Wednesday, October 26, 2011

Quid Pro Quo-Oh No!

Last week a hot topic flew across the listservs I am a member of. Yesterday, I brought it to my home base listserv to the surprise and sometime delight of some of my professional colleagues across the land. The IRS has just released its section 526 ruling for 2012. And lo and behold, there in tax-ease for all of us to misinterpret is a stricter ruling on the giving of "token gifts" to donors.

---The quid pro quo benefit limits for 2012 have just been announced by the IRS. They are as follows:

For gifts IN EXCESS OF $49.50, you may provide insubstantial (token) items, containing the organization name or logo, without reducing the gift amount as long as the cumulative low-cost value is LESS THAN $9.90.

For gifts below $49.50, you must fully disclose the value of all such benefits - and reduce the gift accordingly - if that benefit value is less than $1.
Below that gift level the token benefit exclusion no longer applies.

Therefore, for a gift of $25, the highest cumulative FMV of benefits you can provide without having to disclose/reduce the gift is a whopping 50 cents. A $10 gift = 20 cents in benefits without disclosure.

For more substantial benefits, like events not items, you do not have to disclose the value as long as the cumulative value of all benefits does not exceed $99 or 2% of the amount given - whichever is LESS.

This is why, on every solicitation some organizations send, they include a check box for: "Please waive benefits so we can deduct the full amount of donation for tax purposes."

See page 17 here for further clarification.

The "receipt" of the benefit does not have to be at the exact second the gift is made - getting it in the mail or in person a few weeks or months later as a direct result of a gift means that the donor "receives" something in exchange.”

These limits are right on trend and have made many of us in the donor relations world that abhor tchotchkes very happy. But for many of my colleagues the panicked question remains, "I'm supposed to follow these rules!?!" The answer is simply YES. Not only are we stewards of donors funds and the builders of relationships, we are also their advocates. Think of us as nurses in this sense, whatever is best for the patient/donor we MUST advocate for. This includes helping to protect them from losing their deductibility of their gift because we just HAD to give them another pen set. We must advocate and ensure that these IRS rules are followed to the letter.

I think from an internal perspective this means a sit down with your counsel and having them make a definitive ruling on this tax code for your organization. The next step involves your communicating with your internal constituents and explaining this to them. Making sure that they understand that this isn't just an idea you came up with so you can get rid of that closet full of gifts in your office(ahem)... Complete understanding and compliance is a must, it is our pleasure and duty to at all times keep the donor in mind.

According to Penelope Burk, who I will quote here, this directly aligns with what donors are telling her repeatedly in her studies and jives with what some of us have been preaching for years. Donor relations is not about an exchange of money for items or perks, it is a relationship building, appreciative, strategic, and holistic view of a relationship.

Penelope says,
"On this issue, both the IRS and donors are in complete agreement. Donors don't want these token gifts and sending them makes fundraisers' jobs much more difficult, especially in tough economic times. Why give donors one more reason to question the cost-effectiveness of fundraising appeals and the sincerity of not-for-profits who solicit with a sense of urgency, then refund some of the donor's gift in the form of a trinket that they never asked for and don't want.

There are, however, gifts that are truly appreciated by donors, which positively contribute to their retention and higher gift value, and which have no negative implication. They are:
• beautiful, original thank you letters -- considered to be the ultimate in donor recognition and often referred to by donors as "gifts";
• thoughtful, impromptu calls that acknowledge a recent gift or simply the ongoing loyalty of a donor -- stunningly effective at furthering donor retention, a source of tremendous information about donors for the purpose of cultivating them into major giving, and highly effective as a motivator for volunteers and paid professional fundraisers, reminding them why they do this job.

It's not often that I am able to say that the IRS got it right, but they certainly have on this issue. They are doing the fundraising industry and, in particular, our stewardship profession, a favor."

So, my challenge to you is, what are you doing to advocate for your donors? Are there other cases in which you have protected their interests? I look forward to your comments.

Until then, I'm having a garage/closet sale, anyone want a branded paperweight?? Ha.



--- Upcoming is another swap brought to you by the makers of the acknowledgment and solicitation swap...Get your best INVITATIONS ready!!---

Friday, October 14, 2011

Professional Development!

I just finished my final conference of the year, and I have to tell you, I am exhausted. I apologize for the radio silence the last few weeks but the world caught up with me. That and for once I took a real vacation to my parent’s house. That time away from my plugged in, constant driving world was a wonderful form of professional development for me, and a rare one at that. I did a whole lot of nothing, except for appreciating family, wilderness, and peace, something that all too often we forget to do for ourselves.

Then, I hopped right back on the road 24 hours later and did two conferences back to back and my full time job in between. I LOVE speaking and conferences; I really do. I believe that for your professional development dollars, there is no better investment. One might ask two questions though; 1. What is so great about a conference other than the sessions, and 2. If I don’t have conference budget money, what can I do? So here we go- tips and tricks from your guru friend.

1. Conferences are not all about the sessions. True, those of us that speak would like you to believe that our educational offerings are the end all be all, but in reality, it just isn’t true. I often learn more outside of the sessions than I do in them. Here’s how: I am constantly networking. There is no better teacher than hundreds or even thousands of people who do the same thing you do for a living. The shared bonds there are priceless and when you need a second or third opinion, what a great resource!
2. TALK to the vendors!! Most of them are great industry resources and have been around a while; they have a perspective that some of us cannot grasp as we are so deeply entrenched in the day to day.
3. Spend time at the bar. I’m not encouraging you to drink, well kind of, but ginger ale is perfectly acceptable here. Most of the leaders like to unwind at the end-or in the middle!- of a day with a good glass of wine or single malt scotch! If you catch someone there, the conversations can be very beneficial to your educational path and your career trajectory; some of the best hiring deals are done at the bar!
4. Not a drinker? Sign up for a dinner group or make one of your own! It doesn’t take much effort to have a great tie with colleagues and learn more about them. Staying in your conference hotel room will do you no good! You might say, well I want to see X city- great! Add a day for that- you are there to get development, and the best way is from your peers and industry leaders.
5. And if you have extra time and are in an area with lots of non profits, set up lunches or visits to places and people you would like to visit, both formally or informally. Use every minute of your time away from the office to develop your skills and learn from others; and be thrilled with the fact that your organization is providing you with a wonderful opportunity to be present and engaged in a conference! Don’t forget to write follow up emails and thank you notes to those you met and spent time with, it will leave a lasting impression!

NO budget money to travel to a conference? Here are some great ideas for those of you that are landlocked for the time being.
1. Apply for a scholarship- most conferences I attend have scholarship programs and are always looking for wonderful applicants- go for it
2. Follow the conference you want to attend on Twitter- it is amazing how much you can learn from us tweeps as we live tweet or blog sessions, it is like you are there- almost!! You can ask questions, follow along, and even reach out to speakers live!
3. When you find a speaker you like and see slides that interest you from one of their speeches, most can be found on or their websites… reach out to them, explaining you weren’t able to be there in person but could they talk you through it, I’ve never said no to anyone and have learned a great deal from these one on one sessions- don’t forget to send them a thank you note afterward!
4. Webinars are a cost effective solution to your inability to travel. They are often hosted by the same speakers and have wonderful content, some organizations even include them in their annual membership fee.
5. Volunteer locally to help organize a regional workshop, it doesn’t cost you anything but time and you usually can attract top speakers to your location and it is a great selling point to your leadership that they might want to let you attend the national version of that conference once they see the value of the sessions and networking that day!
6. READ! There are great blogs, ahem… lol newspapers such as the Chronicle of Philanthropy, websites and other sources for you to feel engaged in the larger community while still at your desk!
7. Participate! Use social media and other forms of sharing like listservs to have your burning questions answered- Every major group has a linked in page and facebook page too, in addition, most have twitter feeds. There is a lot to be discussed and learned out there and each of these are FREE!!

I hope this helps you understand that professional development takes many shapes forms and sizes and is all about what you make of it- I would love to hear your thoughts on the most valuable professional development you take part in, and ones you would like to see in the future!