Will smaller donors pull us through?

I had conversations with development professionals at three public radio stations today who told me that they will meet or exceed goal in their membership programs. One said that, although they are not crying poor on the air, they think many of their listeners sense that their funding is very brittle right now and are doing wht they can to help balance the scales.

I’ve seen this before. During the New England recession of 1989-1991, a multitude of small gifts helped to offset drops in corporate funding and large major gifts.  Well-rounded organizations have individual giving programs that provide a wide range of giving opportunities.

Scam Watch: Pro Publica follows phony AIDS charity

One of our preoccupations is the misuse of non-profit status for private or political gain and outright fraud by supposed charitable organizations. Pro Public has been tracking the “work” of the Center for Aids Prevention for several months and finds that, despite the fact that the authorities know this is a scam, the group is still at it.

If you know of something similar going on in your community, please let me know.

Target National Index documents continued decline

Target Analytics National Index for the First Quarter of 2009 documents continued declines in giving and gifts that have now spread across all sectors. This information is more current than the annual survey conducted by Giving USA that recently documented the most serious decline if philanthropic giving in more than three decades. That survey showed one segment, religious giving, had escaped the financial downturn. The Target Index shows that the religious sector has been affected.

Oregon Legislature Breaks Trust

The Oregon Legislature has voted to steal $1.8 million from the Oregon Cultural Trust to close a budget gap. The trust was established to fund the arts in Oregon, which traditionally has a parsimonious approach to arts funding.  

Problem is, these aren’t public funds, in the usual sense of the word. The Oregon Trust represents voluntary contributions made by individuals through direct gifts, for which donors receive a tax credit, and proceeds from special license plates, for which purchasers pay extra.

The Legislature has broken the trust—both literally and figuratively—by redirecting privately contributed funds to public coffers. Doug Stamm, President of the Meyer Memorial Trust, which made an initial gift to establish the Cultural Trust, was diplomatically low key about the diversion. But asked what would happen if another organization were to divert non-discretionary grant funds from MTT, Stamm said it would be the last grant they would see.

We annually contribute the maximum amount matched by the tax credit and feel robbed.

Chronicle experts peer into crystal ball

The Chronicle of Philanthropy hosted an online discussion, Outlook for 2009: What the Recession Will Mean for Your Organization. Among the findings:

• Foundations will focus on those with whom they have a relationship.
• Not all organizations will be affected in the same way, and many donors continue to give generously.
• Donations that depend on stock gifts will lag improvement in the market.

Also included, some great tips on strategies to survive and present your case.

ACLU blindsided by Madoff fraud

The ACLU told contributors today that two foundations that support its operations were victims of Bernard Madoff’s Ponzi scheme and have had to cease operations. “That means that $850,000 in support we were counting on from these foundations in 2009 simply won’t exist,” according to a letter sent out to donors by Alma Montclair, ACLU’s Director of Administration and Finance.

On Sunday, the New York Times reported that the Picower Foundation, ranked 71st-largest in the nation by the Council on Foundations, has joined the JEHT Foundation in being forced out of business by the Madoff scam. A number of Jewish charities, including Yashiva University, have been affected by the loss of promised grants.

Both had significant funds invested with Bernard L. Madoff, who was arrested by federal agents on December 12 and charged with running a $50 billion fraud scheme.

Conducting a capital campaign during a downturn

If you’re contemplating a “must-do” campaign, what do you do? If your case is strong and your donors are with you, I advise that you move forward. It will take you longer to reach your goal than it would have two years ago, your pyramid may be somewhat flatter, and you will have to visit more donors, but you can make it. (In most campaigns, there are always some who are not contacted due to volunteer fatigue; now you will have to see more of them, and that requires more volunteers.)

A regional hospital foundation officer tells me they are proceeding with five separate hospital campaigns in as many communities. Of 30 donor prospectives whom they re-interviewed, only one advised them to pull back.

So again, is your case strong? Is it for a facility or improvements taht your community badly needs? Are your volunteers committed? If so, this may be precisely the right time, because those with less urgent campaigns may be withdrawing.

Emory development officer gives key to success in economy

Randy Gorod, Director of Development of the Arts and Sciences Department of Emory University told participants at the North American Association of Synagogue Executives meeting last week in Atlanta that the key to success in this economy is to remain one of a donor’s 2-3 top prioritiies. Most donors give to a number of causes, he said, but only 2-3 are at the top of the list.

To get and keep that position, he advised maintaining strong relationships with your organization’s donors through regular communication.

Financial bail-out extends IRA rollover

The stabilization act just signed by the President extends through 2009 the provision whereby an owner of an IRA who is older than 70 1/2 can direct a distribution to a qualified non-profit of up to $100,000 without its being counted as taxable income. It does count toward the mandatory distribution. The donation must be made by the IRA directly and not pass through the hands of the donor first.

clipped from chronicle.com The U.S. Senate has attached a package of tax benefits to must-pass legislation to rescue the troubled financial sector, increasing the odds that the expired benefits could be renewed this year.The package newly added to the bailout bill, which the Senate is expected to take up later today, would extend for two years a tuition tax deduction, a research-and-development tax credit, and an IRA rollover for charitable contributions.

Foundations feel financial effect

The Chronicle of Philanthropy reports on a recent article in the NY Times on the effects of the collapse of two Wall Street investment banks and the takeover of AIG. (Registration required)

clipped from philanthropy.com Foundations Feel Wall Street�Fallout Several big foundations in New York are suffering from the recent collapse of Lehman Brothers and Bear Stearns and the government takeover of the American International Group, reports The New York Times. The Starr Foundation, which held 15.5 million shares of AIG in May, has seen its assets fall by at least $1-billion since the end of 2006. As a result, the grant maker says it will postpone some planned grants. The personal foundations of Bear Stearns executives have also taken losses, and the future of Lehman Brothers Foundation is in question now that Lehman Brothers is bankrupt.