International giving on the rise

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One of the most notable trends in philanthropy, according to the 2012 Giving USA Study of charitable giving, is that international giving has steadily grown despite a tumultuous economy.  For the past two years, 2009-2011, international giving has experienced a 15.2 percent growth, the largest increase across all of the subsectors the Study tracks and reports.

The growth in international giving can be attributed to many things: increasing digital access to global information, a growing number of international giving networks, and a heightened awareness of the interrelationships of global communities.

The Hudson Institute’s 2012 Index of Global  Philanthropy and Remittances shows that despite the recession, U.S. giving to developing countries actually increased to $37.5 billion in 2009, outpacing official U.S. government aid by almost $9 million.

[Excerpted from WealthManagement article, by Betsy Brill and Michael Donovan]

Making an impact even with a little

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You don’t need a fortune to be a philanthropist. For example, you can:

Start a charitable fund. A number of community foundations let you funnel as little as $1,000 a year into donor-advised funds, and let you choose the recipient. You contribute cash, stocks or other property — and take a tax deduction for your contribution each year — until you reach a certain threshold, typically $5,000 or $10,000.

Give to a classroom. What better way to spend your charitable dollars than to help teachers help kids? At DonorsChoose.org, you get your pick of teacher-proposed projects. DonorsChoose makes the purchase and sends it to the teacher.

Volunteer on vacation. Use your next vacation to give something back.

Or you can be an angel for as little as $100: Upstart allows you to give money to entrepreneurial college graduates. You can invest in $100 increments in one “upstart” or as many as you choose. You’ll receive a modest portion of the company’s income — up to an annual rate of return of 14.99 percent — for 10 years.  You can also contribute to projects through Kickstarter, which focuses more on creative individuals who want to raise money to produce films, music and art.

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.

Ponying with Hollywood to teach about Disaster Giving

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Mike Rea, founder of Give2Asia, calls the 2004 Asian tsunami the “first global disaster of our time.” When he learned that Hollywood was producing its own retrospective (of sorts) on the tsunamis, he realized it was an opportunity for educating people about responding effectively in the wake of natural emergencies.

So Mr. Rea fast-tracked his plans for his “Tsunami Plus 10″ Project to coincide with last month’s release of The Impossible, a film starring Ewan McGregor and Naomi Watts.

His goal is to help inform disaster philanthropy. Mr. Rea’s takeaways, in broad strokes, are relatively simple:

* Make gifts not only to the Oxfams of the world but also to community groups.

* Give “when emotions are high,” he suggests, but also later—six months or a year after the disaster, when it becomes clearer which nonprofits are doing an effective job and still need cash.

* Write checks; don’t send used clothes.

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.

The IShack betters conditions in slum settlements

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As you approach the simple dwelling, a rooftop solar panel, an outdoor security light and a roof overhang make Nosango Plaatjie’s shack stand out amid the sprawling cluster of makeshift wooden structures and rusty corrugated iron dwellings where her neighbors live.

Welcome to the iShack, or improved shack, an innovative approach to housing that’s being tested in the windswept slum of Enkanini, just outside Stellenbosch, South Africa. The dwelling, developed by researchers at the University of Stellenbosch, is intended to raise the living standards of slum residents while improving their access to electricity and protecting them from extreme temperatures in an environmentally friendly way.

The iShack prototype is occupied by Plaatje and her three young children. It is fully equipped with a photovoltaic panel capable of producing enough electricity to power three lights, a mobile phone charger and an outdoor motion detector spotlight. Its windows are strategically placed to achieve better air circulation and sunlight heating, while the roof is sloped so that rainwater can be harvested during the winter months.

Plaatjie, a domestic worker employed once a week, says her family’s life has improved a great deal after relocating to the ecologically designed iShack. Their previous home was a cold, damp shack hastily put together from disused pallets and corroded zinc sheets.

62% of the urban population in Sub-Saharan Africa lives in slums, typically characterized by deplorable living conditions, a feeling of insecurity and inadequate infrastructure for basic energy, sanitation and water services.

Excluding the solar power system, the iShack costs about 5,600 rand ($660). And thanks to a grant by the Bill and Melinda Gates Foundation, the iShack project will be trialled over the next year.

 

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 economic impact of American grantmaking

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It’s hard to imagine life without the fruits of charitable giving in America, including hospice care, insulin, vaccines, civil rights, Sesame Street, the 911 system, and even white lines on roadways. These and other advances are among the products of philanthropy that support thousands of organizations serving millions of people every day.

Unfortunately, the broad importance of the sector and the size of its impact are not well known, including among public and elected officials … a particular concern as Congress and the White House debate the role of the sector.

Using established economic models, a new study from The Philanthropic Collaborative (TPC) examines how domestic foundation grants in 2010 ($37.85 billion) are contributing to job creation, wages, GDP, and tax revenues. According to the study, foundation grantmaking in 2010 helped create about 500,000 direct jobs for those hired to implement the grant. Within one year, the number expands to nearly 1 million jobs when the “ripple effects” are included.

The study also presents longer-term projections of economic benefits such as better health care, educational opportunities, and quality of life. In addition, the study connects foundation grantmaking to nearly 4.5 million new jobs through long-term benefits or 8.8 million jobs when including ripple effects.

To help specifically demonstrate benefits to communities, the report includes case studies that document long-term economic benefits from reduced costs of juvenile crime, health care and social services, greater employment opportunities for the disabled and homeless, revitalized urban areas, and advanced longevity and quality of life from medical cures and treatments derived from scientific research.

Other outcomes include improved worker education and productivity, as well as a thriving business environment given the importance of schools, hospitals, cultural organizations, and other charitable enterprises to a community’s ability to attract and retain businesses. Of course, philanthropic support for entrepreneurship and the ecosystem that supports it can be even more far reaching.

–John Tyler, chair of The Philanthropic Collaborative

Helping Americans better understand the impact of philanthropy

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A message from Vikki N. Spruill, president and CEO of the Council on Foundations:

According to recent studies by the Philanthropic Awareness Initiative, only 1 in 10 engaged Americans can give an example of a foundation’s impact on an issue they care about. Yet 8 in 10 engaged Americans think it would be a loss for their community if foundations no longer existed.

This past year presented philanthropic leaders with the grave reality of how delicately the charitable sector hangs in the balance of broader national issues. For nearly 100 years our government has provided an incentive for American generosity, but as our country’s leaders grapple with finding fiscally responsible solutions, their decisions may result in limits on philanthropic giving. If we aspire to foster a more philanthropic society, more Americans must understand our sector’s role and the impact of our work in communities around the globe.

Americans recognize the importance of philanthropy but they cannot readily identify it. It’s time for philanthropy to take a more proactive role in promoting our collective impact. We should come together on behalf of the broader causes we champion to build more awareness among Americans about the impact and opportunity our daily work fuels in communities across the globe. We must replace organizational and transactional communications with a collaborative strategy about our impact and encourage each other to apply our individual strengths and expertise collectively in the search for solutions to social problems.

If we can increase the visibility of our respective issues and build awareness of how we collectively advance them, more Americans will understand the role we play and will reaffirm the strong tradition and future importance of the charitable sector. We will have a clear sense that we are putting issue priorities ahead of organizational ones and are creating a better world.