OMG! Sweet sixteen!

As my youngest child has her sweet sixteenth birthday today, I remain in disbelief that she has grown up so fast.  Yet I still look pretty good (it’s OK – you can chuckle!), albeit with much less hair than when I first held her and told her I loved her!

I will not bore you with the details of her childhood.  But as I write this, I am truly amazed at what philanthropic milestones have occurred over the same 16 years.   Just looking at a few events in healthcare made possible through philanthropy:

• Immunizing the third world – the Gates Foundation invested $2.5 billion to immunize some 750 million children – more than twice the population of the United States – against diseases which the developed world largely has not seen in decades.
• Allen Institute for Brain Science – Paul Allen has given some $500 million to endow this center which studies how the brain processes information; basic brain structure; and what goes wrong in the brain to develop neurological disease and disorders.
• Nothing but Nets – little did Rick Reilly know when he authored that now-famous column in Sports Illustrated almost 10 years ago that he would ignite a worldwide push to eradicate malaria in the world. People all across the globe provided over 400 million mosquito nets to allow people to sleep without fear of mosquito bites, annual malaria deaths plummeted over 350,000.

Many more successes have happened and those stories need to be told about the transforming power of philanthropy in areas such as arts, education, animal welfare and so on.  Sixteen years have flown by so quickly in my household and I have seen my daughter grow into a beautiful, smart, and talented young woman.  Throughout those same sixteen years the world has witnessed many remarkable triumphs, as well as tragedies.  So what do you dream might happen in the next sixteen years?

Don’t Forget to Have a Stewardship Day

Get hyped for Thursday! North Texas Giving Day finally arrives after much preparation by over 2,100 North Texas charities and the Communities Foundation of Texas. September 17 marks the seventh year of the massive effort to raise awareness and funds for charities critical to the fabric of the North Texas area. $86 million in giving in the six prior years is most impressive by any measure.

Giving Day represents a marvelous opportunity to pull in new donors. And a meaningful way to engage your board members in thanking and welcoming and appreciating donors. How is your non-profit thanking the thousands of donors who take time out of their schedule to make their gift? Make that first thank you call fast!  Penelope Burk with Cygnus Research states over 90% of surveyed donors would be thrilled to receive a thank you call from a board member of the nonprofit. Ms. Burk’s research also shows a clear link between an expedient thank you and increased giving.

What if our sector put as much effort into a stewardship day as it does into giving day? Admittedly, stewardship does not have the same allure as securing bonus dollars yet this type of engagement provides staff, board members, and other stakeholders with the good fortune to build a relationship with the people who fuel the nonprofit enterprise: donors.

What are your thoughts on a special stewardship day sponsored by nonprofits? Your thoughts and comments are welcomed and appreciated.

Remembering September 11

I had just dropped off my oldest daughter at school.  I was listening to the “Mike & Mike” show on ESPN radio when Mike Greenberg announced a plane had crashed into one of the towers.  It was initially thought to be a tragic accident. About one minute later, he said this was no accident…

When I got to work, everybody was around the many television sets in the hospital.  The video sent a cold chill throughout everyone watching.  Questions came from all directions. How could anyone do this?  Who did this?  Would there be another attack?  If so, where was the target?  My co-workers were not panicking by any means, but an atmosphere of deep somber permeated all corners of our hospital. The clinical teams focused on patient care and those in the C-suite pulled out our disaster manuals and began to refresh our understanding of what to do, who would do what, etc.  Our CEO was in New York, so our first thoughts were of her safety.  She was able to call to let us know she was safe, but stuck at the airport as all flights had been grounded.  No one knew when she could travel back.

I was President of the Longview United Way and the annual campaign kickoff luncheon was scheduled for that day at the convention center.  A crowd of 700+ was expected for the event.  One of the campaign co-chairs wanted to cancel the event as rumors flew that President Bush was on Air Force One heading to Barksdale AFB in Shreveport about 60 miles away.  She was worried, rightfully so, that he was a target and our area could be subject to an attack.  The only answer I had for her and for the campaign leadership team was if the President was headed to Barksdale (he was), that half of the US Air Force must be around that plane.  I would not cancel the luncheon event – our campaign was too important to the thousands in the community who needed the United Way.  I guess the hubris in me refused to let terrorists win, maybe it was a feeling that we had to go on with our lives.

As part of the response that grounded commercial air traffic, the Amtrak train was stopped at the Longview station with over 100 passengers.  These folks needed a meal.  The United Way Executive Director asked me if they could join our luncheon.  Of course, they were invited.  I do not recall much of what I, or any of the other speakers, said on that day.  But I remember a sense of determination of the attendees as they left the center.  Determination that we would face the challenges brought onto our nation, while our nation’s nose was broken and bloodied, we were not defeated – not by a long shot.

Please take a moment to remember the victims in the World Trade Center, the Pentagon, and flight 93.  And especially remember those first responders who went into the towers, denying the base human instinct to run from disaster, and saved people.  Many of these first responders lost their lives in the collapse of the towers.

Far more eloquent people can express the emotions of September 11.  I just wanted to share how a group of people 1600 miles away did their part to reach out and share what we had with a group of strangers who happened upon our city. Remember we are Americans first and it is in our nature to give of ourselves to help others.

The Philanthropy Prime Directive

For the dozen or so people on the planet who have never heard of Star Trek, what follows makes no sense.  For the billions who are familiar with the nearly 50-year old franchise, and especially those who call themselves Trekkers and who are involved with philanthropy, this is for you.

Every Trekker knows the prime directive:  non-interference in other cultures to allow organic and independent development.  Philanthropy has a prime directive as well:  demonstrating our love and concern for our fellow man in as many ways as we can.  Our prime directive as development professionals can be distilled to this: making the donor so enthralled and enthusiastic about the real changes philanthropic gifts are creating that he/she becomes part of the mission of the agency – takes a sense of ownership.   Some call the process ‘donor satisfaction’ and that only scratches the surface – after all, who wants to be just satisfied when one can be energized?  Others call the process ‘donor engagement’, which is a great place to start.

What are some laudable accomplishments made possible through philanthropy?

Earlier this year, the Schiede family donated their book collection, which comprised each of the first six printed editions of the Holy Bible (including the 1455 Gutenberg Bible); early works of Shakespeare, Beethoven, Mozart, and Schubert; original letters from Lincoln; and a manuscript of the Magna Carta.  Princeton University will make these items available to scholars and the public; the value of this gift was placed at $300 million – the largest gift in the history of Princeton.

You may not have heard of Nathan Straus, but his philanthropic legacy can be found in the dairy aisle:  pasteurized milk.  While Louis Pasteur discovered that heating milk destroyed many disease-causing germs, it was not widely adopted in the US until Nathan Straus happened on the scene in the late 19^th century.  Mr. Straus gave the majority of his fortune to see pasteurized milk become the accepted norm for his adopted homeland.  Through his generosity, Straus underwrote the delivery of almost 3oo milk stations in over 35 cities.  By 1925, these stations provided nearly 25 million bottles of pasteurized milk.  Infant mortality plummeted from 125.1 per thousand in 1891 to 15.8 in 1925.  His campaign to mandate pasteurization of milk sold commercially in the US has saved millions of lives. (Source: M.D. Cohn, Lehigh University thesis, 1993)

Charities across the country have success stories.  While they may not all have the mega-impact like the gifts of the Schiede family or Nathan Straus, they definitely impact local communities and families.  As a reminder, your prime directive is to draw that donor’s attention to the good work done by your nonprofit, show the outcomes philanthropy makes possible, and ask the donor to partner with your agency to make these results a reality.

Charitable Tax Deduction – Where Do You Stand?

Much discussion ensued following President Obama’s proposal to cap the charitable deduction for high income individuals.  While that proposal was not enacted into law, the mention of change to a nearly 100 year old taxation policy generated much consternation in the nonprofit community.   Regardless of one’s political position, the question surrounding the charitable deduction remains:  what value does the charitable tax deduction create in the donor’s decision to make a gift?

Donor surveys consistently and overwhelmingly state the primary reasons for a gift include a passionate belief in the charity’s mission and work, trust in the solicitor, personal experience with the charity as a service recipient, volunteer or board member, and a conviction that the charity’s work is vital to the community.  The federal tax deduction has never risen higher than 6^th place in any survey I have seen in my 20-year philanthropy career.  Yet I submit it can spur giving, especially at the end of the year.

Let’s be honest – Americans are notorious procrastinators.  We wait until April 15 to file taxes and we have to be shamed, goaded, even cajoled into seeing a physician (applies to us men!), just two examples.  When you look at the size of charitable giving in the US for 2014, it has eclipsed the pre-recession mark – $358 BILLION!  (Giving USA study published in 2015)  Put the level another way, this amount would be the 34^th largest economy in the world, ahead of countries like Denmark, Singapore, Israel, and Finland (World Bank Development Indicators database).  Americans are without a doubt the most generous people in the world!

Going back to the posed question, what value does the charitable tax deduction create in the gifting decision?  It certainly has not boosted the overall level of giving as a percentage of the US Gross Domestic Product (GDP), which has held steady at 2% for the past 40 years (Giving USA study).  However, when you look at a possible cap on charitable deductions, I submit it would deter or limit the amount given to US charities, especially transformational gifts that charities use to create solutions the government is likely ill-equipped to duplicate.  And certainly not as efficiently as charities.

Those who itemize their tax returns have historically accounted for anywhere between 65-75% of all individual gifts to charities.  Any proposal that could jeopardize that level of giving would be detrimental to our society at a time when charitable services are needed more than ever.  The charitable tax deduction is a truly unique benefit as it does not provide a direct benefit to the itemizer, unlike the mortgage or property tax deduction.

One idea circulating in the Washington think-tank world is to change the current deduction to a tax credit with a floor on income.  Essentially, individuals would receive a tax credit, which is more beneficial than a deduction, on charitable gifts made above a percentage of income.  For example, an individual with an Adjusted Gross Income of $100,000 would receive a graduated tax credit, say 25% on gifts over and above  a 2% floor – $2,000 in this example.  A taxpayer giving $10,000 would receive a $2,000 tax credit ($10,000 in gifts less the $2,000 floor equals $8,000 at a 25% rate would yield a credit of $2,000)  How would that play in the nonprofit sector?   I frankly do not know.  Change is always difficult and changing the tax code is rarely pleasant.  How could the effects be predicted?  No precedent exists about altering the charitable tax deduction.

As we face the 2016 election season, is it possible for our country to have a rational discussion about how we wish to incentivize charitable giving?  I intend to ask candidates their positions on charitable incentives through the tax code.  I hope you do as well.  Enjoy the Labor Day holiday!