Giving in the News: NCF is AGAIN Fourth Largest DAF Provider

A article posted in the latest Chronicle of Philanthropy identifies Servant’s national affiliate, The National Christian Foundation out of Atlanta, GA, as the fourth largest provider of donor-advised funds (DAFs) in the nation. Each of the three programs larger than NCF are commercial funds associated with national investment firms.

The article highlights the fact that most DAF programs have been significantly impacted by the economic downturn, similarly to other charitable investments and endowments. Though NCF’s assets were down from previous years, a primary reason for this is the greater amount of grants going to ministries in greater need than most years. Many generous Christians have responded to the urgencies of the day by increasing their giving.

At Servant, we’ve seen giving increase YTD over 2008 by 17%. We’re excited to facilitate all giving, and have worked with givers to find creative ways to give a greater amount in 2009, even if extra cash isn’t available.

Thine Eyes Documentary

This week Thine Eyes – A Witness to the March for Life is showing their documentary on their website, www.thineeyes.org, for free. Thine Eyes raised support through a donor-advised fund at SCCF, and has produced the movie to raise awareness for this annual pro-life event as well as the media’s intentional failure to publicize it.

Steve Sanborn, the executive producer for the film, posted the video online in response to Pro-life terrorism accusations resulting from the Tiller shooting. He says, “The murder of abortionist George Tiller cannot be condoned. Neither can accusations of Pro-life ‘terrorism’ be condoned. The crime of one unaffiliated man does not speak for the Pro-life Movement. But this documentary does…”

Additional info can be found on Thine Eyes website.

Study finds giving circles benefit members

A study titled “The Impact of Giving Together” looked at the effects of giving circles and found:

1. Giving circles influence members to give more.

2. Giving circles influence members to give more strategically.

3. Giving circle members give to a wide array of organizations.

4. Giving circle members are highly engaged in the community.

5. Giving circles increase members’ knowledge about philanthropy, nonprofits and the community.

Since its inception in 2000, Servant Christian has recognized the importance of giving circles and sponsors several. For more information on how you can get involved, send us an email at info@servantchristian.com. You can read the entire article highlighting the study here.

Giving in the news: Women Take the Lead in Couples’ Charitable-Giving Decisions

Women Take the Lead in Couples’ Charitable-Giving Decisions

Published May 19 in The Chronicle of Philanthropy

By Paula Wasley

Women are taking an increasingly prominent role in determining their household’s charitable giving, with high-income women in particular more likely to seek financial advice and use sophisticated methods when making donations, according to a new study sponsored by Fidelity Charitable Gift Fund.

An online survey of 1,000 adults who had given $1,000 or more to charity in 2007 — half of whom had donated $5,000 or more — found that more women than men act as their household’s primary decision maker in determining how much to donate to charity and which causes to support.

Among participants in the survey — 80 percent of whom were married — the majority of male respondents named their spouse as the primary influencer in charitable-giving decisions, while women in the study were more likely to name a range in influencers that included family members, friends, and co-workers.

Women in the survey also felt more strongly about involving their children in philanthropy. Nearly half of the women in the study (48 percent) strongly agreed that it was important to them that their children continue their tradition of charitable giving, as compared with 39 percent of men in the study.

Upper Tier

While the average household income for participants in the survey was $136,000, the study particularly looked at the giving habits of the 11 percent of respondents who were women with household incomes of at least $150,000.

The survey found that, in comparison to the other respondents, these high-income women were more likely to make public rather than anonymous gifts to charity, to use more complicated financial structures to make gifts, and to seek the guidance of financial advisors when making charitable contributions.

For example, 7 percent of women in this group said they had made gifts of securities to charity, as compared to 4 percent of all respondents, and 3 percent of men of comparable household incomes.

And 16 percent of high-income women said they had used a donor advised fund, charitable remainder trust, or a private foundation to make contributions, as compared with 9 percent of all donors, and 10 percent of high-income men.

High-income women were also more likely than others in the survey to donate to health and science causes and to make additional gifts to charity in response to increasing needs and difficult economic times, the survey found.

The survey’s findings offer insights into how women are likely to shape the future of philanthropy, says Sarah C. Libbey, Fidelity’s president. “Women have always had a hand in their household’s charitable outreach, but that role is evolving as women increasingly create their own wealth and become beneficiaries of wealth transfers because they live longer,” said Ms. Libbey, in a written statement. “We, and other nonprofit organizations, should pay more attention to this very influential group of donors.”

Researchers also grouped respondents into four distinct donor “profiles” based on their giving patterns and attitudes toward philanthropy.

The “mainstream contributor” — which accounted for 52 percent of those in the study — was less likely than others to increase giving in difficult economic times. And, when cutting back on the percentage of the household income contributed to charity, donors in this category tend to give to the same number of causes as in previous years but decrease the size of their gifts. Donors who fell into this category gave an average of $6,842 to charity in 2008.

Nearly a third of the respondents in the study were identified as “empathetic givers” who were more likely to give more in tough economic times and to respond to a cause when personally touched by illness or tragedy. Respondents in this group gave an average of $7,287 in 2008.

About 15 percent of those surveyed were described as “reactive contributors” who, in comparison to the other groups, give a smaller percentage of their household income to charity and are more likely to reduce their donations in difficult economic times. Total donations from individuals in this group averaged $3,687 in 2008.

Just 4 percent of respondents were identified as “pioneering givers.” Donors in this group gave away the highest percentage of their income to charity, were more likely to give to new and lesser-known causes, and more frequently used credit cards or securities to make donations. Individuals in this group gave an average of $7,347 to charity in 2008.

Giving in the News: Body: The End Of Conspicuous Philanthropy?

The End Of Conspicuous Philanthropy?
Forbes
By Judith H. Dobrzynski, May 5, 2009

Anyone who scowled in 2008 when the New York Public Library announced that it would rename its historic Beaux Arts building on Fifth Avenue the Stephen A. Schwarzman building and chisel his name into it five times to mark his $100 million pledge, might have smiled at the news last week: The Chronicle of Philanthropy reported that anonymous giving is soaring. In this re-calibrated world, it seems, some big givers no longer want such notoriety.

Analyzing gifts greater than $1 million announced between June 2008 and April 2009, the Chronicle noted that 80 were made anonymously, or nearly 19% of the 422 total for the period. By comparison, during the past decade only about 3% to 5% of such gifts were made anonymously, according to data compiled by the Center on Philanthropy at Indiana University, the Chronicle said.

The proportion is somewhat inflated by one mysterious donor who this year has bestowed nearly $75 million on at least 14 colleges headed by women on the condition that no one know or try to find out. Subtracting that, the Chronicle says, would lower the proportion to about 16%–still three to five times normal.

And thank goodness, you may say. “Naming gifts” have proliferated like swine flu. In 2003, the writer Christopher Mason published a hilarious piece in The New York Times outlining the craziness at Disney Hall in Los Angeles–”Every atrium, every staircase, every reception room, even every escalator in and around Disney Hall carries the name of a benefactor”–and citing the mouthful “Ron Burkle-Ralphs/Food 4 Less Foundation Auditorium” as one example. At some institutions, even the restrooms are named, I’ve been told.

But as much as relief from over-the-top credit-taking is welcome, anonymous giving has a downside.

Giving is highly correlated with how the economy is doing, and as wealth exploded over the past 10 years, so did philanthropy. It reached its highest total to date in 2007, when Americans donated some $306 billion to charity. The stats for 2008 are not in yet, but Changing Our World, a philanthropic consultancy, says that figure generally ranges between 1.7% and 2.2% of the economy as a whole, which forebodes a decline.

The best givers are those who’ve already given, and perusing lists of gifts is a big way that fund-raisers find prospects. If anonymous gifts grow, development officers will have a tougher time finding new supporters: Where will they go for clues if donors go underground to avoid new solicitations?

Meanwhile, the mega-philanthropy of the last decade has thrived in part because of “conspicuous philanthropy.” This competition was kicked off in the mid-1990s, when Ted Turner bemoaned the proliferation of rich lists, arguing that they deterred giving by people who didn’t want to drop in the rankings.

Turner advocated the trumpeting of philanthropic gifts–and many publications obliged. Donors swiftly rose to the occasion–especially from laggard communities like the technology industry–and mega-gifts grew in number and size. In 2006, Peter B. Lewis, the chairman of the Progressive Corp., an automobile insurance company in Cleveland, famously gave $101 million to Princeton University specifically to top the previous largest gift, $100 million. Lewis had already given Princeton $119 million in smaller gifts.

But this is a new era. Conspicuous consumption is out: Some shoppers, according to press reports, are even leaving luxury shops like Hermés and Louis Vuitton with their purchases in plain brown bags instead of signature sacks. Many people who are doing well don’t want to rub other people’s noses in it, even with philanthropic gifts.

So the age of competitive mega-philanthropy may have ended with a whimper. Along with it, the inspirational role it played in encouraging smaller donors may also be lost (and donors in other countries as well).

Only twice in the past 40 years, according to Changing Our World, has there been more than a one-year absolute decline in U.S. giving–during the oil crisis of the mid-1970s and following the terrorist attacks of Sept. 11, 2001.

In economic terms, last year–and maybe more to come–are likely to be at least as bad as the ’70s, when total giving dropped a steep 5.4%. Making matters worse, there are more nonprofits chasing the fewer dollars now.

So while those five engravings of the Schwarzman name on the NYPL continue to seem particularly egregious, the end of that philanthropic era is not necessarily something to cheer. It’s something to be wary about.

Judith H. Dobrzynski writes about business and the arts for many publications, including The New York Times and The Wall Street Journal, and blogs at www.artsjournal.com/realcleararts. (Joel Kotkin’s column will appear tomorrow.)

Giving in the News: The National Christian Foundation Celebrates $2 Billion in Grants

The National Christian Foundation (NCF) reached a major milestone in giving with the distribution of its two billionth grant dollar since 1982. This record illustrates the exponential growth of the non-profit as it took almost 25 years to reach their first $1 billion grant mark, while the $2 billion grant milestone came in just over three years.

NCF President, David Wills said, “We attribute this growth to God at work in and through believers as they seek to be wise and faithful stewards, even in these difficult economic times. Additionally, our expanding network of over 37 Affiliates around the country has allowed us to work more closely with those whom we are privileged to serve.”

Currently, NCF and its 37 Local Christian Foundation Affiliates are ranked as the nation’s
22nd largest charity.¹ Givers make contributions to their donor-advised funds at NCF and then recommend grants to organizations that are making a difference here and around the world.

The $1.5 million grant that made this milestone possible was recommended by “The Green Fund to Reach the Children,” a donor-advised fund of Hobby Lobby, one of America’s fastest growing arts and crafts retail chains. Their grant will go to help needy children.

David Green, C.E.O. of Hobby Lobby says, “At a time when our nation’s charities need help like never before, we are delighted to be a part of this new milestone in the history of American giving. With the help of NCF and their Kansas City affiliate, The Servant Christian Community Foundation, Hobby Lobby is able to give more to the causes that are closest to our hearts, such as needy children.”

¹ 2008, Chronicle of Philanthropy, Non-Profits Ranked by Revenue

What’s Up With Washington?

Helping Advisors Cope with Tax Changes on the Horizon

Since President Obama released his controversial budget, advisors all over the country have been overwhelmed with calls about the proposed changes to upper-income taxes, charitable deductions, and estate taxes.

While it is not yet clear if Congress will vote these proposals into law, current economic challenges along with unprecedented government spending will undoubtedly feed an insatiable governmental appetite for more revenue. So we can be sure that big tax changes are on the horizon.

Let’s take a look at the three primary areas of proposed changes, as well as a fourth proposal regarding private foundations, and what it all means for you and your clients:

1) Tax Increases

The proposal includes a tax hike, increasing the highest marginal tax rate from 35% in 2010 to rates as high as 39.6% in 2011. Increased taxes on capital gain income could grow from 15% to 39.6% as well.

Gifts of appreciated assets prior to the sale would become even more attractive, allowing your clients to avoid more capital gains tax. Charitable remainder trusts and charitable gift annuities would become more prevalent as these vehicles are used to avoid capital gains tax upon the sale of an appreciated asset, while providing a continuing income stream to the giver.

2) Lower Limits on Charitable Deductions

It’s proposed that the benefit for taxpayers who make $250,000 or more be limited to 28%, beginning in 2011. So if one of your wealthy clients gets an extra $100 of income and donates it to charity in 2011, the extra $100 would be subject to a nearly 40% federal tax rate. But their charitable gift would only produce a $28 deduction. So they must spend nearly $12 in taxes to make the gift. Therefore, the “cost” of giving would go up.

There is strong bipartisan opposition to this proposal, and many observers do not believe it will pass. The bottom-line is you should look for opportunities to help your clients give income-producing assets so that income is removed from their individual tax returns and passed directly to charity.

3) The Estate Tax Freeze

In 2009, President Obama hopes to pass legislation that would freeze the estate tax exemption at its current level of $3.5 million and at its current rate of 45%, with no repeal of the estate tax which was scheduled to go away in 2010. Wiser estate planning with options for transferring wealth while still living will be essential for those with estate values beyond this exemption.

4) Greenlining

Efforts are underway by several groups to impose radical restrictions that could have a major impact on your clients who operate private foundations. The Greenlining Institute is lobbying for proposals that would require private foundations to make mandatory grants to certain “disadvantaged” groups, and require diversity in the sexual orientation of the foundation’s management and grant recipients.

The Alliance for Charitable Reform was established in 2005 to provide an emergency response to the greenlining effort (visit www.acreform.com to learn more). But overall, the result is that many private foundations are terminating in light of this new threat to philanthropic freedom.

So the real question is, what should you do? To help you plan in this challenging environment, read our post “Planning Checklist for Challenging Times“.

Giving in the News: Wealthy People Increasingly Give Online, Study Finds

From Chronicle of Philanthropy

By Elizabeth Schwinn

Affluent people are increasingly likely to use the Internet to make their charitable donations, according to results released today of a study of nearly 3,500 donors.

But charities are turning off some of their biggest donors — people who give $1,000 or more, the survey found. Some charities send too many messages to donors who say they don’t want them, while others don’t take take advantage of the interest many donors express in expanding their online interaction with nonprofit organizations, the survey found.

“Most charities are not paying attention,” says Mark Rovner, president of Sea Change Strategies, a fund-raising consulting company in Takoma Park, Md. “The people responsible for larger gifts need to start taking the Internet much more seriously than they have.”

Sea Change conducted the survey along with Convio, an Austin, Tex., company that provides Web-based software for nonprofit groups, and Edge Research in Arlington, Va., which does research and polling for nonprofit organizations.

The survey was based on data from 3,443 donors who had made gifts of at least $1,000 to a single cause in the past 18 months and donated an average of more than $10,896 per year to charities.

Sixty-four percent of the donors were age 45 to 64, and 57 percent had incomes of at least $100,000. The donors’ names were provided by 23 organizations that represent an array of causes, including advocacy groups, health organizations, international relief groups, public television stations, and Christian ministries.

Among the key findings:

• Four out of five donors said they had made a charitable gift online, and a little more than half, 51 percent, said they prefer to use the Internet for their donations. Some 46 percent said that they expect to make a greater percentage of their charitable gifts online within the next five years.
• Fifty-six percent said that charities send too many e-mail messages, and 47 percent said they do not read as many messages from charities as they did in the past.
• Seventy-four percent said it’s inappropriate for a charity to obtain their e-mail address from a commercial database, while 82 percent said they don’t think it’s right for charities to send them messages about another organization.
• Ninety-two percent of donors like getting year-end tax receipts by e-mail, while 83 percent want to get electronic updates on a charity’s finances and spending. Seventy-four percent said e-mail messages are appropriate when notifying donors that it’s time to renew an annual gift or to explain how a donation has been spent.
• Eighty-one percent of donors dislike messages that take an urgent tone in seeking a repeat donation.
• Forty-six percent of donors said the charity’s messages do a good job of making them feel connected to the organization, whil 43 percent said the messages are well-written and inspiring.

Most of the donors want more say on the quantity of e-mail they receive from charities.

In a follow-up call from researchers, one donor told them he is disappointed that charities often give him just two choices for receiving e-mail messages: “always” or “never.”

“Instead of just having me check a box that says ‘Never,’ they could actually grade it and say ‘only contact me once or twice a year, exceptional events,’” he said.

The poll results suggest that charities need to stop treating online communications with wealthy donors as little more than an electronic version of direct mail, says Mr. Rovner.

“It really behooves these organizations, particularly with these higher-dollar donors, to look into how to sort these people out,” Mr. Rovner says. “It may be OK from a financial standpoint to throw mediocre stuff at the small-dollar donors but it’s not OK to e-mail that stuff to the high-dollar donors.”

The survey was conducted last fall and had a margin of error of 1.5 percentage points. It was based on e-mail addresses of big donors provided by 23 large nonprofit organizations.

The people contacted for the survey represented only 1 percent of all the e-mail addresses the charities have collected from donors and other supporters but accounted for 32 percent of all the annual gifts made to the charities. A report on the survey, The Wired Wealthy: Using the Internet to Connect with Your Middle and Major Donors, is available free.

Giving in the News: IRS Says Number of Charities and Foundations Hit 1.2M

From Chronicle of Philanthropy

By Grant Williams

The number of charities and private foundations registered with the Internal Revenue Service has increased by more than 5 percent in each of the past two years, according to figures released by the tax agency, and reached a total of nearly 1.2 million last year.

The IRS reported that the number of groups classified under Section 501(c)(3) of the Internal Revenue Code rose from 2007 to 2008 by 58,548, or 5.2 percent — one of the highest percentage increases in recent years.

In 2008, a total of 1,186,915 charities and foundations were registered with the federal government, compared with 1,128,367 registered in 2007.

The number of groups classified under Section 501(c)(3) has increased by 81 percent since 1996, when the IRS counted a total of 654,186 of them.

The number of all charitable organizations increased by 6 percent from 2006 to 2007; 1.7 percent from 2005 to 2006; 3.5 percent from 2004 to 2005; 4.8 percent from 2003 to 2004; and 6 percent from 2002 to 2003.

High Approval Rate

In 2008, 79,236 groups applied to the tax agency for charity status. The IRSapproved 54,969 applications and denied 1,221. The remaining 23,046 applications fell through for a variety of reasons. Some organizations, for example, withdrew their applications or failed to furnish required information.

The IRS acknowledges that an unknown number of the groups classified under Section 501(c)(3) of the tax code are still on the agency’s books, even though they have shut down.

The IRS’s statistics show that the total number of tax-exempt organizations classified under all parts of Section 501(c) of the Internal Revenue Code rose by 62,261, or 3.8 percent, from 2007 to 2008.

The statistics were published in the Internal Revenue Service’s Data Book for 2008, in Tables 24 and 25.

Read the original post here.

Giving in the News: Conservatives Have Answered Obama’s Call

Arthur Brooks’ op-ed in yesterday’s Wall Street Journal makes an interesting claim: conservatives – religious or not – are more likely to give than their liberal counterparts are.

Data has long indicated that religiousness has a significant impact on if and how much someone gives, and religious individuals are less likely to lean liberal in their politics.

Here’s why this important, though: according to Brooks, “Here’s where the charity gap really starts to make a difference for the recession of 2009: Conservatives don’t just give more; they also decrease their giving less than liberals do in response to lousy economic conditions.”

Another interesting note on the data:

“Ironically, few environments are less tolerant of conservatives and their ideas than the nonprofit world. The Chronicle of Philanthropy reported in October of 2008 that employees of major charities favored Democrats over Republicans in their private political contributions by a margin of 82% to 18%. Among the employees of major foundations, the difference was an astounding 98% to 2%.”

The entire article is worth a read.