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News You Can Use

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News You Can Use
Issue 135 / March 2014
Is “Overhead” a Valid Way to Evaluate Your Nonprofit?

Continuing the Dialogue about “The Overhead Myth” 

Jeffrey D. Byrne

Jeffrey D. Byrne
President + CEO    

Editor’s Note:

This article is the first in a series aimed at continuing objective analysis and hearty dialogue regarding the appropriate role “Overhead” should play when assessing the value of nonprofits.  

While this issue is not a new topic in the nonprofit industry, it was certainly catapulted into the spotlight last summer through a very public and unified plea from the leaders of GuideStar, Charity Navigator and BBB Wise Giving Alliance.  

Firm President + CEO Jeffrey Byrne is part of a Task Force** (see members of Task Force listed below) working with Nonprofit Connect to present this stimulating series, during which national “thought leaders” will be discussing aspects of operating and managing effective organizations within the philanthropic sector.  Jeffrey Byrne + Associates is proud to be the lead sponsor in bringing Jacob Harold – President and CEO of GuideStar, Dr. Patrick Rooney – Associate Dean for Academic Affairs and Research at the Indiana University Lilly Family School of Philanthropy, Ken Berger – President and CEO of Charity Navigator and Jon Derek Croteau of Witt/Kieffer to Kansas City as part of the 501 (c) Success National Speaker Series.

We believe it is necessary to have an open conversation about overhead because of the significance it plays – not just in decision-making for funding, but in the overall operations of effective and efficient nonprofits. We know overhead is not always wisely or efficiently utilized. The antithesis of this is that highly effective organizations can be so cautious about overhead that they neglect other aspects and opportunities to serve their mission.  

Last June (2013), three of the nation’s most highly-respected thought leaders in the nonprofit world asked donors in America to look beyond overhead and help dispel the “Overhead Myth.”  

Jacob Harold, President and CEO of GuideStar, Ken Berger, President and CEO of Charity Navigator, and Art Taylor, President and CEO of BBB Wise Giving Alliance, launched an initiative to help donors make better decisions about their giving: by eradicating what they believe is a common misconception that, on its own, “overhead” is a valid and appropriate way to evaluate a nonprofit.

In an open letter to the donors of America, the most trusted and reputable organizations that provide information about nonprofits in America denounced the overhead ratio and asked for help in ending the “overhead myth.” Donors were asked to take into account additional factors of a nonprofit’s performance – such as transparency, governance, leadership and results – when evaluating charities and making their charitable giving decisions. 

More than 2,800 have signed the pledge to “end the Overhead Myth and help support nonprofits to invest in their mission, sustainability and success.” But after an initial flurry of reaction and commentary, the “movement” seems to have quieted a bit.  

We all understand the overhead ratio (more commonly referred to as “overhead”) is the common term used to describe the percentage of a charity’s overall expenses allocated to administration and fundraising costs. We also know it is a commonly-accepted and often-used metric to assess a nonprofit’s performance and worth. But many times, it is misinterpreted by foundations, major donors and corporations when used as the key tool in evaluating a nonprofit’s organizational efficiency. Maintaining low overhead may also inhibit organizations from making investments necessary to achieve success.  To make matters worse, feeling pressure to present low (or in some instances, practically nonexistent) overhead, many nonprofits misrepresent or underreport this number – especially when it comes to fundraising expenses.  

Is this behavior truly in the best interests of either side – let alone the causes they each hope to support?  

The Overhead Myth Letter acknowledges that while overhead does have a role in evaluating charities, focusing on overhead as the sole or primary determinant of a nonprofit’s effectiveness can have negative repercussions: if charities don’t direct resources toward sustaining and strengthening themselves, they will ultimately not be able to fulfill their missions or effectively help those they are trying to serve.  

Another concern is the way donors, funders and watchdog agencies utilize audited financial statements and publicly available IRS Forms 990 as part of their assessments: the proportion of total expenditures for administration and fundraising often receive particular scrutiny. But how accurate are the numbers reported?  If there are errors, what are the sources of the inaccuracies?    

Dr. Patrick Rooney, Associate Dean for Academic Affairs and Research at the Indiana University Lilly Family School of Philanthropy and one of the lead researchers in the Nonprofit Overhead Cost Project conducted in 2004* offers the caveat that obvious functional expense reporting errors occur even when the documents are prepared by auditors and CPAs. For example: reporting all salaries as program expenses and reporting no fundraising expenses despite the existence of fundraising staff; or not including the cost of the time top executives and senior program managers devote to securing government grants. Responding to pressure (both real and perceived), nonprofits have changed their behavior to keep real and reported administrative and fundraising costs low. 

The authors of the Overhead Myth Letter back up both their claim and their call to action with statistics and research from several experts, including Indiana University, the Urban Institute and the Bridgespan Group. Dr. Gene Tempel, Founding Dean of the Indiana University Lilly Family School of Philanthropy, supported the Overhead Myth movement through his own open letter to the authors. Dr. Tempel expressed gratitude for their efforts and stressed the importance of continuing to educate donors and nonprofit executives about the best ways to evaluate nonprofit efficacy, instead of relying on one, over-simplified measure. Dr. Tempel also pointed out that overhead costs are “essential investments for effective, high-performing organizations.”

As Dr. Tempel says, “Donors and funders today want nonprofit organizations to do thoughtful planning, deliver effective programs through excellent management, and conduct effective fundraising and thorough evaluation . . . we have an ethical responsibility to get organizations to focus on accountability, transparency, and trust building.”

I encourage you to look at the Overhead Myth website, read the letter and read Dr. Tempel’s response. Then let us know how you feel you feel about the matter, and if you would consider joining the movement: take our brief survey by clicking here.

 Visit the Overhead Myth website by clicking here.

Read the Open Letter to the Donors of America by clicking here.

To view Dr. Gene Tempel’s open letter response to the Overhead Myth movement as posted on Bloomerang’s Blog, click here.

*The Nonprofit Overhead Cost Project was a collaborative study conducted by the Center on Philanthropy at Indiana University (now the Lilly Family School of Philanthropy) and the Center on Nonprofits and Philanthropy at the Urban Institute, published in 2004.


Including and Counting Planned Gifts in a Capital Campaign

John Marshall

John F. Marshall
Senior Vice President   

Our firm has partnered with many, many clients in planning and conducting capital campaigns of all shapes and sizes and with incredible arrays of objectives. What has interested me in the campaigns I have been involved with is the question of “should we include planned gifts as a giving option; if we do, how should we count them?”

Unless there is truly a compelling reason otherwise, I always advise our client that planned gifts should be a component of a capital campaign. (By the way, I struggle in coming up with a compelling reason that they should not be.)

There does seem to exist a myth – a formidable one -that planned giving takes dollars off the table. My response to those who believe the myth is that they are being shortsighted and forgetting about the best interests for the donor and the organization. Consider this – by including planned gifts:  

(1) there will be an increase in the number of gifts to the campaign

(2) planned gifts can help to leverage new money

(3) planned giving can often get donors to think about making gifts from assets rather than from income.

Just how to count a planned gift in a capital campaign has, in the past, been all over the place. Too often planned gifts were included within the campaign but their role was limited by strict guidelines or were not clearly defined by campaign planners. That is why I believe that it is so essential to take the time to strategically define the role of these unique giving opportunities. In doing so, you will be taking an important step towards ensuring a successful effort.

The NCPG is a highly reputable organization and the aforementioned guidelines have been fully endorsed by no less than the Association of Philanthropic Counsel and the National Capital Campaign Counting Guidelines Committee.

Incorporating planned giving into your capital campaign will most likely make greater gifts possible. Remember this: 90% – 95% of all planned gifts are bequests, so when creating policies on how to promote and count planned gifts in your campaign, don’t get caught up in complexities….keep is simple. Donors will appreciate the clarity….and will respond generously if properly and strategically approached..

If you would like to discuss this topic further or if you have questions relating to capital campaigns in general, please don’t hesitate to contact us here at JB+A (816-237-1999) or contact me directly at

News You Can Use

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News You Can Use
Issue 127/July 2013

Editor’s Note:

We are pleased to introduce Shelley Loethen as a guest contributor to this month’s issue of News You Can Use. Shelley is the owner of Encore Grant Services, Inc.

Since beginning her grant writing career in 2009, Shelley has written or been part of grant-writing teams that have been awarded more than $17.6 million in grants. As the general manager of a nonprofit organization from 2008 until 2011, she implemented a process of strategic grant seeking that resulted in an increase in grant funding from just $700 to more than $10,000 in less than three years. Her experience spans a variety of nonprofit sectors, and her proposals have been funded by federal, state, county and local government entities as well as community, corporate and private foundations.

Shelley is a Grant Professional Certified (GPC) and a member of the Grant Professionals Association (GPA) and the GPA Heart of the America Chapter. She serves as a board member and treasurer in the Heart of America Chapter.  

A Foundation for Successful Grant Seeking

Shelley Loethen

Shelley Loethen, GPC
Encore Grant Services, Inc.

The benefits of grants extend far beyond the actual funding received. The grant seeking process can help you design better programs, evaluate them more effectively, and communicate their impact more broadly. In addition, grants may attract other grants and donations by giving your organization or your program(s) credibility.

Despite efforts to make grant applications less complex – or, at a minimum, to align the complexity of the application and required reporting with the amount of the grant – many nonprofit leaders still find grant seeking and management too arduous. As recently reported in the Chronicle of Philanthropy, 77% of funders report they have simplified their processes. However, “fundraisers say they are not experiencing any widespread change” (“Applying for Grants Is Still a Burden, Say Fundraisers,” May 19, 2013).

How can we harness the power of grants without drowning in the details? 

How can we harness the power of grants without drowning in the details? The three-part foundation outlined below will make your grant seeking more efficient and effective.

The Basics

If your organization doesn’t have written policies and procedures for grant seeking, consider creating them. Some of the items that should be defined in this document include the staff member responsible for oversight of the grant seeking and grant management process, criteria that will be used to determine if a grant will be pursued, a list of those who must approve pursuing the grant, a list of people that must sign off on the grant application prior to submission, and the person responsible for grant reports, both internally and to the funder.

Once you have outlined your policies and procedures, gather the documents that are most often requested. Keep copies of these documents in a folder so they are easily accessible when it’s time to submit. Most funders ask for a fairly predictable list of attachments that usually includes:

  • IRS tax exempt [501(c)(3)] letter
  • articles of incorporation
  • audited financial statement for the previous year
  • statement of financial position (balance sheet) and statement of activities (income statement or profit and loss) for the most recently completed fiscal year
  • statement of activities for the current fiscal year to date
  • most recent Form 990
  • a list of your board of directors or trustees (keep a master document that includes name, office, address, phone number, email address, professional affiliation, title, current term, the year they joined the board, gender, and race)
  • board-approved organizational budget for the current fiscal year
  • certificate of good standing or current registration with the secretary of state

Keep these items in a file called “Standard Attachments” or something similar. I keep all of these documents in a file on my computer.  It’s easy to upload them to an online grant system, or I can print them as needed for paper submissions.

A Grant Seeking Plan

Once you have the basics of your foundation, develop a grant seeking plan with a 12- or 18-month grant calendar. Begin by reviewing your strategic plan and prioritize the programs and projects that will need funding over the next 12 to 18 months. Then, conduct a thorough search of funders and evaluate the likelihood of receiving funding. When evaluating grant opportunities, I consider on a variety of factors that include the funder’s stated priorities and mission, their history of giving to similar organization or programs, the geographic location of past grant recipients, the amount of grants given to similar organizations and programs, personal knowledge about the funder, and, honestly, my gut feeling after reviewing their website and Form 990s.

Once you’ve identified good matches for your organization create a grant calendar. Focus on funders that are most likely to fund your program, but also include some stretch grants from funders that weren’t at the top of your evaluation list. First, list opportunities with firm due dates, and then go back and fill your calendar with applications that have rolling deadlines. In addition to providing a grant seeking timeline, the calendar will help you decide how to handle opportunities that arise unexpectedly.  You may decide to pursue the new opportunity instead of one of your scheduled grants, or you may decide to bring in some extra grant writing help. The calendar is an excellent organizational tool that helps keep your grant seeking on track. 


It always comes down to this, doesn’t it?  As the saying goes, “people give to people.”  While this is most often used in the context of donations and major gifts, it applies to grants as well. People are behind the funding decisions of every foundation. 

Ask your board members and other key leadership personnel to review a list of board members and trustees for funders that have been identified. Also identify a few key people in your organization who enjoy the relationship-building aspect of fundraising.  Teach your relationship-builders about grants – need statements, your programs’ target populations, goals and outcomes for your programs, and your history of success. Then, your board members and other leadership personnel should introduce these individuals to their contacts within the funding organizations. You won’t always get to talk with the funder, but when you do, it can significantly increase your chances of a successful proposal.

Grant seeking, the application processes, and reporting requirements will always take an investment of resources. However, with a solid foundation in place, your grant seeking efforts will be more effective and less stressful for everyone.

KC Nonprofit Community Gathers for Latest Information on

Who Gives What, to Whom and Why

By Trudi Galblum
Trudi Galblum Communications

Giving is growing. Not as fast as everyone would like, and not in all subsectors. Nevertheless, potential is boundless.

That, in the briefest way possible, summarizes the messages that more than 220 participants heard at a presentation on June 28, 2013 at the Ewing Marion Kauffman Foundation Conference Center about the results of Giving USA 2013, as presented by Patrick M. Rooney, Ph.D., associate dean for academic affairs and research at the Indiana University Lilly Family School of Philanthropy.

Sponsored by Jeffrey Byrne + Associates, Inc., The Giving Institute™, U.S. Trust Bank of America Private Wealth Management, Nonprofit Connect and the Indiana University Lilly Family School of Philanthropy, the program provided insights into the who, what, where and why of giving that CEOs, fundraisers and boards need to deliver the resources necessary to achieve their organizations’ missions. The program also included results of the School of Philanthropy’s “Study of High Net Worth Philanthropy,” sponsored by Bank of America since 2006.

“Total giving as a percent of GDP has been stuck at two percent, plus or minus, for the last 50 years,” said Dr. Rooney. “Yet, if every American household reallocated $5 a day of frivolous consumption to philanthropy, that would double household giving overnight.”

Giving is Growing

Giving in 2012 totaled $316.23 billion. As always, the bulk of those dollars come from individuals in one form or another. Of the $316.23 billion in total giving, household giving, bequests and family foundations represented 86 percent of those philanthropic dollars.

The good news overall is that 2012 was the third consecutive year of increases in giving. In 2012, a significant portion of the growth was due to a 12.2 percent increase in corporate giving, largely driven by corporate profits, as well as foundation giving, which increased 4.4 percent.

Recipient categories that grew in 2012 include Education (by 7 percent), Human Services (by 3.8 percent), Health Organizations (by 4.9 percent), Arts, Culture and Humanities (by 7.8 percent), Public Society Benefit (by 5.4 percent), International Affairs (by 2.5 percent) and Environment/Animals (by 6.8 percent).

“Religious giving still gets a third of the total,” said Dr. Rooney, “but that’s down from over one-half twenty to forty years ago. Giving to religion hasn’t declined. It’s just growing at a slower rate.”

Interpreting the Data

Dr. Rooney offered two hypotheses for the 4.6 percent decrease in giving to foundations. First, he cited uncertainty about the tax code and fiscal cliff negotiations. Second, people waiting to lock in gains in the rapidly growing stock market.  “The role of the stock market in giving is huge,” he said. “Tax rate and income matter, but the S&P is the single biggest predictor of foundation and household giving.”

“Healthcare giving,” he said, “is affected by the historically reciprocal relationship between government and philanthropic spending.” It’s no surprise to Dr. Rooney that health and human services, which receive significant government support, are the slowest growing pieces of the philanthropic pie.

High Net Worth (HNW) Philanthropy

The “Study of High Net Worth Philanthropy” includes any household with an annual income of more than $200,000 or assets of more than $1 million (excluding the value of their home). Key findings from the 2011 study include:

  • Almost all HNW donors give. In 2011, 95 percent of HNW donors gave just under $53,000, a decrease of seven percent from 2009. Most of the decline occurred in the highest wealth groups.
  • Education and Family Foundations/Donor Advised Funds each receive 25 percent of HNW gifts, followed by Religion.
  • Level of education, which strongly correlates with giving in general, does not among HNW donors, many of whom are entrepreneurs.
  • HNW donors plan to keep giving. More than 52 percent said their giving will stay the same over the next three to five years and 24 percent said it will increase.
  • Planned gifts appear to be an underdeveloped area. Only 43 percent of HNW donors have a will that includes charitable provisions.
  • Three quarters of HNW donors cited a sense of accomplishment as the top benefit they derive from giving, following by feeling financially secure.
  • Spending the appropriate amount of administration and fundraising is important to four out of five HNW donors.
  • The top reason why HNW donors say they stopped giving to an organization is too frequent solicitation or asking for an inappropriate amount.
  • Of million-dollar-plus gifts, Education gets the largest share. In fact, according to the School on Philanthropy’s research on million-dollar plus gifts, higher education gets more than 48 percent of gifts and 32 percent of dollars.

Glass Half Full

“During the Great Recession,” said Dr. Rooney, “total giving in current dollars dropped for the first time. Since then, we’ve had three years of consecutive growth.”

The way Dr. Rooney sees it, the glass is half full.

“Giving is growing but we’re still eight percent below where we were in 2007,” he said. “For the last two years, total giving grew by two-and-a-half percent combined. If giving continued to grow at that pace, it would take six to seven years to get back to where we were.”

Concern about proposals to cap itemized deductions and to eliminate the charitable tax deduction was raised in the question and answer session. Asked by the White House to weigh in regarding the cap, Dr. Rooney’s team found that it would indeed have a negative impact on giving. Other members of the panel besides Dr. Rooney included Jeffrey Byrne, president and CEO of Jeffrey Byrne + Associates, Inc., Lewis Gregory, senior vice president and private client advisor for U.S. Trust/Bank of America, and Laurie McCormack, vice president of university advancement for Park University and president of board of directors of Nonprofit Connect. Like Dr. Rooney, they’ve heard donors and clients voice their opposition to these proposals as grossly unfair.

Jeffrey Byrne summed up the environment for nonprofits and fundraisers as positive.  

“The Chronicle of Philanthropy says there’s a shortage of really qualified, high energy fundraisers,” he said. “People who get out of their offices with volunteers, put together strong cases of support and touch donors.

“Think of what another $5 from every American could do. And it’s up to us to do it. Our potential is boundless.”

News You Can Use

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News You Can Use
Issue 115/July 2012


“Beware”  Hiring an Unethical Fundraising Consulting Firm Can Cost You Your Reputation and Results

By Jeffrey D. Byrne
President & CEO

Recently it came to my attention that a competitor was misrepresenting their firm to potential clients. I was appalled by the allegation, and I asked what this consulting firm was doing that caused alarm.

I was told that the consulting firm was claiming victories for clients who were, in fact, not their clients. I was also told that the firm engaged in “bait and switch”. That’s where the principals of the firm “promise” that they will be the consultant for the project, but as soon as they are engaged, they place “junior” consultants into the client relationship while charging the same price. Lastly, I was told that the firm identified individuals as references, but that these individuals had never been asked for their permission to do so.

Fundraising consultants and consulting firms too often get a “bad” rap for such things as charging outrageous prices; poor attention to detail and the inability to perform for the client. These are avoidable if the consultant and consulting firm are paid value for their experience(s) and appropriately invest the time needed to achieve success; plan properly before and after a consulting engagement; and work diligently with the client in providing innovative, creative and proven strategies that have worked before. And you can be certain that the price we have quoted for our services will remain at that level.

Jeffrey Byrne & Associates has provided the non-profit sector with quality counsel for the past 12 years. During that time, we’ve represented our clients and engagements to the public in an open forum, always careful in representing our achievements factually and careful to share successes about our clients. We believe in the old saying “what you see is what you get”, which is to say that whoever we are putting forth to serve as assigned counsel is the consultant who will guide the project from start to finish. And, you can be certain that there will be no “adding on” to our costs; whatever amount was set for the agreed upon services, it remains the same.

Furthermore, we are proud of our past relationships with nonprofit executives, directors of development, donors, and volunteers and are respectful of those relationships by seeking their permission when addressing successes that occurred as a result of our partnership.

Here are some “best practices” if you are considering interviewing and hiring a fundraising consultant.

Choose someone who…

  • Understands client readiness for input
  • Assures client capacity to sustain results
  • Can redefine the problem in innovative ways
  • Customizes tools to client’s specific needs
  • Is a trailblazer in their chosen field
  • Doesn’t just know the state of the art, but is the state of the art

Finally, Jeffrey Byrne & Associates is the only Missouri and Kansas firm that has been vetted extensively for membership into the Giving Institute, the nation’s oldest and most respected association for fundraising consulting firms. For the Giving Institute’s ethical guidelines for fundraising consulting firms, go to

News You Can Use

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News You Can Use
Issue 133/January 2014

How to Guarantee Success in the Selection of Campaign Volunteers


mary-ellen-clarkMary Ellen Clark
Senior Vice President  

The success of fundraising campaigns hinges on leadership, and that leadership starts with the Board. Board members are the campaign solicitors of first and last resort. They are the most important fundraising resource of the organization. There is no greater strength in a fundraising campaign than a Board ready and willing to lead. However, a Board that sees fundraising as someone else’s job highlights its greatest weakness.
Far too many Board members are reluctant fundraisers. They’re quick to claim they don’t have the time, feel uncomfortable “begging,” don’t have the right contacts or didn’t sign on to be fundraisers – that’s for the staff. Does that mean we have the wrong people on our Boards?   No.

We find that many organizations are careful to outline the mission of the organization and discuss staff and future plans, but fail to outline the fundraising role of their Board membership.  While each may have been initially nominated because of his/her background, experience or success with other organizations, we will soon find ourselves with individuals who find themselves unsuccessful as a Board member and declining a second term. 

The organization should include the following in its “blueprint” for attracting, developing and retaining successful Board members:

  • Make the fundraising expectation clear at the time a person is asked to serve.
  • Provide Board members with the tools and assistance needed to raise money.
  • Keep members well informed of the operational and financial efficiencies so that they can understand the organization’s importance and necessity.
  • Create a mentor relationship between new and experienced Board members.

In planning for a capital campaign, the organization needs to define the project, develop the case for support and the budget, measure internal and external readiness and decide on outside counsel.  Critical next steps include recruiting volunteer leadership. The natural first considerations are members of the organization’s Board.  This is when your recruitment, development and cultivation of the right Board members pays off for the organization.  Turn to your Board for their leadership, contacts and understanding of the fundraising process for a successful campaign. 

To further discuss ways to increase your Board’s fundraising capacity or educating and training capital campaign volunteers, contact me directly at

Supporting Support Staff During a Capital Campaign

heather-ehlertHeather Ehlert 
Director of Development +
Senior Consultant 

“Supporting support staff…” Does that phrase sound like a bit of an oxymoron?  Typically, we think of support or administrative staff as being there to support the fundraisers and managers of the development office.  They handle the internal clerical and administrative activities (not always exciting) that support the external relationship-building activities with volunteers and donors (often exciting!).  While we readily acknowledge these roles and responsibilities are important (critical, if we’re being totally honest with ourselves,) we would probably also concede they are not the most glamorous pursuits, especially during the excitement of a capital campaign.  And does that mean we sometimes take those roles and the people fulfilling them for granted?

Here are some simple steps you can take (both tangible and intangible) that will help you support your support staff during your capital campaign:

  • Provide education about what a campaign is and how it works (don’t assume they already know.)  Review everything from mechanics to intricacies.  Share goals, budgets, timelines, org charts, job descriptions, strategies and tactics of the campaign.
  • Stress the importance of a professional campaign office.  While a lot of campaign activity happens outside the office, you never know when a volunteer or prospective donor may pay a visit.  Enact good office practices, respect confidentially and always exhibit a friendly, helpful atmosphere.
  • Clearly outline roles and responsibilities during a campaign:  Establishing and managing systems, including the donor database and other tracking mechanisms of the campaign
    • Helping manage the campaign calendar
    • Scheduling meetings and making meeting reminder calls
    • Assembling solicitor packets
    • Preparing newsletters and other mailings
    • Taking detailed notes at meetings
    • Producing lists, reports and other data on a timely basis
    • Helping prepare the case statement and other campaign collateral
  • Share information and updates, not just to-do lists.  Describe a great cultivation visit or committee meeting, or be open about some challenges you’re facing.
  • Invite them to participate.  Include support staff in strategy and brainstorming sessions.  They may bring a valuable perspective and/or relationships to the campaign.
  • Familiarize them with the case for support and work with them to create their own “elevator speech.”  Everyone in your organization can advocate for the campaign and help create strong external messaging.  
  • Say thank you.  While campaigns are fun and exciting, they still entail more work for everyone.  Acknowledge that extra work, and make sure everyone feels appreciated.
  • Celebrate success. Gather the office together as a team, on a regular basis, to talk about accomplishments and progress.  Encourage every staff person to share a success story. 

When support staff understand their roles and responsibilities, remain closely involved and are recognized and appreciated for their contributions throughout the entire campaign, your team will be stronger.  Your campaign will be more successful.  And the experience will truly be exciting and rewarding…for everyone.

To further discuss how your entire resource development team can achieve fundraising success, contact me directly at

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News You Can Use
Issue 109/January 2012

The Powerball Winner: Sharing in Good Fortune

Jennifer FurlaBy Jennifer Furla
Executive Vice President   

Recently, a convenience store customer in Minnesota won the Powerball – at $229 million. While the lucky winner had not yet revealed himself, accompanying the story was the ubiquitous security cam picture of the transaction that suggests it was a 30-something male.  The winner has one year to present him/herself and can take the winnings in installments over a 30-year period, or take a lump sum of $123 million.

As fundraisers, we often dream of finding that lottery winner among our donor prospect pool.  With strong values of giving, I suspect that many of us dream of what we would do if we were to purchase that winning ticket?  In our house, we’ve talked about it as a family.  Give to our favorite causes.  In my case, possibly help complete a campaign goal for a lucky client?

For this week’s winner, $123 million after taxes – even invested in simple CDs at 1.55% – will generate some $600,000-plus per year. 

I met a lottery winner not long ago. Sitting on the wharf outside our hotel for the Giving Institute and International AFP Conference in Baltimore, I struck up a conversation with a gentleman who sidled up to me with his family, all dressed in matching athletic suits. Turns out they were in town for the man to receive medical treatment for a highly complex medical condition at Johns Hopkins University. 

He talked about winning $150 million in the Canadian Lottery.  He was from Ottawa, on the western side of the country and was among the First Nations peoples of Canada – the native, aboriginal peoples, akin to the American Indian.

He talked about how it changed his life and his family’s. In Canada, he said, all winnings are immediately paid out, lump sum and tax free to the winner. He purchased a new home for his family. He paid to fix up the homes of near relatives. Of course, took a couple of once-in-a-lifetime, memory-making trips (to Disneyworld in Orlando, if I recall correctly). His good fortune was paying for the trip and treatment at Johns Hopkins. 

Then there was charity.  He built schools for the children of his Indian Nation and endowed those schools so they could maintain the new buildings and populate them with programs and staff.  He established a Trust that will provide scholarships for the youth of the Nation.  He made a large gift to the Tribal Council to help families in need.

At the hotel, he became interested in another conference that was taking place there – for families of children of autism. “How could he help, he asked?”  He understood what was “enough” for his family and him and wanted to share his good fortune.

I do not know if the connections he made that day resulted in support for the autism group, but can only imagine the number of causes this man and his family have since sought to  help – and will  in the future.  For us in the profession, this lottery winner serves as an example of unselfish philanthropy – love of brother.

As my son would say, “Now, those are real heroes.  People like that.”

The Time is Ripe:
Clean Off The Shelf And Start Planning For Your Senior Living Community

Jean Bacon

By Jean G. Bacon
3B Fund Development Group

Following more than two years of fear, paralysis and “tread water” management, senior living communities may once again be in the position to dip their toes into the development waters.  It may need to be done gingerly, and most certainly will require courage on the part of administrators and boards willing to take risks, but the signs are there and developments are moving again.

The earliest signs of the bond market freeze began to appear in late spring of 2008.  In the intervening three years, many a plan was put on the shelf, gathering dust as leaders struggled to cope with economic realities that were part of the overall recession.

Interest rates were all over the map and very little new construction began.  Sure, there was money out there to be had, but only for those who didn’t need it.  Those who did need financing, found the financial gurus — the bond underwriters and the financial feasibility consultants  – were retrenching and unwilling to invest in expansions.  There was some refinancing of older communities, but this was mostly donein an effort to cut monthly bond payments.

Communities that were fortunate to have a large percentage of “healthy” residents in independent living saw that their census remained relatively stable.  However, new sales were a challenge given the housing crisis and how difficult it was for older people to sell their homes.  Older adults who had always imagined that they would choose to move to a senior living community reversed course.  They sought help in their homes for their health and support needs and settled into a “wait-and-see” mode, continuing to live in the family home with the hope that the economy would turn around.  This same population, unfamiliar with the real costs of in-home healthcare, worried with stock market declines that if they were able to move they lacked the resources to live out their lives in the type of community they’d always wanted. 

In an industry which requires continuous upkeep and updating, it was hard to identify cash for projects that did not immediately show revenue returns.  Given the overall climate and all these conditions, there was no desire to take risks.  This created an interesting dynamic in an industry that had always taken risks to improve products and services for their residents.

And, now, the pendulum is swinging.  The housing crisis is easing and older adults who have adjusted to the “new normal” in resale values are showing signs that they are willing to sell their homes for less than they could have two years ago, especially when they aren’t carrying hefty mortgages. 

Economic indicators are encouraging bond underwriters and financial feasibility consultants to cautiously advise communities to begin planning for the future.  Projects that were in a holding pattern largely since 2009 are now moving forward and new construction is on the horizon.  Management teams and Board members realize that a deteriorating physical plant will not compete successfully in the market place, and if they want to preserve their identity and market share, they are going to need to spend money to update.

For those who are willing to venture into the visioning and planning cycle, the time – and the environment  – may be ripe to clean off that shelf and get those plans that have been gathering dust the past two years into action.  But those same leaders are wise to keep in mind that those are two, maybe three years old, and should ask how the environment has changed and whether those plans may need re-tooling post-recession.  Beyond that, smart senior living leaders will not only ask whether the plans meet current and near-term needs, but will once again start that longer range process of master planning for the resident of tomorrow.


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Issue 132/December 2013

A Year-End Note 

Perspectives on Philanthropy in 2013

Jeffrey D. Byrne

Jeffrey D. Byrne
President + CEO 

As I reflect upon 2013 and the great and numerous events that happened, three things really resonated with me in regards to our professions in the nonprofit world.

First, giving hit an all-time high as reported in Giving USA 2013. Second, a consortium of leaders of information on nonprofits came together to encourage dialogue around the need to re-think the way we evaluate nonprofit overhead. Third, the study of philanthropy took a great leap forward with the launching of a school of higher education dedicated to this field at the nation’s leading academic institution of philanthropic and nonprofit education.

These certainly aren’t the only or main stories for 2013. However, they reflect a cross section of commentary about the sector we all love. As you end this year, I hope you reflect on the positives and plan for an even brighter 2014.  

1. Giving in the United States topped a new high in 2012.  The Giving USA Foundation and the Indiana University Lilly School of Philanthropy reported that Americans gave more than $316 billion to charitable causes. This giving came from individuals (72%), bequests (7%), foundations (15%) and corporations (6%). A closer look shows that each area of giving increased in 2012, with the exception of bequests. (Bequest giving is always volatile, depending upon the very large gifts from estates that close during that year.) Americans continue to be the most generous people on the face of the earth.  And within the sector recipient categories, nonprofit giving went up in almost every recipient group. 

© 2013 Giving USA Foundation™

Source: Giving USA Foundation™ / GIVING USA 2013



   © 2013 Giving USA Foundation™

Source: Giving USA Foundation™ / GIVING USA 2013

In June 2013, during the Giving USA 2013 presentation in Kansas City, Dr. Patrick Rooney (referenced below) pointed out “total giving as a percent of GDP has remained at two percent, plus or minus, for the last 50 years.  Yet, if every American household reallocated $5 a day of frivolous consumption to philanthropy, that would double household giving overnight.” 

2. In a speech viewed more than 2,500,000 times, Dan Pollatta’s TED March 2013 talk challenged America’s leaders in the nonprofit and funding sectors to think differently about the cost of doing business for nonprofits. (TED is a nonprofit devoted to Ideas Worth Spreading. TED stands for Technology, Entertainment, Design – three broad subject areas that are, collectively, shaping our future. Today, TED is broader still, showcasing ideas that matter in any discipline.) Dan feels “there is no greater injustice than the double standard that exists between the for-profit and nonprofit sectors. One gets to feast on marketing, risk-taking, capital and financial incentive, the other is sentenced to begging.” View Dan’s inspiring TED speech by clicking here.

Dan’s sentiments are echoed in the movement known as “The Overhead Myth” initiated in 2013 by the leaders of the BBB Wise Giving Alliance, GuideStar and Charity Navigator.  Visit the Overhead Myth website here. These CEOs began the initiative to help donors make better decisions about their giving, by eradicating what they believe is a common misconception that, on its own, “overhead” is a valid and appropriate way to evaluate a nonprofit. In a historic move, these leaders penned an open letter to the donors of America, denouncing the “overhead ratio” as the only valid indicator of nonprofit performance and encouraging donors to consider the whole picture. The letter launched a campaign to “End the Overhead Myth” and help support nonprofits to invest in their mission, sustainability and success. Dr. Gene Tempel, Dean of the Indiana University Lilly Family School of Philanthropy (referenced below) penned an open letter supporting the movement. You can view Dr. Tempel’s letter here.

3. Indiana University introduced the nation’s first school of philanthropy: the Indiana University Lilly Family School of Philanthropy, named in honor of the Lilly family, one of the most generous philanthropic families in America. View the press release announcing the School here.

Indiana University is credited with founding the field of philanthropic studies and established the nation’s first bachelor’s, master’s and Ph.D. degrees in that field through the School’s predecessor, the Center on Philanthropy at Indiana University. The new Lilly Family School of Philanthropy serves as the preeminent educational resource and research body for philanthropic thinking around nonprofit management and fundraising. Dr. Gene Tempel serves as the Dean for the School and Patrick Rooney, Ph.D., serves as the Associate Dean. The School’s vision is to build an engaged world through giving and voluntary action for the public good.

(Editor’s Note:  Jeffrey Byrne + Associates, Inc., in conjunction with U.S. Trust Bank of America Private Wealth Management, Nonprofit Connect and The Giving Institute, has hosted Dr. Patrick Rooney’s presentations of Giving USA – The Annual Report on Philanthropy for the past seven years in Kansas City, at the Ewing Marion Kauffman Foundation.)

On behalf of all of us at Jeffrey Byrne + Associates,

Happy Holidays + Happy New Year!


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Issue 124/April 2013


Recent IRS Changes Increase Transparency


Judy KellerBy Judy Keller
Senior Vice President


Changes at the Internal Revenue Service will make financial data about the nonprofit world more broadly accessible to the public—and that’s a good thing.

According to the Chronicle of Philanthropy, the tax agency has come under pressure in recent years by open-government advocates who wanted the information available in a format that is easy to put in a spreadsheet and analyze. Until now, the IRS has released this kind of data only to a few research groups; everybody else could obtain only a set of DVDs that allowed readers to look one by one at each charity’s informational tax return, but made large-scale analysis tough to do.

The data released by the IRS doesn’t include everything on the informational returns filed by charities and foundations. Mostly it includes figures on sources of financial support, total assets and revenue, spending on overhead and programs, and compensation paid to a group’s top-paid officials. It also lacks the names and locations of the organizations, instead just offering a federal employee identification number for each group’s form.

So while the changes aren’t as user friendly as they might be, they are an improvement and will allow for wider use of information.

Nonprofits should welcome this change, take advantage of it, and encourage their donors to do the same.

As our donors become more sophisticated in analyzing how their charitable dollars are spent, the nonprofit community is under increased pressure to be not only more efficient and effective with each dollar, but more transparent as well. A well-managed organization has nothing to fear with the increased potential for scrutiny and should encourage efforts to educate and evaluate, whether by donors or peer organizations.

To encourage this drive for efficiency, The Bill & Melinda Gates Foundation is holding a competition that will offer $100,000 grants to projects that help nonprofits and donors pull together information on a wide variety of sources, such as data that would show a nonprofit program’s results, what beneficiaries and grant makers thought about the project, and what other experts say about its value.

The competition, which could finance as many as 80 projects, expects to receive at least 1,000 applications. Details about how to apply are available at

Everyone in the philanthropic community grows stronger when we raise the standards of accountability by which we are all measured.

For more information on how to help your organization meet transparency standards, reach out to me directly through Jeffrey Byrne + Associates, Inc. at

Death, Taxes…and Tax Reform 

John Marshall
By John Marshall
Senior Vice President 

As we hear so often “there are two things for certain in this life: death and taxes.” Well, based upon all the talk in Washington at the moment, we probably ought to alter that quote so that it also includes “tax reform”. Recently, the House Ways and Means and Committee has been holding hearings on the subject of tax reform and specifically about the future of the charitable tax deduction.

In his book Federal Taxation in America: A Short History, W. Elliot Brownlee has some very insightful things to say about taxation and reform in the United States. He reminds us that real tax reform….serious, durable, ambitious tax reform….requires a national crisis. 

Brownlee’s story centers on the concept of a tax regime: the collection of revenue tools that make up a discrete system of federal taxation. Regimes tend to last a long time; the current one has been around for 70 years. But others have been quite short, including one that lasted for less than a decade. Brownlee contends that every tax regime in American history shares one central trait: they have been forged in the “crucible of national crisis.” Wars have been the most common impetus for reform, but economic depression has also been a catalyst. (However, he further contends that while crisis prompts reform, it does not shape it).

Over the course of more than five centuries, the United States has had five distinct tax regimes, each emerging from a crisis-borne watershed:

  1. 1789 until the Civil War: marked by tariff duties and low-rate import duties
  2. 1862 until World War I: featuring new consumption taxes and steeper excise and tariff duties
  3. 1916 through 1931: introducing new corporate and individual income taxes
  4. The shortest, coincided with the first two terms of FDR’s presidency
  5. World War II to the present: transformed the income levy from a “class tax” to a “mass tax”

 But if the structure of American taxation has been constant for decades, the debate has raged for just as long. However, to date, sweeping reform has proved elusive marked by American leaders repeatedly stopping short of fundamental change. The TAX REFORM ACT of 1986 almost rose to the status of a watershed, but its reforms failed to establish a new regime. As Brownlee points out, “that ambitious effort served to revitalize the existing regime, giving new life to the income tax.”

So what about today and all the talk going on in Washington? Well, if Brownlee is right about the role of national crisis prompting fundamental tax reform, not much real reform should be expected. Of course, we still might see a crisis which as history has shown, has a way of sneaking up on you. But as tax reform analyst Joseph Thorndike has stated “real reform happens when it MUST. Policymakers are not likely to make hard fiscal choices just because they seem like good ideas. Rather, they will make those choices when their backs are to the wall….and not a moment sooner.”

So back to the recent hearings…….the Committee invited representatives from throughout the philanthropic community to address the topic of reforming the federal charitable tax deduction and the impact such reform could have on giving. Thirteen United Way heads, university presidents, leaders in health care, human services and the arts, community foundation heads and fundraising consultants (such as Conrad Teitell) spoke eloquently and most persuasively about reformation, and urging  change that will enhance ways to promote even greater levels of philanthropy in the United States.

I was particularly taken with the comments of Brian A. Gallagher, President  and Chief Executive Officer of the United Way Worldwide, extracts of which follow.

“Americans give for a variety of reasons. I think it is rare that someone gives to charity only because of a tax incentive. But, tax incentives are often a factor in how much someone donates. I can tell you from my experience, large donors are very sensitive to the tax code. In a recent study, 23% of high net-worth individuals indicated that receiving tax benefits for charitable contributions was a major motivation for giving. 

At a time when all manner of government funded social service programs are being cut, decreasing the capacity of charities to provide services is the wrong thing to do. Those at the bottom of the economic spectrum have suffered the most through recent years of economic downturn. They are also the ones who would bear the brunt of reduced giving to charity because of a tax policy change.

I urge the Committee to preserve and expand the charitable deduction so that we can continue our important work to improve the lives of millions of Americans.”

Returning to what Mr. Brownlee contends, it would appear that unless things get much worse for the United States, tax reform seems likely to “remain a chimera.” We’ll see…….

To learn more about how your organization might be affected by charitable tax reform, contact me directly through Jeffrey Byrne + Associates, Inc. at  


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Issue 130/October 2013

“I’ll need to check with my financial advisor about that.”

Jeffrey D. Byrne

Jeffrey D. Byrne
President + CEO

Hasn’t every fundraiser or CEO heard this response when soliciting a prospective donor for a major gift?  “Let me check with my financial advisor about that $50,000 pledge you requested.” That normally sends chills up and down the spines of fundraisers: the dreaded financial advisor “hand-off” by your trusted donor or donor prospect.

So, what does this mean to you?  What are you going to do about it?

A recent study1, released by U.S. Trust/Bank of America Private Wealth Management in partnership with The Philanthropic Initiative (TPI), reveals some disconnects in conversations with high net worth (HNW) individuals and their professional advisors.  The  majority of HNW individuals who discuss philanthropy with their advisors do believe the conversations are important, and that their advisors play an important role in their charitable giving.  The study also reveals there is room for improvement in how advisors counsel their clients about philanthropy.  This study gives fundraisers a valuable glimpse into that “mysterious world” of the donor/advisor relationship.

Professional advisors almost universally agree that philanthropy plays an important role in their clients’ wealth experience.  And with HNW households maintaining a strong commitment to charitable causes, (95% of HNW households report they support at least one charity, with an average amount given of $52,7702), philanthropy is clearly at the forefront of wealth management discussions. 

To better understand the dynamics between HNW individuals and their advisors, specifically regarding approaches to philanthropy, U.S. Trust partnered with TPI in August 2013 to survey more than 300 financial advisors (trust and estate attorneys, accountants, tax professionals and wealth advisors) and 120 HNW individuals (with $3 million or more in investable assets who were also actively engaged in charitable giving). 

“Individuals and families are increasingly turning to their financial advisors to help them achieve their philanthropic goals,” said Lewis Gregory, Senior Vice President and Private Client Advisor with U.S. Trust in Kansas City.  “Our recent study of these philanthropic conversations reveals the patterns and priorities of America’s wealthiest donors and provides valuable insights into the strategies, vehicles and approaches that can make giving more effective.”

We know (and probably without being told) that conversations between major donors and their financial advisors are taking place.  But what are they discussing?  And who is leading the dialogue?  Some of the key findings from the study may surprise you:

  • Most advisors (89%) discuss philanthropy with at least some of their clients, and 71% make it their regular practice to ask clients about their interests in charitable giving.
  • Meanwhile, only 55% of HNW individuals say they discuss philanthropy with a professional advisor.
  • One-third of advisors (33%) say they initiate these discussions with their clients, and that clients initiate them just 20% of the time.
  • However, among HNW individuals who report having discussed philanthropy with an advisor, half (51%) say they are typically the one to initiate the conversation, and that their advisor brings up the subject just 17% of the time.
  • And even if they are not discussing philanthropy with an advisor, most HNW individuals (90%) are discussing it with someone – a spouse or partner (84%), other family members (48%), friends (37%) or the nonprofit to which they give (33%).

HNW individuals are more concerned about philanthropic discussions taking place early in the advisor relationship than they are about who initiates the conversation.  Advisors, however, indicate they are more likely to introduce the subject after they have greater knowledge of the client’s personal or financial goals, when the client has accumulated a certain amount in assets or when they are aware a client volunteers/is active in the community.

  • Among advisors who discuss philanthropy with their HNW clients, nearly all (91%) encourage their clients to give to charity.
  • Approximately half of advisors (48%) discuss their own charitable giving with their clients.
  • Many HNW individuals (34%) indicate they would be more open to discussing charitable giving, or would perceive the value of the philanthropic advice from an advisor to be greater (43%), if they were aware of the advisor’s own philanthropic involvement.

There is consistency between HNW individuals and their advisors when it comes to motivations for giving.  HNW individuals reported their top three reasons to give:

  • Being passionate about a cause
  • Having a strong desire to give back
  • Having a positive impact on society and the world

Advisors, too, believed these to be the key motivations for their clients’ philanthropy. 

Three out of four advisors (74%) responded that philanthropic dialogue with clients is beneficial.  More than half (57%) of advisors intend to increase their knowledge about philanthropy, to improve their ability to advise clients about charitable giving.  Of these advisors wishing to improve their proficiency in offering philanthropic guidance, they shared the following goals:

  • Helping clients form a strategic giving plan and mission (55%)
  • Understanding more about giving vehicles (50%)
  • Integrating client philanthropic values/goals into an overarching wealth management plan (46%)
  • Engaging the next generation in giving (45%)
  • Understanding the role that social impact investing has on clients’ philanthropic pursuits (38%)

After all is said and done, fundraisers and financial advisors are working toward a common objective:  knowing what matters most to our donors/clients.  So the next time your donor says he’s/she’s going to seek advice from their financial advisor, you will now know how to better respond and help manage expectations.  You will have a better perspective about your donor’s decision-making process, and should feel empowered to seek input into the discussion.  This is an excellent way to deepen your relationship with your donor and deepen your donor’s relationship with your organization.

1:  The U.S. Trust Study of the Philanthropic Conversation, October 2013 (Read the full study here.)

2:  The 2012 Bank of America Study of High Net Worth Philanthropy, November 2012


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Issue 131/November 2013




 Tuesday, December 3, 2013

“The end of the year is a powerful time for nonprofits, a time of tremendous energy and momentum. Nonprofit professionals understand and appreciate the potential for their organizations in year-end giving,” says Jeffrey Byrne, President + Founder of Jeffrey Byrne + Associates, Inc. “#GivingTuesday harnesses the power of this time of year, by inspiring people to take collaborative action and give back. #GivingTuesday also reminds us of the true spirit of the holiday season: community. One of the most powerful gifts we can give our loved ones is our promise to work together to help create a better world…for everyone.”

Jeffrey Byrne + Associates, Inc., is a proud endorser of #GivingTuesday, joining fellow members of the Giving Institute, and encourages EVERYONE to participate.

#GivingTuesday is a call to action. 

Currently, more than 4,000 partners have committed to participate in #GivingTuesday.  With three weeks left until December 3, new organizations are joining daily and providing creative ways people can embrace #GivingTuesday and collaborate in their giving efforts to create more meaningful results.

Whether you are part of a nonprofit organization that is coordinating a fundraising initiative or volunteer project, a donor looking to make a contribution, a volunteer hoping to donate time and talent or a business wishing to increase its engagement with the community – #GivingTuesday is the perfect opportunity to do so. 

Several resources are provided on the #GivingTuesday website to make your participation as meaningful as possible: 

For Nonprofits: ( )

For Families:  ( )

For Businesses: ( )

The success of #GivingTuesday 2013 depends upon the collective efforts of a special group—a special group to which you belong.  You are the most important part of making this movement a reality.

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Issue 123/March 2013

Giving Institute and Giving USA Foundation Board Meeting, Spring 2013

Jeffrey D. Byrneby Jeffrey D. Byrne
President + CEO

Last week at the Giving Institute and Giving USA Foundation Spring Board meeting (the publisher of the Giving USA annual report on philanthropic giving) where I am a Board member, we had the pleasure to engage with Dr. Una O. Osili, PhD, Director of Research for The Center on Philanthropy at Indiana University. Una’s presentation was around tax policy changes proposed in the U. S. Congress on itemized charitable giving.

As you may know, Congress enacted the charitable giving deduction in 1917, four years after instituting a federal income tax. Changes over the past 96 years have occurred in various ways, but the charitable deduction, as we know it, has not been in jeopardy of elimination until recent discussions by Congress.

Congress is currently debating a number of options to close “loopholes” in the tax code to raise revenues. Philanthropic Industry Leaders are watching closely these actions and are quickly reacting and mobilizing their constituencies to inform their Congressmen and Congresswomen and Senators about the impact that their votes can have on constituencies in their districts and states.  

Recently, C. Eugene Steuerle, the Richard B. Fisher chair, an Institute Fellow at the Urban Institute, a cofounder of the Urban-Brookings Tax Policy Center and the Center on Nonprofits and Philanthropy, in his testimony before the Committee on Ways and Means of the House of Representatives (2/14/13) said: a tax subsidy like that for charitable contributions should be treated like any other government program, examined regularly, and reformed to make it more effective. The good news is that the charitable deduction can be designed to strengthen the charitable sector and increase charitable giving at the same or even lower revenue cost.

 Steuerle further stated that to increase giving, Congress can:

  • create a charitable contribution for all taxpayers, not just itemizers;
  • allow people to make contributions until the filing of their tax returns or April 15;
  • make it easier for people to donate from accumulated amounts, such as retirement accounts and lottery winnings; and
  • remove or reduce and certainly simplify the dysfunctional excise tax on foundations.

Congress can more than pay for these changes with little or no reduction in giving if it would:

  • put a floor under deductions, which would have little effect on giving incentives;
  • reform subsidies that tend to be highly ineffective and invite abuse, such as the deduction for household goods and clothing; and
  • provide a better information system for charitable giving.

Our responsibility is to participate and actively engage with our elected officials. The stakes are too high. Our elected representatives need our active involvement and expertise because they will use our input in their calculations on how to maneuver through the maze of policy options. Don’t be shy. Engage.  

For more information on how to become involved, reach out to me directly through Jeffrey Byrne + Associates, Inc. at

Financial Anxiety in Senior Living Industry: An Incentive to Fundraise  

Jean Bacon
By Jean Bacon
Senior Living Consultant  
The uncertainties of the financial climate have spread to the senior living industry. Although there is limited financing of new projects and loan refinancing for refurbishment of existing projects and interest rates remain lower than they have been for awhile, there is widespread anxiety. It is truly a time for serious fundraising, primarily from residents and families. It does not matter if the residents are actively involved in community activities yesterday, today, or tomorrow, or whether their families have been donors in gratitude for the care received by a loved one, the history of this country has always been that charitable giving fills the gaps in times of serious belt tightening. And yet management is not exploring and capitalizing on this resource to assist with necessary projects. This is a golden opportunity for a successful CEO.

Initially, a CEO might feel reticent about providing leadership in fundraising because of census targets. Most bond documents require 95 – 100% occupancy, but due to high expenses, many communities are unable to maintain mandated census. But this is the golden opportunity in a nutshell. Residents are the best able to improve census by “talking up” the community to their friends, potential residents. There may be a special club with dues organized to interest these “tomorrow” residents in the services offered by the community. These “dues” will reflect the level of services required and will provide a serious alternative for those who do not or cannot sell their homes, their one substantial piece of equity. This is the concept of a CCRC (continuing care retirement community) without walls, and is organized as an insurance policy. Fundraising can take all sorts of perspectives.

A recent case study illustrates all this. Last month, a faith-based community in Williamsburg, Virginia, declared bankruptcy. This is a beautiful senior living choice with VIP residents, many retired military and diplomats. They opened in 2008 sponsored by a faith based umbrella corporate organization. Since opening, they have not made census targets, and it was time to reorganize. It was noted that the residents would not be affected by changes and their Entry Fees would remain as designated at entry. Interestingly, this community had its own Foundation and continues to raise funds to fill the gap. This is a contradiction to a bankruptcy filing, and yet demonstrates stakeholder dedication to the community.

How does a CEO turn attention to fundraising? A comprehensive Development Plan is the first step, followed by realistic timelines to organize donor participation. Resident participation is mandated in order to make the Plan work. An experienced consultant with a track record in the senior living industry should be made available to all stakeholders to ensure success!