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SmartGiving News for March 2005

Securing Funding Using Philanthropic Advisors

This panel discussion, featuring SmartGiving founder Phyllis Freedman, has been moved to a larger venue and a new date, March 17th. Joining Phyllis on the panel will be Janet Kreutter, President of the Community Foundation of Northern Virginia and Dan Studnicky, who leads the Charitable Services Group at Wachovia Wealth Management. For more information contact Phyllis at pfreedman@smart-giving.org or visit www.afpdc.org.

"Why do they keep sending me name & address labels?" and other questions I'm always asked by donors

Wherever I go, as soon as people find out about my work, the questions begin. And with few exceptions, the questions are the same. Herewith, a few of the questions and the answers:

1. Why do nonprofits keep mailing me name and address labels? The answer is "because they work!" While it may seem counterintuitive, name and address labels in particular, and other free gifts of all kinds, boost response to direct mail solicitations and generate important revenue at a reasonable cost.
2. I write all my checks at the end of the year. How do I get my favorite charities to stop mailing me all year long? Most nonprofits have computing capability that enables them to "flag" donor records for specific actions, such as mailing once a year at year end. Attach a note to the reply slip or send a separate letter making your request. It may take several months for the mail to stop, however, since updating the computer often takes time and the mail is often prepared weeks in advance.
3. How do I say "no?" Most of us have been asked, sometimes often during the course of the year, to give to the favorite charity of a friend or co-worker or to sponsor someone who is walking, running or bicycling for charity. On an annual basis, these gifts often add up, diverting charitable dollars away from our own favorite causes. Many donors find it awkward to say "no." Here are a few of tips for dealing with these requests:
   • Tell the requestor that the organization for which they are requesting funds falls outside your giving interest. If you put your "no" in the context of your own giving, it may be easier for you to say and for the person making the request to hear.
   • Budget annually a certain amount of your charitable giving for responding to just this kind of request. With a definite amount budgeted you can avoid over-spending in this category of giving.
   • Give half. If you really don't want to say "no" try giving half or less of the amount being asked. If, for example, your co-worker asks for a $100 donation, try responding that you're able to give $50. If the request is for $1,000, offer to donate $500.

If you have a question you would like answered, e-mail me at pfreedman@smart-giving.com and we'll answer your questions in a subsequent issue of SmartGiving News.

Nonprofit Board Members Face New & Increased Regulation

Many people are not aware that the Sarbanes-Oxley Act, passed by Congress to address corporate accountability scandals, has implications for nonprofit organizations and especially nonprofit Board members. Although very few of the provisions of the Act are currently required of nonprofits, many of the other provisions of the Act represent good business practice for nonprofits and their Boards. Moreover, it seems likely that Congress will soon make some of these provisions mandatory for nonprofits. Therefore, nonprofits should be working to implement these provisions now.

The Act specifically requires nonprofits to offer whistleblower protection and mandates that nonprofits prevent destruction of litigation-related documents.

In addition, the Act includes provisions for publicly traded companies that, while not required of nonprofits, represent good business practice:

• Independent and competent audit committee
• Various requirements of auditors, including rotation of the lead and reviewing partner, among others
• Certified financial statements
• Conflict of interest provisions
• Disclosure requirements
• Prohibition against destruction of litigation-related documents

The Association of Fundraising Professionals (www.afpnet.org) has available on its website a white paper, created jointly by Independent Sector and BoardSource, that helps nonprofits, and especially nonprofit Board members, understand their obligations under the new law. The link to print a copy of the report is:

http://www.afpnet.org/tier3_cd.cfm?content_item_id=14506&folder_id=894

In addition, a Panel on the Nonprofit Sector, a coalition of 500 nonprofit groups, foundations and corporate philanthropy programs recently issued an interim report that calls for changes in 15 major areas to improve nonprofit governing procedures and financial disclosure. Many of these recommendations reflect provisions of the Sarbanes-Oxley Act. Information about the panel, including the provisions recommended to Congress may be found at www.nonprofitpanel.org.

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