Exploring Fundraising Issues, Trends cdn. Fundraising Issues, Trends Regulations Michael J. Baker, ... Ray and Barbara Dalio ... The Giving Pledge

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  • Whats the Code: Exploring Fundraising Issues, Trends & Regulations

    Michael J. Baker, CFRE

    7/13/2011 1www.m3development.net

  • To give away money is an easy matter and in anyones power. But to decide to whom to give it and how large and when, and for what purpose, is neither in everyones power-nor an easy matter. Hence it is that such excellence is raise, praiseworthy and noble.


    7/13/2011 2www.m3development.net

  • 1,046,719 Public Charities Registered with IRS in US

    59% Growth over past 10 Years

    $1.44 Trillion in total Revenues

    $1.34 Trillion in total Expenses

    $2.6 Trillion in total Assets

    52,121 Public Charities Registered with IRS in Florida

    69% Growth over past 10 Years

    $54 Billion in total Revenues

    $91 Billion in total Assets


    7/13/2011 3www.m3development.net

    Source: National Center of Charitable Statistics

  • Non-Profits

    Charitable Giving was $280.3 in 2009 compared with $303.75 Billion in 2008

    Charitable Giving is 2% of the US Gross Domestic Product (GDP)

    1,046,719 NPOs in US 2010

    June 2011, 275,000 NPOs lost tax exempt status

    Employ 1 in Every 14 American Workers

    9% of US Workforce


    64 million people

    30% of all Women Volunteer

    23% of all Men Volunteer

    7/13/2011 www.m3development.net 4

    Source: National Center of Charitable Statistics & Giving USA 2011

  • Professionals in Fundraising

    According to U.S. News and World Report,

    fundraising is one of the top 25 hottest jobs for

    the future.

    Average salary for Development Director

    between $66K & $76K.

    Source: U.S. News & World Report; AFP & Nonprofit Times

    7/13/2011 5www.m3development.net

  • Regulatory Changes

    IRS Form 990 Redesigned effective 2009

    returns for 2008 tax year to promote tax

    compliance & transparency.

    IRS is currently seeking comments on new 990

    by 8.1.2011 for upcoming revision.

    Pension Protection Act of 2006 had provision if

    charity did not file 990 in past 3 years the org

    automatically lost their tax-exempt status.

    Source: IRS

    7/13/2011 6www.m3development.net

  • 2011 Federal Taxes Income tax rates from 10% up to

    35% (expires end of 2012)

    Long-term capital gains and dividends (expires end of 2012)

    For taxpayers in the 15% income tax bracket and below, the rate is zero.

    For taxpayers in the 25% bracket and above, the rate is 15%.

    Estate tax exemption up to $5,000,000 (expires end of 2012)

    Source: IRS

    7/13/2011 7www.m3development.net

  • Florida Regulations

    Florida law requires all charities to register

    with the Florida Department of Agriculture and

    Consumer Services.

    These groups do not file with the Department

    of Agriculture and Consumer Services.

    religious or educational institutions, government

    agencies or political groups

    Source: FL Department of Agriculture & Consumer Services

    7/13/2011 8www.m3development.net

  • 7/13/2011 9www.m3development.net

  • The Giving PledgePaul G. Allen

    Laura and John Arnold

    Nicolas Berggruen

    Michael R. Bloomberg

    Eli and Edythe Broad

    Warren Buffett

    Jean and Steve Case

    Michele Chan & Patrick Soon-Shiong

    Lee and Toby Cooperman

    Joyce and Bill Cummings

    Ray and Barbara Dalio

    John Paul DeJoria

    Barry Diller & Diane von Furstenberg

    Ann and John Doerr

    Larry Ellison

    Charles F. Feeney

    Ted Forstmann

    Phillip and Patricia Frost

    Bill and Melinda Gates

    David and Barbara Green

    Jeff Greene

    Harold and Sue Ann Hamm

    Lyda Hill

    Barron Hilton

    Jon and Karen Huntsman

    Carl Icahn

    Joan and Irwin Jacobs

    George B. Kaiser

    Vinod and Neeru Khosla

    Sidney Kimmel

    Rich and Nancy Kinder

    Elaine and Ken Langone

    Gerry and Marguerite Lenfest

    Lorry I. Lokey

    George Lucas

    Duncan and Nancy MacMillan

    Alfred E. Mann

    Joe and Rika Mansueto

    Bernie and Billi Marcus

    Michael and Lori Milken

    George P. Mitchell

    Thomas S. Monaghan

    Tashia and John Morgridge

    Dustin Moskovitz

    Pierre and Pam Omidyar

    Bernard and Barbro Osher

    Ronald O. Perelman

    Peter G. Peterson

    T. Boone Pickens

    Julian H. Robertson, Jr.

    David Rockefeller

    Edward W. and Deedie Potter Rose

    David M. Rubenstein

    Herb and Marion Sandler

    Denny Sanford

    Vicki and Roger Sant

    Lynn Schusterman

    Walter Scott, Jr.

    Tom and Cindy Secunda

    Annette and Harold Simmons

    Jim and Marilyn Simons

    Jeff Skoll

    Tom Steyer and Kat Taylor

    Jim and Virginia Stowers

    Ted Turner

    Sanford and Joan Weill

    Shelby White

    Charles Zegar and Merryl Snow Zegar

    Mark Zuckerberg

    Source: The Giving Pledge

    7/13/2011 10www.m3development.net

  • Individuals$211.8 B


    Foundations$41 B14%

    Bequests$22.8 B


    Corporations$15.3 B


    2010 Charitable Giving

    Total = $290.90 Billion

    7/13/2011 11www.m3development.net

    Source: Giving USA 2011

  • The 2010 Non-profit Fundraising Survey

    Funds raised in 2010 compared with 2009

    In 2010 more organizations saw growth (43%) than declines (33%).

    2009 46% reported a decline.

    Larger organizations were more likely to see growth than were very

    small organizations.

    There were few meaningful differences in the changes in amounts

    received when organizations were grouped by region of the United


    Just 45% of organizations received more than 50% of their

    contributions from individual donors.

    7/13/2011 www.m3development.net 12

    Source: The Nonprofit Research Collaborative 3.2011

  • The 2010 Non-profit Fundraising Survey

    Funds raised in 2010 compared with 2009

    Internet/online giving rose at 58% of the organizations that reported

    using itand more than threequarters reported online or Internet fundraising.

    Major gifts and events proceeds rose at half of the organizations using

    them, but for most other fundraising vehicles, the picture was mixed.

    Most organizations held their investment in fundraising steady in 2010.

    However, those that increased expenditures, staffing, or volunteer

    engagement were more likely to see increases in funds raised. There is

    also a relationship between failing to invest in fundraising and failing to

    meet goals. That is, investment doesnt guarantee increases, but

    decreased investment is associated with not meeting goals.

    7/13/2011 www.m3development.net 13

    Source: The Nonprofit Research Collaborative 3.2011

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  • Most Cost Effective Ways to Raise $

    Email Marketing $.02 per $1 raised

    Major & Planned Gifts - $.10 to $.20 per $1 raised

    Capital Campaigns - $.10 to $.20 per $1 raised

    Corporations & Foundations - $.20 per $1 raised

    Direct Mail (renewal) - $.20 to $.25 per $1 raised

    Special Events - $.33 to $.50 per $1 raised

    Direct Mail (acquisition) - $1.25 to $1.50 per $1


    Source: DMA 2009 & The Nonprofit Handbook 2002

    7/13/2011 16www.m3development.net

  • Generational Giving

    7/13/2011 www.m3development.net 17

    Source: AFP

  • 7/13/2011 18www.m3development.net

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  • Americans Love a Winner

    7/13/2011 www.m3development.net 20


  • Recent Scandals

    Bernie Madoff stole over $18 Billion

    Many losers.

    Individual investors

    Non-profit investors

    Foundation investors

    Corporate investors

    Government investors

    Source: Wall Street Journal

    7/13/2011 21www.m3development.net

  • Madoffs Victims

    7/13/2011 22www.m3development.net

  • Recent News

    The cancer charity Livestrong could face a $5-million to $10-million

    loss in donations as investigators probe doping allegations against its

    founder, seven-time Tour de France winner Lance Armstrong

    Source: Bloomberg 6.7.2011

    7/13/2011 23www.m3development.net

  • Some Recent Florida Press

    Florida to Navy Veterans charity: Cease fundraising immediately

    The activities of the U.S. Navy Veterans Association "constitute

    immediate, serious dangers to the public welfare," the state of Florida

    says in a new order, and the same order says the group must cease

    operations immediately.

    three companies keep 60 to 90 percent of every dollar collected and

    account for most of the $4.58 million the Navy Veterans Florida

    chapter said it brought in

    Source: St. Petersburg Times

    7/13/2011 24www.m3development.net

  • Case Study - Ethics in Action

    The September 11th Fund

    Created by The New York Community Trust

    and United Way of New York City.

    Leadership of Mayor of NYC; CEOs of orgs;

    & 22 independent directors.

    More than 2 million donors gave $534 million.

    Dissolved in 2004 after 559 grants totaling

    $528 million were distributed.

    7/13/2011 25www.m3development.net

  • Ethics and accountability: powerful forces in fundraising, ensuring

    Stakeholder trust and conf