Non-Cash Giving Can Be an Important Donor Option

Reposted from eJewish Philanthropy – May 3, 2012

While the most common way to satisfy charitable commitments is with cash and appreciated securities, an often uncommon means available to donors is to utilize “stuff:” items of value that are often very attractive to collectors and which can become practical ways to satisfy philanthropic obligations.

Donors at all levels, but most notably high net worth contributors, periodically utilize non-cash giving. Art museums have received benefactions of pieces of art for decades and other types of nonprofits have welcomed real estate, especially when property was highly valued and represented an easy way for a donor to avoid costly capital gains taxes while satisfying a pledge.

A recent synagogue client received a valuable sculpture, valued at $300,000, when a member inherited the piece from a deceased relative. The donor did not want the piece and made the gift with two important stipulations: the congregation had to hold the piece for at least three years and that it is displayed prominently (requirements made for tax considerations subject to the related-use and tax exempt purpose rules of the 501(c)3 ).

Another congregation was nearly the recipient of a time-share at a Poconos resort, carrying with it a value of about $10,000. Fortunately formal Gift Acceptance policies prohibited the institution from accepting a gift of this type and the donor ultimately made cash payment for a campaign pledge instead.

Laura Linder, executive director of the Jewish Foundation of Memphis, is talking passionately these days about two gifts the Foundation has received within recent months from older Jewish philanthropists originally unaware of the power of gifting valuable collections.

The Foundation received the first gift in late 2011 when a member of the Jewish community, Susan Adler Thorp, began breaking up the estate of her late parents, Herta and Dr. Justin Hans Adler, and considered ways to deal with a Tiffany glass collection her mother had amassed. Determining that no living relatives wanted the collection, she contacted the Foundation and made arrangements through Mrs. Linder to transfer a significant portion of the collection that took more than 50 years to create.

After cataloging the objects and working in concert with one of the nation’s top auction houses, the Foundation received very significant proceeds earmarked for and added to the Herta and Justin H. Adler Philanthropic Fund, the family’s donor advised fund (DAF). Proceeds from the auction of that collection will be used in part to help fund the purchase of life-saving prescription medications for senior citizens, the Temple Israel Museum, and other charitable organizations designed to help make life better for others.

While the Adlers were avid collectors of art, they also were dedicated philanthropists, often saying that “charity is the gift you give for having a good life,” noted Mrs. Thorp. “My parents shared an eye for beauty and a love for art,” she said. “My mother’s passion was collecting Tiffany glass. Nearly everything in the collection was found as my mother searched for Tiffany glass.” All of the items in the collection were sold in a special Heritage Signature Auction of Lalique and Art Glass in New York City on November 19th. The much- anticipated live auction generated far more than the book value of the collection.

A second non-cash gift came to the Memphis Foundation earlier this year as a result of an anonymous Jewish couple preparing to downsize. The donor had passionately developed an enormous coin collection, including U.S. coins, shekels, and other pieces of varying value. The Foundation has contracted with an auction house to catalogue the coins and it is expected to go to auction in several venues later in 2012. Proceeds could exceed $500,000 and will also be used to create a DAF for an as-yet-to-be-determined set of purposes.

“During the ten years I have been at the Foundation, we have received several real estate gifts,” Laura Linder told us. “But until recently I had never even considered the power of encouraging donors to make non-cash gifts of this type or of this magnitude. This is an eye-opener for all of us at the Foundation.”

Tax implications for donors using collected items are a motivator, for sure, especially if offspring have little or no appreciation for or interest in “the stuff,” a commonly used term voiced by Bob Koo, a Palm Beach-based art and philanthropy consultant to the high net worth philanthropically-focused. “While our work is focused especially on successful individuals and families, there are certainly implications for donors of all levels,” he says.

Koo conducts educational seminars across the U.S. and has written extensively about the approaches that nonprofits might consider to attract part or all of collected possessions. Very often, he says, “things” that people have collected probably have no significant value … other than to the collector. “But in other instances, fine art of all types, books and manuscripts, coins and medals, clocks and watches, entertainment and space memorabilia, furniture, jewelry, vintage motor cars or wines and whiskeys can have large price tags. And when estate planning requires significant taxes, nonprofits can benefit significantly when they openly encourage donors to make gifts of this type … prior to their passing.”

Both Koo and Linder have told us about other circumstances where donors have talked about people who have considered charitable gifts to either satisfy current priorities or pave the way for other charitable opportunities. Both share a common recommendation to nonprofits: market the concepts actively and showcase the values of gifting collectables.

One other important consideration for nonprofits accepting non-cash gifts: carefully review your Gift Acceptance policies and update the written, formal documents so that you minimize jeopardy and are prepared with responses when potential donors inquire about gifting collectibles. Nonprofits should review such policies annually but giving beyond “conventional” methods requires careful strategies and policies.

Connecting Practices and Learning from Each Other

Reposted from eJewish Philanthropy – April 4, 2012

Three different but important conferences took place late last month and have served to connect and engage Jewish development professionals as well as donors and other committed individuals in interesting ways. One gathering reached out to Reform synagogue development professionals only, another involved Jewish foundation representatives and leaders, and the third served to engage primarily nonprofit professionals working to organize their efforts across the State of Israel. Each conference resulted in positive outcomes but took different approaches and each received different levels of visibility in the media.

Consider each of the meetings:

  • At the Jewish Funders Network (JFN) in Tel Aviv, 400 Jewish funders from across the globe gathered to address common concerns and to discuss common practices facing Jewish philanthropists.
  • At Amuta21C, 250 men and women came together to discuss challenges facing “third sector organizations in Israel,” the terminology being used to refer to nonprofit organizations.
  • At the Reform Synagogue Development Professionals (RSDP) annual meeting in Philadelphia, fundraising professionals from 19 midsized and large Reform U.S. congregations focused on best practices, innovative technology considerations, and the challenges related to attracting more philanthropic dollars from the members of Reform synagogues.

In reflecting on the purposes and importance of each gathering, we see important connections that more than justify the value of commitments of time and other precious resources. While attendees at each meeting undoubtedly used the opportunities to connect with longtime friends, colleagues, and like-minded people doing similar work, the value of sharing ideas and considering new methodologies became uppermost and is a uniform theme.

Jonny Cline, the co-organizer of Amuta21C, told us this conference “looked to address the issues of the culture of philanthropy in Israel, or lack thereof, shared responsibilities with the changing paradigm of the relationships between business and the third sector.” The program and other information can be found atAmuta21C.com, and pictures and discussions are at Facebook.com/Amuta21c.

On the heels of Amuta21C, the Jewish Funders Network (JFN) continued its focus on networking between and among some of the most connected Jewish donors. According to one prominent attendee, Jennifer Laszlo Mizrahi, “JFN is the place for people who care about smart giving in the Jewish community. Participants are outstanding human beings and the work they are doing is making the world a better place.”

She told us that one highlight at this gathering “was that there were many Israeli givers … a new trend in global giving” in the Jewish giving arena. Cline cited a panel discussion at the Amuta21 conference that featured “meet the investors” where Dame Stephanie Shirley and private philanthropist and owner of the multi-family office Philippe J. Weil, joined Sandy Cardin of the Schusterman Foundation, and Vered Raz, director of corporate responsibility for the Fishman Group. The “catch phrase” that came from the conference was a call for more and better cooperation between philanthropists and nonprofits/third sector agencies.

At the gathering of Reform synagogue development professionals, networking, too, was a major focus, with several discussions sparking dynamic discussions about planned giving, technology, and best practices. Maxine Lowy, of Temple Oheb Shalom of Baltimore and who chairs the group, termed the annual meeting as “invaluable” and looks forward to the next get-together in San Francisco in March 2013.

“Our focus was a set of discussions about what Jewish houses of worship can learn from other religious institutions … how to better be a ‘connector of people’ rather than facilitators,” she mused.

Reports about these three different conferences have been covered, partially on eJewishPhilanthropy, as well as in other blogs and media sources. Most importantly, they reflect important efforts to connect people with intersecting agendas and priorities, each with different approaches. Strengthening Jewish philanthropy has historically receded in times of economy contraction or recession, which often result in downturns in giving. We note that several other major conferences are scheduled for later in 2012 but the three we have highlighted cover Jewish perspectives that focus on Jewish priorities and nonprofits that serve the Jewish community in the US and in Israel.

Jewish communal leaders have often expressed frustration that Jewish donors were not devoting sufficient attention and resources to Jewish priorities. Perhaps the long term results will reflect more Jewish dollars directed for Jewish needs and a better understanding how to marry Jewish philanthropic desires with the work of Jewish nonprofits … in the US, Israel, and around the globe.

If you are the planner or an attendee of a forthcoming conference on Jewish philanthropy, please advise us. As Cline told us, the point of these meetings “is to facilitate the development of a professional community … that will encourage and enable professional and organizational development and that will create and facilitate a channel of communication between the professional community and the (Jewish) philanthropic world.”

Jewish Development Professionals and the Job Market

Reposted from eJewish Philanthropy – March 27, 2012

An improving U.S. economy and an upturn in charitable giving should expand the market for Jewish fundraising professionals. Is this happening … and what are the projections for the next 18 months?

“Historically, the job market for development positions is the first to see improvement after layoffs occur,” we learned from David Edell, president and cofounder of national firm DRG Executive Search Consultants, where he has been actively engaged for 25 years of search efforts with nonprofit organizations, especially Jewish organizations looking to fill higher executive positions. “We are certainly seeing a hiring rebound, especially during the last 18 months, in three specific areas of the Jewish nonprofit arena.”

“Nonprofits are looking to refill ‘frozen’ positions, they are making certain personnel changes to upgrade staffs, and they are looking to staff some new initiatives that require professional leadership and expertise,” he told us.

He confirmed that the areas that are showing the most activity in the current job market require fundraising experience in major gift donor solicitation stewardship and people comfortable in on-line giving and social media … mirroring where many successful nonprofits are placing emphasis now. “Organizations today are seeking experienced and successful professionals, people who have specific expertise and skills and who are personable and articulate. Jewish agencies are following the same paths as other nonprofit organizations in this regard,” he reiterated.

While the marketplace has once again become reasonably competitive for experienced fundraisers, salary levels have not grown substantially. Current salaries for Jewish (and non-Jewish) development personnel are competitive and are of course higher for “more seasoned and experienced men and women,” even though more people are considering careers in development after having worked in the for-profit world.

Our recent review of development positions showed us a wide range of compensation, ranging from the $45-55,000 level to as high as $250,000 and higher for very seasoned development personnel. These levels have not changed markedly during the last ten years despite competition and levels of experience.

A recent published review of nonprofit salaries by The Forward focused primarily on senior executive compensation at Jewish nonprofits across the U.S., not on development positions specifically. However, because fundraising specialists are in more demand now and as a result of a competitive philanthropic world, Edell projects some upward adjustments of salaries, especially for organizations that are competing to recruit experienced, personable, and strong professionals. “This holds for vice-president positions down to development officers,” he said, but “not especially for lower level, starting positions.”

A wide spectrum of jobs in Jewish nonprofits across the globe is often announced on a popular websiteJewishJobs.com, which was started in 2001. Founder Benjamin M. Brown, of Austin, Texas, had intended to be a college professor and while going for an advanced degree he was looking for a position in the nonprofit Jewish community and there was no jobs web site at the time. Much later, he realized that there are “distinct cycles of ups and downs in hiring” that tend to be more impacted by the calendar than the economy. JewishJobs.com, which initially focused as a clearinghouse for a wide-ranging listing of postings for Hillels, JCC’s, and Jewish Federations, today carries hundreds of job openings at any given time, with “the second best level of the best paying jobs being for development openings,” he reports. Jobs listed on this website range from nonprofits seeking teachers, computer-knowledgeable expertise, researchers, and support personnel at all levels of expertise in the Jewish communal arena, but generally the organizations that turn to this resource seek personnel at levels lower than those who reach out to the executive search firms.

Even during the most severe period of the “Great Recession,” from 2008-2010, there were Jewish nonprofits that were hiring, although the length of time required to fill open positions was longer and more competitive than what we are seeing now, both Edell and Brown agreed. What we witness today, though, places even more pressure on the job seeker, where increasing numbers of candidates are attracted to each position, especially in major cities and for the largest nonprofits.

Our review of published openings currently available illustrates that hospitals and health care are paying the highest salaries for Jewish development personnel among key sectors of the nonprofit arena, with higher education close behind. Other observations about the current – rosier – job market seem consistent with criteria used for more than the last ten or 15 years:

  • nonprofits seek dynamic, curious and engaging people who know how to take initiative and how to cultivate donors;
  • people with a functional knowledge of finance and management are being sought for development positions;
  • career-minded men and women comfortable in the major gift and planned giving arenas are in short supply.

With the job market in flux today, we envision that nonprofits seeking development personnel may need to test different methods of attracting the best and most appropriate development staff, with a greater emphasis on word-of-mouth and networking than ever before. And the networking also holds for job seekers, too, many of whom have felt frozen in current positions where they may not have seen salary increases or promotions.

We talked recently with an experienced nonprofit executive in search of a new job since early January. She has held responsible positions in synagogues and at a national Jewish nonprofit; she wishes to expand her career by focusing on the fundraising profession but she is experiencing some difficulties finding “the right job.” “I have decided to be selective about my next position,” she explained, “and I certainly want to stay within the Jewish community and to use my years of experiences to impact on a dynamic organization.” She has scheduled interviews but during her 12-week job search, no firm offers have come her way . . . as yet. She is hopeful, trying to be flexible and optimistic, but meanwhile is leaving no stone unturned. “Networking is crucial and I am certain that I will ultimately secure a job that captures my skills and expertise!”

So goes the challenging search for jobs … from the employer’s perspective as well as from the view of the job seeker. All-in-all right now it’s probably back to a solid market for the best qualified candidates, though salaries are not escalating and where mid-sized and larger organizations are watching budgets but seeking outstanding personnel.

The Impact of Tax Law Changes on Giving

Reposted from eJewish Philanthropy – March 15, 2012

Experts have long questioned the impact of tax incentives on the philanthropic motivations of American donors. We have followed projections about proposed federal tax law changes on giving to nonprofits across the United States with interest, especially prompted by the corporate tax deadline today and knowing that we are only one month away from the annual federal income tax filings for almost all Americans our thoughts focus on taxes and giving.

Our recent analysis about taxes and their impact on giving suggests unclear projections and calls into question the importance of taxes as a tax motivator for giving, especially on the decision-making processes by high net worth donors. However one looks at the questions, it becomes more than a little complicated.

As we developed our analysis, our basic observation follows that giving will go up in 2012 and down in 2013if proposed changes take place. We arrived at this projection by looking at past performances and insights from others who provide financial service guidance and advice to wealthy Jewish Americans!

Here is an overview:

The Obama Administration’s FY2013 budget proposal to alter the tax code may have absolute implications for charitable giving. Presently, United States tax law permits individuals who itemize to claim contributions for charitable organizations as legitimate deductions on their income tax returns. Under the 2010 Tax Relief Act, the United States’ existing tax rate structure was preserved for two years, keeping alive certain Bush-era tax cuts. One noteworthy aspect of the 2010 Act was that it temporarily extended a full repeal on the limitations placed on itemized deductions, thereby prolonging incentives to contributors to charitable organizations.

The tax code changes contained within the proposed FY2013 budget seek to revive the limitations placed on itemized deductions for higher income tax payers (those with incomes above $200,000 for single individuals and $250,000 for married couples filing a joint return). Included within the President’s proposal is a limit to the tax rate in which individuals and couples at the higher incomes can take itemized deductions: limits amount to a maximum of 28% (it now stands at 35%). Additionally, the changes would allow the top tax rate to increase from 35% to 39.6%, increasing the tax liability for all taxpayers with taxable income over $390,050.

According to The Center on Philanthropy at Indiana University, the proposed tax code changes would have a greater impact on the potential giving of high net worth individuals. Looking at the proposed 28% cap on itemized deductions, The Center on Philanthropy estimates a decline of .064% on charitable giving by itemizers. In combination, the two proposals are estimated to detrimentally affect household giving by tax itemizers by 2.4%. (Generally, individuals account for most charitable gifts.)

Changes in the tax code historically have had relatively modest effects on charitable giving, and it is likely that the proposed 2013 tax code changes will influence some contributions. However, we contend that tax motivations primarily determine the structure and timing of major gifts, not influencing charitable intent.

Note that the last major revisions to the tax code, in 1986, witnessed donors making significant year-end charitable gifts, often paying ahead on gifts they would have otherwise made in 1987. In fact, Giving USA reported a substantial decline in giving in 1987, primarily attributed to the 1986 tax changes. Giving levels returned to previous rates in 1988 and 1989.

We believe the President’s proposed limit of itemized deductions to a maximum of 28% could affect charitable giving. And for those potential donors who plan their giving based on the ability to reduce their tax liability through charitable deductions, this cap could potentially provide them with reduced financial incentives to give.

By increasing the tax rate from 35% to 39.6%, as proposed, those potential donors in this top marginal tax bracket would likely realize a reduction in their disposable income since a greater percentage of their income would be directed towards fulfilling their increased tax liability. We believe that with reduced disposable income, it is possible that these wealthy givers could ultimately reduce their charitable donations. It is important to reiterate that tax liability implications typically do not cause a major donor to withhold a gift. In the short term, however, as we saw in the last major change in the Reagan Administration, a major donor may reconsider the timing on donation payments.

Our discussions with two tax experts suggest some other issues, primarily impacting high net worth donors. Julie H. Zakroff, CPA, of Dresher, Pennsylvania, foresees some potentially detrimental results on the contributions from Jewish donors as a result of the proposed tax code changes. Unless they are unusually charitable or have a particularly strong affinity for an organization, her wealthy clients almost always approach charitable giving strategically. From this perspective, she believes that by increasing the tax rate to 39.6%, her wealthy clients will be less likely to donate as they will have less to draw from: a potential danger sign for Jewish nonprofits.

The proposed tax code changes will likely affect different donors in a variety of ways. Stuart Katz, CPA, a tax manager in Philadelphia, Pennsylvania, believes that generally, charitable contributions by “the six-figure married couple” are not tax motivated. They will either give or not give. By contrast, many of his higher net worth clients are motivated by tax issues. He predicts that high net worth donors will be more hesitant to increase their charitable contributions with the proposed 2013 tax code changes, rather than reduce their overall giving.

As expected, the proposals have not been received well by many nonprofits. Nathan J. Diament, the Washington, D.C. director for the Orthodox Union, was quoted as saying, “We were hoping this would not come up again this year. We asked that they not renew it, but unfortunately the request was not taken. It’s a real concern.”

Clearly, the negative implications of the proposed tax code changes on charitable giving are greater as a result of tax rate increases rather than through limitations on itemized deductions. However, we believe that the amount available for someone to give is more demonstrative of that person’s ultimate decision on whether or not to donate rather than any incentives provided by the ability to itemize deductions for charitable giving and to reduce their tax liability. Typically, the biggest donors plan their gifts strategically and are motivated to contribute regardless of the tax implications. The mission, vision or other commitments to the charity is usually motivation enough and trumps any itemized deduction opportunities. However, it is possible that mid-range donors, less driven by strategy and for whom the deduction plays a significant role in their giving, could be affected.

More often than not, changes to the overall economy directly affect household circumstances and wealth has the greatest impact on charitable giving as compared to changes in tax rates. While we hold that the proposed tax code changes may affect mega gifts rather than average donations, an improving economy is the critical factor for increasing giving across all income levels. Nonprofits should continue to effectively communicate their importance to prospective donors regardless of which way the taxing pendulum swings. Donors continue to press for improvement, growth and transparency at all levels. We predict that those nonprofits that consistently meet these demands head on, and going beyond them, can essentially transcend tax considerations.

Branding Jewish NPOs

Reposted from eJewish Philanthropy – March 8, 2012

With the thoughts about the Purim holiday, we are reminded of the many “masks” that nonprofit organizations wear and some of the institutional games that we play, and at least one of the messages that we get from reading the Megila. The mandate: rather than hiding one’s identity, be forthcoming about who you are and work diligently to identify your goals and vision.

One contemporary lesson from Purim: the more a nonprofit is aware of and framing its image, the more successful it will be in maintaining and attracting financial and passionate support, along with successful brand recognition.

Nonprofits of all sizes need to regularly redefine – and reaffirm – their positions within the Jewish marketplace. We acknowledge that the nonprofit arena is undergoing many changes and some of our iconic institutions are either vanishing or diminishing. Recall which Jewish agencies of our alphabet soup no longer exist (think American Jewish Congress [AJC] or some of the synagogues and JCC’s where we spent our youth.) At the same time, other organizations are experiencing unprecedented expansion and support.

The choice is to embrace the need for marketing savvy or face the threat of perceived irrelevance. We point, for example, to synagogues across North America. With the average life span of a synagogue building today at 50 years, congregations are growing or ebbing because of population changes, where people are moving between certain urban and suburban areas and then back again. Congregations must face the need to adjust their facilities as much as they adjust programs and services.

But some would say, “We’re already investing significant dollars in advertising and self promotion.” But are those resources focused on the right priorities? How are priorities determined? Know that while you are questioning your competitors are introducing new approaches and beautiful facilities, getting more and more aggressive and making use of every tool available to stand above and apart.

Snoozing means losing today and this requires more aggressive outreach, as well as in-reach. And this circumstance calls for constrained budgets to include more dollars for marketing, branding, and progressive communications efforts … unprecedented but critical.

Rebranding is especially critical if your organization is preparing to undertake a fundraising campaign, increase efforts at attracting a previously illusive segment of the population (synagogues: have you considered this issue in attracting young, single people?); or if the organization has undergone significant change (congregations merging, service agencies serving adding revenue-generating, fee-for-service modules).

With the panoply of communication approaches, and the need to stay current, it is no Purim shpiel that marketing programs need to be reviewed and updated annually. Even organizational logos and other materials require updating every 10 years. We acknowledge, too, that what attracts our attention ranges from traditional (like direct mail and telephone) to technologically current or advanced (Facebook, Twitter, or other social media venues). With the flood of information, many people are almost shutting down and refusing to read or even listen to an unrelenting assault of promotion! Therefore, using these tools to create increased opportunities for personal contacts probably are becoming an even more important and successful mode of sharing information. Return to the future?

Warning: the successful rebranding process will likely be provocative and soul-searching. Evaluating the messaging and image of your organization will require you to identify the sometimes subtle and elusive pathways to people’s emotions, values, and self-definition. The personal/emotional connection is crucial, especially as a growing number of brands (did you know your organization is/has a brand?) compete for the same charitable dollars. Capturing the spirit and inspiration of your audiences is key to building long-term relationships with donors and other key stakeholders.

The branding process should include multiple sessions with staff and some representatives of your intended audience – especially top volunteer leaders. Exercises should include individual, team and group formats to allow for different types of reflection and brainstorming. The result of this process should be group consensus around the impacts that your organization makes, the images and words that best capture them, and the audiences to whom this information must be conveyed.

The mantra we all hear and repeat to others is about too much information coupled with not enough time in the day. Keep this in mind as you get into the heads of your intended audiences – they need a simple message with a clear and agile directive that stays at the tip of their minds and hearts. What is the one word that is synonymous with your organization? What is the relationship that the audience can have with your brand?

The answers to these questions will help form the foundation for your communications and fundraising efforts and should be reflected on your website, in your collaterals, and advertising.

Branding will continue to be an important issue for Jewish nonprofits for the foreseeable future. As Jewish institutions grapple with how “Jewish” to be and as the connection between younger generations of potential Jewish donors and constituents becomes more tenuous, nonprofits will have to make intentional and well-strategized decisions about their image in the marketplace.

Are You Tackling Planned Giving Yet?

Reposted from eJewish Philanthropy – March 2, 2012

While every charitable gift is planned, some are “more planned” than others. And in today’s charitable giving arena the importance of testamentary giving is more punctuated than ever, especially as Jewish Baby Boomers are aging … quickly.

Yet, America’s Jewish congregations lag far behind other Jewish nonprofits in reaching out to secure commitments by wills, trusts, estates and other revocable and irrevocable approaches, complementing current gifts. In fact, planned giving is acknowledged to be among the most critically important, but often overlooked, aspects of a synagogue’s overall fundraising strategy. Higher education, arts organizations and hospitals have successfully pursued testamentary gifts for decades. But why not synagogues?

Charitable bequests in the U.S. rose an estimated 18.8% in 2010 to $22.8 billion, according to Giving USA. Although planned giving is becoming more important to many nonprofits, Jewish leadership – and especially congregational leaders – has been reluctant to make it a centerpiece of congregational fundraising.

Philanthropy in both the Jewish and non-Jewish worlds has evolved fundamentally from the “crisis mode” of the post Holocaust generation. With a substantial accumulation of wealth, we would expect that donors have money to give for compelling causes and important organizations. Coupled with increased wealth is increased involvement in philanthropy, as donors strive to find the best fit for their specific areas of interest and demand assurances that their contributions are being well utilized. Perhaps synagogue leadership have been afraid of talking about the eventuality of death and the importance of putting the synagogue on an equal footing in estate planning with an individual’s other philanthropic priorities.

This then begs another question: why haven’t synagogues evolved their fundraising capabilities to position themselves in the new philanthropic dynamic? This is an especially critical question in light of recent economic challenges.

Most congregations rely on annual and High Holiday appeals, the bread-and-butter of synagogue fundraising, along with events and other “nickels and dimes.” Additionally, synagogues generally focus on securing contributions to address day-to-day needs rather than looking at strategic and future needs. Further, planned gifts involve seemingly complex and unfamiliar legalistic terms and are sometimes couched as the private purview of financial advisors, lawyers and wealth consultants and not with clergy and synagogue administrators. It’s no wonder why some would hesitate to initiate discussions about planned giving.

So why must synagogues integrate planned giving into existing development programs? Talking about planned giving need not be fraught with technical jargon, and, in fact, is a wonderful opportunity for dynamic discussions with members, engaging them in personal conversations about their hopes and dreams for the future of the congregation. Incorporating planned giving conversations and efforts into other campaign-focused efforts provides an alternative or a partner to outright gifts. Moreover, planned giving can be geared towards a larger audience, reaching those who may not have the capacity to make a significant outright gift. There are also tax benefits and supplemental funding considerations to various planned giving vehicles.

In a nutshell, planned giving focuses on an individual’s assets, which typically comprises the majority of a person’s net worth and allows individuals to make larger gifts than they could merely from their income. Rather than make a single major gift through various planned giving vehicles, donors can structure a bequest or something more complex that provides both income and tax advantages to the donor as well as heirs. Depending on the gift, a donor may pay no capital gains tax, receive current tax deductions, qualify for sales tax exemption or receive fixed payments.

Our research led us to four practitioners with varying positive perspectives on planned giving. Lisa Farber Miller is the Jewish Life Program Officer with the Rose Community Foundation in Denver, Colorado. Through the Rose initiative, Live On: Build Your Jewish Legacy, 31 Denver/Boulder area Jewish organizations, including nine area congregations, have built endowments through planned giving. Like many Jewish communities, Denver’s Jewish organizations had not approached fundraising from a strategic perspective, relying mainly on membership dues and annual giving. Ms. Miller attributes a willingness to consider alternative fundraising techniques to a dwindling dues pool and recent economic challenges. Through targeted training, incentive grants and a public awareness campaign, Live On has enabled the Denver/Boulder Jewish community to harness about $45 million in endowment bequests since 2005.

When educating Jewish organizations on the creation of planned giving initiatives, Ms. Miller leans towards keeping the message simple, as planned giving terminology and functionality can be confusing. Similarly, she stresses the relative ease of “stroke of the pen” gifts, such a adding a Jewish organization as a life insurance beneficiary, which allows donors to add the synagogue to the policy themselves and does not require legal counsel. The culture of planned giving starts at the top, which is why she advises the creation of a leadership-based Planned Giving Committee. Committee members should receive training in how to establish and build upon relationships with legacy donor prospects as well as make planned gifts themselves.

One of the most successful synagogue-based campaign efforts now in progress is at Temple Oheb Shalom, in suburban Baltimore. With more than $5.0 million in pledges already secured for restricted and unrestricted endowment, about $1.5 million comes in the form of testamentary commitments, according to Mrs. Maxine Lowy, director of development and special projects. “We have incorporated a solid planned giving component into our campaign and I know that we will see many more planned gifts in the future,” she told us. “Our Pathways Campaign has a planned giving subcommittee and they will continue even after Pathways concludes.” She noted, too, that discussing planned giving with congregants is opening up many discussions that serve to strengthen all aspects of the congregation.

Rabbi Michael G. Holzman, of Northern Virginia Hebrew Congregation in Reston, Virginia, recognizes the importance of planned giving, yet believes that synagogues have been fundamentally slow to adapt to the changes in the philanthropic environment and to adopt new practices. With burgeoning membership growth a benefit of the baby boom, synagogues did not have to try too hard to grow and remain fiscally sound. However, he believes that the last ten years have been a wake-up call to congregations.

Declining membership in many communities, coupled with economic challenges, has both drastically altered the vision that many synagogues have for their next generation. When it comes to fundraising – fortunately or unfortunately, “everything is on the table.” Challenges exist for many suburban synagogues, of which NVHC, in the Washington, D.C. suburbs, fits the mold. A majority of the almost 500 household member congregation comprises families with school-age children – not exactly the cohort to embrace planned giving. However, congregants who are a little older have considered planned giving options as part of their synagogue support. Rabbi Holzman describes planned giving as being exactly consistent with Jewish traditions of giving and supporting the community. He counsels that synagogues should create a culture of planned giving by investing staff time and leadership effort, congregational energy, and the required financial resources. Additionally, they should insert a planned giving line item in their budget and through the above investment, expect to receive testamentary support annually.

The acknowledged leaders in capturing the planned giving market are the so-called eds and meds – institutions of higher learning and medicine – which traditionally have had development departments engaged with alumni, former patients and their families. According to Brian Rissinger, Executive Director of Reform Congregation Keneseth Israel in Elkins Park, Pennsylvania, it is rare to find a synagogue that has kept pace with higher education and hospitals in developing and promoting planned giving. Although he sees more synagogues with development professionals, there too often is pressure for immediate results rather than an acceptance of the delayed gratification of planned giving.

As a result of a recent endowment campaign there is renewed emphasis on planned giving and a lay-led committee is coordinating an on-going approach that develops into a long-term fundraising vehicle, he hopes. At Keneseth Israel, Mr. Rissinger is rarely notified beforehand that congregants have named the congregation in their estate. More often than not, he receives bequests that he was unaware were being left to the synagogue. Several major bequests were a result of “seeds” that were planted 15 years ago. The bequests are treated like “found money,” of which the unrestricted bequests are used for capital needs or placed in a rainy day fund. Regardless, the KI policy is to recognize each and every bequest, whether or not specific instructions were included. Donor recognition in the form of plaques and special newsletter articles are used to inform and educate the membership about planned giving.

Planning legacy gifts requires a dedicated effort of a congregation’s professional and volunteer leadership. A commitment to both strategically accommodate and demystify planned giving is a must.

  • Establishing a Planned Giving Committee of members who not only are passionate about the synagogue and its future but also possess some technical familiarity (e.g. lawyers, accountants, financial planners) is essential to ensuring that donors can efficiently plan legacy gifts safeguarding their charitable intent.
  • Clergy as well as past and current leadership should be included in the planned giving process.
  • As always with fundraising, leadership should lead by example so Planned Giving Committee members should be the first to designate the congregation as a beneficiary. The other responsibilities of the Planned Giving Committee should include creating gift policies and procedures, marketing, asking for gifts and donor recognition.

Planned giving should be approached as a long-term venture, where relationships with congregants are stewarded, through consistent promotion and regular and appropriate promotion, until they are ready to make such a special gift. Discussing the synagogue’s mission and future plans is a good way to initiate contact with potential donors and learn more about their specific motivations and preferences.

Communication and education are essential. Virtually all communication should have an integrated planning giving message, including newsletters and brochures along with a “Ways to Give” link on the synagogue’s website. Specialized seminars given by legal and financial professionals, possibly drawn from the congregation, are an informal way to promote planned giving. Recognizing individuals who have made planned gifts is vital to maintaining relationships and building new ones.

Planned giving is the most flexible way for congregants to proactively acknowledge the importance of their synagogue in their lives. Likewise, planned giving affords synagogue leadership with a tremendous opportunity to forge and strengthen bonds with congregants when discussing how to best use the multitude of testamentary options, not to mention supplementing dues, enhancing capital projects and supporting vibrant programming. The time is ripe for synagogues to expand their funding capacities and catch up with other nonprofits in strategically planning a sustainable financial future.

Social Media and Jewish Nonprofits: Missing in Action?

Reposted from eJewish Philanthropy – February 15, 2012

So much attention is focused today on technology and especially social media as a platform to inform, educate and organize. Not a day goes by without some mention of the dynamics of Facebook and Twitter, and even eJewish Philanthropy almost always includes citations about the power of technology for nonprofits. This has prompted us to conduct an unofficial survey of a number of Jewish nonprofits, investigating how they are utilizing social media and how it enables them to meet the demands that they and their leaders are facing. The picture is not entirely positive.

The bottom line, as summarized by Jim Gelles, of Membership Management Services, developer of MM2000, a synagogue software system used by more than 200 congregations: “most of the Jewish world seems frozen in the 20th century when it comes to being technologically advanced.”

The Third Annual Nonprofit Social Network Benchmark Report reported in 2011 that 92% of U.S. nonprofit organizations have a presence on one or more social networking websites. This does not come as a surprise. However, what shocked us is the alarmingly low rate of Jewish nonprofits that have embraced social media as viable communications and fundraising enabling opportunities.

In the last decade, online social networking has expanded beyond being used solely as a tool for individuals to connect to/with each other. Instead, nonprofits are transitioning to using Facebook and Twitter as ways for organizations to build a donor base and market themselves to supporters. In terms of driving and growing fundraising potential and results, social networking may well be the next frontier!

However, there is still a great deal to be learned about just how effective a tool Facebook and Twitter can be.

Our recent survey demonstrated a significant lack of human or dollar resources invested by Jewish groups into Facebook and Twitter. Very few synagogues even seem to have any presence on Facebook or Twitter, although they all have websites, many of which are reasonably interactive. Robyn Cimbol, director of development at New York City’s Temple Emanu-El, noted that her congregation was probably the first Jewish congregation to have a website but today they have no specific plans to foster Facebook or Twitter activities, citing other pressing priorities and no apparent demands from their 2,800 member households. “We have limited staff resources and capabilities for this,” she noted, “but we are gearing up ultimately to recognize social media as one communications opportunity,” she told us. She did emphasize that “a number of staff members do use Face Book … to communicate with specific constituents but it is not used Temple-wide.”

Facebook reports that 89% of 1.3 million U.S. nonprofit organizations boast a social networking presence, offering opportunities potentially for fundraising. However, fundraising on Facebook is still a “minority effort,” despite recent gains.

Some organizations are opting for a modified social media fundraising approach. According to Robert Strickler, the Donor Pages Product Manager at DonorPerfect Software, an increasing amount of non-profits is turning to what he calls a “donor driven” approach. His firm has developed Donor Pages, an online “friend to friend portal” where an organization recruits its supporters to set up a website where they can reach out to family, friends and colleagues and personally ask them to donate. A platform like Donor Pages would be especially useful for synagogues, he notes, where membership serves as a “viable community which could set up pages and fundraise within their own personal networks.”

“Using a page like this gives ownership to the online social fundraising experience,” says Strickler. “We find that this tends to be effective because it operates on a more personal level.” He added that DonorPerfect has over 200 clients, both large and small, using donor pages, and that some have raised millions of dollars through the system. However, of these, only about 10 or 12 are Jewish organizations, and he said they are not yet fully utilizing the program.”

Despite the lack of nonprofits actively fundraising using Facebook, some data speaks to how viable an option it is. According to this year’s Nonprofit Social Network Benchmark Report, four out of five nonprofit organizations find social networks a “valuable” fundraising option, yet they cannot exactly quantify why. This may be because only 9% of Facebook-using nonprofits measured a hard “return on investment” (i.e.: money raised or supporters recruited) for their social network usage. Therefore, estimates of fundraising successes via social media are hard to quantify.

Two organizations we contacted talked passionately about their experiences using social media. Avi Halzel, Head of the Denver Jewish Day School, noted that all of their events are publicized and communicated through Facebook, with a goal of reaching all of their audiences. “There is no real extra work for us,” he noted, because “we believe that this builds community and this is one of our key goals.” “While we cannot quantify income directly from our Facebook activities, we believe it’s working.”

“Our goal is one or two tweets and Facebook postings every day,” he added, “and we work hard to coordinate our messages accordingly.”

At Beth Tfiloh Congregation and Community Day School in Baltimore and its close to 1000 student PreSchool-12 day school, social media has become a high priority, especially to connect families and alumni with dynamic school activities. Mandi Miller, the director of development, predicts even much more significant attention to Facebook and Twitter in the coming months, especially as they look to their critical annual Spotlight Scholarship event in June. “For the past few years we have experimented with different ways to use Facebook and Twitter, recognizing that the major costs are staff time.”

Her acknowledging that devoting resources, especially of staff time, towards stewardship, maintenance and expansion of the online community and other outreach efforts, seem unacknowledged generally. Just like fundraising through direct mail, meetings or phone calls, the same rules of stewardship are just as critical. Most nonprofits have no specific budget for technology, including social networking, despite the fact that no organization can manage today without staying current with technology. Miller also points out that volunteers can serve as a very powerful resource to expand the organization’s use of social media.

The power of resources is evident in what the Nonprofit Social Network Benchmark Report calls Master Social Fundraisers, nonprofit organizations that have raised more than $100,000 on Facebook. Quite surprisingly, with 30% of these agencies having an annual budget of $1-5 million, they reported at least $100,000 received in financial support. Distinguishing this group of agencies is that they report they had two or more people on staff dedicated – at least part-time – to social networking.

Last week, the Jewish Futures Competition was announced by the Jewish Education Project and JESNA’s Lippman Kanfer Institute, in partnership with UJA Federation of New York. Perhaps some candidates for creative projects will be tempted by the $1,800 prize money to suggest dynamic ways that the Jewish community’s nonprofits can advance utilizing Facebook and Twitter arenas and thus capture more participation and dollars … perhaps even functioning on a par with non-Jewish nonprofits that seem to be light years ahead of them.