Category: Fundraising

You can provide care for those affected by humanitarian crises

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Recently in Northern and Central Iraq, clashes between the Islamic State of Iraq and the Levant (ISIL), its allied militias, the government of Iraq and Kurdish regional government security forces have driven thousands of people from their homes. Since January 2014, an estimated 1.8 million people have been displaced by violence in Iraq. Their brutal circumstances are confounding, but their need for medical services, clean water, food and shelter are not very different from the privations of people affected by natural disasters.

Four thousand miles from Iraq, a protracted outbreak of the Ebola virus continues to wreak havoc across Guinea, Liberia, Nigeria, Senegal and Sierra Leone. As of this writing there are more 5,335 and 2,622 deaths, according to the World Health Organization. Widespread population loss has threatened fragile local economies and has left many children parentless — two of numerous factors that will have ramifications long after the disease is contained.

The humanitarian emergencies in West Africa and Northern Iraq are different, but the best way to help those who suffer is the same — through cash donations to reputable organizations working with communities on the ground. Even small financial donations combine to make a huge difference in the lives of people affected by disasters. As is the case after natural disasters, donors who make the most positive and enduring impacts give monetary support to relief organizations working in affected areas, initially and over time. Unlike unsolicited material donations — those not requested by organizations working in affected communities — monetary donations enable immediate support to communities.

As situations evolve quickly in complex humanitarian emergencies like these, cash allows relief organizations to respond to changing needs quickly; enabling them to deliver essential supplies that are fresh and familiar, a huge comfort in these tragic circumstances. Most important, monetary donations empower those in the hardest hit regions to rebuild their communities, as those impacted will need support for years after the crises ease and the world’s attention turns elsewhere.

[Juanita Rilling, Director of the United States Agency for International Development’s Center for International Disaster Information, writing in Huffington Post] 

Grassroots support and assistance for Kashmiri flood victims

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Deadly flooding occurs regularly across India, but the recent flooding in Jammu and Kashmir is the region’s worst in 50 years. Commentators there have compared this disaster to Hurricane Katrina, for its devastation of a famously picturesque city Srinagar and also for its emotional backdrop where trust between the populace and the central government is so low that some relief deliveries have dissolved into open confrontation.

Following the lackluster reaction from the state government to the heavy flooding in the region of Jammu and Kashmir –affecting 1.9 million– and the Indian government’s tacit refusal to solicit help from the United Nations, disaster relief has consisted chiefly of concerted efforts from organizations within India, coupled with fellowships being formed worldwide.

Civilian response to the flood relief is unparalleled: despite being caught off-guard and irrefutably unprepared for the cataclysm. Citizens have been attempting to fill the gap of the state government and serving as the primary caregivers of their own people. The disparate entities and individuals coalescing to revive Srinagar predict a long road ahead for this steadily unfolding disaster. As of today, the National Disaster Response Force has rescued 50,860 people from floods and 12 camps have been arranged.

Marriage halls, mandirs and mosques have been converted into provisional community kitchens, welcoming throngs of uprooted people. Locals house strangers, doctors volunteer in smaller makeshift dispensaries, and volunteer rescue teams continue to wade through waters to deliver food.

Raheel Khursheed  of Twitter India utilized Twitter to send SOS distress messages, culling information about supplies needed, and coordinating rescue operations. Time zones away, a group of expatriates work to create awareness and coordinate the relief efforts underway on the ground.

Change.org campaigns and pleas for international aid are being circulated through social network channels, tax-exempt nonprofit organizations are being devised, and expatriates are returning home to lend their expertise and FCRA approved organizations surface to accept funds from abroad.

[Read full Forbes article] 

American charities continue to struggle financially

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According to the Chronicle of Philanthropy, America’s biggest nonprofits are barely able to make up the fundraising losses they sustained in the Great Recession.

Only about half of the charities on the Philanthropy 400 are raising more than they did in 2007, when the recession started.

A sign of the struggle: The No. 1 organization, United Way Worldwide, is treading water.

After United Way and Fidelity Charitable, number 3 on the list was the Salvation Army, followed by Task Force for Global Health, Feeding America, and Catholic Charities USA.

Most traditional charities, which rely on a broad pool of donations from Americans at all income levels, continue struggling to win support.

How important is the non-profit sector?

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Despite limited resources, nonprofits take on our toughest social and global problems, and always are looking for new ways to learn, lead and grow. They address the symptoms as well as the causes of deeply rooted problems, and serve as civic society’s research-and-development arm.

Overworked, underpaid, under-appreciated and at risk as never before, the nonprofit sector represents what is best about America and remains the best hope for addressing our most urgent social and global problems.

Having grown more rapidly than business or government for decades, the nonprofit sector now accounts for 5 percent of gross domestic product and 10 percent of the workforce.

Nonprofits struggle, continually, to raise money, sometimes understanding the tools and techniques of fundraising, but rarely recognizing that truly effective fundraising must be part of a larger vision of creating a culture of philanthropy within the organization and connecting donors to larger needs in the community.

Many nonprofits are getting better at building effective business models, understanding and engaging donors, and working in partnership with their supporters to take on community problems and enlist additional partners.

Charitable giving, whether in the form of money, know-how or time, is fundamental to our society, and many nonprofits are doing a better job of nurturing donors for the greater good.

So despite the lack of resources, shortage of leadership, disproportionate clout of big players, lameness of many consultants, and ideological rigidity of many foundations and advocacy groups, the nonprofit sector offers the best hope for addressing our most urgent social and global problems and making our communities better places to live and work.

[Philanthropy Journal]

Fiscal Cliff Tax Deal expected to boost Charitable Giving

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The income-tax provisions adopted by Congress to avert the year-end “fiscal cliff” will increase charitable giving by an estimated 1.3 percent, or $3.3-billion in 2013, according to a new Urban Institute analysis.

The boost will come mainly from the decision to increase the top tax bracket from 35 percent to 39.6 percent on income above $400,000 for individuals ($450,000 for married couples), the institute said.

Because the charitable deduction is tied to a person’s tax bracket, those donors will now save $39.60 in taxes for every $100 they give to charity. In other words, their gift will cost them only $60.40, down from $65 under the 35-percent rate.

People in the top 1 percent of income distribution will provide almost all of the higher giving, increasing their donations by an estimated 6.2 percent, the analysis found.

The study also took into account the decision to raise the capital-gains tax from 15 percent to 20 percent. That provides an additional incentive for people to donate stock or other property that has risen sharply in value. Not only will they escape the higher capital-gains tax, they will also get the bigger 39.6-percent tax savings on their gift.

Generation Y and charity

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According to a recent survey, volunteerism and charitable outreach are vitally important to Generation Y (ages 20-35). In brief:

  • 75% of Gen Y personally donate to charity
  • 70% have raised money on behalf of a charity
  • 63% volunteered for a non profit
  • 77% are interested in becoming involved in volunteer leadership

IRA charitable rollover still an option

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As part of the “fiscal cliff” deal, Congress has resurrected a popular tax-law provision, known as the “IRA charitable rollover,” that had expired at the end of 2011.

The rule allows many investors 70½ or older to transfer as much as $100,000 a year from an individual retirement account directly to a qualified charity without having to count any of that transfer as taxable income. The transfer, if done properly, counts toward the taxpayer’s required minimum distribution for that year.

And there still is time for some people this month to take advantage of the rule for 2012. “Charitable rollovers can be made in January 2013 for 2012, and individuals who took mandatory distributions in December 2012 can donate that money to a public charity and not have the distribution subject to tax,” according to Independent Sector, a Washington-based nonprofit, nonpartisan coalition of charities, foundations and corporate philanthropy programs.

According to a Senate Finance Committee document, the law is scheduled to “sunset,” or die, at the end of 2013. What will happen after that? That’s anybody’s guess.

Wooing Millennials

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Donate.ly, a new, open-source funding platform for nonprofits, wants to make it easy for any charity to show donors where their money is being used and let people create personalized fundraisers. Calling the platform a Kickstarter for charities, Donate.ly founder Javan Van Gronigen believes such detail and customization is key to appealing to young people brought up in the information age.

“Before our generation, you saw my parents would be like, ‘Oh, we want to give to the Red Cross,’” he says. “My generation would say we want to give to education or to fighting child slavery. Now it’s going even deeper and the next generation is saying, ‘I want to save that person right there.’”

Compelling narrative also plays a key role in wooing many donors, particularly young people. A survey of more than 6,000 people between 20 and 35 for the Millennial Impact Report found that 42% chose to donate to “whatever inspired them at the moment.”

Invisible Children, a nonprofit focused on stopping the abduction and use of child soldiers in central Africa, struck viral gold with young people last March when it released Kony 2012, a dramatic 30-minute short film about Ugandan war criminal Joseph Kony. The video racked up 100 million views in less than a week and helped the organization double its revenue year over year. Van Gronigen’s nonprofit-focused creative studio, Fifty and Fifty, devised the marketing scheme for Kony 2012.

The Effect on Philanthropy of Fiscal Cliff Aversion

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Congress passed the American Taxpayer Relief Act of 2012 (H.R. 8) in a deal to avert the fiscal cliff. The following provides pieces of the bill relevant to the philanthropic sector.

  • The charitable deduction will continue to be coupled with an individual’s or household’s corresponding tax rate. In other words, there is no cap on charitable deductions.
  • The tax rate will be increased to 39.6 percent for individuals making more than $400,000 a year and households making more than $450,000. The previous rate for those earners was 35 percent.
  • The estate tax will have a $10 million exemption for couples, $5 million for individuals, and a top tax rate of 40 percent.
  • The bill extends the IRA charitable rollover through December 31, 2013. This provision permits tax-free distributions to an eligible charity from an IRA held by someone age 70½ or older of up to $100,000 per taxpayer, per taxable year.
  • The provision includes two transition rules to allow donors to make 2012 contributions. First, the extension allows individuals who received an IRA distribution in December 2012 to elect to count that distribution (or a portion thereof) as a 2012 IRA charitable rollover if the individual transfers the amount in cash before February 1, 2013, to an eligible charity. Additionally, the extension allows donors to make distributions directly to eligible charities before February 1, 2013, and elect to have such distributions treated as qualified charitable distributions in 2012. This change may be of particular benefit to donors who would like to take advantage of the rollover in both 2012 and 2013.

In 2013, itemized deductions for higher income taxpayers will be reduced by the lesser of (1) 3 percent of the amount by which the taxpayer’s income exceeds $250,000 for individual filers, $275,000 for heads of households, or $300,000 for married couples filing jointly (these amounts are adjusted annually for inflation) or

(2) 80 percent of the value of the taxpayer’s itemized deductions. This reduction of itemized deductions is referred to as the Pease Limitation.

Source: Council of Foundations

Non-profit trends for 2013 and beyond

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Nell Edgington predicts these non-profit trends:

1. More Demand for Outcomes – A growing demand for nonprofits to 1) articulate what results they hope their work with achieve and 2) track whether those results are actually happening. This increasing focus on nonprofit outcomes is leading to the 4 other trends:

2. Decreasing Emphasis on Nonprofit “Overhead” – The good news is that more and more people are coming to realize that you can’t just invest in programs without the staff, infrastructure and fundraising to make those programs happen.

3. More Advocacy for the Sector as a Whole – Instead of  a fractured grouping of organizations of various sizes, business models, and issue areas, … we will start to see the sector organize, mobilize and build confidence.

4. Savvier Donors – Because nonprofits are getting more savvy, donors are as well. They are starting to recognize that nonprofits cannot exist on revenue alone, but must have infusions of capital every once and awhile to strengthen and grow their staff, technology, systems, and fundraising.

5. Increased Efforts to Rate and Compare Nonprofits – We will increasingly evaluate nonprofits based on the results they achieve, not on how they spend their money, which requires a whole infrastructure for evaluating and rating nonprofits emerges.