, political entities, or ideas. "Our goal is to strike a very delicate balance between giving Facebook users the freedom to express their opinions and beliefs, while also ensuring that individuals and groups of people do not feel threatened or endangered," says Facebook spokeswoman Elizabeth Linder. "We've taken action on groups promoting both sides of the current conflict, but do not typically provide details on such instances."
Rita King, who studies online communities as a Senior Fellow at the Carnegie Council for Ethics in International Affairs, says the heightened level of hostility since Israel began its military operation is troubling. "Learning how to navigate this potentially dangerous new twist in human interaction is complicated, particularly with regard to issues of security," King says. According to Lea Bishop Shaver, a lecturer at Yale Law School, threatening to kill someone through an online forum "can land you in jail for assault, even if you never touch the person." But she added that making empty threats over the Internet rarely results in prosecution. "To trigger criminal prosecution, the threat has to be a serious one," Shaver says.
In fact, because online forum participants rarely know each other and often live on different continents, threats are rarely serious. Partly for that reason, King maintains online exchanges — even ugly ones — facilitate communication and understanding. "The Internet removes the threat of physical harm and thus offers an unprecedented opportunity for the development of new ideas for conflict mediation," says King.
Certainly governments see value in talking directly to the public through online communities. On Dec. 30, The Israeli consulate in New York hosted a press conference on Twitter, a social-messaging service, to respond to questions from the public about Gaza. For Facebook and other social networks, "the struggle ... is to find ways to create an environment that encourages truly meaningful dialogue," says Amy Bruckman, an Associate Professor at the College of Computing at Georgia Tech. Until that happens, there will likely be no ceasefire in the virtual world.
Monday, January 12, 2009
FEELING THE SQUEEZE....BRUSHSTROKES REPORT
FROM: Chronicle of Philanthropy
Special Report
January 15, 2009
Charities Brace for a Tough Year and Seek Role in Recovery Plan
advertisement
Perhaps no other year-end fund-raising season has been watched as carefully and nervously as the one that just closed. While the last quarter is always important for filling charity coffers, it was perhaps even more important in 2008 as a bellwether of just how difficult the coming year will be for the nation's charities.
The anxiety about the year ahead was clear in a new poll that found a record-setting decline in confidence about fund raisers' ability to succeed over the next six months. More than one-third of fund raisers say they do not expect fund raising to fare well over the next six months, far more than have reported such pessimism since Indiana University's Center on Philanthropy started conducting the poll in 1998.
While most charities have yet to tally their results for December, it's clear that the record was mixed. The most notable successes were achieved at social-service groups, as donors responded to charities' aggressive efforts to seek aid to meet rising needs of poor and middle-class people.
Still, most social-service groups said the increases were not large enough to meet surging requests for aid. At the Salvation Army, in Syracuse, N.Y., donations were running 20 percent higher in December than at the same time a year ago. But demand for food from its pantry doubled in the past year, and it is housing 50 percent more people than its shelters were built to accommodate. To top it off, the charity, which relies on government grants and contracts for 70 percent of its operating budget, has just learned that New York State, facing a $15-billion shortfall, will cut support for many programs, starting in April.
Even at organizations that achieved better fund-raising results than expected, the overall financial picture is so bleak that many charities have started to lay off workers.
Big Brothers Big Sisters of Colorado, in Denver, saw contributions rise last year but still decided to dismiss nine of its 48 employees. The charity says it expects a 10-percent decline in corporate donations, which account for more than a quarter of the group's revenue.
As a new year opens, many charities are hoping that President-elect Obama and Congress will take heed of their money woes and channel money from an economic-stimulus plan to nonprofit organizations.
In the following pages, The Chronicle looks at how charities did in the search for year-end gifts from recession-weary donors, and what they are doing to drum up help from private and government sources.
Copyright © 2009 The Chronicle of Philanthropy
Special Report
January 15, 2009
Charities Brace for a Tough Year and Seek Role in Recovery Plan
advertisement
Perhaps no other year-end fund-raising season has been watched as carefully and nervously as the one that just closed. While the last quarter is always important for filling charity coffers, it was perhaps even more important in 2008 as a bellwether of just how difficult the coming year will be for the nation's charities.
The anxiety about the year ahead was clear in a new poll that found a record-setting decline in confidence about fund raisers' ability to succeed over the next six months. More than one-third of fund raisers say they do not expect fund raising to fare well over the next six months, far more than have reported such pessimism since Indiana University's Center on Philanthropy started conducting the poll in 1998.
While most charities have yet to tally their results for December, it's clear that the record was mixed. The most notable successes were achieved at social-service groups, as donors responded to charities' aggressive efforts to seek aid to meet rising needs of poor and middle-class people.
Still, most social-service groups said the increases were not large enough to meet surging requests for aid. At the Salvation Army, in Syracuse, N.Y., donations were running 20 percent higher in December than at the same time a year ago. But demand for food from its pantry doubled in the past year, and it is housing 50 percent more people than its shelters were built to accommodate. To top it off, the charity, which relies on government grants and contracts for 70 percent of its operating budget, has just learned that New York State, facing a $15-billion shortfall, will cut support for many programs, starting in April.
Even at organizations that achieved better fund-raising results than expected, the overall financial picture is so bleak that many charities have started to lay off workers.
Big Brothers Big Sisters of Colorado, in Denver, saw contributions rise last year but still decided to dismiss nine of its 48 employees. The charity says it expects a 10-percent decline in corporate donations, which account for more than a quarter of the group's revenue.
As a new year opens, many charities are hoping that President-elect Obama and Congress will take heed of their money woes and channel money from an economic-stimulus plan to nonprofit organizations.
In the following pages, The Chronicle looks at how charities did in the search for year-end gifts from recession-weary donors, and what they are doing to drum up help from private and government sources.
Copyright © 2009 The Chronicle of Philanthropy
Here Comes The Judge...More on Madoff
From: eJewish Philanthropy
January 12, 2009
The Madoff Loss - How Large Might it Grow
Last week, the court appointed trustee for Bernard L. Madoff Investment Securities LLC mailed claim forms to more than 8,000 potential victims - both individuals and institutions with open accounts in the 12 months preceding the collapse. This mailing did not include potential secondary victims (i.e. those invested through Merkin's Ascot Partners). Advertisements were also published in various U.S. and Israeli newspapers.
Jeffrey Katzenberg's loss has now been put at $20 million (approximately 90% of his foundations' value); Katzenberg indicates this will cause "extraordinary damage" to his philanthropic efforts.
Mark Rich (of Clinton pardon fame) lost $15 million. Despite the negative PR, Rich supported a new wing of the Tel Aviv Art Museum and played a part in assisting aliyah from Ethiopia, Iran, the former Soviet Union and Yemen.
While we have discussed losses to the Jewish world through Madoff and related investments, as evidenced by the trustee's mailing, the broader international fallout is much larger. For those interested, here are the latest lists (January 7th) from both The New York Times and The Wall Street Journalof individuals, banks, charities and investment firms exposed to losses in Madoff's various investment funds.
In related news, Ezra Merkin finally resigned as chairman of GMAC, the troubled financial arm of General Motors. Merkin has also recently resigned from leadership roles in several Jewish organizations, including Yeshiva University and UJA Federation New York; we understand he will not be resigning as president of Fifth Avenue Synagogue (where individual congregants have losses estimated at $2 billion through
January 12, 2009
The Madoff Loss - How Large Might it Grow
Last week, the court appointed trustee for Bernard L. Madoff Investment Securities LLC mailed claim forms to more than 8,000 potential victims - both individuals and institutions with open accounts in the 12 months preceding the collapse. This mailing did not include potential secondary victims (i.e. those invested through Merkin's Ascot Partners). Advertisements were also published in various U.S. and Israeli newspapers.
Jeffrey Katzenberg's loss has now been put at $20 million (approximately 90% of his foundations' value); Katzenberg indicates this will cause "extraordinary damage" to his philanthropic efforts.
Mark Rich (of Clinton pardon fame) lost $15 million. Despite the negative PR, Rich supported a new wing of the Tel Aviv Art Museum and played a part in assisting aliyah from Ethiopia, Iran, the former Soviet Union and Yemen.
While we have discussed losses to the Jewish world through Madoff and related investments, as evidenced by the trustee's mailing, the broader international fallout is much larger. For those interested, here are the latest lists (January 7th) from both The New York Times and The Wall Street Journalof individuals, banks, charities and investment firms exposed to losses in Madoff's various investment funds.
In related news, Ezra Merkin finally resigned as chairman of GMAC, the troubled financial arm of General Motors. Merkin has also recently resigned from leadership roles in several Jewish organizations, including Yeshiva University and UJA Federation New York; we understand he will not be resigning as president of Fifth Avenue Synagogue (where individual congregants have losses estimated at $2 billion through
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