September 2009 Journal Of The Dma Nonprofit Federation


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September 2009 Journal Of The Dma Nonprofit Federation

  1. 1. Volume 12: Issue 3 | September 2009 Charitable Giving Should not be Punished United States Senator John Thune, South Dakota I t is a remarkable statement on the character of the American people that in difficult economic times, individuals give gener- ously to those who are less fortunate than themselves. President Kennedy once said, “The raising of extraordinarily large sums of money, given voluntarily and freely by millions of our fellow Amer- icans, is a unique American tradition.” This spirit of generosity is something we should celebrate and promote, not discourage. Unfor- tunately, the Obama Administration has proposed reducing the tax deduction for charitable giving, which would discourage individu- als from giving money at a time when many are struggling. Charities provide invaluable public services to those in need, es- pecially during difficult economic times. The services provided by charitable organizations are frequently more targeted, more effec- tive, and more sustainable than comparable government services. cont. on page 6 9 Premium Fundraising: Where Art Meets Science Also in 11 State Charity Registration Laws this Issue 16 The Way We Write Is All Wrong 23 New Leadership, New Century: NAACP Case Study 26 Cutting Your Print Newsletter? Think Again! And MORE...
  2. 2. 2009 Leadership Following are the members of the DMA Nonprofit Federation’s Advisory Council: Diana Estremera Chris Ragusa ChAIr May Development Services Estee Marketing Group, Inc. Susan M. Loth Disabled American Veterans (DAV) Karen Gleason Kyla Shawyer American Cancer Society Operation Smile VICe ChAIr Jeanne Harris David Strauss SCA Direct National Wildlife Federation Geoffrey W. Peters CDR Fundraising Group Tom Harrison Atul Tandon Russ Reid Company United Way MeMbers Beth Isikoff Kim Walker Merkle Memorial Sloan-Kettering Mary Arnold Cancer Center ChildFund International Karin Kirchoff Defenders of Wildlife Kathy Ward Vinay Bhagat American Institute for Cancer Convio Mimi LeClair Research Mercy Home for Boys & Girls Jennifer Bielat Easter Seals Steve Maggio sTAFF DaVinci Direct Mary Bogucki Christopher Quinn Amergent Kristin McCurry Executive Director MINDset Direct Brian Cowart Helen Lee ALSAC/St. Jude Matt Panos Senior Director Food for the Hungry Ken Dawson Alicia Osgood InfoCision Management Corporation Chris Paradysz Membership Manager ParadyszMatera News Update Nonprofit Only News & Information Delivered to Your Inbox Each Thursday Contact Alicia Osgood @ to sign-up! MAnAgIng edITor: Alicia Osgood PubLICATIon desIgn: Andy Farkas, SCA Direct
  3. 3. Letter from the Executive Director Christopher M. Quinn, Executive Director Much has transpired in the nonprofit and charitable sector since our last issue. Before delv- ing into those matters, however, I want to thank everyone who attended our 2009 New York Nonprofit Conference. It was a stellar program and truly wonderful to see so many people from around the country. Our speakers received overwhelmingly positive reviews and the networking event at Papillon Bistro made for a terrific time. None of these good times would have been possible without the extraordinary work of the con- ference co-chairs, Lynn Edmonds of LW Robbins Associates, Independent Fundraising Consul- tant Margaret Carter and Craig Zeltsar of NNE Marketing. Lynn, Margaret and Craig were sup- ported by an extraordinarily dedicated Planning Committee who overcame any obstacle in their way. Everyone involved brought their A game to the table and for that we are most grateful. In the midst of the conference, the Federation formally welcomed our new Advisory Council leadership into their roles. Susan Loth of Disabled American Veterans is now Chair of the Advisory Council and Geoffrey Peters of CDR Fundraising Group is now Vice Chair. We also welcomed three new members to the Advisory Council: Ken Dawson of InfoCision Management Corporation, Karen Gleason of American Cancer Society and Kyla Shawyer of Operation Smile. With such an immensely talented and accomplished group of people behind us, there is no limit to what the Federation will achieve in the coming year. We also said farewell to outgoing Ad- visory Council Chair Jo Sullivan of ASPCA as well as another long time menber of the Council, Joan Wheatley of Special Olympics. They will be missed. Technology is something that has changed here as well. The DMA Nonprofit Federation has em- braced the times and expanded our reach by entering the world of social networking. The Federa- tion has its very own LinkedIn group and Twitter account. Links to sign-up for both our LinkedIn group and to follow us on Twitter are available on our website Be on the lookout for new and improved communications as we refine our methods to keep you informed in the most efficient and effective way. You will find this Journal a bit thicker than past issues. Look for expert advice on acquisition, harvesting the power of online and the brave new world of fundraising via social networking. A hallmark of each issue will be a Legislative and Regulatory section. Coverage will include pending legislation and articles by elected of- ficials, such as this issue’s cover article by United States Senator John Thune of South Dakota. I hope you enjoy this edition of the Journal. We welcome any feedback you have on this or any future issue. Yours truly, Christopher M. Quinn Executive Director 3
  4. 4. Friends for Life A Partnership That Creates Lasting Relationships Our experts in direct response fundraising strategy and database analysis help you turn prospects into donors and turn donors into Friends for Life. • Strategic Direct Marketing • Flexible Database Management • Insightful Analytics • Award-Winning Creative 9 Centennial Drive, Peabody, MA 01960-7927 • If you are looking for new fundraising solutions, please call Jack Doyle at 1-800-370-7500. 4
  5. 5. PubLIC PoLICy sCoreCArd unITed sTATes tax rates increase to 36% or 39.6%. The modified version would then keep authority to pursue those who assist others in violating the FTC act. Our PosTAL serVICe: the deduction rates at 33% and 35% staff continues to monitor this legisla- instead of rising with the tax rates. tion as it moves forward and will keep The United States Postal Service con- Our staff and the DMANF-lead Coali- you apprised of further developments. tinues to experience unprecedented tion continue to monitor this issue declines in mail volume and revenue and meet with members of Congress and projects a net loss of $7 billion stating our firm opposition to any onLIne behAVIorAL this fiscal year. The Government Ac- disincentive to give. AdVerTIsIng: countability Office has again placed the financial condition of the Postal Online Behavioral Advertising (OBA) Service on its High-Risk List. Faced ConsuMer is the collection of information for with such daunting challenges, the FInAnCIAL the marketing of offers or charitable Postal Service has launched programs solicitations based on a user’s pref- with incentive pricing for increased ProTeCTIon erences while online. Privacy and volume including the current Summer AgenCy ACT: other interest groups are advocating Sale. Congress has also examined for increased regulation of behavioral several options to ease the financial The Administration has proposed a advertising. In response to calls from burden including a restructuring of bill, the Consumer Financial Protec- the Federal Trade Commission (FTC) payments to the Retiree Health Ben- tion Agency Act (CFPA), which would to develop more far-reaching self- efit Fund (introduced as HR 22 and S give sweeping authority to a newly regulatory guidelines for behavioral 1507) as well as studying the impact created agency to protect consumers advertising, DMA and a coalition of reducing the number of days of in the financial services and products of key trade groups have released delivery to five days a week from the area by transferring authority from a comprehensive privacy principles for current six. number of existing federal agencies, the use and collection of behavioral including the FTC, to the new agency. data in online advertising. The new As currently written, the CFPA is too principles are the result of an unprec- ChArITAbLe broad and goes beyond consolidating edented collaboration of representa- deduCTIon: the actions of the financial regulators tives from the entire marketing-media in one agency, and includes broad community.  These principles will As the debate continues on Health authority over the advertising and be incorporated into DMA Member Care Reform through its August marketing of a wide range of financial Guidelines. recess, Congress searches for a way products and services, which could to provide adequate financing for this potentially include many nonprofit For questions or concerns, please legislation. Although currently not organizations. CFPA would also give contact Chris Quinn at 202.861.2410 found in any legislation, reducing the the Federal Trade Commission (FTC) or via email CQuinn@the-dma. charitable deduction rate for those greater rulemaking powers in these org. Also contact Alicia Osgood at who make over $250,000 from 35% to areas, as well as expand the scope 202.861.2427 or via email AOsgood@ 28% remains an option. There is also of the FTC’s remaining enforcement if you are not already a modified version of this proposal authority over non-financial activ- receiving our weekly News Update. which would take effect in 2011 when ity. CFPA would also give the FTC 5
  6. 6. Charitable giving Protecting the full tax deduction for should not be Punished charitable giving should be a top continued from cover legislative priority for the nonprofit I am not suggesting that people make sector. President Obama’s Fiscal charitable donations solely in the Year 2010 Budget proposed reduc- interest of receiving a tax break. In- ing the deduction, and the President stead, Congress has long used the tax and administration budget officials code as a means to facilitate charita- have continually defended the pro- Nonprofit Day at ble giving. While the charitable dona- posal. Earlier this year, I offered a DMa09 tion deduction is not the primary mo- “Sense of the Senate” resolution as an tivation for generosity, any decrease amendment to the National Service October 19, 2009 | San Diego, CA Bill that expressed support for the in the deduction will limit potential philanthropy, with the beneficiaries preservation of the full deduction for of charitable organizations suffering charitable giving. Unfortunately, the What’s for the most. amendment failed in the Senate by a single vote. you at DMa09? In 2007, Americans gave more than The issue was again debated in the $300 billion, roughly two percent of how about a whole day our gross domestic product, to chari- Senate when the FY2010 budget was designed with your issues table causes. Roughly three-fourths of considered. I again offered an amend- and concerns in mind. these donations came from individu- ment to preserve the full tax deduc- als. This scale of generosity is un- tion for charitable giving, and this Experience sessions designed for time the amendment was successful nonprofit direct marketers and matched in the world. It is estimated fundraisers such as: that 70 percent of American house- by an overwhelming, bipartisan 94 to holds make charitable contributions 3 vote. Unfortunately, my amendment Creating Loyalty Through was not included in the final budget Experience on an annual basis. resolution. Advanced Fundraising: Studies of the reduction of the What’s Next for Direct The issue of tax deductions for chari- charitable tax deduction proposed Marketing table giving is not likely to go away. A by President Obama earlier this year struggling economy means more fami- You’ll also get your creative juices indicate a reduction in charitable giv- flowing while walking the exhibit lies and individuals will need extra ing by as much as $8 to $16 billion hall floor and collaborating with assistance, which will lead to further your colleagues in an exclusive annually. To impose these losses on strain on the budgets of charitable nonprofit networking reception. charities at a time when the troubled organizations. I am confident that economy is already costing charitable Americans will continue to be gener- To RSVP for this event, contact organizations billions of dollars would Helen Lee at 202.861.2496 or ous with charitable donations and vol- be disastrous. via email at unteer work to help the less fortunate, and I believe the federal government The Foundation Center, a leading should remain dedicated to facilitat- authority on American philanthropy, ing private acts of charity and com- recently released a report detailing passion. Together, we must continue the severe impact of the economic October 17 -- 22, 2009 to raise awareness of this issue in the downturn on charitable organizations. San Diego Convention Center United States Congress to ensure that According to the report, foundations San Diego, California the unique American tradition of giv- lost over $150 billion in assets in ing continues.   for more information visit, 2008. A recent survey of 900 non- profit organizations found that only John Thune represents the state of South 12 percent of surveyed organizations Dakota in the United States Senate. expected to finish 2009 with an op- Thune serves on the Agriculture, Nutrition Mention Keycode NPJ & Forestry Committee, the Armed Services erating surplus, compared to the 40 when signing up. Committee, the Commerce, Science & percent that ended the year with an Transportation Committee, and the Small operating surplus in 2008. Business Committee. DMA09_NonProfit Ad_Journal.indd 1 8/18/09 3:36:53 PM 6
  7. 7. The shortest distance between you and your next donor. Direct Mail Insert & Print Media Marketing Analytics 7
  8. 8. Mark your Calendars! ook the key to g reat fundra Messages ising Friends Search Settings Enter your status: The Integr ated Futur e is NOW Friends (v iew all) uture Direct Mail Social Networking Print Publication E-Mail s he limit!” 2010 Washington Nonprofit Conference Television Fundraising , Events SMS Telemarketi ation, The Integrated Future is NOW n g Message B January 28 oa29, 2010 – rd it Renaissance Washington DC Hotel | Washington, DC it. Social Netw orking wrote : Welcome a uis b oard! t. DMA_Wash_Ad_NPF AD.indd 1 8/7/09 3:12:08 PM bus 8
  9. 9. Premium Fundraising Where ArT MeeTs sCIenCe By Megan Gibeau and Andrea Manseau, PEP Direct U sing premiums in fundraising makes sense. As mailboxes become increasingly crowded, adding some bulk to a fundraising package that is well designed may be what gets your mail piece opened. Sometimes, the desire to see what gift lies within is enough motivation to open the envelope. As numerous nonprofit organizations would agree, choosing the right premium for your donors is not always easy. This is where art and science come together. Whether you’re choosing a premium to illustrate your mission, the season, or your donors’ interests, effectively using them throughout your program will allow you to increase and retain your donor base more rapidly. To create the right combination, you need a mix of eye-catching art, compelling copy and a premium that relates to your donors. Knowing why your donors identify with and give to your organization is important. This will help you determine what your particular constituents identify with, since the premiums that work for one organization might not work for yours. Or, what previously didn’t work might work now. The Guideposts Foundation learned this when they retested a greeting card package against the longstanding stacked premium control. By replacing the notepad, labels and bookmark package with five all occasion cards, the organization saw a lift in response of 84 percent. With the results of previous mailings as your guide, the trick is to continually test and retest. If you have a control that is showing signs of fatigue, there are several ways to reinvigorate that campaign, such as testing a backend premium against the control. A small sports membership organization did that with success. Their backend offer of a T-shirt at the $35 gift level raised both response and average gift. The offer, which mailed in conjunction with a name label package, beat their existing control name label package without the backend offer. Before moving forward with a back end offer, however, it is imperative that you work all of the fulfillment details out in advance. Fulfilling an offer within the promised timeframe will build trust with your donors, and in turn strengthen their relationship with your organization. Another way to strengthen a donor’s relationship with your organization is to offer premiums as a way of saying “thank you.” For major or frequent givers, it is important to recognize their continued and future support. As it is less expensive to renew a donor than it is to acquire 9
  10. 10. one, creating loyal donors through mind. The format you choose noticed and opened, the first step sending a high velocity or logo- may bump you into another mail towards creating a donor for life. treated premium is beneficial to your class, resulting in higher postage organization. than you have budgeted for the Megan Gibeau is Vice President, program. Strategic and Client Services, Some other things you should do • Ignoring what other fundraisers and Andrea Manseau is Sales & when selecting a premium for your are mailing. Remember that Marketing Specialist for PEP Direct, program are: what is working for them might a full-service direct marketing agency not work for you, but they can specializing in strategic premium • Try different types of premiums. serve as a reference and be the fundraising.  They can be reached Usable premiums, such as inspiration for your next strategic at and notepads and name & address breakthrough. labels will work for some • Assuming that the premium that programs, while response works for one donor segment will enhancers like decals and work for all. Maybe men and LET US HELP GROW photo cards will work in others. YOUR PROGRAM SO YOU CAN Remember, though, that finding You need a mix of the premium with the right fit will SLEEP BETTER take some testing and time. eye-catching art, AT NIGHT • Capitalize on holiday-related premiums or significant compelling copy and a times of year with ties to your organization. National awareness premium that relates days and months connected to to your donors. your mission are great times to reach out to your donors. women respond differently to • Be objective when choosing your calendars or greeting cards, or premiums. Sometimes the most different age groups respond to Your organization depends on you effective programs don’t resonate different art. Keep testing until for the membership growth and with you or your agency, but they you find the right mix. fundraising results that power its work with your donors. • Expecting the premium to single- mission. That’s a lot of pressure. • Test a premium in a weaker handedly improve your results. It You need an agency that takes that appeal slot. It might be the extra needs to work in concert with the responsibility as seriously as you something needed to make that rest of the elements. do—one that has the cross-channel appeal more successful. • Disregarding the advice of your marketing knowledge and creativity • Test and retest! A premium that agency. They have experience to deliver those results. works for another organization working across different types of might not work for yours. Also organizations and their insights Maybe that’s why our clients’ remember to test other elements may prove invaluable. programs are growing by leaps and of the package, such as gift ask bounds—and their bottom lines are strings, copy and art. Using premiums has worked for growing even faster. many large, established nonprofits, as Sleep better tonight—call Ned While all of the above points will well as many smaller, regional ones. Shannon today at 1-800-965-0577. get you on the path toward a thriving Approaching the process of choosing We’re ready to stay awake nights so premium program, there are many the premiums for your fundraising you don’t have to. factors that could derail your program with both art – a beautifully success: and aptly designed package with gripping copy – and science – results • Forgetting to keep postal and testing – in mind is the best requirements and costs in thing you can do to get your mail An Inc. 500/5000 Marketing Services Agency 10 Contact: Jen Parker, Director of Customer Relations Bleed: no Client: Nexus Direct Nexus Direct, 2101 Parks Ave., Suite 600 Trim: 2.25” x 7” Job: DMA Journal Ad Sept. 2009 Virginia Beach, VA 23451
  11. 11. 990 9 Program principal officer: OMB No. 1545-004710 Investment income (Part F Name and address ofservice revenue (Part VIII, line 2g) Reven Re Activities & Governan Return of Organization Exempt From (A), lines 3, 4,Tax 7d) H(b) Are all affiliatesOther revenue (Part No 10 Investment income (Part VIII, column Income and Application pending H(a) Is this a group return for affiliates? Yes 08 Form 11 VIII, 2 Check this box Tax-exempt status:501(c),501(c) Other revenue (Part VIII, columnmoreCode 25%6d,its assets. 10c, and 11e) attach a list. (see instructions) lines 8 if the organization 11 (or 4947(a)(1) no.) the or 4947(a)(1) or (A), than (except 8c, 9c, Under section 527, its operations Internal Revenue lines 5, of black lung discontinued (insert of disposed of 12 Total revenue—add No included? Yes I ) 527 If “No,” 3 Number ofJvoting members of the 12 Total revenue—add lines 81a) Website: governing body (Part VI, line through 11 (must equal Part VIII, column (A), line 1213 number benefit trust or private foundation) 3 ) Open exemption Grants and similar amou H(c) Group to Public Department of the Treasury Internal4 The organization may13 Revenue Service of independent votingCorporation Grants and similar amounts paid (Part1b) column (A),formation: Number K Type of organization: memberstoTrust a governing body (Part VI, line IX, have ofuse copy of this return to satisfy state reporting requirements. the Association 4 14 L Year of lines 1–3) Inspection of legal domicile: to or for m M State Benefits paid Other Expenses 5 Total number of employees (Part beginning A For the 2008 calendar I Part Summary 14 Benefits paid to or for members (Part IX, column (A), line 5 year, or tax year V, line 2a) , 2008, and ending 4) , 20 15 Salaries, other compensat sTATe ChArITy Expenses 15 necessary) 6 ifTotal number of volunteers (estimate if Salaries, other compensation, employee benefits (Part IX, column (A), lines 5–10) number Please C Name of organization 6 D Employer identification 16a Professional fundraising f B Check applicable: 1 Briefly describe the organization’s mission or most significant activities: 7a Total gross unrelated business revenueProfessional fundraisingcolumn (C)IX, column (A), line 11e)7a Address change use IRS label or Doing Business As 16a from Part VIII, line 12, fees (Part b Total fundraising expense b Net unrelated business taxable income Total fundraising expenses (Part IX,Room/suite line 25) E Telephone number Number and street (or P.O.b from Form 990-T, street 34 box if mail is not delivered to line address) column (D), 7b 17 Other expenses (Part IX, Activities & Governance print or Name change type. 17 Other expenses (Part IX, column (A), lines 11a–11d, 11f–24f)) Prior Year Current Year Total expenses. Add line 18 Initial return See ( regIsTrATIon 8 Contributions and grantstown, state orline Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25) 19 Revenue less expenses. S Specific City or (Part VIII,18 1h) and ZIP + 4 country, Termination Instruc- 2 Check this box if the organization discontinued its operations or disposed of more than 25% of its assets. Revenue Fund Balances 9 Program service revenue (Part VIII,19 Revenue less expenses. Subtract line 18 from line 12 G Gross receipts $ Net Assets or tions. line 2g) 3 Amended return 3 Number of voting members of the governing body (Part VI, line 1a) Fund Balances Beginning of Year Net Assets or 10 Investment F Name and address of principal(A), lines 3, 4, and 7d) income (Part VIII, column officer: 20 Total assets (Part X, line Application pending 4 Number of independent voting members of the governing body (Part H(a) IsVI, a group return for affiliates? Yes 4 this line 1b) No 11 Other revenue (Part VIII, column (A), lines 5, 6d, 8c, (Part10c, and 11e) 20 Total assets 9c, X, line 16) H(b) Are all affiliates included? 21 Total liabilities (Part X, lin Yes 5 No 5 lines number 11employees (Part V, line 2a) 12 Total revenue—add Total 8) throughof21 Total liabilitiesVIII, column (A), line 12 ) LAWs: I Tax-exempt status: 501(c) ( (insert no.) (must4947(a)(1) or (Part X, line 26) equal Part 527 22 Net assets or fund balan 6 Total number of22 Net assets or volunteers (estimate if necessary) If “No,” attach a list. (see instructions) 6 13 Grants and similar amounts paid (Part IX, column (A),fund balances. Subtract line 21 from line 20 number J Website: lines 1–3) Part II Signature Block 7a Total gross unrelated business revenue from Part VIII, line 12, column (C) H(c) Group exemption 7a Under penalties of perjury, I d Part II Signature Block 14 Benefits paid to or Net members (Part IX, column (A), line 4) K Type of organization: for unrelated business Other Corporation b Trust Association What Direct Marketers L Year of formation: taxable income from Form 990-T, line 34 M State of legal domicile: 7b and belief, it is true, correct, Activities & Governance Expenses Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the 15 Part I Salaries, other compensation, employee benefits (Part is true, correct, and complete. Declaration of preparer (other than officer)Year Summary and belief, it IX, column (A), lines 5–10) Prior is based on all information of which prepare Current Year 16a Professional fundraising fees (Part IX, columnor most significant activities: 1 Briefly describe the organization’s mission (A), line 11e) 1h) 8 Contributions and grants (Part VIII, line Sign b Total fundraising expenses (Part IX, column (D), line 25) shoulD tell their clients Sign Here Signature of officer Revenue 9 Program service revenue Signature of officer Here (Part VIII, line 2g) Date 17 Other expenses (Part IX, column (A), lines 11a–11d, 11f–24f) Tony Martignetti, 10 Managing Director (Part VIII, column (A), lines 3, 4, and 7d) LLC Investment income of Martignetti Planned Giving Advisors, Type or print name and t 18 Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25) 11 Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e) 19 Revenue less expenses. Subtract line 18 from line 12 print name and title Type or Preparer’s 2 Check this box 12 Total revenue—add lines 8 through 11 (must disposed of more column (A), lineassets. if the organization discontinued its operations or equal Part VIII, than 25% of its 12 ) A Date of Year Check if signature Fund Balances Beginning of Year End Preparer’s identi Net Assets or prepare your of the governing paid (Part Preparer’s 3 Number s you 13 Grants and similar amountsbody (Part VI, line 1a) (A), lines 1–3) of voting members direct mail, signature website IX, column means different things across the states, but self- email, tation’ 3 Paid the (see instructions) 20 Total assets independent 16) Paid employed of (Part X, line voting to or nonprofit clients, of the governing body (Part VI, line 1b) fall into a few 4 4 Number or other solicitation formembers members (Part IX, column (A), line 4) 14 Benefits paid your for various definitions categories. Preparer’s Firm’s name (or yours 21 Total liabilities of employees (Part V, line 2a) (Part X, line 26)Preparer’s 5 Total number 15 add considerable value to your work benefits (Part IX, column (A), lines 5–10) 5 Use Only if self-employed), Expenses you will Salaries, other compensation,from (or yours 22 Net assets or fund balances. Subtract lineself-employed), employee Firm’s name line 20 Use Only if 21 EIN address, and ZIP + 4 6 Total number 16a Professional fundraising fees (Part IRS of volunteers the implications of new IX, column (A), line 11e) like Arizona, Florida, Illinois, New (estimate if necessary) 6 Part II if you alert your clients to Signature Block address, and ZIP + 4 In many states, 7a May the IRS discuss this ( return) w Phone no. 7a Total gross unrelated business revenue from(Part IX, column (D), line 25)(C) requirementsof perjury, I declare thatincome from laws. VIII, including Jersey and New York, the mere and to the best ofa website Act and Paperwork Red b state charity registration Part thisline 12, with the preparer shown above? (see instructions) b Net unrelatedtrue, correct, taxable Mayhave IRS discuss 990-T, line 34 business expenses Declaration of preparer (other than officer) is based on Form column Under penalties andTotal fundraising theexamined this return, return accompanying schedules and statements, existence of Forknowledge I expenses All 7b my Privacy and belief, it is 17 Otherand complete.(Part IX, column (A), lines 11a–11d, 11f–24f) all information of which preparer has any knowledge. states have laws that require For Privacy Act and Paperwork Reduction Act Notice, seePrioraseparate instructions. Year charities to register with that accepts donations the Year is solicitation. Do your cli- Current Cat. No. 11282Y Sign officials when18 Total expenses.clients cannot stop 18 froments 12 IX, their donorsline 25) giving options? If so, they solicit. Your Add lines 13–17 (must equal Part 8 Contributions 19 Revenue less VIII, line 1h) and grants (Part expenses. Subtract line line offer column (A), online Here Signature of officer they must register in theDate listed states as Year as Revenue fundraising—it’s their lifeblood. Yet they should know above Beginning of well Fund Balances 9 Program service revenue (Part VIII, line 2g) End of Year Net Assets or Investment print name (Part VIII, columnX, line 16) with the 7d) others. how to operate their programs (Part (A), lines 3, 4, and Type or 10 income and title 20 Total assets in compliance laws. Other revenue21 Total liabilities (A), linesline 6d, 8c, 9c, 10c, and 11e) (Part VIII, column (Part X, 5, 26) 11 Check if Date Total revenue—addNet assets or fund(must equal Subtract column from line 20self- Utah to Preparer’s identifying clients send Preparer’s 12 22 lines 8 through 11 balances. Part VIII, line 21 (A), line 12 ) and Add California the list if your (see instructions) number signature employed Paid 13 Grants and similar amounts paid (Partbeen ignored for Part II Signature Block State charity registration laws have IX, column (A), lines 1–3) emails or otherwise encourage donors to go to a web- Preparer’s Benefits paid yours for members of perjury, I column (A), line 4) site where they can make a donation.and statements, and to the best of my knowledge 14 decades. Until or Underthis year, I wouldn’t have Ibeenexamined this return, including accompanying schedules Add in Texas Firm’s name (or to earlier penalties (Part IX, declare that have and belief, it is true, correct, and complete. Declaration of preparer (other than officer) is based on all information of which preparer has any knowledge. EIN Expenses Use Only Salaries, other compensation, employee There is(Partpenalty if your clients encourage online giving through direct 15 allotted space to write about them. benefits no IX, column (A), lines 5–10) if self-employed), address, and ZIP + 4 Phone no. ( ) Sign 16a Professional fundraising feesand the few for breaking most of with (Part IX, column (A), above? (see instructions)phone. line 11e) May the IRS discuss this returnthem the of officer states that have preparer shown mail or by Yes No Here Signature b Total fundraising expenses (Part IX, column (D), line 25) Date penalties Paperwork Reduction Act Notice,has been no For Privacy Act and rarely enforce them, so there see the separate instructions. Cat. No. 11282Y Form 990 (2008) 17 Other expenses (Part IX, column (A), lines 11a–11d, 11f–24f) incentive to comply. lines 13–17 (must and title stepped column Email that requests a gift irrespective of a website is a 18 Total expenses. Add That or print name equal Part IX, in. Type is, until the IRS (A), line 25) 19 Revenue less expenses. Subtract line 18 from line 12 solicitation that triggers registration in all of the above Date Check if Preparer’s identifying number Preparer’s self- This year, the Service’s vastly revised Form 990 comes states plus Massachusetts, Oregon and Washington. (see instructions) Fund Balances signature Beginning of Year employed End of Year Net Assets or Paid 20 Totaleffect, with aX, line 16) into assets (Part few hundred new questions and a Preparer’s 21 Total liabilitiesschedules. name (or 990 is the information score of newOnly Firm’s Form yours Direct mail requesting a donation is a solicitation in Use (Part if self-employed), X, line 26) EIN 22 Net assets or fund balances. Subtract line 21 from line 20 all states and that may have the most significance( for ) return filed annually by nearly all4nonprofits. With address, and ZIP + Phone no. Part II thisSignature Block discussyearsreturn with the preparer shown company’s nonprofit clients. first May thein about 30 this come two questions update IRS your above? (see instructions) Yes No Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge asking explicitly correct, and complete. Declaration of preparerNotice, see the separateon all information of which preparer has any knowledge. and belief, it is true, about your clients’ compliance with For Privacy Act and Paperwork Reduction Act (other than officer) is based instructions. Cat. No. 11282Y Form 990 (2008) laws where they must register. In order to answer those Form 990 questions, chari- Sign Here Signature of officer ties must research the requirements in every state in Date While it is just two questions, there is a great deal of which they solicit donations. In Part VI of the 990 work Type or print into answering them completely. Do that goes name and title charities are asked for a list of states where they must your clients know where their organizations must reg- Preparer’s fileDate 990. It’s a part of the registration requirements the Check if Preparer’s identifying number self- (see instructions) Paid ister or seek exemption? signature in nearly everyemployed Schedule G asks in which states state. Preparer’s Firm’s name (or yours the charity is registered or if the states have notified Use Only The state registration laws—different in every state them of exemption from registration. EIN if self-employed), and the address, District of Columbia—agree on one thing: and ZIP + 4 Phone no. ( ) May the IRS discuss this returnstatesthe preparer shown above? (see All this brings us to an interesting point. Exemptions nonprofits register in with where they solicit. ‘Solici- instructions) Yes No For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11282Y Form 990 (2008) 11
  12. 12. exist in close to all the states; some are quite broad required to register unless they are a government body while others are rather narrow. In many of the states or fundraising for a political cause. But that’s not the that offer exemption, the organization must apply for it most onerous state—or should I say ‘comprehensive?’ and receive a decree that they qualify. In others, the Some jurisdictions, including D.C., Idaho and Indiana, institution decides it is exempt and moves on to the offer no exemptions at all. next state. The federal Form 990 exemptions will shrink over the Where you sit usually determines where you stand in next few years. Currently, every nonprofit with gross these areas. If you are a state or federal regulator, you receipts of at least $1 million or total assets of $2.5 would most likely see narrow exemptions in the best million or more must file the 990. In two years, those interest of the public. Narrow exemptions provide the thresholds will be down to $200,000 and $500,000. broadest protection from charity fraud, but then you If it’s not already there, the Form 990 is coming to a would have to process more registrations. Registration nonprofit near you. Those exempt from the 990 are not is typically processed through a state’s attorney gener- forgotten. There’s a 990EZ, with one registration-lite al or secretary of state. Florida is an exception, where inquiry. registration is processed through the Department of Agriculture and Consumer Services. In D.C., charities The nonprofit 990 filing requirement is an impetus for work with the Department of Consumer & Regulatory ‘getting right’ with state registration laws where your Affairs and the Office of Tax and Revenue. nonprofit clients solicit donations. The 990 is filed four-and-a-half months after the close of the fiscal year and one of your client’s officers signs it under penalty of perjury. Your clients should Your clients should also want to operate on the right also want to operate side of the law. It’s the right way to do business. on the right side of And while enforcement at the state level is near non- existent, do they want to take the chance that they will end up a test case? Do their board members know the law. It’s the right they are asking them to take that chance? If their charity is not registered where they solicit, it is break- way to do business. ing the law. Under the principles of fiduciary duty, the charity’s board members can be held individually liable. Regulators and legislators alike might favor limited Most states don’t have penalties but some do. Further- exemptions because they increase revenue. There are more, in some states the penalty is part of the criminal fees for registration, which, for the largest nonprof- code. In Florida you are looking at a 3rd degree felony its, can run as high as $400 in Florida and $300 in and an up to $5,000 fine. There is the potential for California. Like many others, fees in those states are jail time as well—it’s a felony. And Florida offers very graduated based on gross revenue in a year. A few limited exemptions: soliciting for a named individual thoughtful states base the fee on revenue from within (think child’s cancer treatment fund) or only from the their borders. Surprisingly, New York’s price tag is a organization’s members. That’s it. Likewise, in Ari- low $25 for all comers, plus another $25 for the larg- zona, Pennsylvania and Washington, noncompliance est. Perhaps I shouldn’t publicize that… is criminal. In most states the penalties are civil, so while there will be no perp walk for your clients’ CEOs Not surprisingly, nonprofits are looking for the widest and CFOs, the fines can be hefty. For instance, fines exemptions. Nonprofits come in all stripes and in- run as high as $25,000 in Georgia. clude broad charitable missions like education, health care and religion. In Arizona, though, your clients are To stay on the right side of these laws requires more 12
  13. 13. than initial registration. Notice that I slipped an ad- I suggest a government source for population ranking jective in to introduce the foreboding new phrase ‘ini- for greater reliability. I would look to the U.S. Census tial registration.’ In the majority of states, an organiza- Bureau ( as the source. tion will have to renew registration annually, and file a financial report as well. Renewal isn’t typically as memorable as their first time, but they do have to remember the anniversaries As soon as your and spend some time together. nonprofit clients have a There is a long-term, less palpable consequence of be- ing outside the laws. Your clients risk a gift challenge website with a donation down the road from a family member or heir who has some (probably pecuniary) motive for making trouble page or email a request over a solicitation. An attorney will look for any way to invalidate a gift and by having it ruled illegal—be- for a gift they are in the cause the nonprofit was not registered at the time— will go pretty far in that endeavor. There is no end to thick of it. the mischief that can be made when a disgruntled heir hires an enterprising attorney. If the solicitations are not primarily through a website State charity registration laws are a messy web with then I would presume they are mostly using email or which to tangle. They are not complex, but they are direct mail. Rather than relying on an outside source, time consuming and cost some money. As soon as they should start with their own database. Select those your nonprofit clients have a website with a donation they solicit and query for state of primary residence, page, or email a request for a gift, or mail a solicita- getting output ranked in descending order by state tion, they are in the thick of it. frequency. Start the registrations at the top, with the state where they (or you) send the most solicitations. Here is a plan for how your clients can get started. Charity begins at home, so they should register first With time devoted to taking on a few new states every in their home state. I trust by now you recognize this month, your clients will achieve compliance. And re- does not mean incorporating in the state. This is also member, they might enjoy exemption in some places. not registering a Charitable Gift Annuity program, for Remember too, there are some exemptions for which your clients that have one and if their state requires it. they must apply. Those having been completed, your clients must com- ply with this additional layer of home-state regulation. Whether or not your clients adopt my plan or proceed down another path, they must get started. In order to Then I recommend the charity look at where they (or protect their organization’s good name, their board and you) send the largest number of solicitations. If their their officers, your nonprofit clients need to operate on fundraising is mostly from online giving, I am talking the right side of state charity registration laws. They about web based solicitations. Rank the states in de- cannot ignore them any longer. scending order of population and start at the top, work- ing through the states where the website is considered Tony has been supporting the fundraising needs of a solicitation. California is the most populous state. I nonprofits since 1997. He is the author of Charity described their definition of ‘solicitation’ above. (I am Registration: State-by-State Guidelines for Compliance sorry, but I cannot go into detail state-by-state because and Managing Director of Martignetti Planned Giving if I apply the law to direct a specific action then I am Advisors, LLC. His two websites are www.StateCharity- giving legal advice. In an article, I can only go so far and as to tell you what the law says.) To contact Tony, email him at 13
  14. 14. scenes from the 2009 new york nonprofit Conference 14
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  16. 16. The Way we write * A Profile of and Prescription for Fixing The broken discourse of Fundraising Frank C. Dickerson Ph.D. A new kind of data mining from the scholarship of linguistics and rhetoric has uncov- ered disturbing artifacts in the discourse of fundraising. These discoveries are the product of my doctoral studies at The Peter Drucker School of Management and Claremont Graduate University School of Educational Studies. I Found ThAT The dIsCourse oF FundrAIsIng Is broKen. Like a linguistic MRI, my computer-based corpus analysis revealed surprising linguistic and rhetorical patterns in fundraising texts. These underlying patterns profiled a discourse focused more on transferring information than creating interpersonal involvement. Fund- raising texts sounded cold and detached like doctoral dissertations rather than warm and friendly like personal conversations. Rather than gaining reader attention with emotionally rich human-interest stories, these texts contained less narrative than academic prose. They contained even less narrative than official documents! A seVere judgMenT? ProbAbLy. ACCurATe? unForTunATeLy, yes. These counterintuitive conclusions grew out of research that mined 1.5 million words of on- line and printed fundraising texts from America’s largest charities. Of the 880 organizations represented, 735 reported direct support of $20 million or more on IRS form 990, line 1a or 1b. I analyzed 2,412 web- and print-based documents across nine philanthropic sectors. The largest study of its kind to date, my research offers insights that can help improve com- munication among fundraisers at all levels—from direct mail to major gifts. The method- ology was patterned after research Ulla Connor and Thomas Upton of Indiana University conducted that examined 316 fundraising letters (2003). 16 *is all wrong
  17. 17. My sTudy WAs bAsed high involvement and high informa- While the analogy of a ruler is tion. Conversely, on the high infor- helpful, Biber’s analytic framework on A MuLTIVArIATe mation pole of the same continuum, measures texts on seven dimensions FACTor AnALysIs. long words and nominalizations that of variation, a procedure he calls transform verbs and adjectives into multi-dimensional analysis. So to be Douglas Biber (1988) performed a nouns by adding ion or ity (e.g. eval- adequate my analogy would need to factor analysis that profiled approxi- uate becoming evaluation or intense stretch and include an ensemble of mately 960,000 words contained in becoming intensity) co-occurred in measures like those a doctor makes three corpora (bodies) of texts. The order to serve the communicative aim when he or she draws blood for a bat- first was the LOB (Lancaster-Oslo/ of creating an informational focus in tery of tests, weighs you on a scale, Bergen) corpus that represented a genres like academic prose. measures your blood pressure, etc. wide range of published documents. The second was the London-Lund I MeAsured And My study measured fundraising texts corpus, comprised of spoken English on five of Biber’s seven dimensions that included panel discussions, CoMPAred The of variation. I summarize and bench- private conversations, interviews, LInguIsTIC ConTenT mark scores on two of those dimen- sions in Tables 2 and 4. The analysis telephone conversations, radio oF FundrAIsIng TexTs broadcasts, spontaneous and public included four steps: 1.) first I tagged speeches. The third corpus was a col- To bIber’s 23 genres. and tallied counts of linguistic lection of personal and professional letters. Analysis of these corpora   Table 1. yielded profiles for 23 text types (al- The Twenty-eight Salient Linguistic Features Whose Co-Occurrence Defines Dimension 1 ternatively referred to as genres or Positive Features: DO as pro-verb BE as main verb Sentence relatives Negative Features: Private verbs Analytic negation Causative subordination WH-questions Nouns registers). Biber’s seminal work laid THAT-deletion Demonstrative pronouns Discourse particles Possibility modals Word length the foundation for follow-up studies Contractions General emphatics Indefinite pronouns Non-phrasal coordination Prepositions that measured and compared the Present tense verbs 1st person pronouns General hedges WH-clauses Type/token ratio linguistic content of new text types 2nd person pronouns Pronoun IT Amplifiers Final prepositions Attributive adjectives against the linguistic benchmarks Note. Adapted from Biber, (1988). his groundbreaking factor analysis    Dimension 1 – Interpersonal Involvement versus Informational Content calibrated for spoken and written Sum of Z- Connor & Upton Dickerson IRS 880 English. Scores Biber Corpus 316 Corpus INTERPERSONAL INVOLVEMENT FOCUS Corpus 35 Face-to-face conversations As A ruLer desCrIbes 30 LengTh, LInguIsTIC 25 20 Personal letters sCALes reFLeCT A TexT’s 15 Public conversations Interviews CoMMunICATIVe AIM. 10 5 Romantic Fiction Biber’s factor analysis measured 0 Prepared speeches General Fiction 67 linguistic features in texts, and -5 Professional letters Science Fiction discovered that certain groups of Religion -10 Popular Lore features occurred together to achieve Academic Prose -11.9 -12.8 specific communicative aims. Per- -15 Press Reportage Official Documents sonal pronouns, contractions and -20 INFORMATIONAL CONTENT FOCUS private verbs (e.g. I think, I feel) Table 2. Scores on Dimension One Positioning Texts on the Continuum Contrasting Those Focused on co-occurred to create interpersonal Interpersonal Involvement with Those Focused on Creating Informational Content. involvement in personal letters and Note: Using Analysis of Variance (ANOVA), both the Connor & Upton 316 Direct Mail Corpus and the Dickerson IRS 880 Corpus were compared to the scores of 14 of the 23 genres in the Biber Corpus. Dimensional scores represent the conversation — two genres located summed frequencies of the linguistic features that make up the dimension. Before summing the occurrence of these features, their raw scores were normalized to a per-thousand-word ratio in order to eliminate skewing based on text- on one pole of a continuum between length. Then these scores were converted to units of standard deviation (z-scores, with means of zero). Adapted from Biber (1988, 1995) 17
  18. 18. features in my corpus of texts; 2.) to In fundraising, narrative has long nor and Upton 316 Corpus. avoid text-length skewing, I normal- been championed by practitioners ized these counts to their occurrence like Jerry Huntsinger and Mal In AddITIon To per 1,000 words; 3.) then I translated Warwick. In fact, one of Huntsinger’s averages to units of standard devia- letters scored highest among those ProFILIng TexTs, I tion; finally, 4.) I compared my texts’ studied. This remarkable letter surVeyed Those Who dimensional scores to those of Biber’s featured the narrative account of a 23 common genres. The frequency young girl who was rescued by Cov- WroTe TheM. counts of 28 linguistic features made enant House workers from slavery to it possible to locate and compare sex traffickers. It put a human face My goal was to learn what factors my corpus against Biber’s genres on the appeal. Most of us know a these executives believe make a on a continuum between two poles: good story when we see it. But seeing fundraising text effective. To this interpersonally focused on one end what makes a story good—well . . . end, I asked respondents to score the and interpersonally focused on the that’s another story. Table 3 lists the importance of using an argument- other. Table 1 lists linguistic features ten linguistic features which indicate centric (expository) writing style on a measured and Table 2 shows how the presence of narrative content 1 to 5 scale (with 5 being high). Only fundraising texts in the Dickerson in a text. Then Table 4 shows how 5.04 percent rated exposition high. IRS 880 corpus compare to Biber’s fundraising texts in the Dickerson corpus and the Connor and Upton IRS 880 corpus compare to those in I then asked them to score emotional, 316 Corpus. Biber’s corpus and those in the Con- human-interest narrative writing. Those rating narrative high grew by a ratio of nine-to-one over those rat-   Table 3 The Ten Salient Linguistic Features Whose Co-Occurrence Defines Dimension 2 ing exposition high. But despite the Positive Features: Synthetic negation Negative Features: Past tense verbs Present participial clauses Present tense verbs increase of those favoring narrative to Third-person pronouns Attributive adjectives 45.21 percent, the linguistic evidence Perfect aspect verbs Past participial WHIZ deletions of their writing revealed a wide gap Public verbs Word length Note. Adapted from Biber, (1988). between what they believed about   good writing, and what they actually Sum of Z- Dimension 2 – Narrative Versus Non-Narrative Connor & Upton Dickerson IRS 880 wrote. Belief did not match practice. Scores Biber Corpus 316 Corpus Corpus The root of the disparity is that we all NARRATIVE 7 Romantic Fiction tend to take writing for granted. 6 General Fiction Adventure Fiction We all can write. And we all think 5 we can write well. Yet the evidence 4 of linguistics analysis refutes this 3 assumption. The problem is that few 2 Biographies of us critically consider the rhetorical 1 Spontaneous Speeches Prepared Speeches and linguistic substructure of what Personal Letters we write. We don’t critically consider 0 Popular Lore Face-to-Face Conversation the language. -1 Religion Press Editorials -2 Telephone Conversations Stephen King drove this point home Academic Prose -3 Official Documents -3.1 -3.0 in explaining what motivated him -4 Broadcasts to write On Writing, his book about NON-NARRATIVE composition principles and tech- Table 4. Scores on Dimension Two Positioning Texts on the Continuum Contrasting Those Containing Narrative with Those Containing No Narrative. niques. King’s motivation came Note: Using Analysis of Variance (ANOVA), both the Connor & Upton 316 Direct Mail Corpus and the Dickerson IRS from a conversation with author of 880 Corpus were compared to the scores of 15 of the 23 genres in the Biber Corpus. Dimensional scores represent the summed frequencies of the linguistic features that make up the dimension. Before summing the occurrence of these The Joy Luck Club, Amy Tan. He features, their raw scores were normalized to a per-thousand-word ratio in order to eliminate skewing based on text- had asked her “if there was any one length. Then these scores were converted to units of standard deviation (z-scores, with means of zero). Adapted from Biber (1988, 1995) question she was never asked dur-     18