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.

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.

Remaining significant as a non-profit

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For more traditional nonprofits, targeting millennials is an investment in the future instead of a tactic to immediately generate funds.

The Salvation Army, one of the nation’s oldest charities, recently increased its focus on involving young people after a series of focus groups showed that few students in high school and college knew what the organization did.

“It was a hard slap in the face,” says Major George Hood, the Salvation Army’s national community relations and development secretary. “It said to us we’ve got to go to work on this or there’s going to be a day where we will not have any donors left.”

Now the organization hosts an annual concert featuring teen favorites like Owl City and sponsors Red Kettle Clubs for philanthropy in high schools around the country. It also debuted an online Red Kettle for people to launch online fundraisers, which Hood says are popular among their younger donors. All are attempts to help Millennials personally identify with the Salvation Army brand.

“They want that relationship and they want to believe that they’re really making an impact on someone’s life,” he says. “If you can come up with that ingredient, you’re ready to go.”