Experts-on-everything McKinsey & Co. issued its official recommendations to the US Postal Service at a conference in Washington this week. While they are only recommendations and are non-binding (a USPS spokesperson said the consultant was instructed to “investigate all possible options”), Bloomberg News stresses in its report that not only would it be good to eliminate Saturday mail, but also 2 other days as well. (Read on …)
Thanks, DMA Nonprofit Federation, for passing along this article from Politco’s Ben Smith about how President Obama’s proposed budget affects non-profits. A proposal in Obama’s 2009 budget that would reduce the value of deductions such as mortgage interest and charitable contributions for people in the highest tax brackets was widely assumed by many from all over the political spectrum to result in lower contributions to non-profits from the affected populations. And as a result, the proposal was killed in the House.
But now, it’s back. (Read on …)
On Monday, the Wall Street Journal featured an opinion piece by Pablo Eisenberg that took foundations to task for how they support and work with non-profits. In it, he decried many things in a list of recommendations, but notably the decrease in funding foundations are providing organizations in these troubled economic times.
What stuck out to me was how that is such a good reason for non-profits to have diverse sources of funding. Too many groups – especially small ones – are either so reliant on a handful of major gifts (including from foundations) or have a full-time staffer dedicated to filling out mountains of foundation grant requests – usually without much success – yet haven’t even thought of an individual giving program. (Read on …)
In a significant departure from their strategy of the last several years, the USPS made this announcement last week:
Simply stated, there will not be a price increase for market dominant products including First-Class Mail, Standard Mail, periodicals, single-piece Parcel Post. There will be no exigent price increase for these products.
In doing so, they recognized that “increasing prices might have generated revenue for the Postal Service in the short term, the long term effect could drive additional mail out of the system.” The entire announcement is after the break.
Just a quick link to yesterday’s “Wizard of ID” comic strip. One thing I like to mention in my lecture on online fundraising at NYU’s Graduate School of Philanthropy is how the internet has inspired greater vigilance by donors and required greater accountability on the part of not-for-profits. Even if that increased reporting doesn’t take place online.
The New York Post very dismissively reported on the “New York Elite’s Kooky Causes” this weekend — from Donna Karan’s efforts to “integrate holistic and conventional medicine and enhance children’s spiritual growth” to Mayor Bloomberg’s daughter’s collection of “lightly used” equestrian clothes to give to the underprivileged – the Post and its readers were predictably outraged at what they consider the wealthy’s “narcissistic and self indulgent hobbies masquerading as charity.”
Playing the devil’s advocate though, isn’t any grassroots organization thatn identifies a problem — no matter how small — and fills a need, a good one? Granted, these groups aren’t out to save starving babies or cure diseases (although, social climber Fabian Basabe’s Imaginary Heroes Foundation is out to “promote universal cooperation and advance human achievement”) but they are trying to help someone or something. Specialization is what makes modern society possible. You and I might not be into it, but if someone is, why not?
Or am I just being naive?
In today’s Washington Post, in a column that was also printed elsewhere, Harvard economics professor Martin Feldstein theorized that “President Obama’s proposal to limit the tax deductibility of charitable contributions would effectively transfer more than $7 billion a year from the nation’s charitable institutions to the federal government.” He repeated the concern among some that decreasing the deductible amount of philanthropic contributions by higher income tax payers would cause them to decrease their giving.
It’s a complicated argument, but he explains it this way: (Read on …)
The Wall Street Journal’s lead story today is on President Obama’s proposed budget and how the new tax applications might affect upper income families. Specifically, it questions whether there will be an affect on charitable giving.
The tax increases would raise an estimated $318 billion over 10 years by reducing the value of such longstanding deductions as mortgage interest and charitable contributions for people in the highest tax brackets. Households paying income taxes at the 33% and 35% rates can currently claim deductions at those rates. Under the Obama proposal, they could deduct only 28% of the value of those payments.
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One concern certain to get attention in Congress: whether a change to the deductions formula would discourage charitable giving among the wealthy, or further depress the housing market given that the interest deduction would fall for some.
So, the question is out there: Is the tax deduction that important for major donors? Or are they generous simply because they want to do good? Certainly a $35 or $50 donor who makes under $250,000 wouldn’t be hurt, but will this turn into a funding problem for non-profits as major donors pull back even more?
I think it might be a problem as nearly all donors are only part-philanthropist, while the other part has at least some self-interest. The ratio of one to the other under this new system is unknown. Only time will tell.
In what may pre-sage greater oversight in many locales, Kansas’ Senate Majority Leader has proposed new regulation of telemarketers who fundraise on behalf of non-profits. Because of a call he got over the holidays, Derek Schmidt wants phone agents to provide info about “how much of their contributions will actually go to the charity” when asked. This is obviously aimed at “pay out of proceeds” or percentage-based fundraisers who often require a minimum amount raised before the non-profit sees any money. Time will tell whether Schmidt’s proposed legislation will differentiate between those tyes of callers and those that operate simply for a fee (in my opinion a more honest business model). He plans to introduce a bill on January 12th when the state government reconvenes, but his proposal has already inspired calls for more telemarketing regulation overall, including extending Kansas’ Do Not Call list to include non-profits and political callers.