Sunday, February 07, 2010
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By William F. High
Are you giving to charity after you die?
Many people would do so if they had confidence that there was someone who could carry out their wishes. In fact, I’ve seen it many times where a person was considering giving to charity but later backed out. Why?
For lots of reasons — perhaps they didn’t have confidence in the charity, or they believed that the charity would change their mission. In truth, all of these reasons can be solved with the right person administering the charitable gifts.
In the case of a person’s will or trust, that person would be the executor or the trustee. How do you make sure the executor or trustee follows through on your wishes? Give them specific instructions. Tell them the specific organizations they should support. If you are not sure about the specific organizations, then tell them the kinds of organizations they should support.
We’ve seen one family go so far as requiring a receiving organization to sign a statement of faith. If they don’t sign the statement of faith, they don’t get the gift.
In the case of a donor advised fund, the donor advised fund organization can serve in a similar role as trustee or executor. In other words, you can give the sponsoring organization the same kind of instructions that you would give a trustee or executor.
We often advise that a family leave their charitable gift to their donor advised fund instead of making their gift directly to a charity through their will or trust. The donor advised fund provides an added layer of protection. The sponsoring organization can investigate the ultimate charity before making the gift. On the other hand, if a gift is left directly to a charity, then by the terms of the will or trust, the gift must go. But if the gift is left to a donor advised fund with specifications to go to a charity, the sponsoring organization must still check out the charity to make sure that it is tax exempt and consistent with the charter of the sponsoring organization.
The point from these statements is that there are many ways a person can make a gift to charity and be assured that the gift will go to the right place. So don’t hold back—make that gift.
Mergers, Closings Plague Charities - that was the headline of a front page article in the
The Wall Street Journal this week. The article indicates that poor performing charities may not event make it. I was intrigued by the comment of the charity leader who was surprised that "funders want to see outcomes." When givers invest in a charity they want know their giving is making a difference - they are interested in knowing the ROI. A charity's mission should be the driver but it is clear goals and measurable outcomes that help us know how we are doing in meeting that mission.
Tuesday, February 02, 2010
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By Connie Hougland
Servant Christian Community Foundation
For churches looking beyond the church walls to find funding it can feel more like running into a brick wall. When we look for outside funding it is important that the church's reach is beyond the church walls as well. Grant funders typically look for community impact.
Joy Skjegsted, author of
Winning Grants to Strengthen Your Ministry offers valuable insight for churches looking for funding from foundations in her article
Finding Funds.
Finding Funds shares six characteristics of church programs that are most likely to receive funding from a foundation or corporation:
1) The program benefits at least some people outside of your church congregation.
2) The program is not one of the core internal programs of your church.
3) The church can separate out the spiritual component of the program or make it optional.
4) The program possesses clearly defined outcomes.
5) The program possesses a well-defined plan.
6) The program works collaboratively with other organizations.
Click
here to read Joy's full article. Keeping these points in mind may help your church find grant support for outreach efforts.
Monday, December 14, 2009
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By Michelle A. Adams
Attorney in Georgia
California’s Attorney General filed suit against the L.B. Research Foundation (“L.B.”) and its board members this past September, disclosing alleged areas of “gross mismanagement” and requesting involuntary dissolution of the organization.
The apparent deficiencies noted, as described below, could easily occur in charities that are not aware of pertinent legal requirements.
Failure to Maintain Adequate Books & Records
L.B. was unable to produce many of the many of the documents requested by the Attorney General, including adopted bylaws, grant applications, grant agreements, final grant reports, or meeting minutes for the first 7 years - all things required of private foundations under various US and California code sections.[1] Board members have a fiduciary duty of care to keep proper books.
Violation of Board Officer Rules
In California, a nonprofit public benefit corporation must have a chairman, a secretary, and a chief financial officer. The chairman cannot concurrently serve in either of the other two offices. In this case, Mr. Buckberg (the founder) was single-handedly selecting the officers – who purportedly did not even know of their appointments until the annual meeting. Board members were sometimes uninformed of the names of fellow board members. Grants were being fully distributed before the “officers” were aware of them.
The board was not operating as a board as it did not have control; all decision making was in the hands of Mr. Buckberg. This scenario may have an all too common resemblance to many nonprofit boards.
Self-Dealing
The prohibition of private inurement and self-dealing, though central to the definition of a nonprofit organization, are too often glossed over by nonprofit leadership. This apparently was true of the board of L.B. - which to all appearances was unaware that the charity could not award grants for the private benefit of board members.
Substantial contributors to a private foundation or those in management over it are considered “disqualified persons,” meaning that they are prohibited from using, receiving, or benefiting from the organization’s assets or income.[2]
Yet according to the Attorney General, L.B. reportedly made the following grants:
- Over $60,000 to UCLA Foundation to support Mr. Buckberg's research and laboratory
- Over $120,000 to produce an educational DVD, all rights being owned by Mr. Buckberg and his cousin, and which also supported a patent owned by Mr. Buckberg and another board member
- Over $15,000 to a for-profit company owned by Mr. Buckberg and his cousin for the production of the Helical Heart Model, which was also patented by these individuals
- Over $140,000 for research which would be overseen by Mr. Buckberg
- Over $50,000 for expenses related to conferences to promote a medical device patented by Mr. Buckberg and another board member
- Over $40,000 for statistical analysis related to the same medical device
- Over $8,000 to a board member for research and a conference
- Funneling $25,000 to a board member’s friend as quid pro quo for the member’s donation
- Over $1,000,000 to UCLA to create an endowed faculty chair that Mr. Buckberg applied for, which he did not get, and then spent over $400,000 in legal fees suing UCLA for the position
Members of a nonprofit board have a fiduciary duty of loyalty, which prohibits the kind of self-dealing that was seemingly pervasive among this board, and primarily by its founder.
Expenditure Responsibility
When a private foundation makes a grant to a non-tax-exempt entity, it is required to exercise expenditure responsibility, whereby it must 1) make pre-grant inquiries, 2) enter into grant agreements, 3) obtain full and complete reports and final reports from the grantees, 4) base grants to individuals on procedures preapproved by the IRS, 5) award grants on an objective, nondiscriminatory basis from a pool large enough to constitute a charitable class, and 6) keep all records related to grants made to individuals.
L.B. adhered to virtually none of these requirements when doling out grants, which consequently should have been considered taxable expenditures.
Settlement
A settlement agreement was reached by all on December 4, requiring the organization and several of its officers to pay hefty sums, including all the Attorney General’s legal fees. The organization is required to undergo board member training and hire consultants to rework its policies and develop proper granting procedures. The board must also increase the number of independent members. Mr. Buckberg was stripped of financial control, including the checkbook. He even has to turn over his keys to L.B.’s post office box.
Although L.B. was not forced to dissolve as the Attorney General originally sought, this resolution has left the organization unrecognizable in terms of its management, and probably its reputation.
Organizations should not be lulled into apathy because past corner-cutting has yet to be exposed. L.B. Research Foundation “got away with it” for ten years before paying a big price.
Lastly, the ignorance of L.B.’s board not only didn’t serve as a defense – it was in fact counted against them.
This case and settlement can be located at the following links, respectively:
http://ag.ca.gov/cms_attachments/press/pdfs/n1799_lbresearch.pdf
http://ag.ca.gov/cms_attachments/press/pdfs/n1840_document.pdf
Monday, November 30, 2009
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Michelle A. Adams
Attorney in Georgia
Does your organization need “clergy malpractice” insurance? Insurance companies have been offering this since the late 1970’s when clergy malpractice claims first were filed. But courts have yet to recognize claims for “clergy malpractice.” Thus why do insurance carriers offer such coverage?
The term “malpractice” means an instance of incompetence or negligence on the part of a professional responsible for damages. This has been applied successfully in the medical, legal, and advisement fields, but has never been successfully applied to a church. The most common scenario prompting clergy malpractice claims occurs when the clergyperson serves as a counselor. Most commonly litigated situations include improper sexual relationships arising from the intimacy of counseling sessions, failure to refer potential suicide victims for help, or simply poorly given advice. As stated above, however, none of these scenarios has resulted in a successful malpractice claim against the clergy (nor can a church be held liable when no negligence is proven against the clergy).
Besides the courts’ hesitation to get into sticky First Amendment issues, a more immediate barrier is that of practicability. Courts will not apply malpractice to churches because of the lack of a uniform standard. In negligence cases it is imperative to show that there was a duty owed by the defendant to the plaintiff. If that duty was breached resulting in harm the plaintiff will recover damages. In the fields of medicine and law those duties appear as a uniform standards of care. There, the questions are “what procedure is customarily performed in this medical scenario?” or “how would a competent attorney advise his client in this situation?” But how would a court define the duty normally expected of a clergyman?
The major difficulty is that churches are so diverse in beliefs, protocol, and requirements of their clergy. In fact, the term “church” itself is nowhere defined in law, and the term is commonly used for many different religious organization (such as temples and mosques). A judge from the most famous clergy malpractice case (Nally v. Grace Community Church) stated:
“[B]ecause of the differing theological views espoused by the myriad of religions in our state and practiced by church members, it would certainly be impractical, and quite possibly unconstitutional, to impose a duty of care on pastoral counselors. Such a duty would necessarily be intertwined with the religious philosophy of the particular denomination or ecclesiastical teachings of the religious entity.”
The Nally case was brought against John MacArthur’s Grace Community Church of the Valley in the 1980’s after one counseled by the pastoral staff committed suicide. The parents claimed that the pastors should have done more to prevent the suicide. They also criticized the church doctrine of “once saved, always saved” on the assumption that it had the effect of encouraging rather than discouraging their son’s suicide.
But the court refused to cast judgment on what should or should not have occurred in the counseling sessions. Quoting an article of Sam Ericsson (formerly with Christian Legal Society, now President of Advocates International) the Nally court said "the secular state is not equipped to ascertain the competence of counseling when performed by those affiliated with religious organizations." The most famous line arising from the case: “There is no compelling state interest to climb the wall of separation of church [and state] and plunge into the pit on the other side that certainly has no bottom.”
The Nally case decision has been mimicked in other states and seen as persuasive, but it is not binding upon other states. The decision, although overwhelming, was not unanimous in stating that clergy have no duty to parishioners. These facts indicate that while clergy malpractice has yet to emerge as a viable basis for damages, it is not impossible that it will in the future. Religious freedom has been redefined in recent decades and undoubtedly we have not seen the end of reformation.
Bottom line: Although clergy malpractice is still unacknowledged by the courts, “counseling insurance” could be beneficial for your church as a precaution – not because litigants will necessarily be successful suing under a theory of clergy malpractice but because such suits may be attempted. Lawsuits, even if successfully defended, can be very expensive because the American court system requires even winners to absorb their legal fees. This available insurance is generally inexpensive. (But make certain it provides adequate coverage.) With an increase in family discord, substance abuse, and economic stress resulting in parishioners increasingly turning to clergy for counseling, the importance of litigation protection grows as well.
Monday, November 23, 2009
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The economy is forcing many nonprofits to rethink how they find new donors. It takes different styles of communication to demonstrate the need to donors. Because of the current situation, everyone knows there is need, so nonprofits must determine how to present their need.
1) Put numbers to the need—By giving an accurate picture of the true need, donors have a better feel for the urgency and how your plan will change these numbers. Look up the compelling statistics on the areas you work with, and utilize these to strengthen how you reach out to donors.
For example, the Ozarks Food Harvest created a map of the counties they serve and color-coded the areas to demonstrate the various levels of need within the different communities. They then developed a plan for each of the different color levels. Bart Brown, their executive director, says “By putting the facts and the goals in a quantifiable manner that is easy to understand, donors can see exactly how many people can be fed with their gift.”
2) Develop new fundraising strategies—You do not have to create an elaborate plan filled with large expenses. Instead, with a bit of planning and wisdom, you can create cost-effective ideas to act on. One of the simplest ideas of nonprofits is to invest in their current donor base. Contacting lapsed donors and major gift donors can especially be helpful. The point is not always gaining the largest amount of money, but making donors aware of your organization and drawing them into your group.
3) Refine your communication—Looking at your donor base, make sure that you are reaching each group according to its needs. Are you using social media? How is the content of your email newsletters? Have you created a website with an online giving option?
4) Be willing to change your focus—Certain areas simply do not lend as much success to fundraising or are not as cost-effective. Do your research and make sure you understand what would be the best place to invest in. Maybe your direct mail responses are significantly down—have you looked at alternative options such as email newsletters or making personal visits?
It can be hard to make these changes especially after you may have invested a lot of time in these ideas. However, a change of focus often can help revitalize your organization and provide the groundwork to move forward. Don’t be afraid to move ahead if you have done the research.
Additional information taken from Linda Leichter’s article in News-Leader “Searching for givers when the need is great.”
Need help getting started in fundraising? Subscribe to our database of over 4,400 foundations that all accept applications and give to Christian causes! www.christianfoundationgrants.com
-- Jessica High is a Research Assistant at Christian Foundation Grants (www.christianfoundationgrants.com) which is a subscription database of foundations that provide grants to faith based organizations. iDonate.com is a website (www.iDonate.com) that allows ministries to receive non cash gifts online
Monday, November 16, 2009
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Organizations often are so caught up in their worries of “getting their message out there” that they begin ignoring some of the fundamental rules for successful fundraising. Take some time to review today:
--- Keep your message simple and concise—The clearer and shorter your message, the more likely people will be interested in what you have to say. People will not be motivated to join your cause and support you if they cannot understand the basics of what you are doing and what you hope to accomplish.
Imagine a scenario where you only have a short amount of time to share about your organization. Can you communicate your mission and vision clearly? I have reviewed grant proposals where ministries were asked to imagine they were on an airplane, and as the flight was pulling in, the person next to them asks about their ministry. The ministries were then asked to write what their responses would be. Many of the answers I read were very lengthy, some over two pages. Either you have to be very fast at talking or you need to shorten your message.
When you can present people with a simple message, it draws them in. The point is not to provide people with all the details they need to know about your history, purpose, staff, etc. The point is to find a connecting point with that person and get them interested. With this established, then comes the time where they can inquire more about the details.
--Listen—This idea goes contrary to common sense, at first glance. It would seem that in order to have fundraising success you need to talk in order to get donors. That is not entirely true. The most fundamental step in fundraising is relationships. I have seen many ministries that are very passionate about their cause and they are very good at communicating their vision. However, they miss engaging donors because they do not first stop and listen to them.
As you learn to listen, look for the connecting points—how your story fits in with the donor’s. Build a relationships based upon those connections. It takes time and a willing heart, but it is important. Remember, it is not about the money or even about your great work. It is about people—show them you care.
--Refine your message—This process of developing a fundraising message should be like the first step suggests: simple. Having many people involved is going to create a more complex message. Instead, when you seek to refine and develop it, invest in a few people:
-- a person good with details—have them look for grammar errors and that the facts are all correct
-- a person familiar with your vision—have them make sure it fits what you hope to accomplish
Additional information taken from Jeff Brook’s article “Three Laws of Fundraising Dynamics”
-- Jessica High is a Research Assistant at Christian Foundation Grants (www.christianfoundationgrants.com) which is a subscription database of foundations that provide grants to faith based organizations. iDonate.com is a website (www.iDonate.com) that allows ministries to receive non cash gifts online
Monday, November 09, 2009
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With foundations cutting back on the amount of grants they award, it will be even more important for ministries to write excellent proposals. They must carefully consider what will make their proposal stand out.
The Chronicle of Philanthropy recently hosted a live discussion where Jane Geever, a fund-raising consultant and author, Bernard Turner, an assistant professor at Belmont University, and Neal Hegarty, a program officer at the Charles Stewart Mott Foundation, all answered questions from various organizations.
Are your questions similar to these?:
--“What are good sources of funding for small budget organizations?”
--“What is the most important messages to convey to a funder in this climate when requesting support for the first time?”
--“What are significantly different approaches to grant writing in the competitive time?”
--“How can you can best "visualize" a project for a potential funder?”
If you want answers and helpful ideas, read the transcript of this discussion at http://philanthropy.com/live/2009/04/grant_writing/
You may also want to visit www.christianfoundationgrants.com where we provide additional resources for grant-writing help. Check out our free subscription where you can download sample grant templates.
-- Jessica High is a Research Assistant at Christian Foundation Grants (www.christianfoundationgrants.com) which is a subscription database of foundations that provide grants to faith based organizations. iDonate.com is a website (www.iDonate.com) that allows ministries to receive non cash gifts online
Wednesday, November 04, 2009
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With the growth of technology, donors have set expectations about ministries’ websites. Web experiences that meet or exceed donors’ expectations are important for ministries to stay competitive in this marketplace. Good websites have the power to gain a donor’s loyalty.
Some ideas to consider as you develop your website:
n Include a sign-up box for your newsletter. Direct email marketing is becoming an increasingly powerful tool; therefore, having a strong database of email contacts is important. Your website is one of the easiest ways to capture new names- potential donors.
n Promote your online fundraising. Even a simple “Click here to donate” box is an easy tool. Having the option to make a gift online is a subconscious reminder to your website viewers that you do need support.
n Invest money in a nice website design. So many ministries have drab designs, broken links, and poor content. This can be a turn-off to first time visitors and even to your donors. Your website does not have to be flashy; keep it simple but make it appealing. For example, Crossover Graphics (www.crossovergraphics.com) has premier designs available.
n Get website usage reports. This will help you analyze the best times to send out emails or what content needs to be altered etc.
n Investigate search engine optimization to fully promote your organization.
Remember, your website isn’t just there to pick up a couple donations or provide information. It is a dynamic and engaging tool.
-- Jessica High is a Research Assistant at Christian Foundation Grants (www.christianfoundationgrants.com) which is a subscription database of foundations that provide grants to faith based organizations. iDonate.com is a website (www.iDonate.com) that allows ministries to receive non cash gifts online
Monday, October 26, 2009
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Before foundations accept grant proposals, many require letters of inquiry. When you submit a letter of inquiry, there are some basic tips to remember:
Scheduling—make sure you submit your letter far enough advanced according not only to the foundation’s guidelines but your project’s deadlines.
Contact person—Confirm with the foundation the correct person to whom your letter should be sent.
Mailing—Submit your letter through regular mail. Be timely in your mailing, not squeezing it in last minute.
Writing the letter—
Summarize: You only have a short amount of space so use it wisely. Provide a brief synopsis of your project and funding amount in one paragraph. If applicable, be sure to identify how many people will be served through this project or other similar statistics.
Emphasize: Tell about the greater impact of their gift rather than just addressing your request as your organization’s need. For instance, if you are requesting funds for your organization that builds home, talk about how this will impact your community, rather than simply saying you are lacking funds.
Perspective: Be positive. Talk about your project as if it is a reality. Don’t use “if”, talk about “when” and how “it will”. A sense of anticipation is important.
Confidence: Make it clear that this is your program and you value it. Use terms like “our program” rather than just “the program”.
Payment: Be sure you suggest payment periods, especially if it is a large grant. Consider the size of the foundation and what would be easiest for them. Sometimes multiple year grants are more feasible for foundations to incorporate in their budget than paying it all at once.
Information taken from Grant Proposal’s website (www.grantproposal.com)
-- Jessica High is a Research Assistant at Christian Foundation Grants (www.christianfoundationgrants.com) which is a subscription database of foundations that provide grants to faith based organizations. iDonate.com is a website (www.iDonate.com) that allows ministries to receive non cash gifts online