It’s either grimly humorous or laughably tragic. Take your pick.

Mr. Roman Blum, Holocaust survivor, a widower, childless, successful real estate developer, worth $40 million, dies at the age of 97.

Without a will.

If you’re reading this blog, chances are we don’t have to tell you any more. But for the details, you can read an online article from the New York Times here.

Laughing or crying – it hurts. Don’t let this happen to you – or to any of your prospects.

I asked about using social media to promote their foundation.

He said when he tweets a cheer for their sports team before a big game, he gets a good number of re-tweets.

More importantly, though, he said when he tweets a link to a donor story, he gets n-o-t-h-i-n-g.

You do the math.

What a great group of people!

Carrie Kinnear passed out this poem at the end titled…

One

One tree can start a forest.
One smile can begin a friendship.
One hand can lift a soul.
One word can frame the goal.
One candle can wipe out darkness.
One laughter can conquer gloom.
One hope can raise our spirits.
One touch can show you care.
One life can make the difference.
Be that one today.

We ran a similar article two years ago… and our opinion has not changed.

Few non-profits succeed with Facebook or social media. Why? Because they neglect the time and effort needed to do it right.

Successful social networking requires:

• Circular promotions from all venues
• Constant day-to-day monitoring
• Publications to your Twitter, Facebook, and LinkedIn sites
• Embracing the online social networking culture
• Cultivating participation
• Creating engagement activities

This is work!

Even the miraculous Internet will not give you something for nothing (that’s why Viagra spammers are dying). And this is why you must approach Facebook marketing with a results-based mindset. If you can’t or won’t measure ROI, it’s not going to work.

Now, we are not opposed to social media — so hold all hate mail. But don’t Facebook due to peer pressure. Because a little bit of this and a little bit of that and hopping from this year’s hype and hoopla to the next will distract you from venues that are already getting you results.

All the followers in the world will jump on the social networking bandwagon with little or no evaluation and waste all kinds of dollars and time. The leaders will evaluate it and execute it if they feel it serves their interests. Or, they will move on to what gets results. The real question is, are you a leader or a follower?

Another thing to take into account is: Is your non profit a good fit for social media? One of our clients has over 600,000 followers. It’s a women’s breast cancer organization. Breast cancer affects the woman, husband, children and friends. Such an organization is a perfect fit as there are emotions involved. Everyone is affected and everyone cares. Should I also add that this organization has someone dedicated to social media 48 hours a week? That is, he does nothing but focus on and breathe social media.

Social media is like any other marketing vector. It’s serious work and requires real effort and real top dollar if you decide to outsource. So ignore peer pressure and do it if you have commitment and resources to do it right.

Over the last several years, there has been an explosion in the popularity of donor-advised funds, with over $37.43 billion held in such funds at the end of 2011.

While the figures are not yet available for 2012, the large, national Donor-Advised Funds such as Vanguard Charitable, National Philanthropic Trust, Fidelity Charitable Gift Fund and Schwab Charitable reported dramatic increases in donations at year-end due to fears about potential future limitations on the deductibility of charitable gifts.

Donor-Advised Funds are a charitable giving vehicle that allow donors to make a charitable gift to the sponsoring public charity now, and later advise that charity to make distributions to other charities in the future. They are often seen as a replacement for, or cheaper alternative to, family foundations.

In the typical case, the donor sets up a Donor-Advised Fund with the sponsoring charity, making gifts as the donor sees fit. Over time, the donor then requests (”advises”) that the sponsoring charity make distributions to other charities of the donor’s choice. When the donor passes away,

• A replacement advisor can be named,
• The fund can terminate with the remaining assets going to the sponsoring charity in a variety of forms,
• Or the donor can request that one or more charities receive the final proceeds from the fund.

With the increase in overall assets in these funds, assets that donors have already allocated to charity, this is an additional pool of resources your donors can use to make a planned gift to your organization. By naming your nonprofit as the final beneficiary of the Donor-Advised Fund, you could receive substantial benefits.

It should.

With Charitable Planning, you can be a facilitator for good and generate revenue at the same time.

You can:

• Help clients make a difference in the world,
• Develop new client relationships,
• Market your services
• And build your practice.

Don’t believe it? Want proof? Want to learn more?

Read “Philanthropy and the Financial Advisor,” a must-read white paper by George P. Brown, PhD., and Kevin C. Brown, of Summit Trust Company.

Directed specifically to financial advisors, this lively informational piece includes:

• The three reasons why advisors do charitable planning
• The four reasons they don’t
• Secret ingredients for successful charitable planning
• How to market the most popular planned gift
• Quick-hit self-tests
• Info-packed gift illustrations
• And more…

Don’t miss this opportunity to learn more about an exciting and profitable field of practice that you may have been ignoring!

Read the white paper here.

Some of you who never read Forbes Magazine might think it’s just a stuffy business periodical, but how stuffy can a magazine really be when it runs an article celebrating “investment-grade” Scotch whiskey, as Forbes recently did?

Sounds whimsical, but it’s for real. And with dollar values per fifth reaching five and six figures, what nonprofit wouldn’t appreciate a gift of such a very special bottle of booze?

When canny marketers seek to pull the cork on high-end snob appeal, the sky’s the limit – but not for me. My personal Scotch budget is $45 a bottle. But the players in this new savory game usually tack on a few more zeroes to so miniscule an amount.

Padlock Your Wetbar

How’s this for value-added? The $2,750 entry-level price you pay to purchase a bottle from the Annie Liebovitz Scotch Collection, for example (yes, it’s that Annie Liebovitz), also includes a limited edition Liebovitz print to hang on the wall – right next to your flashing neon Miller sign.

Other stratospheric examples:

• Macallan 1926 Fine and Rare: $75,000
• Dalmore ‘64 Trinitas: $160,100
• Glenfiddich 1937: $71,700

2012 traffic in such tasty trifles was up 550% over 2008, and Whiskey Highland founder Andy Simpson says an index fund of the top 250 bottles shows they delivered 206% appreciation from Q3 2008 to Q3 2012.

Interested? To get closer to this action you might choose to join New York’s “1494” whiskey club (collector’s membership: $25,000). Forbes seems bullish on investment-grade Scotch: “And if the rare-whiskey market should collapse? Just drink your losses. Try that with social media stock.”

A Toast to Fundraising Relevance

Gifts of personal property – appreciated “stuff” – are a great way donors can make a difference for your nonprofit. And who wouldn’t appreciate a bottle of that Glenfiddich ’37? But let’s also imagine other, perhaps less exotic possibilities:

• How about a 1955 Corvette?
• A piece of original artwork?
• The world’s second-largest collection of porcelain frogs?
• A vintage sailboat?

I asked Brian Sagrestano to give us his rundown on the benefits and requirements of such gifts:

“Any asset can be donated. The question is whether it can be deducted. But I work on gifts of highly appreciated collectibles all the time. Say the donor has an asset, like a bottle of wine, which is highly appreciated. The donor has it appraised and then donates it. The deduction is based on a qualified appraisal unless the charity cannot use the asset for a purpose related to its charitable mission (this is called the “related use rule”). But in positive-speak, if the charity can use it for a purpose related to its mission, deduction is based on the appraisal. If the charity cannot, deduction is limited to the donor’s cost basis (what donor paid for it).”

Whether it’s a whiskey, a classic car, artwork, whatever – this kind of giving represents a significant opportunity for donors, nonprofits and for you.

We hoped to reach out to the fundraising community with helpful news and analysis about the recent tax law changes, and informed opinion about what might be coming in 2013. Webinar attendees said we were exceptional, and many stayed overtime with their questions.

Though that’s not really a surprise, of course…

…not only because I was involved as Master of Ceremonies, but also because the program featured Brian Sagrestano sharing his insights into what has happened, what might happen, and what it all means to philanthropy.

By the way, we talked about some helpful materials in the Webinar, and we’ll provide links to them here:

•    Brian’s book with co-author Robert Wahlers, The Philanthropic Planning Companion (Wiley 2012)
•    Independent Sector’s article on the Pease Amendment
•    IRS Form 8606

And if you want a better idea of why these materials are important, and what they mean, you can access the audio/video of the webinar here.

We’re sure attendees will find the complimentary materials we provided – including our $200-value Charitable IRA Rollover Toolkit Edition 2013 and more – helpful to them in closing more and bigger planned gifts in the challenging year ahead. We plan to include similar resources in all our upcoming programs.

We’re all excited by the response we’ve received to this and we’re looking forward to holding more and better webinars in the future.

Stay tuned!

Due to the recent  uncertainty about whether the government would limit income tax charitable deduction as part of its effort to raise tax revenues, many high-net worth donors have made very significant additions to their donor-advised funds.

These donor-advised funds, particularly the ones at Fidelity, Schwab and Vanguard are now some of the largest charities in the world by capitalization.

The net result is that many of your best donors now have significant assets held in donor-advised funds.

When they pass on, they can either name a successor to make grants to charities from their donor-advised fund, or they can name one or more charities to receive the balance left in the account.

With such large sums in donor-advised funds, you are missing the boat if you are not asking your donors with donor-advised funds to name your charity as at least one of the final beneficiaries of the fund. It is money that they have already allocated to charity, so the sell is completely about your mission and the long-term good they can do for your charity.

By Brian M. Sagrestano, JD, CFRE

On January 1, 2013, the Congress passed the bi-partisan, 157-page American Taxpayer Relief Act of 2012.

This new law makes permanent several expiring tax provisions passed in 2001 and 2003 and includes a wide variety of other provisions, including “tax-extenders” (tax code rules that are usually re-authorized on a regular basis but not made permanent).

The Act does not renew a temporary payroll tax “holiday” for earners. This means that most working Americans will see a 2% decrease in take-home pay starting with their first paycheck in 2013.

You should be aware The Affordable Care Act of 2010 also imposes new taxes to help offset healthcare cost increases. Its significant provisions are also noted below.

Key tax code changes include:

Income Taxes:

1. Rates: The Act increases the maximum income tax rate from 35% to 39.6% for individuals earning more than $400,000 and couples earning more than $450,000 ($400,000/$450,000). The new rates do not have an expiration date.
2. Itemized Deductions: The Act reinstates the phase-out of itemized deductions and personal exemptions, but at a higher income level than in the past: $250,000/$300,000 (no expiration date).
3. Alternative Minimum Tax (AMT): The Act includes a permanent fix, including a new, higher income threshold (indexed for inflation) at which the AMT applies.
4. Credits: The Act extends the expanded child tax credit and earned income tax credits for five additional years.
5. Affordable Care Act: For those earning more than $200,000/$250,000, it includes a supplemental Medicare tax levy of 0.9%.

Long-Term Capital Gains and Qualified Dividends:

1. Rates: The Act maintains the preferential 15% rate for taxpayers earning less than $400,000/$450,000. Those earning more than the threshold will pay a 20% rate.
2. Affordable Care Act: Those earning more than $200,000/$250,000 also pay a 3.8% net investment income tax.

Gift and Estate Taxes:

1. Exemption Amount: The Act maintains the exemption amount at $5,000,000, indexed for inflation (this equaled $5.12 million for 2012; the numbers are not in yet for 2013).
2. Rates: The Act increases top gift and estate tax rates from 35% to 40%.

IRA Charitable Rollover:

(The IRA Charitable Rollover allows individuals over age 70½ to directly transfer up to $100,000 per year from an IRA account to one or more charities. This transfer counts toward the minimum required distribution rule for IRA accounts.)

1. Extension: The Act extends the IRA Charitable Rollover for 2012 and 2013.

Other Provisions:

The American Taxpayer Relief Act of 2012 also extends several additional provisions of interest to charities and charitably-minded individuals, including:

1. The deduction of expenses for elementary and secondary school teachers (Sec. 201)
2. The special rule for contributions of capital gain real property for conservation purposes (Sec. 206)
3. The above-the-line deduction for qualified tuition and related expenses (Sec. 207)
4. The enhanced charitable deduction for contributions of food inventory (Sec. 314)
5. The basis adjustment to stock of S corporations making charitable contributions of property (Sec. 325), and
6. The extension of significant Medicare and other health provisions (Title VI)

Impact on Charitable Giving:

Because these tax law changes do not make significant changes to current tax laws, they likely will not impact charitable giving behavior in a meaningful way for now.

When surveyed, the majority of charitably-minded individuals indicate that they give because of the mission of the charity, not because of tax law incentives. However, these individuals also share that they want their charitable gifts to be as tax-efficient as possible and do seek out ways to lower their tax bill using charitable gifts.

So there are concerns that additional changes to the tax code could impact charitable giving in the future – not necessarily on the decision of whether or not to give, but on the choice of gift type and gift amount. Some groups, on the other hand, may find new incentives to give in such changes (please see “What’s Next?” below for further discussion).

The salient implications of the Act are as follows:

1. High Income Earners: Those exceeding the $200,000/$250,000 and/or the $400,000/$450,000 income threshold levels will see their taxes increase in 2013. The deduction available for charitable gifts may help to offset some of these additional taxes. However, this same group likely will be subject to the new income phase-outs on itemized deductions, so the value of their charitable deduction could be slightly reduced. Each individual will need to check with his/her tax preparer.
2. Those Formerly Subject to the AMT: The AMT stripped away the benefits of many income tax deductions and exemptions. For those no longer subject to the AMT, charitable gifts may prove to be an effective way to lower their tax bill.
3. Investors: Gifts of highly appreciated assets continue to make sense for everyone, as the donor benefits from both an income tax deduction and avoidance of capital gains tax. For people above the $200,000/$250,000 and $400,000/$450,000 thresholds, these gifts are even more effective at lowering the tax bite.
4. Those with Overfunded IRAs: The extension of the IRA Charitable Rollover will allow individuals who are required to take distributions from their IRA accounts to once again directly transfer some of those assets to charity. In so doing, they avoid the IRA distribution being added to their adjusted gross income for the year, which can trigger many of the new taxes for higher income earners.

What’s Next?

While the American Taxpayer Relief Act did not dramatically impact charitable giving, both political parties in Washington have suggested there is substantially more to do in order to decrease spending and increase tax revenues to help eliminate the budget deficit and eventually pay down the National Debt.

These additional discussions will likely occur as the Congress bumps up against deadlines for the debt ceiling (late February/early March), continuing budget resolution (March) and sequester (automatic spending cuts – March).

Many of these discussions have included provisions which could negatively impact charitable giving:

• One proposal suggests capping all income tax deductions for earners above a certain threshold, which would substantially reduce the value of the income tax charitable deduction. These are the very people who give the majority of the dollars to charity each year.
• Another proposal suggests capping the value of the income tax charitable deduction at 28%, meaning that those in the new 39.6% bracket would pay income tax of 11.6 cents of every dollar donated.

When surveyed, many of these individuals have indicated that they will decrease the dollar amount of their charitable giving to offset any tax increases. Again, since these individuals give the majority of dollars to charity each year, such proposals could have substantial consequences for charitable giving if enacted.

Of course, it is impossible to predict the future of tax policy. It is also not wise to let the so called “tail” of tax policy “wag” the charitable giving “dog.” Individuals give because they believe in the mission of the charity. The tax incentives are simply a mechanism that enables donors to use pre-tax dollars to help support those in need for the betterment of all.

With that in mind, in the coming year charities should:

• Focus on mission when talking to donors, and
• Encourage Congress and the President to protect the income tax charitable deduction to incentivize new charitable giving.

Brian M. Sagrestano, JD, CFRE, is co-author of the Philanthropic Planning Companion: The Fundraiser’s and Professional Advisors’ Guide to Charitable Gift Planning (Wiley 2012) as well as president and CEO of Gift Planning Development, LLC, a full-service gift planning consulting firm which provides planned giving consulting services to PlannedGiving.Com.

[Webinar on this topic - click here]