http://www.kahnlitwin.com/index.php en jlandry@kahnlitwin.com Copyright 2012 2012-05-10T13:29:00+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/permanent-endowment-is-a-long-time http://www.kahnlitwin.com/blogs/mission-matters-blog/permanent-endowment-is-a-long-time#When:13:29:00Z In early March there was an article in the Wall Street Journal about an endowment issue playing out in Ipswich, MA.  It seems that a wealthy merchant named William Paine left 35 acres of land in his will to the “free schools of Ipswich”.  He said the land should never be sold and should be used forever for the benefit of the Ipswich public schools.  This happened in 1660! A board of 7 trustees has governed the property for the past 351 years.  Over the years the purpose of the bequest – benefiting the Ipswich public schools – has evolved wherein the seaside land is now rented to people who have built small summer cottages.  The rental income is turned over to the Ipswich public school system.  Now the board wants to sell the land for approximately $32.5 million (a good price, it would seem) and create an investment-based endowment for the Ipswich public schools.  Although this plan was approved by the Essex Probate Court, some Ipswich residents are disputing the Trust’s ability to enter into such a transaction. They claim that the trustees do not have the right to deviate from the terms of the gift instrument.  They question what value there is in a permanently restricted gift if there is no guarantee that the donor’s wishes will be honored.  Interesting questions that will be addressed by a Massachusetts Court of Appeals sometime this year. This is just a brief glimpse into the frequently confusing world of permanent endowments.  The world of endowment management and endowment gifts, one which has existed for hundreds of years, was once governed by a body of lore with very little law supporting it.  However, over the past 40 years or so more and more laws have been put on the books, culminating in the recently passed Massachusetts Prudent Management of Institutional Funds Act (MPMIFA).  Many portions of the law are quite different from the hundreds of years of lore, and as with most laws, the passage of the Act and widespread compliance with the Act is frequently separated by long periods of time – a potentially dangerous situation for those who may still be acting according to lore.  If your organization has permanently restricted endowment funds, full knowledge of the MPMIFA is critical.  Don’t miss our upcoming webinar Nonprofit Accounting & Reporting for Endowments on Wednesday May 23rd. I will cover; permanently restricted endowment funds, MPMIFA and what the passage of this act means for you. Register now. As one of the largest CPA firms in Boston, KLR is unique because they service over 220 not-for-profit organizations with compliance and consulting services. We have extensive experience helping Nonprofit organizations regarding boards, and board responsibilities, charitable contributions, taxes and 990 filing requirements. 2012-05-10T13:29:00+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/internal-controls-fraud-prevention-in-a-not-for-profit-organization http://www.kahnlitwin.com/blogs/mission-matters-blog/internal-controls-fraud-prevention-in-a-not-for-profit-organization#When:14:28:51Z One of the greatest challenges in managing a successful not-for-profit organization is understanding their similarities and differences from other organizations. This blog, and most not-for-profit articles, devote a great deal of time describing how these organizations are different.  But today, I will key in on one critical way in which the not-for-profit is the same as everything else in this world. Not-for-profit organizations are all run by human beings.  Regardless of their mission, people make them run.  Failure to recognize that individual people are the foundation of all actions in the not-for-profit organization is a potential recipe for disaster.  Yet I frequently see management acting as if those employed or volunteering for a not-for-profit organization possess attributes that are substantially different from the rest of mankind. Internal controls that should be designed to safeguard assets and provide assurance that activities are conducted in accordance with established policies and procedures are frequently overlooked in the not-for-profit organization and considered too costly.  This is a convenient conclusion when mission related activities are never adequately funded.  The reality, however, is that mission related spending can always be increased – seldom will an organization ever have enough financial resources to do all that it could in trying to achieve its mission. However, if the board recognizes that human beings work in the organization and are not perfect – as we all are – then internal controls will no longer appear to be a costly luxury.  Fraud and embezzlement occur in not-for-profit organizations just as they do in every other sector of the economy.  They result from the actions of imperfect human beings.  Internal controls should be viewed as a necessity, critical to the long-term sustainability of the organization. Here’s another example.  The Governor of Massachusetts will likely sign House Bill No. 03516 (co-sponsored by 21 legislators) which will outlaw compensation for not-for-profit boards of directors.  This legislation was introduced at the request of Attorney General Martha Coakley who believes that “compensation of board members creates unavoidable conflicts of interest and diverts resources otherwise focused on achieving the mission of the charity.” The reality is that board members assume a significant responsibility to the public when they agree to serve on a not-for-profit board.  Every citizen is providing resources to these organizations either directly, via personal donations, or indirectly via tax-exemptions or grants funded by tax dollars.  The failure of boards to take their job seriously or to not devote a sufficient effort to the job is a frequent complaint of resource providers.  Yet, Ms. Coakley and the Massachusetts Legislature believe that this job must be performed for free.  I wonder, isn’t it human nature for someone who has a busy life to let slide that which he or she is doing for no compensation?  No employer adds an important additional responsibility onto the job description of an employee without a commensurate adjustment in compensation.  Why do the Attorney General and the not-for-profit world think differently? Occasionally I have not-for-profit organizations ask if we (KLR) perform any work on a pro-bono basis.  The answer is no, and there are two very good reasons for this.  First, it is unfair to our clients who are paying for services rendered.  If I am working somewhere for free, I must be overcharging those who are paying because there is a cost involved in every piece of work performed.  Second, it is unfair to the organization that is not paying for the services.  The reality is that each day my staff and I will naturally work first and foremost for those clients who are paying customers – it is only human nature to do so.  No organization should be provided less, but human nature being what it is, will likely negatively impact the pro-bono work. One of the central structural features of the U.S. Constitution is the separation of powers.  The division of power among the three branches – legislative, executive and judicial – is necessitated because human beings are imperfect.  The imperfection of human nature means that well-structured government is necessary to prevent tyranny.  Separation of powers is the means by which power is divided and its accumulation in the hands of any single entity denied.  If our country is founded on the realization of the weakness of human nature, shouldn’t the not-for-profit organization follow suit? As one of the largest CPA firms in Boston, KLR is unique because they service over 220 not-for-profit organizations with compliance and consulting services. We have extensive experience helping Nonprofit organizations regarding boards, and board responsibilities, charitable contributions, taxes and 990 filing requirements. 2012-04-26T14:28:51+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/can-a-nonprofit-organization-have-too-much-profit http://www.kahnlitwin.com/blogs/mission-matters-blog/can-a-nonprofit-organization-have-too-much-profit#When:19:15:05Z This is a question that I am asked almost on a monthly basis.  I think that part of the reason why this question pops up so frequently is that leaders of nonprofit organizations have not yet grasped the difference between thinking about their organization as a nonprofit vs. thinking about it as a not-for-profit organization.  I go into detail about this topic in my February 21, 2012 blog post titled “Nonprofit vs. Not-for-Profit”.  Not-for-profit organizations are allowed to operate at a surplus – having more revenue than expenses.  This sure beats the alternative – operating at a loss. Operating at a break-even is almost impossible unless you operate like some government agencies and spend money wildly near the end of the year. Being financially successful is the dream of just about every not-for-profit.  An operational surplus allows you to do even more with less stress and equips your organization to undertake new activities to accomplish your mission.  It is also important to realize that all surpluses have to be invested back into the organization – they cannot go into the pockets of staff or board members. Can there be too much profit?  Yes, if your operational surplus is very high, you may be asked why you have not devoted more resources into your mission.  The reason may be that the surplus arose late in the year and there was insufficient time to effectively increase spending in mission related areas.  Remember my golden rule of publicizing operating results – anticipate what a critic might question and prepare your response in advance.  If you don’t think you have a good reason why you were so profitable in your most recent fiscal year, address the issue by talking about how these profits are going to be used in the coming year.  Annual profitable results should be your goal and consistently achieving your goals is the road to success.  Our communities need successful not-for-profit organizations much more than they need organizations operating by the seat of their pants, constantly distracted by worries about where the next dollar is going to come from.  As one of the largest CPA firms in Boston, KLR is unique because they service over 220 not-for-profit organizations with compliance and consulting services. We have extensive experience helping Nonprofit organizations regarding boards, and board responsibilities, charitable contributions, taxes and 990 filing requirements. 2012-04-19T19:15:05+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/merger-strategies-for-not-for-profit-organizations http://www.kahnlitwin.com/blogs/mission-matters-blog/merger-strategies-for-not-for-profit-organizations#When:18:36:22Z There has always been a great deal of pressure on not-for-profit organizations to maximize their operational efficiency and achieve their mission at the lowest possible cost.  The current economy and the recession of the past few years has exacerbated that situation.  Pressure at the federal, state and local government level has also eliminated or reduced grants, with those that remain available harder to come by, and the selection process much more competitive. The response to this situation has many organizations searching for strategies to reduce their costs while continuing to accomplish their mission.  A growing number of organizations are forging agreements with other entities either with a similar mission or serving a similar geographic location in order to share costs and reduce their overall cost structure.  These agreements can take several different forms but generally fall into one of two broad categories: the formal merger and the more informal partnership agreement. In a formal merger, two or more organizations legally combine into one.  The goal is usually to develop program synergies across a broader geography or extend current programs to a larger recipient base.  The hope is that support services – administration, financial, human resources and information technology – will be combined and will be less than the sum of the individual parts.  The danger in this assumption is that the sophistication of the systems in two or three smaller organizations is insufficient in a much larger entity.  A formal human resource function, which may not have even existed in any of the smaller organizations, may be essential to an organization that is two or three times the size and now with multiple physical locations. In an informal affiliation agreement, organizations share resources, ideally resulting in savings for both entities.  Usually these agreements are aimed at back office administrative support savings.  While such affiliations might appear easy to craft, both organizations should perform their due diligence with the aim of crafting a well defined service level agreement so that cost savings are realized without compromising effective support for either organization. Who are the best candidates for a formal merger?  Entities that share a common mission and a similar service market make the best merger candidates.  During the pre-merger process, executive teams and boards need to look closely at the culture of both entities and how the decision-making process and strategies will come together.  Developing an integration plan with an eye toward what the new processes and systems will look like and how the organizations will do business on a combined basis is critical.  Each organization will likely have to change even though one legal entity will survive and one will disappear.  Identify the strengths and weaknesses of each organization and work to capitalize on the strengths and improve the weaknesses. Among the differences between organizations that must be carefully ironed out are compensation and benefits.  The retention of key employees is critical as is the need to eliminate duplicate positions.  All of these issues take time to investigate and develop solutions for.  Management, which already had a full-time job prior to the merger process, could easily be stretched beyond their capacity.  One way of alleviating this is to bring on additional, temporary help in the form of volunteers and consultants.  In addition, if the time table for the process is lengthened, it allows for management to devote the needed time in less concentrated amounts, freeing them up to continue to address their normal responsibilities. KLR is one of the top 10 firms in Boston, and is unique because they service over 220 not-for-profit organizations with compliance and consulting services. KLR’s Not-for-Profit Services Group issues whitepapers on various topics that help our clients with the day-to-day operations of their organizations.  Additionally our weekly e-newsletter provides up to date information for nonprofit organizations.  Sign up for the KLR E-newsletter now. 2012-04-10T18:36:22+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/using-form-990-cost-allocation-to-calculate-your-not-for-profit-success http://www.kahnlitwin.com/blogs/mission-matters-blog/using-form-990-cost-allocation-to-calculate-your-not-for-profit-success#When:21:14:56Z In my blog post “Non-Profit Fundraising Efficiency” I discussed the use of sabermetric principles in baseball and indicated that statistical metrics are also being used more and more in evaluating not-for-profit organizations.  Since this is Spring Training season, I thought we would continue that thought for another blog or two. In baseball, OBP is on-base percentage.  Many believe it measures the most important aspect about a batter’s productivity.  While I grew up thinking one measured a baseball player’s offensive value based on his batting average, number of home runs, and runs batted in, that is all very “yesterday”.  OBP is the new metric.  The concept of OBP can easily be applied to the non-profit world. So, what is the not-for-profit OBP?  It is the percentage of money that is spent on program activities as compared to the percentage spent on administrative and fundraising costs.  Organizations are required to provide financial information in both their financial statements and their publicly available Form 990 on a functional basis.  (A functional basis means that there is a total for program expenditures as well as one for administrative expenditures and one for fundraising expenditures).  Together these three functions comprise the entire amount of expenditures for a year.  What are the good numbers?  The best not-for-profit organizations (the most valuable players) report administrative expenses that are below 15% of total expenses.  They also report fundraising expenses that are 10% or below as a percentage of total expenses.  Said another way, the best not-for-profit organizations report program expenses that are 75% or more of total expenses.  This tells a donor or other resource provider that for every dollar provided to these organizations, 75 cents or more is directed into the program effort. How does one determine a program expense vs. an administrative expense or fundraising expense?  This is accomplished via the organization’s cost allocation system.  Of the accounting policies and procedures that you must have in place at your organization, the cost allocation system is one of the most important.  It is also the most difficult system to design and implement. It is said that accounting is part science and part art.  Cost allocation is definitely more art than science. When you are creating your cost allocation plan, you want to be assisted by knowledgeable, creative people to help you with the art.  If you are concerned that your cost allocation plan is not painting the correct picture of your organization, please contact our not-for-profit services group.  We understand and will share the art of cost allocation plans. KLR is one of the top 10 firms in Boston, and is unique because they service over 220 not-for-profit organizations with compliance and consulting services. KLR’s Non-for-Profit Services Group issues whitepapers on various topics that help our clients with the day-to-day operations of their organizations.  Additionally our weekly e-newsletter provides up to date information for nonprofit organizations.  Sign up for the KLR E-newsletter now. 2012-03-15T21:14:56+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/non-profit-fundraising-efficiency http://www.kahnlitwin.com/blogs/mission-matters-blog/non-profit-fundraising-efficiency#When:18:44:13Z If you saw the movie Money Ball, you realize that successful baseball teams no longer select players based on how they look (“he has the look of a star”).  Today they analyze thousands of statistics and know more about a player than the player himself.  In the book, Money Ball, Bill James, the father of Sabermetrics, is quoted as saying “I am not shocked that we are doing this much analysis in the game of baseball.  I am shocked that they do not do this kind of analysis in all other businesses.” The analysis of the performance of not-for-profit organizations is going down that statistical road.  No longer are people content to view a charity and say “they look like a good organization.  They appear to be doing a great deal of good in the community.”  More and more we see charity watchdog groups performing a statistical analysis of a not-for-profit’s financial statements and tax return and reporting the results to the world.  Charity Navigator, the largest independent charity evaluator, is one such organization.  One of the metrics they report upon is a charity’s financial health score.  One of the six components that comprise the financial health score is the charity’s fundraising.  Charity Navigator is not the only organization interested in fundraising efficiency.  Each year, Forbes Magazine publishes an issue devoted to charity in America and it reports on the fundraising efficiency of America’s largest charities.  The magazine clearly advises its readers not to donate to organizations with a fundraising efficiency below 70%. Fundraising efficiency is the amount a charity spends to raise $1. The less an organization spends, the better it is.  The charity’s fundraising efficiency will be higher as you spend less on fundraising.  Fundraising efficiency is computed by comparing fundraising expenses to contribution income. How does Charity Navigator and Forbes determine this?  It’s easy. Fundraising expenses and contribution income are clearly identified on every organization’s Form 990. Every charity’s Form 990 is available on the internet at www.Guidestar.org. Unfortunately, the Form 990 is sometimes vague as to what figures belong on what lines.  If the preparer is not aware of the importance of fundraising efficiency, a caviler approach to reporting revenues may lead to a lower fundraising efficiency than is in the organization’s best interest. This problem is frequently more acute on the organization’s annual general purpose external financial statements. Here, organizations usually like to describe their sources of revenue and will sometimes identify contribution income by other names, such as “foundation support” or “special events”.  When the reader of these statements computes the fundraising efficiency, they compare fundraising expenses with contributions.  So if your contributions have been reported on three or four different revenue lines, it is likely that your fundraising efficiency is going to be computed abnormally low.  This is not a good thing. Our solution to this is to either properly identify all contribution revenue as simply “contributions” or, even better, include a fundraising efficiency footnote within your financial statements.  In the note, you can perform the fundraising efficiency calculation for your financial statement readers and they can see how you have calculated it, what it includes and agree with you that your organization is meeting this metric with flying colors.  It is always better to give people what they are looking for rather than depending on them to find it for themselves. As you can see, resource providers are seeking and receiving more and more statistical information about not-for-profit organizations.  They are no longer making their funding decisions based on a “good feeling” for the organization.  Fundraising efficiency is just one of the new metrics to measure not-for-profit effectiveness.  I will discuss others in later blogs. KLR is one of the top 10 firms in Boston, and is unique because they service over 220 not-for-profit organizations with compliance and consulting services. KLR’s Non-for-Profit Services Group issues whitepapers on various topics that help our clients with the day-to-day operations of their organizations.  Additionally our weekly e-newsletter provides up to date information for nonprofit organizations.  Sign up for the KLR E-newsletter now. 2012-03-09T18:44:13+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/obamas-health-care-act-expands-1099-reporting-requirements http://www.kahnlitwin.com/blogs/mission-matters-blog/obamas-health-care-act-expands-1099-reporting-requirements#When:21:27:03Z As you may know, the President’s Health Care Act contained a provision significantly expanding the level of 1099 reporting.  This provision was to begin on January 1, 2012 but was met with almost universal objection because it was so far reaching and compliance would have been difficult if not impossible for many organizations.  Although this portion of the Health Care Act was recently repealed, 1099 reporting changes were not eliminated and are still very important. The IRS believes that there is approximately a $300 billion gap in the amount of taxes paid and the amount owed if all income was properly reported in accordance with the law.  The IRS further believes that proper reporting of miscellaneous income via Form 1099 will put a significant dent in this tax gap. As a result, the IRS conducted and recently concluded a 4-year intensive examination of 1099 reporting. Because of these IRS efforts, the total number of cases reviewed by the IRS climbed 10% during the examination period. Moreover, during the same period, the IRS increased its discovery of under-reporters by 210%.  That is a lot people “forgetting” to report taxable income.  During that same time period, IRS imposed monetary assessments increased a staggering 380%.  We should all be concerned about unreported taxable income since it costs each of us additional taxes and leads to tax-increase proposals designed to close the budget deficit.  Needless to say, as a result of this level of success, the renewed emphasis on regulation that began in 2008 is likely to increase the IRS enforcement efforts. In addition to wanting all people to pay their fair share of the tax burden, compliance with 1099 reporting regulations is in your own best monetary interest. Failure to file the Form 1099 or filing one with errors subjects your organization to a $50 penalty for every Form 1099 with errors or every Form that should have been filed and was not.  This penalty can easily double if the IRS finds your failure was the result of willful disregard of tax reporting requirements. As a not-for-profit organization you know that you typically employ a number of subcontractors due to the project nature of some of your work.  This makes your organization a prime target for an IRS 1099 compliance audit.  It is therefore in your best interest to learn the 1099 reporting rules and how to protect yourself from a finding of “willful disregard of the tax reporting requirements”.  The IRS views a lack of compliance policies and procedures, lack of staff training, lack of internal controls and even inaction as evidence of a willful disregard of reporting requirements. As one of the largest CPA firms in Boston, KLR is unique because they service over 220 not-for-profit organizations with compliance and consulting services. We have extensive experience helping Nonprofit organizations regarding boards, and board responsibilities, charitable contributions, taxes and 990 filing requirements. 2012-02-28T21:27:03+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/nonprofit-vs.-not-for-profit http://www.kahnlitwin.com/blogs/mission-matters-blog/nonprofit-vs.-not-for-profit#When:13:56:18Z Almost everyone in the not-for-profit industry uses the term nonprofit.  What is the difference?  The preferred term, not-for-profit, emphasizes that the organization has been formed for a purpose that is other than making a profit for its owners or shareholders.  As a matter of fact, not-for-profit organizations do not have owners or shareholders – they exist to serve the communities in which they operate.  The way they serve these communities is known as their charitable mission and that is the reason they were formed, not for profit purposes. The term nonprofit has the connotation that these organizations should operate without having a surplus of revenue over expenses at the end of the year.  They should finish with no-profit.  Unfortunately, many believe this is true and this is harmful to the not-for-profit world and the communities they serve. Being financially successful is essential to just about every nonprofit just as it is to any business.  Building an operational surplus allows you to do even more for the community you serve with less stress and enables your organization to undertake new activities to accomplish your mission. Many believe that a not-for-profit organization would be considered financially strong if it held unrestricted, liquid reserves equal to approximately 35% to 40% of a normal year’s operational expenses.  Thus, an organization with a $1 million budget should strive to accumulate reserves of approximately $350,000 to $400,000. The Better Business Bureau Wise Giving Alliance, a charity watchdog group, in their standards for charitable accountability indicate that organizations should avoid accumulating funds that are more than three times the size of the past year’s expenses.  This would mean that the organization with the $1 million budget should not accumulate more than $3 million in reserves.  As you can see, there is a wide range between what many consider to be a financially comfortable level of accumulated “profits” and what the watchdog group considers excessive. Each time I speak to boards, I encourage them to realize that they are a business with a purpose that is not-for-profit but that they have a normal business obligation to operate at a surplus rather than a break-even or deficit and that accumulating a reserve from operating at a surplus consistently over a period of time is an essential and worthy goal.  I encourage all of you to incorporate this concept into your organizational planning. As one of the largest CPA firms in Boston, KLR is unique because they service over 220 not-for-profit organizations with compliance and consulting services. We have extensive experience helping Nonprofit organizations regarding boards, and board responsibilities, charitable contributions, taxes and 990 filing requirements. 2012-02-21T13:56:18+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/valentines-day-and-board-governance http://www.kahnlitwin.com/blogs/mission-matters-blog/valentines-day-and-board-governance#When:19:00:43Z A week ago I Blogged (is this a real verb?) about the Super Bowl and its relationship to the not-for-profit organization.  So, of course you were expecting me to find a connection between St. Valentine and not-for-profits.  I will not disappoint my loyal reader.  Actually, I can’t take all of the credit for this.  It was my friends at Board Source who turned me onto the connection between Cupid and Board Governance. Boards that work well, who govern their organizations properly are doing so because of the good relationships among board members and the good relationship between the board and the organization’s senior management.  So that’s it!  The secret to a good not-for-profit life is all in the relationships.  Good governance is a partnership between the Board and the senior management that has to implement the board’s strategic plan designed to achieve the organization’s mission and purpose.  I’ve been involved in a few partnerships.  Some were good and some were difficult.  The good ones required a great deal of work to make them good and keep both parties happy.  The difficult ones were tough and, although a sufficient amount of hard work may have made them work, the hard work had to be done by every party, not just some of the partners.  So, I conclude that one of the foundations of a well-functioning board (and a good relationship) is that everyone is working toward the same objective and committed to expending the effort to make the relationship work.  This will likely lead to good boardroom chemistry and we all can agree that chemistry is a key to good relationships. Two of the challenges that I hear boards complain about most frequently are dealing with the troublesome board member and managing the difficult executive director, especially when that person is part of the organization’s founding group.  Where to look for a part of the solution to these issues?  Yes, start with creating a good relationship - one that exists beyond the business of the organization.  Getting the board together socially (without significant others) is a task with a purpose and result that is well worth the time and cost involved.  Doing the same thing with the executive director pays similar dividends.  And don’t forget to build your relationship with your CPA as well! I hope you all receive a number of Valentine cards this year – just like you did in elementary school.  When you do, think of all of the relationships in your life and commit to doing something at your next meeting to improve each of those relationships. 2012-02-13T19:00:43+00:00 http://www.kahnlitwin.com/blogs/mission-matters-blog/charitable-giving-increase-in-2011 http://www.kahnlitwin.com/blogs/mission-matters-blog/charitable-giving-increase-in-2011#When:17:20:43Z According to a recent article in the Wall Street Journal many charities finished 2011 with increased donations over 2010 and 2009, down years in the giving world.  What does this mean? Does it mean that the recession is over?  Is charitable giving a leading indicator of the state of the economy?  I don’t think so, since charitable giving did not decline until after the recession was well recognized and the lead topic of the nightly news.  Charitable donations only declined when people lost their jobs and the rest of us were concerned about suffering a similar fate. One thing that this information does confirm is that Americans are the most charitable people in the world.  In a massive global survey conducted by Charities Aid Foundation of America in 2011 the United States ranks highest in terms of charity.  In 2010 the U.S. ranked 5th.  The survey results are based on over 150,000 Gallup polling interviews with members of the public in 153 countries.  There were some other interesting items in the WSJ article.  It was noted that the Salvation Army’s “Red Kettle” campaign raised $147.6 million up 4% from 2010 and 6% from 2009.  One of the big changes in the “Red Kettle” campaign is that the Salvation Army began accepting credit card donations in select markets to allow donors who don’t carry cash to give via credit card. They were able to do this via smart phones and a company called Square – because a little square card reader attaches to your smart phone and allows you to accept credit cards.  If you are not yet accepting contributions via credit card you need to do so soon.  I just hope my golfing opponents do not hear about this technology! Another interesting item in the article was the fact that St. Jude Children’s Research Hospital raised more than $64 million in its “Thanks and Giving” campaign.  This is where they obtain donations from stores whose cashiers ask retail shoppers if they’d like to donate.  Have you thought about asking the merchants in your service area if they would conduct a campaign such as this on your behalf? Contact me, I can help you set up a similar program. The last point I wish to make about this article is that it really highlights the amount of giving that occurs at the end of the year.  Some people think this is the result of tax planning on the part of donors.  Based on my many years in the tax business, I don’t think it is tax planning as much as it is a time of the year when people are feeling especially charitable.  If you want to participate in this charitable time, begin to plan now and realize that the competition is very difficult.  Design a campaign that will let you stand out from the crowd. 2012-02-08T17:20:43+00:00