The Giving Institute Blog’s New Home

The Giving Institute’s blog has moved. Please visit http://givinginstitute.org/resources/ to continue reading the insightful posts from our member firms.

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Dig deeper into Giving USA 2012 at webinars, presentations

Reading Giving USA 2012’s annual report on how much Americans gave to charity in 2011 – an estimated $298.42 billion – is good; hearing interpretation from Giving Institute experts on what the research means for fundraisers working in today’s philanthropic climate is even better.

Toward that end, many Giving Institute member firms are hosting special events across the country to mark publication of our Foundation’s 57th annual report, which is researched and written by the Center on Philanthropy at Indiana University.

See the list below for how to participate in upcoming events and become more informed about our nation’s giving trends and patterns. The press release and related documents announcing 2011 estimates by source and use may be viewed here; visit Giving USA Reports to order your own copy of Giving USA 2012 or to download the complimentary executive summary, made possible by the generous support of donors and friends.

Thursday, June 21, 2012

Campbell & Company of Chicago presents Giving USA 2012 in Independence, Ohio, at the Crowne Plaza, 5300 Rockside Road. If you are in the Cleveland area, visit the firm’s events page to sign up.                                      

Cramer & Associates, of Dublin, Ohio, is a sponsor partner of the Dayton NonProfit Forum, along with Huntington Bank, The Dayton Foundation, United Way of the Greater Dayton Area, and Montgomery County, Ohio, being held at the Presidential Banquet Center in Dayton. Guest speaker will be Melanie McKitrick, managing editor of Giving USA 2012.

The Curtis Group, headquartered in Virginia Beach, Va., joins with AFP’s Western Maryland Chapter for a Giving USA 2012 presentation in Frederick, Md., at Dutch’s Daughter Restaurant, 231 Himes Ave. Registration is available here.                                                                                                        

Friday, June 22, 2012

Campbell & Company continues its presentations on Giving USA 2012 for those in the Washington D.C., area, with an event 8-11 a.m. at AFP Headquarters in the IHQ Conference Room, 4300 Wilson Boulevard, Suite 3000, Arlington, Va.           

Tuesday, June 26, 2012

Jeffrey Byrne & Associates, Kansas City, Mo., presents on “Giving in the U.S. and High Net Worth Philanthropy” 8-10:30 a.m. at the Kauffman Foundation Conference Center in Kansas City. Register here.             

Wednesday, June 27, 2012

Campbell & Company travels to Boston for this presentation on Giving USA 2012, to be held at the Revere Boston Hotel, 200 Stuart St. Registration is available on the firm’s events page.                                              

Friday, June 29, 2012

The Curtis Group will once again be on the panel at a Hudson Institute/Center on Philanthropy presentation in Washington, D.C., to discuss Giving USA 2012. To attend the event in-person, register here; it will also be streamed live on the Web at this site.

Thursday, July 12, 2012

Arnoult & Associates, Memphis, will be presenting Giving USA 2012 at the AFP Memphis Chapter meeting, 11:30 a.m., Christian Brothers University. Check the Chapter’s events calendar to find out when registration opens for this event.                      

Wednesday, August 22, 2012

The Curtis Group will present on Giving USA 2012 and end-of-year fundraising strategies at an AFP Maryland meeting in Annapolis, Anne Arundel Medical Center. Register here for the three-hour event, which begins at 9 a.m.                

Thursday, August 23, 2012

The Curtis Group will present on Giving USA: What the 2012 Data Means For Your Fundraising at an AFP Central Virginia Chapter meeting in Richmond. Check the Chapter’s on-line calendar to find out when registration opens for this event.

Wednesday, September 12, 2012

The Curtis Group will address local nonprofits on Giving USA 2012 at an event hosted by the Elizabeth City Chamber of Commerce, Elizabeth City, Va. Check the Chamber’s website to find out when registration opens for this event.

Friday, September 14, 2012

Jeffrey Byrne & Associates will present perspective on Giving USA 2012 at the AFP Topeka Chapter meeting. Event opens at 11:30 a.m. with networking; program begins at noon. The Chapter meets at the Topeka-Shawnee County Public Library, 1515 S.W. 10th Ave., Topeka. Visit the Chapter’s Facebook page for more information. 

Earlier events

Other Giving Institute member firms have already held events related to Giving USA 2012; please visit their respective websites to see if archived material is available for viewing:

Alexander Haas

The EHL Consulting Group

Smith Beers Yunker & Company

The Alford Group

The Collins Group

The Hodge Group

DonorPerfect and EHL Consulting Group

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It will never let go

By Rick Dunham
Dunham & Company

In leading an organization, there is a gravitational force at play that is always pulling against you. It’s the gravitational force of mediocrity. And it’s why success is such hard work.

Left to its own, any organization will be drawn toward mediocrity. It’s as sure as the law of gravity itself. Even if you have a moment of success, the gravitational pull of mediocrity continues to work against you, seeking to make any success you may experience temporary.

Just like it takes continuous exertion of force for a jet to take flight against the laws of gravity, so organizations must exert tremendous and continuous effort to fight against the gravitational pull of mediocrity. And just like that jet, if you stop exerting that force, you will fall victim to the gravitational pull… and become defined by the mediocrity that describes so many organizations.

The landscape of business is littered with those companies that have succumbed to this constant pull of mediocrity. It is powerful and it is relentless.

We have a saying in our company: “If you want to be the best, you have to constantly work to be better.” That’s the only way to fight against the pull of mediocrity.

What about you… your organization… or department? Are you being pulled into mediocrity? The only way to overcome that pull is through a deliberate and continuous expenditure of focused energy on those areas and disciplines that will ensure your movement toward excellence.

This is why achieving and maintaining success is just so hard. You have to overcome the strong and continuous pull of mediocrity… and understand it will never let go.

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Technology in Fundraising

by Robert K. Lewis, Jr. of member firm Global Advancement

            Those of us working in development are, for the most part, in the people business. Donations to good causes come forth only after the careful nurturing of potential donors. That is the counsel we give our clients who are trying to raise funds in various capital campaigns.

But that doesn’t mean we as professionals can’t or shouldn’t use technology to assist in maximizing the work we perform for our clients. Some believe technology is greatly altering the way funds are raised in the 21st Century. In fact, many are saying the Internet is reshaping philanthropy as a whole.

Technology can help fundraisers better communicate with their prospects, strengthen their relationships with their best donors, stay organized and on track so as to increase the number of and size of the gifts. Fundraising and donor management software can make it easier to collect and archive important donor biographical information to ensure that each touch they have with their donors helps enhance the cultivation process.

These sophisticated software programs also allow clients to retrieve up-to-date information on their constituents, identify high-value prospects, track response rates and make it easier for donors to pledge, donate or contact a campaign representative about possibly making a gift.

Should you urge your clients to create a dedicated website for their capital campaign? There are numerous reasons why it should be considered. A website can be an outstanding contact point for potential donors who may want to give online. Or, the website doesn’t have to be state-of-the-art with all the bells and whistles to be effective. It could be informational and include a half dozen or so pages that clearly explain the campaign, the case for support, fundraising efforts to date, upcoming special events, testimonials and so on.

People today are connecting to each other more often through social networking. The most popular social network site, of course, is Facebook. The social networking giant has a site called “Causes.” Facebook calls it the world’s largest platform for activism and philanthropy. The site empowers individuals to create grassroots communities called “causes” that take action on behalf of specific issues or nonprofit organizations.

Another online fundraising tool is FirstGiving, which helps non-profits raise money for the causes they care about. FirstGiving partners with nonprofit organizations to allow them to plan, execute, and measure successful online fundraising campaigns and charity fundraising events with special fundraising software.

Whether to register on these sites is something an organization must carefully consider, but they are just two of many ways that technology is becoming important in philanthropy.

You just may find that technology is the key to moving your campaign from where it is today to where you want it to be tomorrow. Microsoft founder Bill Gates once wrote that even though PCs and mind-boggling technology can often be part of a solution, in this case successful fundraising, everyone must remember to always use technology in the service of humanity.

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Payments in Lieu of Taxes: Necessary Evil or Unfair Imposition?

 

 

 

 

 

By: Robert I. Evans & Avrum D. Lapin

May 22, 2012

Today’s continued economic uncertainty has prompted bold actions by local governments as they struggle to secure necessary income while faced with substantial budget shortfalls, unpredictable tax revenues and critical services in dire need of funding. In this era of municipal belt-tightening, a rapidly growing number of local officials now look at previously untapped sources of revenue: nonprofit institutions.

Since Boston’s Mayor Thomas Menino first broached the issue several years ago, other communities – small, medium, and large – have followed suit and have turned to some of the country’s most significant nonprofits to augment the current tax base. This has become an unprecedented source of revenue as well as debate, especially as questions arise around the endowments and land holdings of some of the country’s largest nonprofits, with universities, museums, hospitals and other community resources being cajoled, negotiated with and sometimes even publicly assailed in the media.

This country’s 1.5 million nonprofit organizations represent and cater to a myriad of important causes and missions, and in return, they have traditionally received immunity from real estate taxes and other taxes through their federally-designated 501(c)(3) statuses. However, the notion that charitable institutions are off-limits to the tax collector has recently been cast off.

As a result, municipalities now see an opportunity to extract some much-needed revenue from nonprofit organizations. This phenomenon has been working its way across the U.S. under creatively phrased monikers such as “voluntary contributions” and “payments in lieu of taxes (PILOT).”

We first noticed the momentum towards acceptance of this new model about 15 months ago when we developed a then-controversial op-ed piece for the Giving Institute’s blog about PILOT.  Since then we have witnessed additional municipalities placing public pressures on their largest local nonprofit institutions. Most organizations are obliging, and only a few weeks ago a precedent-setting court decision undoubtedly propelled these controversial PILOT issues into the public arena.

The Mesivta Eitz Chaim of Bobov Inc. summer camp, located on 61 picturesque acres in Pike County, Pennsylvania, is operated by the Bobov Orthodox Jewish community in Brooklyn, New York. Between June and August, the camp provides classes and lectures on Orthodox Judaism as well as some recreational activities, though the camp is primarily designed as an educational institution.

Although the camp’s dining and recreational facilities are open to the public, camp representatives were unaware of neither Pike County residents using the facilities nor Pike County or Pennsylvania residents attending the camp.  As a nonprofit organization, the camp sought an exemption from real estate taxes, but Pike County and the local school district denied the camp’s request for an exemption based on the nature of the camp and its charitable status.

The Pennsylvania Supreme Court upheld two lower court rulings against the camp’s tax exemption. In order to receive an exemption, the Court held that a claimant must meet the definition of a “purely public charity” as measured in a 1985 Pennsylvania case (Hospital Utilization Project v. Commonwealth). In Pennsylvania, an “institution of purely public charity” advances a charitable purpose, donates or renders gratuitously a substantial portion of its services, benefits a substantial and indefinite class of persons who are legitimate subjects of charity, relieves the government of some of its burden, and operates entirely free from private profit motive.

At issue in the case was whether the camp relieved the government of some burden, since the dining and recreation facilities were open to the public and the camp’s soccer fields, located outside of the camp’s gates, were used on occasion by the public. The Court affirmed that the occasional use of recreational facilities was insufficient to relieve Pike County’s government of some of its burden and made the camp’s property taxable.

This decision has the potential to be very important, especially in this challenging economic environment when many municipalities are cash-strapped. The implications from the point of view of the nonprofit are that local governments may look to charitable organizations as revenue sources. Furthermore, nonprofits that balk at payments in lieu of taxes may face a likely possibility that the municipality could challenge its nonprofit status, and possibly revoke it.

Here’s an overview of where PILOT programs are especially active:

Boston, Massachusetts

Boston has become the clear leader in implementing PILOT programs, collecting almost $17 million annually from a variety of cultural, educational and medical institutions, with annual payments ranging from a few hundred dollars from a VFW Post to millions from hospitals and universities. In 2010, 36 nonprofits provided “voluntary tax” payments to the city.

New guidelines promulgated by Mayor Menino’s PILOT Task Force increased the number of nonprofits asked to contribute and pushed nonprofit payments up by 24%. Boston University and other large landholders have “volunteered” payments for municipal services approximating 25% of what they would pay if they were a for-profit entity.

Chicago, Illinois

Chicago has slashed critical city services amounting to $417 million. Colleges, universities and hospitals are being approached, although organizations of all sizes are affected.

One prominent example is the 20-member nonprofit Austin Green Team. Since 1989, the Austin Green Team has maintained over one dozen gardens and two greenhouses in the Austin neighborhood on Chicago’s west side, providing beauty and a sense of serenity to more than 100,000 residents. Under the Mayor’s 2012 budget, the Austin Green Team’s water service fee waiver is proposed for revocation, threatening the viability and survival of the gardens. The proposed budget plan includes eliminating fee waivers for virtually every nonprofit organization in Chicago.

Worcester, Massachusetts

In 2011, Worcester Polytechnic Institute entered into a 25-year agreement with the city to annually fund $50,000 to maintain and improve a neighboring park. WPI had already been making annual PILOT contributions of $180,000, including a 2.5% increase built in annually over the next 25 years. WPI president Dennis Berkey described the payments as strengthening the quality of the relationship between the college and the city. WPI also received assurances from the city that for the next 25 years, no additional taxes would be levied on the institution. However, a more important aspect of the relationship was the positive publicity lauded on the school for its support of the city.

Syracuse, New York

In 2011, Syracuse University began making $500,000 annual payments on a 5-year, $2.5 million pledge to the city of Syracuse. Responding to the pleas from the financially strapped city, University officials agreed to be the first nonprofit in Syracuse to make a voluntary payment after the City Council began exploring taxing some aspects of the University’s newly expanded properties. According to City Council, even as the University further shifts the burden of municipal services away from taxpayers, “It’s time for the University to kick in a little more to support these services.”

Providence, Rhode Island

Due to unprecedented financial problems, the Mayor of Providence initiated a program designed to pursue tax exempt institutions for a “failure to sacrifice.” The natural target was the city’s largest landowner, Brown University, who since 1764, was “freed and exempted from all taxes.”

Recent negotiations have yielded voluntary payments from Brown in the amount of $31.5 million over 11 years. Brown owns 200 buildings in Providence valued at over $1 billion in total, and if taxed, would pay the city $38 million annually. As Providence Mayor Angel Taveras summed it up, “every organization, including tax-exempt institutions, must share part of the burden of saving our city.”   

Even with a slowly advancing economic outlook, the landscape has changed and nonprofits are unlikely to continue to benefit from their open-ended special tax exemption. With this in mind, land-owning nonprofit organizations should consider the following:

  1. Be prepared. Charitable organizations should not assume that their nonprofit status creates blanket immunity from all taxation. Houses of worship, community centers of all types, camps and other agencies owning larger parcels of land may be targeted for voluntary payments.
  2. Budget now for PILOT. Nonprofits should plan on including PILOT payments that might represent “reasonable” contributions to the municipality and tailor their budgets and programming accordingly.
  3. Get out in front of the issue and use it to your advantage. Appearing as a “good citizen” is important to nonprofits, especially those that are large landowners. Tailoring the PILOT to garner positive PR can strengthen an organization’s community image as well as possibly enable special consideration from the municipality later on. Nonprofits of all sizes should expect governments to ask them to step forward and contribute voluntary payments or pay usage fees to cover municipal services, including fire and police protection and other services.

Robert I. Evans, Managing Director, and Avrum D. Lapin, Director, are principals of The EHL Consulting Group located in suburban Philadelphia. A Giving Institute member, EHL Consulting Group works with dozens of non-profits on fundraising, strategic planning, and non-profit business practices.  Visit EHL Consulting Group at:

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Reporting Success

By: Russ Hodge, CFRE  - Managing Partner
The Hodge Group

Amongst the organizations we serve there has been an increasing drive toward standardizing and qualitatively analyzing the Development process. This is taking the form of several different types of dashboards, flash reports, other bench-marking and tracking documents. These documents are given to volunteer boards to demonstrate the progress or lack of progress of the fundraising function. But I wonder, if these reports in all of there complexity are not only a management tool for Trustees but also a way to distance themselves from the real work of Development which is intimate, personal and in fact “in your face”. Looking at pie charts, bar charts and ROI’s is very different from having a meaningful discussion about a close relationship with an individual and how that can transform the organization. All though not statistically valid I found often the Boards with the least amount of data are the highest performing because they are focused on the task at hand – raising money, and the inverse is true as well. It’s not to say that we do not need accurate real time reporting systems but the purpose is the real question.

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Seven Tips for Good Governance

Peter Fissinger, President & Chief Executive Officer, of member firm Campbell & Company

Increasingly, non-profit organizations are asking Campbell & Company to assess their governance structures. This often happens with a campaign on the horizon, but not always. Depending on the nature of an organization, governance requirements can vary. But I will list seven tips that we usually recommend to our clients:

  1. Get your house in order before a major campaign. It is difficult to reorient board members’ role in fundraising after a campaign has begun. People recruited to a board who have not been told they will be expected to make a major gift, that the board should account for 20-50% of the campaign goal and that they will be expected to help solicit others may resent being told this later on.  Building a strong board is like tending a garden; seeds must be carefully planted and nurtured prior to harvest.
  2. The board development committee is the most important committee of the board. It is responsible for identifying, qualifying, recruiting and orienting new board members. No other committee has such an important role, and membership of this committee should be carefully constructed.
  3. Develop clear role descriptions for board members, and communicate expectations to prospective board members very clearly. Board members have a few critical roles: to serve the public trust and protect the mission of the organization, hire and fire the CEO, set major policy and steward financial resources (this last role is where fundraising comes in). The board development committee should share the board role description with the entire board annually for approval, and the role description should be shared with prospective board members before they are invited to join the board.
  4. Create a profile for prospective board members and work to develop a deep list of candidates.  Far too often, individuals are invited to join a board based on the well-intended but offhand recommendation of a current board member during a board meeting. This is not good discipline, and it will create dysfunction. Good boards have multiple discussions with prospective members, and strong candidates will appreciate thorough vetting. A deep list of candidates and strong protocol for qualifying candidates will help prevent rash decisions made under the pressure of deadlines. Note: most development officers are capable and willing when it comes to developing a list of board candidates.
  5. Work hard to orient and support new board members.  If you want a strong board, help new board members to become contributors to the board’s work right away. Good orientation is critical to supporting new board members. Also consider assigning new members with a mentor who can help guide the process and answer questions.
  6. Consider implementing term limits. Increasingly, Campbell & Company is favoring term limits in our governance practice. While term limits may not be appropriate in all cases, there are two distinct advantages to having them: Boards are forced to seek new members regularly, and it is easier to shed mediocre performers. Remember, we can always invite outstanding board members back on the board after one year, and we can extend term limits in the case of officers.
  7. The board has one employee (the CEO), and the CEO reports to the board as a group (not any one member). These are important ground rules which will enable the CEO to be effective and the board to refrain from meddling.

While governance can be a complex topic, Campbell & Company has found these principles – when followed – will help nurture an effective board.  Strong boards are critical to non-profit organizations, especially when implementing major campaigns.

For questions regarding Seven Tips for Good Governance, please email Peter Fissinger at peter.fissinger@campbellcompany.com.

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