September 2008 Archives

September 24, 2008

Fundraising for Charity in Tough Times

Nonprofits worried about how the nosediving economy will affect their ability to bring in grants and donations will find lots of good material online. Here's a roundup of some choice bits of advice and encouragement:

Direct mail guru Mal Warwick, in the NonProfit Times, reminds nonprofits feeling the financial pinch not to cut the very donor cultivation efforts that will bring them steady returns over the long term. He also gives some excellent comparative analysis of how foundations, corporations, and individual donors change their giving habits during a recession.

Todd Cohen, on Inside Philanthropy, reminds everyone not to panic! He pulls together experts' advice to step up fundraising efforts, and diversify and cultivate your donor base. He quotes Doug Bauer, senior vice president at Rockefeller Philanthropy Advisors in New York City, as saying donors will likely focus on "need-to-do giving rather than nice-to-do giving." (That obviously puts the onus on you to make sure your nonprofit looks like it's serving a vital need -- but remember, even "optional" activities like arts are vital, when you consider their ability to engage people in other educational and community activities.)

Carrie Hill, on, suggests (in the context of asking for pledges), asking more people for less, and asking friends to reach out to other friends.

Reporting for Reuters, in an article called "Charities brace for Wall Street decline," Emily Chasan quotes a number of fundraisers who plan to heighten their attention to individual donors, whose loyalties may remain strong even as corporations, for example, are acting out of budgetary, not philanthropic concern.

No one's doubting that the pool of available money is shrinking -- but the consensus seems to be that, with wise management and a careful look at the most likely sources of donor interest, nonprofits will weather this rough patch -- and help those they serve to do the same. 
September 15, 2008

IRS Advance-Ruling Worries Gone for Young Nonprofits

Until recently, many new nonprofits (those seeking tax-exempt status as publicly supported charities) started their life with a temporary, five-year approval. That's because they had no previous record of their operations, and needed time to prove that they were the real thing.

At the end of the five years, the IRS put them through a literal reality check, asking for proof that they had, in fact, received most of their support from public sources. Although 95% of nonprofits eventually passed this test and received their permanent ruling, it made for some nervousness as the five-year mark approached.

But no more. The IRS recently announced that, because it's so pleased with the amount of information that nonprofits must reveal year by year on their Form 990, it's doing away with both advance rulings and this five-year double check. Better yet, the new rule applies to nonprofits that have already formed but haven't yet reached the five-year mark. As one lawyer I know said, "This will be a relief to the parents on our preschool board."

For details, see the IRS announcement of September 8, 2008.
September 11, 2008

Giving Makes a Body Feel Good

And now, with the election looming ahead of us like a super-sized speed bump, let's take a moment to remember what binds people together regardless of party: Helping others, or so scientists continue to say.

I confess I sometimes get tired of the arguments as to whether there's a "helping gene," or whatever -- it's obvious that some people like to give and share, while others have forgotten whatever such instincts they might have once had, and science isn't going to help fundraisers cross the latter group over into the former.

But reading an article by David Korten called "We Are Hard-Wired to Care" in the Fall 2008 issue of Yes! magazine reminded me of one important thing: For those in the business of asking other people for money, it pays to get re-inspired once in a while. And some of the scientific insights can do just that.
For example, Korten describes research with advanced imaging technology showing that people who think about another human being harmed have the exact same reaction in their brain as mothers who actually see distress on the face of their baby. Then given a chance to help out, the pleasure centers in the brains of people studied light up, which Korten says "benefits our health by boosting our immune system, reducing our heart rate, and preparing us to approach and soothe."

Okay, it doesn't get much better than that. By showing people how they can make a difference (and in the case of giving money, with minimal time commitment on their part) fundraisers can actually improve their health!

One thing that occurs to me, however, is that I don't always get that flush of good feeling from writing a check as often as I do from more direct interactions, like walking the dogs at my local Humane Society. I think that shows the importance of both good setup and follow-through. The more a fundraiser can do to make a problem come alive in the brain of a potential donor, the better. And then to complete the brain circuit loop, send a thank-you letter that doesn't sound like a generic tax receipt, but drives home the fact that the donor HAS TRULY HELPED another person, or a forest, creature, cause, or whatever. I can feel the donors' immune systems getting stronger already.

September 5, 2008

Is Fundraising a Dirty Word in McCain's Dictionary?

Nonprofit090508.jpgI'm holding a recent campaign letter from Senator John McCain. To read it, you'd think one of his main objections against the Democrats is their very ability to rally support in the form of monetary contributions. Here are some choice phrases:

"The Obama Democrats and their left-wing, special interest allies have come together in a united front, combining their enormous fundraising arsenal."

[They are] "raising staggering amounts of money."

And (in the reply note, meant to be the sender addressing McCain), " is absolutely essential to our Party's success for us to battle back against the Democrats' massive and limitless fundraising machine."

Wow, doesn't every nonprofit wish it had a "fundraising machine?" Just plug it in and it starts churning out money...

But really, Senator McCain, wasn't this supposed to be a campaign where candidates debated the issues? Turning fundraising into something sinister when it comes to individual donors seems to me like a cynical way to capitalize on people's lingering discomfort about the word "money" -- highly ironic in a letter meant to raise -- what else? More money.

September 4, 2008

Nonprofit Meetings, Minutes & Records Released

Nonprofit Meetings, Minutes & Records: How to Run Your Nonprofit Corporation So You Don't Run Into Trouble is a new book by my colleague Attorney Anthony Mancuso, published by Nolo, which contains valuable information for anyone running their nonprofit's meetings or keeping corporate records for their organization.

Remember, in order to maintain a 510(c)(3) tax designation and stay out of trouble with the IRS, there are myriad record keeping requirements you'll need to fulfill. If you want to make sure you're following the letter of the law, this book is essential for you and your organization. And, all the forms you'll need are provided on a handy CD-ROM.

For more information on staying tax-exempt, read Nolo's article "Protecting Your Nonprofit Corporation's Tax-Exempt Status".

And if you'd like to get your own copy of Nonprofit Meetings, Minutes & Records, visit Nolo's online store, here.