Do you have any advice on getting phone numbers for donors not connected to board/staff/etc?
We’re finding it increasingly challenging, and people are understandably protective of personal info.
Signed, Waiting By The Phone
Dear Waiting:
I don’t, actually, though I’m a big user of WhitePages.com, where lots of people “protective of personal info” will find to their surprise that they’ve been listed. It’s worth checking, at least, because it’s much more comprehensive than the old phone book. You do risk having people say, “How did you get this number?” though relatively few will want to yell at you for saying thank you, and it doesn’t hurt to say, “Your number is published on WhitePages.com so we thought it was public information; if you’d rather it weren’t you might contact the site.”
Another thing: make sure your staff carefully examines the front of any check you receive (does anyone still send checks instead of credit card numbers?). It’s pretty standard to have phone numbers there, and that’s your first, last and only chance to copy down information you’ll need later.
Finally, modify your donor contribution card to ask for a phone number. Some people will refuse to complete the card, but many will fill it in just out of habit and then you’ve got them.
So here’s something the Nonprofiteer heard yesterday: if an agency’s response to every initial donation is to have a Board member pick up the phone and call the donor to thank him/her, the likelihood of a second donation increases by something like 80%.
What’s terrific about that (other than the obvious, donor retention) is that picking up the phone is often the biggest hurdle Board members need to clear to become effective fundraisers. So if they get used to picking up the phone in a completely non-threatening situation–when their only task is to say, “Hi, I’m a volunteer Board member of agency X and I just wanted to thank you for your gift–we really appreciate your support”–you’re halfway (well, maybe one-third-way) to getting them to pick up the phone and ask their friends to come to a benefit event or a fundraising lunch.
Sounds like the ultimate low-cost high-yield endeavor. Has anyone tried it? Is it as good as it sounds?
The estimated effects of the cap and other elements of the budget package depend on whether the proposals are compared with the current tax rates of 33% and 35% or the rates scheduled for 2011, 36% and 39.6%. Compared with current rules, estimated effects are between one-half a percent and 1% decline in charitable giving . . . . When compared with tax rate provisions in 2011, charitable deductions are estimated to fall by about 1.5% if only the cap is considered, butif income effects from the entire budget package are included contributions actually rise 2.5%. The relatively modest effects of the proposal arise because (1) the effect of caps on the subsidyvalue is limited, (2) only a fraction (about 16%) of charitable giving is affected, and (3) becauseevidence suggests that behavioral responses to changes in subsidies are relatively small.
(Emphasis the Nonprofiteer’s.) To paraphrase: the tax subsidy isn’t much reduced; that small reduction doesn’t affect 84% of charitable giving; and, in fact, charitable giving isn’t all that tied to tax benefit.
So whether we take the IUPUI findings that charitable giving is likely to decline modestly if these tax reforms are enacted, or the CRS findings that it might actually go up, we should realize that everyone who’s hyperventilating about the impact of these changes on their poor struggling private school, museum or hospital should just take a deep breath. Given that the reforms will support many of the social programs, environmental protections, educational institutions and health care options the nonprofits themselves seek to provide, it’s about time for the community to stop whining and agree to pony up.
The hard Right has long argued that government services were unnecessary because nonprofits could step into the breach. This claim was always nonsense; but at least its exponents didn’t also take on themselves the task of interfering with the charities’ overwhelmed attempts to do so. Wisconsinites will pay the same Federal taxes whether or not the state receives Federal grants to support its nonprofit sector. So clearly the point is not to shelter the state’s citizens from confiscatory taxes but to punish people who need help. Governor Walker’s ideology apparently requires not just that people in need of assistance seek private charity but that private charity be deprived of the means of assisting them.
And let’s be clear about the legal antecedents of what’s going on here. Groups of citizens of a single state are being deprived of access to something available to all other citizens of the United States—just as groups of citizens of the states of the Old Confederacy were once deprived of the vote. Then, “states’ rights” was a buzz-phrase meaning “the opportunity to mistreat black people without interference from those durned Feds.” Now, in Governor Walker’s view, the phrase is even more expansive, meaning “the opportunity to mistreat unhealthy and/or poor people of every color to make the point that those durned Feds have no right to interfere.” Anyone who’s enthusiastic about the states’ rights claims in the governors’ lawsuit against the Affordable Care Act should check out Wisconsin for a foretaste of what states’ rights really mean to the rights of states’ citizens.
About a month ago the Nonprofiteer received a note from a public relations officer at the Jewish Federations of North America describing the Federations’ opposition to placing caps on tax deductions. Being well aware that the debt ceiling negotiations are completely out of her control (and probably out of anyone’s control at this point), this letter failed to move the Nonprofiteer to leap to her telephone and urge her Congressbeing to beat back this latest assault on the nonprofit sector.
But it wasn’t mere laziness that kept her from the front lines in this particular battle; it was actual disagreement, based on the letter’s own summary of the horrifying proposal:
Specifically, the Administration has proposed limiting tax benefits for charitable contributions for those earning over $250,000 (married) or $200,000 (single). The tax benefit of all itemized deductions, including charitable contributions, would be capped at 28 percent and the Jewish Federations want the charitable portion to be exempted.
Thus, an extremely modest proposal for assuring that the wealthiest citizens pay some additional portion of our shared tax burden is considered a threat to the health and well-being of the hundreds of thousands of people served by the Jewish Federations. This, despite the fact that deductibility’s impact on giving is far from clear.
Listen up, gang. You want to see a threat to health and well-being? How about cuts in Medicaid, in Medicare, in the Affordable Care Act, in Social Security, in food stamps, in child care, in education? The fundamental problem of the American economy is that we don’t pay enough in taxes to support the services we very reasonably demand. We don’t pay nearly as much in taxes as our quite conservative neighbors to the north, or our counterparts in Europe or Japan. So we don’t have the health care, the educational system or the family support services we need.
Even complete abolition of the charitable deduction wouldn’t make much of a dent in the shortfall we’ve created out of pure political cowardice and foolishness. The deficit is not the result of social spending but of three simultaneous wars piled on multiple tax cuts. So the hideous notion of a cap on deductions fails on the Willie Sutton basis: you don’t rob nonprofits because that’s not where the money is.
But. If there were what Everett Dirksen called “real money” hidden in the charitable deduction for wealthy families, it absolutely should be subject to revision, for the same reason every other deduction and credit and tax dodge should: because those dodges enable the wealthy to pay less than their share, and because this society needs more money than poor people’s taxes provide to continue those services necessary for us to remain a member in good standing of the developed world.
The Jewish Federations’ objection to this proposal—while completely understandable from their perspective—suggests that even the nonprofit sector has become infected with the shortsighted quarter-to-quarter thinking which addles Wall Street. Rather than consider the long-term good of the society they serve, the Federations are concerned about balancing next year’s budget. And while the Nonprofiteer doesn’t blame them for that—that’s their job—you’ll pardon her if she sides with (and cites) a different giant of the American Jewish community, Samuel Goldwyn*:
*Per Wikipedia: “In 1916, Goldfish partnered with Broadway producers Edgar and Archibald Selwyn, using a combination of both names to call their movie-making enterprise the Goldwyn Pictures Corporation. Seeing an opportunity, Samuel Gelbfisz then had his name legally changed to Samuel Goldwyn, which he used for the rest of his life. “
Could this possibly be because the alternative combination of their names is Selfish?
Even if mandatory “contributions” (oxymoron watch!) weren’t offensive in suggesting that volunteers’ time has less than no value, they’re practically the definition of penny-wise and pound-foolish: people will pay what you require (or not) and then regard their giving to the agency as being done for the year.
Or forever. Please stop this idea before it kills again.
As governments at all levels scramble for resources, the idea of eliminating the charitable deduction from the income tax code has begun to attract support. Many people who work in nonprofits say this would damage the sector, because people would be less inclined to give and those who did give would give less. Let’s assume this is true (though Americans’ passion for voluntary organizations long predates the tax code; Tocqueville, anyone?). Is the health of “the sector” really the relevant concern?
It may be that people will give less to their churches or alma maters or prestige arts organizations if deprived of a tax benefit for doing so. But that money will be in the public treasury, where it will go for health care and education and environmental protection (and even a pittance for the arts). So wouldn’t the goals of nonprofit hospitals and nonprofit schools and environmental nonprofits and arts nonprofits actually be advanced if the government had more to spend on these essential services?
In other words, as with health care, the question isn’t whether people pay; it’s how. You either pay for health care by giving money to an insurance company, or by paying taxes and letting the government insure you. (The latter model, in use in this country only for the aged, produces the greatest efficiencies and greatest satisfaction among patients, families and caregivers; but of course extending it to the rest of the population would set us on the road to serfdom. Hayek himself endorsed public provision of health care, so what are we arguing about, again?)
Likewise, you pay either way for education and schools and environmental protection and so on; it’s just a matter of which pot you’re anteing up in: the private nonprofit or the public.
So there’s a real discussion to be had about whether the charitable deduction is a good idea for the entire sector, or whether in fact social service and social justice nonprofits–-the ones that struggle the most for philanthropic support–-would be better off without deductions but with a bigger public fisc.
(Yes, the money might go for defense, or subsidies for oil companies, or some other boondoggle. It’s our responsibility as citizens to prevent this; tax deductions were not designed to protect us from self-government.)
This is another version of the argument the Nonprofiteer has made elsewhere about the generosity of billionaires versus the reinstatement of a significant inheritance tax. (We Democrats should make a point of calling it “the inheritance tax,” because that’s the whole point: at the moment, people who work for their money pay income taxes on it while people who inherit their money don’t. Or we could call it “the windfall profits tax,” which is what it is: a tax on the windfall profits of people whose only contribution to society is having picked the right parents. And the Nonprofiteer speaks as a windfall recipient.)
When the government collects inheritance taxes it can spend the money on things we as a democratic society think important: health and education and social services and, yes, roads and weapons systems and a bunch of other things about which the Nonprofiteer’s opinions are in the minority. If the government doesn’t collect, billionaires’ offspring can spend the money on the things they as potentates think are important, which might be eradicating malaria and endowing charter schools but which might, yes, be paying scholars to produce support for the elimination of public education or the abolition of all regulation, or even paying legislators directly for said elimination and abolition.
The tax code is designed to provide the government with resources to do its job. Its job, among other things, is to provide essential services to citizens who cannot provide those services for themselves; and the more money it collects, the more services it can provide. What’s important is that those services get provided, not that they get provided by the sector that happens to employ the Nonprofiteer.
So the question here is not, “Is it good for the sector?” but “Is it good for social welfare and social justice?” The answer is not clear-–crunching the numbers would be a huge job for which the Nonprofiteer is totally unqualified-–but let’s make sure we’re asking the right question.
I recently saw an offer to serve on a non-profit board where there was a monetary donation requirement each year, but the amount could be substituted by service or other activities through the scale pasted below. Here’s the way they phrased it:
To ensure active participation, members earn points for financial contributions and volunteer service. We ask that a contribution of $250 be made in order to remain as an Associate Board member. You can, however, combine a cash donation of $100 with your fundraising and volunteer efforts by earning these points:
Sample Opportunities to Earn Points
Opportunity
Points
Additional cash contribution of $50
50
Plan a Board Social or Fundraising Event
50
Serve in a leadership role
50
Secure $100 event sponsorship
15*
Represent [agency] at a public fair or presentation
15*
Sell a ticket to a fundraiser
10*
I was wondering, is this a common practice? I’m actually thinking about recommending it for another board where I’ve been asked to donate money.
Signed, Victor on Points or Technical Knock-Out?
Dear Knock-Out:
The Nonprofiteer knows that some larger organizations use this point system, but for smaller organizations she thinks the record-keeping and arguments about “what counts” are more trouble than they’re worth. Obviously it depends on the size of the required contribution, but in general everyone on a Board should be expected to give AND participate, and in roughly equal measure.
This is expressed in a number of different formulations: Board members offer the three Ws (Work, Wealth and Wisdom) or are expected to provide the three Gs (Give, Get and Govern). Whichever initials you use, the point is the same: Board membership is not an either-or proposition but a yes-and one. The best way to assure fulfillment of these expectations is to adopt a clear statement of them for Board members, and go over that statement with every Board recruit. “Every Board member is expected to make a $500 contribution, and buy a ticket to the annual gala, and attend monthly Board meetings, and serve on a committee . . .”. That way, no one agrees to join the Board who isn’t prepared to do all those things.
People are fond of making exceptions to this in two cases: for Board members perceived to be significantly poorer than the rest of the group, and for those perceived to be significantly wealthier or better-connected than the rest.
In the first case, the Nonprofiteer’s advice is: don’t count the money in other people’s pockets. Poor people are more generous than rich people generally, and thus are often less upset by minimum Board gifts than their wealthier counterparts. If a rich Board member can just write a $500 check while a poorer one has to ask 10 friends for $50, well, that’s just another example of ways in which poor people have to work harder than rich people. And, as $500 per year is less than $10 per week, most working people—regardless of their assets—can afford it.
In the second case: if someone tells you s/he’s too busy to actually do anything but s/he’ll be glad to be on your Board, remember this motto: if they can’t do the time, they can’t do the crime. Someone willing only to lend his/her name and write a check should be placed on an Advisory Board (create one if you have to, or dub the person a “Special Advisor” and put him/her on the stationery), not on the Board of Directors. If you do put such a person on the Board proper, s/he will have all the legal responsibilities of Board members without being there to discharge them—a recipe for disaster and hard feelings, should the agency be socked with a bill for unpaid withholding taxes or a lawsuit from an injured client.
In short: the Board is a governance institution, and governance includes assuring that the agency has the resources it needs to fulfill its mission You shouldn’t have to negotiate with your governors about their tasks, which is what a point system suggests. Rather, they should be the ones setting their own goals and meeting them, and attracting others who will do the same.
And that’s the final reason not to use this point system: no one wants to serve on a Board of lazy people. Your group is more attractive to prospects if everyone’s revved up and ready to go on every possible front. You can find such people, provided you don’t declare defeat and stop looking.
So a couple of weeks ago the Nonprofiteer received a press release announcing “Redefining [of] the Nonprofit Model.” Doubtless you’re all familiar with the genre: a group of business people get together and decide that the nonprofit sector hasn’t cured cancer or ended poverty because people in the nonprofit sector are stupid and lazy, and that an infusion of good old hard-headed American for-profit business practices will compensate for that. Voila: instant Great Society!
This particular redefinition was truly revolutionary:
One hundred advisors, including many of Silicon Valley’s elite, are coming together to disrupt the nonprofit space. . . . [They] have committed to one full year of serving on the board of a nonprofit. . . . [and] attending monthly salons where they will discuss the specific pain points of their assigned nonprofits and attempt to find solutions as a team. . . . [This] is part of a larger movement . . . to make the non-profit world more efficient. . . . “This is just the start of how [we] will disrupt the nonprofit sector and create new, innovative ways for business leaders to contribute . . . . Before [this], there was no easy path for nonprofits to find experienced leaders to help them at a board management level. A board role is not just about fundraising, but includes developing growth plans, operational efficiency, cause marketing, customer relationship management, event planning, and much more.”. . . . In order to maximize results, [the group] carefully matches advisors to nonprofits based on their skills, interests and a nonprofit’s needs.
So let’s review: a bunch of business people are going to sit on nonprofit Boards of Directors! And then periodically those business people will get together and talk about how to be better Board members! As Board members, they will not only fundraise but contribute their skills! They’ll join Boards based on their interest in the nonprofit’s mission! And they’ll seek ways to improve the whole sector!
The accumulation of these radical notions caused the Nonprofiteer to swoon; but the one idea that really had her down for the count was that the entire purpose of the endeavor was to “disrupt the nonprofit space.” Because really, what nonprofits trying to serve their clients need most of all is disruption of their management to supplement the disruption of funding they face constantly, disruption of their staff produced by those funding crises, and disruption of their ability to operate smoothly or secure resources when their message is being drowned out by a constant drumbeat of demands for “reinvention.”
The Nonprofiteer understands that in the tech world, “disrupt” is a positive word, suggesting the kind of change-the-world ethic that fueled Microsoft and Facebook. But she urges everyone to notice that when those disruptive entrepreneurs Bill Gates and Mark Zuckerberg moved into the nonprofit sector, what they did was to find nonprofits doing good work and give them lots of money to do more of it. If the disruptive “advisers” of the press release would just do the same thing, there would be less “news” but a healthier nonprofit sector.
As she fanned herself back to consciousness, the Nonprofiteer was struck once more. In this case, the weapon was yet another article about hybrid corporate forms designed to enable nonprofits to earn their own revenue and stop “begging.” Whether the discussion purports to be about L3Cs or public benefit corporations or Triple Bottom Lines, the argument is always the same: nonprofits should just get with the capitalist program, identify lucrative markets and earn their keep like every other good red-blooded American.
This approach ignores the fact that nonprofits’ markets usually consist of clients who are not profitable to serve—because if they were profitable to serve, the for-profit sector would be serving them. The better a nonprofit is at finding and serving its market, the poorer it will be, because though for-profit clients are a profit center, nonprofit clients are a cost center.
Fine, say the hybrid-benefit-earn-your-own-revenue people: so start a profitable business and funnel its profits into the charity. But this notion of a two-headed agency is, like most similar creatures, a monster. If nonprofits expend their limited energy on creating market-based revenue streams, they’ll be diverted from their mission-based activities. Either the marketing strategy succeeds, in which case the profit-generating people gain the power within the organization and mission falls to a sad second; or the marketing strategy fails, in which case it has consumed significant resources that should have gone to serving clients.
There are, of course, institutions for which running a business can be part and parcel of mission, for instance, job-training centers. But for mental health agencies, arts organizations, group homes, rape crisis hotlines and most of the other charities which do the important work in our society, running a business is a dangerous distraction.
What if, instead of spending time telling nonprofits how they should operate differently, business people re-examined their own operating principles? What if every business set aside 25% of its profits for investing not in the business itself but in the wider community?
In other words, instead of asking why a charity can’t be more like a business, let’s start asking why businesses don’t operate more like charities. Businesses receive all sorts of public services and protections, from the enforcement of contracts in the law courts to well-maintained roads along which to distribute their products. Why shouldn’t they be expected to contribute to the public good in return?
Most business people would say, “But our primary duty is to our shareholders, not to the public good” (and those over-influenced by Ayn Rand and the University of Chicago economics department would say “Our SOLE duty is to our shareholders, the public be damned”). Right: and the primary (or SOLE) duty of charities is to their/our clients. Anything that takes nonprofits away from that activity is perforce improper.
What’s the point of this thought experiment, in which charities chide businesses instead of the other way around? Simply to demonstrate how much business advice to charities is sheer nonsense. To presume that the voluntary sector doesn’t make a profit because it hasn’t thought about how to do so is to fundamentally misconceive its role in the wider economy.
Besides, what nonprofits need isn’t more advice: it’s more money. When business people are ready to provide that—when they’re ready to serve on Boards not as agents of disruption but as securers of resources; when they’re ready to advocate for a tax system which will underwrite the necessary work done by the voluntary sector—well, THAT will be the time for a press release.
she suggests you take a look at her version of Nonprofit 101, a presentation she delivered in January to the fellows of the University of Chicago Public Interest Program. These are recent college graduates serving one-year fellowships in nonprofit agencies; if their work experience doesn’t daunt them, this presentation might!
