 |
Take Ownership of the New Tax Laws
The
nonprofit community is abuzz with concerns over the new tax laws that
Congress just passed, which will go into effect in 2007. In this
newsletter we highlight some of the changes that will take place, and
also give you online sources for additional information.
For some time now,
Washington has been examining the way charities do business and the way
donors handle their gift giving. Attention has been thrust upon the
nonprofit world, in part because of a few unscrupulous charities and
less-than-honest leaders. . ."One Bad Apple Can Spoil the Whole
Bunch."
But what does this mean
for the other 99.9 percent of our country's conscientiously-run
nonprofits that now must adhere to stricter laws that govern the way we
raise money and the way we operate our charities? It is now more
important than ever to talk with your donors. Explain the new law's
potential benefits to them. For example, the IRA contribution
provision, that will be available to donors until the end of 2007,
could produce $1-billion for charities by the end of that year-if
enough donors find out about it and understand it. (See article below for more details of changes .)Yes, there are restrictions to this new incentive, but donors
should use what they can to their advantage while they can. It should
be our job, as development professionals, to inform donors now so they
can take quick action.
While many see the new
laws as placing unwarranted pressures on charities and those that
support them, it also creates opportunities. No legislation, whatever
it governs, is perfect. However, like the KETRA act before it, this
legislation does contain provisions to encourage increased
philanthropy. This new reform should be applauded by the 99.9 percent
of the nonprofits who already adhere to the letter of the law, as it
will rid our community of those remaining "bad apples" before our whole
bunch is spoiled.
Don't let the negatives
overshadow the positive impacts the new laws can bring for your
fund-raising efforts. Make it your job to understand the new laws.
Educate your staff. And most importantly, educate your donors how the
new tax laws can work for the benefit of all.
David H. King, CFRE
Managing Partner & President
Alexander Haas Martin & Partners
|
|
|
|
|
New Law Puts Restrictions on Charities and Donors
A new law goes into effect next year and nonprofits and their donors can expect to suffer the consequences. The Pension Reform Bill , represents the most comprehensive changes to rules governing
the charitable sector since the Tax Reform Act of 1969. It contains
both incentives to encourage giving and safeguards designed to deter
individuals who would use charitable organizations for personal benefit
and to ensure that donations are used for charitable purposes.
Among the incentives is an IRA
rollover that marks the beginning of a major new initiative to
encourage charitable donations. However, donors can give no more than
$100,000 by the end of 2006, and another $100,000 in 2007. Donors must
be 70 ½, and they must make donations to charities that provide direct
services. They cannot channel their IRA funds into charitable trusts,
gift annuities or other similar giving tools. This provision will
expire in two years, so it is important that organizations educate
donors about this opportunity.
Taxpayers who itemize deductions
on their annual income taxes may only claim deductions for donated
clothing and household items that are in good used condition. The
Treasury Secretary also may prohibit deductions for any item with
minimal monetary value, such as used socks. Donors who contribute a
single piece of clothing or a household item for which a deduction of
more than $500 is claimed are now required to file a qualified
appraisal of the donated item with their tax returns. Charities that
accept donations of clothing and household items should make donors
aware of the new requirements, and may wish to institute new procedures
to reject donations that cannot be sold or used by the organization in
its programs.
Congress
passed limits on so-called fractional-interest gifts out of concern
that people were getting overly generous write-offs when they promised
to donate a piece of art or collectable. The new law limits the number
of years over which donors can make such gifts and tightens the
requirements on organizations that accept the works.
Also, effective January 1, 2007,
nonprofits that are not currently required to file a Form 990 because
their annual revenues are less than $25,000 will be required to submit
an electronic report to the IRS.
The
Independent Sector has several documents available for download that
give more insight on the law, and tips for charities, foundations and
donors. Click here for those PDF documents.
The Chronicle of Philanthropy, 9-14-06, the Independent Sector.
Tennessee's Historic Gift
The University of Tennessee received an anonymous $50 million gift to the university's
capital campaign. This is the largest personal gift in the history of
the state's flagship school.
UT President Dr. John Petersen was advised by the donors that half of the gift was to be
used towards initiatives in Veterinary Medicine and the College of
Engineering, while the other half is to be designated for
intercollegiate athletics, including the historic Neyland Stadium
renovations. "This is a tremendous validation of the good work already
taking place on our campuses and a testament to the fact that private
individuals recognize the power of philanthropy in impacting the future
of UT and in turn the development of the entire state of Tennessee,"
Petersen said.
The
anonymous gift follows the commitment earlier this year by Knoxville
philanthropists Jim and Natalie Haslam of $32.5 million, the previous
largest individual gift. In just 18 months, UT's campaign has reaped
commitments exceeding $400 million through October 2006.
AHM&P is proud to serve the University of Tennessee as fund-raising counsel.
back to top |
|
|
|
SHUFF HAPPENS
The Impact of Philanthropy
We all
know that donors give because they want to make a difference. It is the
development officer's job, then, to show them how their gift will make
a difference in the life of a student or a faculty member, in the
quality of a program, or in building a new facility. That is the
essence of the case for support.
At the
same time, however, the development officer should be able to put a
single gift in the context of the overall impact of philanthropy on the
university, college, or department. This is often the case with
the University Fund or general endowment. But it can also be the case
with new or renovated facilities when donors may ask "Why don't we just
borrow the money with interest rates relatively low?" And, more
and more, we are seeing mature philanthropists who think strategically
and want to know the big picture.
Thus,
you should be able to articulate what difference philanthropy makes for
your institution. Sometimes this is best done in the null, i.e.,
where would you be without philanthropy. For example:
- Without
the University Fund, our tuition would have to increase by $XXX or, in the
case of public institutions, our state appropriation would have to
increase by $YYY to make up the difference. And at the same time you
can articulate what the University Fund makes possible: xxx scholarships,
yyy in equipment, etc.
- Without
our endowment, tuition would have to increase by $XXX to make up the
difference, or a $YYY increase in our state appropriation, or then what
you would have to do without this income.
- Without
the gifts that built or renovated Smith Hall, tuition would have to
increase $XXX if we financed the construction, or the state would have
to appropriate $YYY, or we would have had to have done without the
renovation meaning....
And, of course, you can aggregate these to be able to say that without philanthropy we would have had to.....,etc.
With
the increasing emphasis on accountability and benchmarking, board
members and donors are wont to compare your effectiveness with
others. The Voluntary Support of Education survey provides one good source for such comparisons. But it
is difficult to compare apples to apples in all areas. You can
calculate total dollars raised for current operations as a percentage
of the educational and general (E&G) budget to provide one
comparison. Endowment per student is another. Overall
comparisons are more difficult because total giving usually includes
current support, endowment gifts, and capital gifts, and comparing the
total to E&G is only a crude measure.
Do
your homework on this subject so that you are prepared to set a major
gift in that larger context so the donor knows not only the specific
impact of her or his gift, but its contribution toward the whole.
David T. Shufflebarger, CFRE
Managing Partner
Alexander Haas Martin & Partners
Shuff's Bio can be found here.
Shuff will "Sound Off" as often as we can tear him away from his clients long enough to put his many thoughts down on paper.
back to top
|
|
|
|
Did You Know?
In issues of Cornbread Brief we will share statistics pertaining to financial and development data
directly related to Southeastern institutions of higher learning. In
this issue we'll take a look at Endowment per Student of several Southeastern schools reporting this financial information. We gathered this data from the Voluntary Support of Education's (VSE) "Survey for the Council for Aid to Education."
Where does your institution stack up?
Institution |
2005 |
2004 |
2003 |
2002 |
2001 |
Duke University |
$232,650 |
$205,956 |
$189,801 |
$194,415 |
$207,283 |
Vanderbilt University |
$230,054 |
$204,187 |
$182,619 |
$189,567 |
$211,851 |
University of Virginia |
$97,021 |
$103,439 |
$96,890 |
$89,055 |
$95,276 |
Georgia Institute of Technology |
$70,498 |
$67,886 |
$62,490 |
$70,074 |
$74,908 |
Univ of North Carolina at Chapel Hill |
$53,298 |
$46,744 |
$41,783 |
$42,635 |
$44,770 |
University of Miami (FL) |
$34,498 |
$31,124 |
$27,622 |
$30,425 |
$33,729 |
University of Louisville |
$27,986 |
$25,848 |
$22,533 |
$23,482 |
$24,230 |
University of Tennessee |
$21,797 |
$18,514 |
$17,956 |
$17,639 |
$18,731 |
University of Kentucky |
$19,749 |
$14,059 |
$12,287 |
$13,491 |
$13,547 |
University of Alabama at Birmingham |
$17,220 |
$16,630 |
$15,345 |
$13,572 |
$15,899 |
University of Florida |
$16,832 |
$15,378 |
$12,255 |
$12,594 |
$14,048 |
University of Georgia |
$15,480 |
$14,009 |
$12,054 |
$12,496 |
$13,101 |
Florida State University |
$12,927 |
$9,773 |
$9,098 |
$9,056 |
$9,487 |
North Carolina State Univ. at Raleigh |
$12,703 |
$10,859 |
$9,753 |
$10,161 |
$10,853 |
Virginia Commonwealth University |
$8,894 |
$8,916 |
$7,906 |
$7,854 |
$8,368 |
Louisiana State University |
$8,723 |
-- |
-- |
-- |
-- |
Virginia Polytechnic Inst & St Univ |
$13,215 |
$11,748 |
$11,539 |
$12,761 |
$13,224 |
Business Travel Soaring to New Levels
Have
you noticed your travel costs soaring skyward faster than a jumbo jet?
Delta Airlines reports that airlines are raising the business traveler
fares, even affecting bookings you make seven and 14 days out. Data
from the just released American Express Global Business Travel Forecast,
reports that economy fares will increase by 3-to-6 percent in 2007, and
business fares will increase up to 7 percent. Additionally, new
requirements for one- and two-day minimum stays are popping up more
frequently.
On top of airfares, the Travel Forecast indicates
hotel rates will remain at heightened 2006 levels in the new year and
surge in key business centers. Mid-range hotel properties will increase
rates up to 6 percent in 2007, while upper-range properties will
increase up to 8 percent. Rates in key cities like New York, may rise
up to 18 percent.
The report notes that an average domestic North America trip
inclusive of air fare, car rental and hotel stay will increase by 4.5
percent in 2007.
Holding budgets while on the road, even getting
on the road in the first place, is proving more challenging. AHM&P
suggests setting your travel dates as early as possible, and scheduling
multiple visits during a trip. And work closely with your campaign
consultants to plan the most cost-efficient use of their trips to your
campus. Americanexpress.com
Giving Up, Number of Donors Down
The latest Quarterly Index of Fundraising Performance shows a 2.5 percent median drop in the number of donors in the
first six months of 2006 compared to the same time period in 2005. At
the same time, the amount given by each donor has risen by a median 3
percent, and revenue per new donor has increased by a median 3.5
percent. This index is conducted by Target Analysis Group.
Breaking out by donor numbers:
- New donors declined by an average of 8.2 percent
- Retention rates fell by an average of 3.3 percent
- Reactivation rates decreased by an average of 5 percent
The
index attributes the decrease in donors to the very large growth in
acquisition, retention and reactivation rates in 2005 in response to
the tsunami disaster in late 2004. The 2006 decrease may not
necessarily represent a weakening trend in donor growth, but simply a
return to more typical donor behavior.
The Index report is free, but registration is required. http://www.targetanalysis.com/register.php
back to top |
|
|
|
|
One-Click Survey Results: Online Giving
We're keeping it short and simple with our new One-Click Surveys. In the last issue we asked readers if their school had seen an increase in online gifts.
60 percent of those that responded said they do not have the capability to raise money in this manner. 25 percent said they had seen a moderate increase while 15 percent indicated they had not experienced any increase in online gifts.
Thanks for taking the quick second to weigh in with your response.
back to top
|
|
|
|
Register Now for AHM&P's February Capital Campaign Workshop
Our
September workshop filled up quickly and, from the comments we
received, was a worthwhile learning experience for every development
professional that participated! Knowledge, ideas, education and
camaraderie were shared between the AHM&P staff that lead the
sessions and all the participants.
Due to the overwhelming response and success, AHM&P has scheduled another Face-to-Face Workshop: Capital Campaigns: Let's Face the Facts. The next workshop will be February 2, 2007. Register now to secure your spot - we are already half-full!
If you missed out registering for our September workshop, be sure to sign up early for this winter event.
What will you learn in this 1-day intensive workshop?
How to Get Ready?
· How to define the project
· Should you do an internal readiness assessment?
· The how's and why's of a feasibility study
The Plan: 3 Success Secrets
· What is "sequential fund raising" and why is it important?
· What is the impact of the top ten gifts?
· What role does publicity play?
How to Write Your Case Statement
How to Create Appealing Naming Opportunities
What Role Should Your Board Play in a Campaign?
How to Recruit a Campaign Chair and Campaign Committee
What are the Details That Can Make a Difference?
· Campaign accounting: mystery solved
· How good stewardship can ensure a successful SECOND campaign
· Tracking prospects, solicitations and pledges with minimum headaches
What to Do With Your University Fund During a Capital Campaign
And much, much more. . .
What Will You Get?
· Workshop Notebook with Handouts, including the new book, Essential Principles for Fundraising Success: An Answer Manual for the Everyday Challenges of Raising Money
· Working knowledge of the theories behind building a successful program
· The "how tos" of planning and conducting the most successful campaign possible
· An understanding of the pitfalls to avoid
· Exposure to "real life" experiences of other campaigns
· Your specific questions answered by experts
Who Should Attend?
· Executive directors and CEOs
· Directors of development, development officers
· Board chairs and board members
Workshop Location
Alexander Haas Martin & Partners
Be Haas Memorial Conference Room
Piedmont Place
3520 Piedmont Road, NE, Suite 300
Atlanta, GA 30305-1512
How Do I Register?
Click Here for Registration Form
back to top
|
|
|
|
|
David King's Bowls in University Gallery Exhibit
Woodturning artist and AHM&P Managing Partner & President, David King, has 3 of his wood vessels exhibited at the Brenau University Galleries, Gainesville, Ga. "Turning Point: A Legacy in Wood from the Caswell Collection" is an exhibit showcasing some of the Jim and Carolyn Caswell collection of contemporary wood turned wood vessels.
It is an honor for David to be part of the Caswell's
personal collection. While he has been turning for less than 10 years,
David's work is garnering the attention of serious collectors and his
pieces sit beside those of more-established
artists. The Caswell's have been collecting turned wood
pieces for more than 25 years, having been inspired by the work of
artist Ed Moulthrop. David and his woodturnings were featured
recently in the Atlanta Journal-Constitution. You can learn more about his work, view and inquire for purchase, at his website, here.
 Del "Retreats" with Ringling School of Art
Believing an artist always has more to learn, Del Martin,
AHM&P Chairman, is always open to enhancing her creative talents of
painting and drawing. Her continuing studies recently took her on an
art retreat, run by the prestigious Ringling School of Art in Sarasota, Florida.
The
"camp," which has been held annually for almost 20 years, is held at
Wildacres Retreat Center in the tranquil North Carolina mountains. The
week-long art workshops are led by Ringling School faculty in areas
such as figure-drawing, painting and raku pottery. This year Del
took advantage of her "retreat time" to paint pastel and Conte scenes
of the Italian
hilltown of Cortona and the expansive and expressive vistas of Africa,
based on photos from her trips this year. You can see some of her
Wildacres retreat work here. |
|
|
|
|
Aaron Named Rising Star
 Congratulations to AHM&P Associate Partner Aaron Berger who was just named one of the Atlanta Business Chronicle's "40 Under 40: Rising Stars in Business and Politics." The Atlanta Business Chronicle honors rising young business leaders who are making a difference in the Atlanta area. The publication
receives hundreds of nominations each year from area businesses,
government and educational institutions. Selection is based on criteria
set forth by the publication and recipients are chosen by ABC staff, aided by leaders in the business community. Being one of the 40
chosen from a field of hundreds nominated is truly an honor.
This is the third class of ABC's "40 Rising Stars
Under the Age of 40" who excel both at work and in the community. We
are thrilled to have such a star on staff at AHM&P and know our
clients will benefit from Aaron's talent and expertise. We knew he was
a rising star, and with his 40 Under 40 honor, AHM&P is proud that
the Atlanta Business Chronicle acknowledges Aaron's accomplishments.
Learn More About Our Personalized Services
To learn more about the personalized fund-raising services we offer colleges and universities, please see our web site: www.ahmp.com
back to top
|
|
|
|
AHM&P Sampling of Current & Recent Higher Ed Clients
· Agnes Scott College
· Appalachian School of Law
· Armstrong Atlantic State University
· Chattanooga State Technical Community College
· Coastal Carolina College
· Converse College*
· Fort Valley State University*
· Georgia College and State University*
· Jacksonville University
· Judson College
· Kent State University*
· LaGrange College*
· Lamar University*
· Marshall School of Business at the University of Southern California
· Middle Tennessee State University*
· North Georgia College and State University*
· Northern Virginia Community College*
· Otterbein College
· Pfeiffer University*
· Reinhardt College*
· Simpson College
· Texas A&M University*
· Texas A&M University-Corpus Christi*
· University at Buffalo Foundation, Inc.
· University of Central Florida
· University of Tennessee*
· University of Tennessee-Chattanooga*
· University of Tennessee-Health Science Center*
· University of Tennessee-Knoxville*
· University of Tennessee-Martin*
· University of West Florida
· University of West Georgia
· Valencia College Foundation
· Wesleyan College
· Western Kentucky University
*Current Clients
back to top
|
|
|
|
AHM&P Partners
Click on any name for bio.
Del Martin, CFRE
- Managing Partner & Chairman
martin@ahmp.com
David H. King, CFRE
- Managing Partner & President
david@ahmp.com
David T. Shufflebarger, CFRE
- Managing Partner
shuff@ahmp.com
James R. Hackney, Jr., CFRE
- Managing Partner
jim@ahmp.com
G. Douglass Alexander, CFRE
- Founding Partner
doug@ahmp.com
Arthur L. Criscillis, Ed.D - Partner
arthur@ahmp.com
Jerry W. Henry, CFRE - Partner
jerry@ahmp.com
Joy K. Hallinan, CFRE - Partner
joy@ahmp.com
Jack Hannings - Partner
jackhannings@ahmp.com
D. Mark Anderson - Partner
mark@ahmp.com
Aaron Berger - Associate Partner
aaron@ahmp.com
Sandra K. Kidd - Senior Associate
sandra@ahmp.com
David W. Brown, Ph.D., CFP - Planned Giving Associate
dbrown@ahmp.com
AHM&P is proud to be the largest Southeastern firm in the AAFRC.
|
|
|
|
|
| |
|
