Category Archives: Strategic Planning

Giving Institute and Giving USA Foundation Board Meeting, Spring 2013

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by Jeffrey D. Byrne
President + CEO

At the Giving Institute and Giving USA Foundation Spring Board meeting (the publisher of the Giving USA annual report on philanthropic giving) where I am a Board member, we had the pleasure to engage with Dr. Una O. Osili, PhD, Director of Research for The Center on Philanthropy at Indiana University. Una’s presentation was around tax policy changes proposed in the U. S. Congress on itemized charitable giving.

As you may know, Congress enacted the charitable giving deduction in 1917, four years after instituting a federal income tax. Changes over the past 96 years have occurred in various ways, but the charitable deduction, as we know it, has not been in jeopardy of elimination until recent discussions by Congress.

Congress is currently debating a number of options to close “loopholes” in the tax code to raise revenues. Philanthropic Industry Leaders are watching closely these actions and are quickly reacting and mobilizing their constituencies to inform their Congressmen and Congresswomen and Senators about the impact that their votes can have on constituencies in their districts and states.

Recently, C. Eugene Steuerle, the Richard B. Fisher chair, an Institute Fellow at the Urban Institute, a cofounder of the Urban-Brookings Tax Policy Center and the Center on Nonprofits and Philanthropy, in his testimony before the Committee on Ways and Means of the House of Representatives (2/14/13) said: a tax subsidy like that for charitable contributions should be treated like any other government program, examined regularly, and reformed to make it more effective. The good news is that the charitable deduction can be designed to strengthen the charitable sector and increase charitable giving at the same or even lower revenue cost.

Steuerle further stated that to increase giving, Congress can:

  • create a charitable contribution for all taxpayers, not just itemizers;
  • allow people to make contributions until the filing of their tax returns or April 15;
  • make it easier for people to donate from accumulated amounts, such as retirement accounts and lottery winnings; and
  • remove or reduce and certainly simplify the dysfunctional excise tax on foundations.

Congress can more than pay for these changes with little or no reduction in giving if it would:

  • put a floor under deductions, which would have little effect on giving incentives;
  • reform subsidies that tend to be highly ineffective and invite abuse, such as the deduction for household goods and clothing; and
  • provide a better information system for charitable giving.

Our responsibility is to participate and actively engage with our elected officials. The stakes are too high. Our elected representatives need our active involvement and expertise because they will use our input in their calculations on how to maneuver through the maze of policy options. Don’t be shy. Engage.

For more information on how to become involved, reach out to me directly through Jeffrey Byrne + Associates, Inc. at jbyrne@fundraisingjba.com.

Insights for Strategic and Tax Changes for 2013

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Jeffrey D. Byrne    

by Jeffrey D. Byrne
President & CEO

As Congress passed legislation in the early hours of the New Year, much changes for tax and fiscal issues for 2013. The two things we know about life is: sooner or later we all pay taxes and we can’t take our money with us when we die. So, let me tackle what I know about the fiscal and tax changes that were enacted earlier this month.

Two-Year Retroactive IRA Charitable Rollover Extension: H.R. 8 includes a two-year retroactive extension of the IRA Charitable Rollover provision that lapsed on December 31, 2011. Specifically, the new law retroactively reinstates the Rollover for 2012 and allows any otherwise eligible gifts made after December 31, 2012 and before February 1, 2013 to be treated as a 2012 donation. The new law also specifies that any portion of a distribution from an IRA to a taxpayer made after November 30, 2012 and before January 1, 2013 may be treated as a qualified charitable distribution for purposes of the IRA Charitable Rollover. Finally, the IRA Charitable Rollover has been reinstated for all of 2013 and will now expire at the end of this year, on December 31, 2013. (The Chronicle of Philanthropy, 7 Jan. 2013)

Core of the Fiscal Cliff Legislation & Tax Changes: According to an article I read in a U. S. Trust Investment Strategy Strategic Insights Advisory recently: The core of the 2012 tax Act once again extends “most” of the so-called Bush tax cuts, but not all. The 2012 Tax Act will permanently extend taxable income tax rates for all single taxpayers with taxable incomes below $400,000 and married couples with incomes below $450,000. The top marginal income tax rate increases to 39.6% from 35% and the top marginal dividend and capital gain tax rates rise to 20% from 15% on investments held for more than one year. Adding in the 3.8% health care tax results in an even higher effective tax rate. Additionally, various tax deduction and credits phase out for individuals earning more than $250,000 and couples making more than $300,000. The agreement also extends unemployment benefits for one year, delays automatic spending cuts for two months, raises the estate tax rate to 40% from 35% with a $5 million exemption, indexes the Alternative Minimum Tax (AMT), extends accelerated depreciation allowances for businesses for another year, renews the research and development (R&D) tax credit and extends the “Doc Fix” (cuts in Medicare payments to doctors).

Finally, the Estate Tax Exemption beginning January 1, 2013 is $5,250,000. This exemption is permanent. It is subject to an inflation adjustment annually.

The bottom line is it’s all generally good news for your organization and the donors who care for it. While there are still discussion of further limits on charitable deductions, we will keep you informed of major changes in legislation that impact your donors. In the meantime, I recommend letting your donors know about the opportunities presented to them by the changes in the IRA Charitable Rollover. They may find that NOW is the time to make a gift to your organization.

Repositioning and Fundraising in Senior Living

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Senior Living Advisor, 3B Fund Development Group

The “buzz” word in the senior living industry these days is “repositioning”. What exactly does this mean? For most communities, it means changing the image, changing the brand for marketing/sales, and changing broader community relationships. As we all know, it is a time for the entire world to be retrenching and maximizing existing resources. Many of the leading national senior living communities have celebrated their twenty or thirty year anniversary. If a community has worked hard over this period to meet resident needs successfully, and maintained an above average census, many of its operational systems are tired and antiquated. It may not be necessary to undergo a significant expansion, but some changes more significant than simple remodeling seem important. Hence, “repositioning” is the term that encompasses all of the above. 

For a community to change its image and infrastructure, a project team must be convened that includes architects, contractors, marketing/sales experts, interior designers, financial experts, Board members, residents, family members and other important stakeholders. Very often, the members of this team were not involved in the original design and development of the community. In depth research will have to be undertaken to educate team members how decisions were made in the “beginning”. Perhaps the most important members of the team are residents. First and foremost, the community being repositioned is their home, and they may have no desire to change any particular aspect of their lifestyle in the interest of attracting future residents. Many times, residents can be quite insular in their perceptions of their way of life. And so, it becomes very important to work hard to prepare a budget that is finely tuned with all i’s dotted and t’s crossed. So many times, residents will agree to move forward with a major repositioning as long as it will not cost them more money, in other words entry fees and monthly service fees will not be raised. The financial team members are challenged to walk a fine line assuring Board members and Executive Staff that the costs for the repositioning can be handled without a restructuring of a favorable debt arrangement that has been in place for a number of years.

 

In the total timing of all tasks leading to a successful repositioning effort, this is the point at which fundraising discussions provide a solution to accumulating available resources. Some communities may have sophisticated successful fund development programs. However, many do not, and they will be hearing about Capital Campaign strategies for the first time. One of the financial experts added to the project team at this point is an experienced senior living fundraising consultant, one that can work with residents and families, in addition to the more customary donors. In the senior living environment, a large percentage of Capital Campaign proceeds come from residents, family members, and contacts emanating from these two groups. It will take patience and straightforward realistic negotiations with all members of the project team in order for a Capital Campaign to succeed, and form the base structure for a successful repositioning. When all the aspects of the repositioning are in alignment, an individual community will be well “positioned” to succeed for another twenty years and beyond!

“BEWARE” Hiring an Unethical Fundraising Consulting Firm Can Cost You Your Reputation and Results

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Recently it came to my attention that a competitor was misrepresenting their firm to potential clients. I was appalled by the allegation, and I asked what this consulting firm doing that caused alarm.

I was told that the consulting firm was claiming victories for clients who were, in fact, not their clients. I was also told that the firm engaged in “bait and switch”. That’s where the principals of the firm “promise” that they will be the consultant for the project, but as soon as they are engaged, they place “junior” consultants into the client relationship while charging the same price. Lastly, I was told that the firm identified individuals as references, but that these individuals had never been asked for their permission to do so.

Fundraising consultants and consulting firms too often get a “bad” rap for such things as charging outrageous prices; poor attention to detail and the inability to perform for the client. These are avoidable if the consultant and consulting firm are paid value for their experience(s) and appropriately invest the time needed to achieve success; plan properly before and after a consulting engagement; and work diligently with the client in providing innovative, creative and proven strategies that have worked before. And you can be certain that the price we have quoted for our services will remain at that level.

Jeffrey Byrne & Associates has provided the non-profit sector with quality for the past 12 years. During that time, we’ve represented our clients and engagements to the public in an open forum, always careful in representing our achievements factually and careful to share successes about our clients. We believe in the old saying “what you see is what you get”, which is to say that whoever we are putting forth to serve as assigned counsel is the consultant who will see the project from start to finish. And, you can be certain that there will be no “adding on” to our costs; whatever amount was set for the agreed upon services, it remains the same.

Lastly, we are proud of our past relationships with nonprofit executives, directors of development, donors, and volunteers, and are respectful of those relationships by seeking their permission when addressing successes that occurred as a result of our partnership.

Here are some “best practices” if you are considering interviewing and hiring a fundraising consultant.

Choose someone who…

•       Understands client readiness for input

•       Assures client capacity to sustain results

•       Can redefine the problem in innovative ways

•       Customizes tools to client’s specific needs

•       Is a trailblazer in their chosen field

•       Doesn’t just know the state of the art, but is the state of the art

Finally, Jeffrey Byrne & Associates is the only Missouri and Kansas firm that has been vetted extensively for membership into the Giving Institute, the nation’s oldest and most respected association for fundraising consulting firms. For the Giving Institute’s ethical guidelines for fundraising consulting firms, go to www.givinginstitute.org.

Click here to link to a PDF of “Fundamentals of Hiring a Fundraising Consultant”. This one-page guide will give you the basics and tell you what a consultant will expect from you and your staff as well.

For Smaller Non-Profit CEO’s Considering Conducting a Capital Campaign

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John F. Marshall
Senior Vice President
Jeffrey Byrne & Associates, Inc.

Over the years, I have had the opportunity to work with non-profits of all shapes and sizes, whether conducting board training, engaged in a development audit or offering ongoing advice on running a capital campaign. Whatever the project, what has been critically important in whatever the project was the active involvement of the CEO.

This article is intended primarily for the CEO who has been entrusted with managing a smaller non-profit, one with a committed board but with no one staff person assigned to managing fundraising and development programs. In other words…the CEO who wears many hats!

Capital campaigns provide a wonderful opportunity to raise funds to either build new facilities or engage in renovations, and in further developing broader and stronger relationships within your community. Great outcomes can occur when the campaign is properly organized and executed, as well as being supported through the active participation of the board of directors… in every facet of the effort.

But make no mistake, for the smaller non-profit; it is up to the CEO to make certain that “everything gets done.” The following are several of what I believe are key responsibilities and duties of the CEO of a smaller organization within a capital campaign…from start to finish.

It is CRITICAL that you:

  1. Become even more proficient at TIME MANAGEMENT, being able to BALANCE the demands on yourself and on your time;
  2. Become exceptionally good at DEVELOPING RELATIONSHIPS with community leaders, volunteers and campaign prospects;
  3. Develop relationships that genuinely express FRIENDSHIP, MUTUAL RESPECT, COOPERATION and a willingness to be AVAILABLE at any time;
  4. LEARN  as much as possible about people: their NEEDS, INTERESTS and CONCERNS;
  5. Show a willingness to recognize and express your LIMITATIONS by asking for advice;
  6. Always be PREPARED when attending campaign meetings to ASK questions and RESPOND to questions and possible challenges;
  7. Create, manage and adhere to a CAMPAIGN CALENDAR, being careful to monitor progress and TAKE ACTION when lulls occur;
  8. Accept that NOTHING STOPS with your non-campaign programs and services despite the INCREASED DEMANDS on your time;
  9. Be prepared to address UNFORSEEN CHALLENGES in an effort to avoid negativity that could impact the campaign. FAILURE to address issues can also impact VOLUNTEER MORALE and the public’s perception of the campaign and your organization;
  10. Your staff will require even greater LEVELS OF ENCOURAGEMENT and SUPPORT. They need to know that their efforts are IMPORTANT to the success of the campaign;
  11. Be prepared to ATTEND ALL campaign meetings. Volunteers and staff NEED TO SEE that you are integrally involved with the campaign;
  12. Take every opportunity to PUBLICLY PROMOTE the campaign at public events, in front of civic clubs and through the media;
  13. Become even more CLOSELY ALIGNED with your board. MEET with them regularly, keep them fully INFORMED and PARTNER with them when making fundraising calls;
  14. And lastly, if using campaign COUNSEL, develop a close WORKING RELATIONSHIP to ensure
  • Adherence to the campaign calendar
  • Creation of the best strategies for asking for a gift
  • The timely handling of issues when they arise (and they will, trust me)

For the CEO, regardless of whatever size organization he or she leads, managing a capital campaign could become the most demanding period of their life… AND THE MOST SATISFYING!

Jeffrey Byrne & Associates, Inc. is prepared to assist you with whatever your fundraising and development needs may be. We would be delighted to receive your call and discuss ways in which we can partner with you and your organization in pursuing excellence. 816.237.1999; www.FundraisingJBA.com