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AFP eWire Printable Version: May 19, 2009

AFP President and CEO, Paulette V. Maehara, CFRE, CAE, Starts Blog about Fundraising!

AFP is pleased to announce that its president and CEO, Paulette V. Maehara, CFRE, CAE, is starting a blog about fundraising, the profession and AFP. Click below to read Paulette’s latest post on 2009 and how the economy is (and isn’t) affecting AFP and the charitable sector. Visit http://paulettespov.blogspot.com.

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Obama Administration Continues to Push Proposal to Limit Charitable Deduction for the Wealthy

As Congress turns its attention to healthcare, the Obama Administration indicates it is interested in using the limitation on charitable deductions to help foot the bill for reforms.

Congress, in its recently passed budget resolution, rebuffed the Obama Administration’s efforts to limit the value of the tax break for itemized deductions, including donations to charity, to 28 percent for families making more than $250,000. But the White House is continuing to push for the deduction cap.

White House Budget Director Peter R. Orszag recently wrote a blog entry where he justified the charitable deduction proposal by stating that “[i]f you’re a teacher making $50,000 a year and decide to donate $1,000 to the Red Cross or United Way, you enjoy a tax break of $150.  If you are Warren Buffet or Bill Gates and make that same donation, you currently get a $350 deduction—more than twice the break as the teacher.  Limiting itemized deductions for high-income Americans would help restore balance to the tax code, and any effect on charitable giving is likely to be swamped by other Administration policies.” 

Orszag further added, “The best way to boost charitable giving is to jumpstart the economy and raise incomes—and the purpose of the Recovery Act enacted in the Administration’s first month in office was to do precisely that.” 

AFP disagrees with this assessment.  First, the teacher-Warren Buffet/Bill Gates analogy neglects the fact that Buffet and Gates pay a higher tax rate than the hypothetical teacher.  In addition, assuming that only economic prosperity, and not charitable giving incentives such as tax deductions, affects charitable giving is an incorrect assumption. 

During a roundtable discussion held by the Senate Finance Committee on Tuesday, May 12, 2009, the charitable deduction proposal was raised briefly.  Although it was not discussed in detail, Sen. Max Baucus (D-MT) made it clear that everything, including the charitable deduction proposal, remained on the table as options to pay for healthcare reform.

The committee will next hold closed door meetings to discuss healthcare reforms and ways to pay for them.

Nonprofit Hospitals Tax Exemption also at Risk

Sen. Charles Grassley (R-IA), ranking Member of the Senate Finance Committee, also raised the issue of the tax exempt status of nonprofit hospitals during the committee’s roundtable discussion.  The Senator questioned the necessity of the tax exemption for such hospitals. The panelists generally agreed that some changes to the exempt status were worth considering, but they also argued against eliminating the exemption entirely.  The Senator has been looking very closely at nonprofit hospitals for some time, and this issue will continue to receive scrutiny and consideration.  AFP will continue to monitor this issue as well.

Please Contact Your Members of Congress to Oppose Reducing the Charitable Deduction

AFP is encouraging its members to contact their Senators and Representatives in Congress to oppose any provision that would impose new limits on charitable deductions.

For draft talking points and letters, please click the active link in the electronic version of this eWire story.

Background:

Earlier this year, AFP and the Association for Healthcare Philanthropy (AHP) opposed the proposal in a joint statement (statement in PDF format available as link from electronic version of this story).

In addition, AFP, along with a coalition composed of the American Society of Association Executives, the Alliance of Nonprofit Mailers, DMA Nonprofit Federation and the National Catholic Development Conference, sent letters to key members of Congress in opposition this proposal.  The coalition also thanked the House and Senate Budget Committees for excluding the charitable deduction proposal from the budget resolution.

Were this proposal to become law, it would have a substantial negative impact on charitable giving.  Indiana University's Center on Philanthropy recently estimated that the budget proposal to limit deductions and raise rates, if applied in 2006, would have reduced giving by nearly $4 billion

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Growth Slows for Online Fundraising in ‘08, Smaller Donations the Culprit  

Online fundraising grew in 2008 thanks to an increase in the number of gifts, but the average gift size among all organizations decreased $15 from 2007.

The eNonprofit Benchmarks Study measures the effectiveness of nonprofit Internet fundraising and activism programs and highlights the critical importance of the Internet to mission-focused organizations. It was created by M+R Strategic Services and the Nonprofit Technology Network (NTEN).

The increase in the number of gifts helped offset revenue lost from a decline in average gifts, the study shows. Average gift size across all participating organizations was $71, down $15 from the previous year. This decline was most pronounced in the fourth quarter of 2008.

The number of online gifts increased by 43 percent from 2007, while the total dollars raised online increased by only 26 percent.

More Findings

Email open and click-through rates fell slightly from 2007 to 2008, while response rates remained relatively steady. Open rates declined from 17 to 16 percent, and click-through rates have declined nearly a half of a percent, to 2.4 percent. These declines are less pronounced than the downward trends found in previous studies.

The average subscriber on each email list received about 3.5 messages per month. This was unchanged from 2007 to 2008.

Fundraising emails sent to previous donors received response rates more than three times as high as those sent to non-donors.

"The good news is, online fundraising is still growing. It's weathering the storm better than other fundraising channels," says Marc Ruben, Vice President at M+R Strategic Services and a study co-author. "The bad news is, the pace of growth has slowed. More people are giving online, but they're giving less."

Results of AFP’s State of Fundraising Report show that online fundraising still fared well compared to other fundraising activities. Online fundraising was the only type of fundraising wherein a majority of respondents reported raising more money in 2008 than in 2007. In addition, despite the slowdown, 75 percent of respondents said they will increase their Internet fundraising activities. Full results of the AFP State of Fundraising Report will be released soon.

About the Study

The 2009 eNonprofit Benchmarks Study (available as a free download) analyzes data from 2008 and evaluates the changing landscape of nonprofit email programs, fundraising and advocacy. The data came from 32 major nonprofits working on environmental, legal/civil rights, health and international aid issues.

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Insights About the Leadership Transition Process  

By John W. Corwin

During the past seven years serving a wide variety of nonprofits  as interim chief executive (seven in all), I've frequently been asked to describe what it's like for an organization to transition to a new leader. Below you will find a brief summary of some key insights I have developed in the course of my experiences.

It's an opportunity. Leadership transition presents an ideal opportunity for the kind of constructive change that strengthens effectiveness. With no incumbent in place, the organization is free to take a fresh look at its mission, operations, and environment; to meet current challenges; and to identify and seize future opportunities.

It allows for objective assessment and action. As an outsider, the experienced interim leader—who is not a candidate for the long-term position—has "the best seat in the house" and offers three assets not otherwise available to the organization: (1) the objectivity of someone who is not enmeshed within the organization, the mission, the culture, the history, and the political landscape; (2) perspective based on experience with other nonprofits; and (3) a neutral approach to fact-finding and decision-making, based not on any personal agenda but only on the best interests of the organization. The ability, and duty, to speak candidly from this outsider perspective, and to act accordingly, is a uniquely powerful force for strengthening an organization.

It requires hands-on management. The assessment described above will identify those areas that are working fine, as well as those areas where changes should be made. Maintaining continuity in all areas—program, finance, fundraising, administrative—requires consistent, flexible hands-on management. One of the greatest challenges of the transition period is to repair the playing field while simultaneously continuing to play the game on the existing field.

It's stressful. Leadership transition is highly stressful for any organization. Insiders and outsiders alike worry about the future direction and sometimes even the viability of the institution. Almost everyone embraces the idea of change, but the actual process of change can be frightening. The interim leader is called upon to be the calm amidst the storm.

It presents a variety of challenges. There is no cookbook for leading an organization through executive transition. All key factors must be reviewed, including program delivery, finances, development, upcoming deadlines, key relationships, and board activity. The top priorities will depend heavily on the factual situation, organizational culture, varying attitudes towards the most recent chief executive, and the dynamics between the Board and Staff.

It requires constant communication. Busy nonprofit Staff and Boards find it difficult enough in "normal" times to stay adequately in touch. During transition, when internal and external doubts can be strongest, and the thirst for information the greatest, the interim leader must constantly communicate with all constituencies. This is important for preserving key relationships and for providing credible assurances of consistent progress towards the goal—whether the goal is to hire a new chief executive, consummate a merger, or wind down the operations in a way that maximizes continuity of services to the community.

It's not just about the money. Most nonprofits experience financial anxiety, and the recession has certainly heightened this anxiety. However, organizations often have impressions about their financial condition that are at considerable variance - in either direction - with their actual financial condition. Moreover, financial difficulties usually result not simply from a shortage of funds but from some other organizational weakness(es), which must be addressed in order to ensure long-term viability. Transition is a great time to achieve financial clarity.

It takes as long as it takes. The three major variables are (1) when the search for a successor begins, (2) how long the search takes, and (3) when the new leader is available to begin. Patience is critical; as the saying goes, it takes nine months to make a baby, no matter how many people you put on the job.

It makes a difference. Executive vacancy presents among the greatest risks to the stability of any nonprofit organization: to funder and other key relationships, staff morale, public visibility and credibility, sound fiscal management, and program delivery. Those risks are certainly no smaller today than they ever were. The most gratifying aspect of interim leadership is to help the organization meet the challenges to its stability, continuity and reputation, emerge stronger than before, and succeed in attracting the best possible new leader, and to see it thrive as it serves the community in carrying out its vital mission.

John W. Corwin, a consultant to nonprofits nationwide, specializes in the area of interim executive leadership. His firm, Corwin Consulting LLC, is based in New York. This article can be downloaded at www.corwinconsulting.com.

Copyright 2009 by John W. Corwin. This article was reprinted with permission.

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Member Achievements: AFP Congratulates New CFRE Recipients

A list of AFP members that have recently earned the Certified Fund Raising Executive credential from CFRE International was published in eWire this week. To view the list go to the original eWire email for this week or log on to www.afpnet.org and click on AFP News and Press Releases. AFP congratulates these new CFRE credential recipients.

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Nominations Being Accepted Now for AFP Board of Directors

AFP is seeking nominations of qualified candidates to serve on its 2010 Board of Directors as a district director or as an at-large director. Forms are due on or before July 31, 2009. To nominate someone for AFP’s Board of Directors, go to the AFP homepage, www.afpnet.org, and click on the item in the to-do list regarding board nominations. Or see the electronic version of this story.

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AFP Award Nominations Now Being Accepted - Forms Due July 15

AFP offers a number of awards for exemplary work in philanthropy and fundraising. Act now to nominate an outstanding fundraiser, philanthropist, corporation or foundation. Go to the AFP website, www.afpnet.org, and click on the link for National Philanthropy Day and AFP Awards.

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AFP Canada: Just Days Left to Participate in Globe and Mail Supplement

May 20 is the deadline for reserving space in The Globe and Mail’s special supplement focused on fundraising and philanthropy and published jointly with AFP. Call today to reach out to millions of prospective donors in Canada’s most respected publication.

AFP is continuing its partnership with Canadian newspaper The Globe and Mail through a special June 27 philanthropy supplement titled “A Time to Give.”

Members are encouraged to advertize in this premier report because it will be a tremendous opportunity to reach a wide cross-section of donors and constituents. Special advertizing discounts are available. The deadline for reserving space is May 20.

This special national report will investigate how charities are addressing the current global economic crisis and why charitable contributions are needed now more than ever. Other topics will include the best ways donors can support a charity in the current climate, ethics and public trust, innovative programs and services being offered and planned giving, bequest and endowments.

The Globe and Mail reaches 1.3 million daily readers and is a favorite publication of Canadian senior executives, read by 71 percent of all executives and 76 percent of presidents, CEOs and chairpersons.

“In these economically challenging times, this type of national supplement focusing on philanthropy is more important than ever,” said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. “Charities can’t afford to pull back on their marketing and advertizing efforts, and we believe our partnership with The Globe and Mail is an extraordinary value and opportunity for members to show all of Canada how they’re helping to improve the world. I encourage members to participate in this special report.”

The supplement will include a limited number of one-eighth, quarter-, half- and full-page advertizing positions. The Globe and Mail will also reprint additional copies of the report and provide an online PDF version of the supplement. The special section also will appear online at www.globeandmail.com for seven days and thereafter will be archived for 90 days.

The attached sell sheet has additional information about the supplement. Interested members can contact Richard Deacon, “A Time to Give” project manager, at (604) 631-6636 or rdeacon@globeandmail.com.

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The Color of Money: A Professional Development Conference for Fundraisers of Color

Join AFP, the AFP Greater Philadelphia Chapter and the National Center for Black Philanthropy for the inaugural Color of Money professional training conference—empowering today's fundraising professionals of color. Equip yourself with the knowledge, skills and resources necessary to secure funding for your nonprofit organization or charitable cause. This all-day conference will be held at Temple University in Philadelphia on June 24. To download a scholarship application please see this story in the electronic version of eWire (Applications are due June 5, 2009). To register for this conference go to www.afpnet.org and click on Education and Career Development. Then click on Executive Institutes. Early-bird registration ends May 28.

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Don't Miss Two Upcoming Great Webconferences to Better Your Fundraising!

(To register go to www.afpnet.org and click on Education and Career Development—AFP Web/Audioconferences)

Giving Circles – Presented by Angela Eikenberry and Jessica Bearman
Giving circles are emerging in popularity among groups of donors across the United States and elsewhere as community-based funding vehicles. This presentation will provide information on the giving circle landscape, based on several studies of giving circles, with special attention given to their impact on donor-members and nonprofit funding recipients. Register today for Giving Circles and Fundraising in the New Philanthropy Environment presented on Wednesday, May 20, at 1 p.m. EDT.

Evaluating Your Development Program – Presented by Linda Lysakowski, ACFRE
How does your development program measure up to accepted standards? Are you doing as well as your competition? Is your development program growing or is it stagnant? Does your organization have a philanthropic culture? What tools can help you assess your performance? How do you find the time to "take stock" of your program? These questions and more will be answered in Evaluating Your Development Program: How Do You Measure Up? presented on Wednesday, June 10 at 1 p.m. EDT.

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