DID YOU KNOW? The Universal Declaration of Human Rights, adopted by the UN on December 10, 1948, begins by powerfully asserting, “All human beings are born free and equal in dignity and rights." Last Monday marked the 70th anniversary of the adoption of this historic document. Led by the fierce chair of the United Nations Commission, Eleanor Roosevelt, who famously nicknamed the influential document the “the Magna Carta of humankind,” the declaration was adopted by a vote of 48-0, with 2 abstentions. Arising from the atrocities of World War II, the declaration included 30 articles detailing the rights that every human should be accorded in an ideal world and called for an end to discrimination on the basis of everything from race, religion, sex, among many other things. The adoption of the declaration, according to an article in Forbes magazine commemorating this momentous occasion, marked a new era in history by not only declaring these rights as, like the name aptly suggests, universal and without exception, but also by establishing an international responsibility for ensuring these rights are upheld. Contrary to previous notions of isolationism and total sovereignty over what goes on within one’s borders, the Universal Declaration of Human Rights stated that should human rights abuses occur anywhere in the world, other countries and international entities have an obligation to respond. While human rights abuses can still be found in nearly every corner of the world, thanks to the ardent efforts of those like Eleanor Roosevelt, the ultimate adoption of this document has made human rights “a routine feature of international diplomacy and political discourse.” To learn more about the declaration and its relevance still today, check out this article from Forbes magazine.

1. Why Donor Gift-Giving Might be a Thing of the Past  

In a recent article in the Chronicle of Philanthropy, Alex Daniels calls into question the effectiveness of giving gifts to potential donors to boost donation rates. According to the article, “more than half of fundraising solicitations try to entice donors by including a gift as a token of appreciation,” suggesting a widespread belief in the capacity for both unconditional and anticipated, or promised, gifts to persuade those who may be on the fence about donating. Daniels, however, along with several economists at Texas A&M University, are not entirely convinced. Researchers at the university created a study in which they sent 140,000 solicitations to each of its funders who had not donated in at least one year. They randomly split the solicitations into three categories: those that included an unconditional gift of a luggage tag, those that did not include a gift but promised a gift in exchange for a future donation, and, acting as the control of the experiment, those that included no gift at all. The results of the experiment showed no remarkable distinction in rates of donations for those who were offered conditional gifts and those who were given no gift at all. Donors who were given a gift included in the initial solicitation were in fact found to be more likely to donate; however, upon calculating its costs, the university found that these items were worth more than the value of the donations it had received in return. These economists were thus skeptical about the use of donor gifts in fundraising strategies. Still, Daniels cautions nonprofits to not jump to entirely eliminating such gifts quite yet. Jonathan Meer, one of the study’s co-authors, suggests that “gifts may be more effective with recent donors if they feel like a thank-you and not a quid pro quo.” To read the full study and find out how your organization can alter your gift-giving strategies to make more significant impacts on your fundraising, check out the link above.  

2. Facebook Fundraisers: A Hacker’s Dream Come True

With more and more people utilizing online means of giving, whether directly through an organization’s website or indirectly through a third-party social media platform, questions of the security of online fundraising are beginning to surface. An article in Wired warns organizations that Facebook, one of the largest of such social media crowdfunding tools, might not be as secure as one would expect considering the platform’s growing popularity as a fundraising tool. According to the article, as any registered 501(c)(3) organization with a bank account is eligible to use its fundraising services, “over one million charitable organizations in 19 countries accept donations on Facebook.” The article discusses the story of Alana and Lollar, nonprofit leaders whose Facebook fundraising pages had been threatened and hacked by uninvited administrators. Despite contacting Facebook repeatedly, these women could not get assistance from a representative in time to prevent future attacks and suffered thousands of dollars in lost revenue as a result. John Cantarella, Director for Social Good and Community Partnerships at Facebook, assured worried nonprofit leaders that their pages are safe in Facebook’s hands, maintaining that the company has made available sufficient security features to administrators on nonprofit pages. Still, however, complaints of hackers persist. Due to the high volume of donations filtering through the sector, as well as individual organization’s tight budgets and limited resources allocated for damage control, nonprofits are particularly vulnerable to online attacks. According to the article, nearly “60 percent of nonprofits do not provide cybersecurity trainings to staff on a regular basis,” and “70 percent say they don’t have a plan in the case of a cybersecurity attack.” Concerned nonprofits have recently spoken up about Facebook’s lack of guidance in dealing with possible hacks. To find out more about Alana and Lollar, and how your organization can advocate for increased guidance and protect your social media pages from possible attack, click on the link above.

3. Thanks But No Thanks

In just one of the most recent ripple effects of the new tax overhaul, predicted uncertainty in funding has led many nonprofits to take a critical look at their “funding acceptance policies,” or create them if no such policies exist. An article in The Nonprofit Times stresses the importance of nonprofits adopting such an acceptance policy “regardless of size and complexity of the funding strategy.” Constructing a gift acceptance policy may be burdensome and can, understandably, fall rather low on the priority list of organizations struggling to cover bare-bones operating costs. However, implementing such a policy sooner rather than later can help your organization not only manage its donor expectations, but also maintain important relationships with major donors if and when their donations are rejected. Yet, a gift acceptance policy saves you from more than just a few awkward conversations with disgruntled donors. A predetermined framework for donation acceptances ensures that your organization accepts funding only from those who share your mission and standards of integrity. It can also serve as a “powerful tool to communicate to prospective funders the organization’s preference for the unrestricted gifts and the need for overhead.” Any effective gift acceptance policy entails an explanation to donors whose gifts might have been rejected that clearly outlines the kind of funding that will be accepted in the future. The common misconception that “any funding is good funding,” according to the article, must be challenged. There are many instances in which accepting funding might very well do more harm than good, such as when such funds fail to support a nonprofit’s mission or its overhead costs. Ultimately, although outlining a policy for how and when to reject donations might seem counterintuitive for an organization struggling to make ends meet, adopting these policies will ensure that your organization is accepting funds that will make its operations more efficient, rather than bog you down with unnecessary paperwork. Despite a higher level of certainty in light of the new tax law, organizations that create and stick to a donation acceptance policy are more likely to benefit in the long-run. To read more about gift acceptance policies and what your organization should be accepting as well as rejecting in terms of funding, visit the article linked above.  

4. (Helpful?) IRS Guideline for Nonprofits on Minimizing Impact of New Parking Tax

Among many other things, last year’s tax law prevented businesses from deducting expenses used to provide fringe benefits like parking, as well as forces nonprofits to pay a 21 percent unrelated business income tax (UBIT) for all employee transportation benefits. Unsurprisingly, the inclusion of these provisions was strongly opposed by charitable organizations and faced bipartisan criticism in Congress. As mentioned in last week’s post, Kevin Brady (R-Texas),  House Ways and Means Committee Chairman, proposed the removal of this provision from this year’s plan, Senators James Lankford (R-Okla.) and Chris Coons (D-Del.) wrote letters urging the Treasury to delay the implementation of the tax. Until more permanent decisions are made on the controversial tax, however, the Treasury Department and the IRS released a guideline this week for how nonprofits can best calculate the tax so as to minimize losses. One such way the IRS suggests nonprofits boost their deductions on parking expenses is by reducing the number of parking spaces reserved for employees come spring. The IRS also announced its “tax-penalty relief,” which will give some financial relief to those who did not have to file a business income tax return last year and who are offering fringe benefits. Yet, although seemingly meant to benefit these newly taxed entities, this guideline has come under fire from many claiming that it does not do nearly enough. David L. Thompson, Vice President of Public Policy of the National Council of Nonprofit, was openly critical about the IRS’s recent announcement, claiming that the only viable solution to this problem is a complete repeal of the nonprofit tax. Thompson argued that “the notice provides minimal instruction, relieves some organizations of penalties that result from the IRS’s own delay, and completely ignores the imposition of the new taxes on transit benefits.” Additionally, Thompson called out the guideline for being overly simplistic, as it offers a one-step approach that will undoubtedly play out drastically differently among different organizations and from one month to another. To find out more about the latest update on the parking tax and how the Treasury Department claims this new guideline will minimize impact on nonprofits, check out the link above.

5. Emerging Giving Circles to Help Counteract Predicted Declines in Individual Donations

Nonprofit Quarterly recently reported an upward trend in the number of emerging “giving circles,” or a group in which several donors collectively raise money and then vote on a cause who shares its mission and values to be the beneficiary of such funding. In fact, one study showed that between 2007 and 2016, the number of giving circles across the United States tripled.  This development is likely due in part to the recent repudiation of the universal charitable deduction, causing many donors to rethink how they can best maximize their impact. While individual amounts given within each giving circle vary greatly from group to group, this movement has also shown a steep increase in overall funding over the years. A study carried out this year estimated that these groups disbursed close to $1.29 billion since the creation of the very first giving circle, yet last year’s funding alone made up for a whopping $410 billion of this total. Although the purpose of giving circles is the pooling of smaller-scale individual donations to create greater impact, some circles have claimed rather steep individual donation levels. Impact100 Philadelphia, for example, an all-women giving circle with the purpose of getting more women involved in philanthropy, has a $575 entry level donation for young donors and a $1,150 level for older ones. Still, other circles, like the Asian Mosaic Fund Giving Circle which is comprised of a 50 member donor group who donate a minimum of $50 a year, have significantly lower buy-ins. According to Peter Van Do, Chairman of the Philadelphia-based entity of this circle, even smaller circles can have significant impact, especially on organizations often ignored by larger, mainstream foundations. To learn more about the rise of giving circles and why your nonprofit might want to restructure its outreach to encourage smaller donors to seek out such groups in light of predicted declines in individual donations, visit the link above.  

That’s it for this week’s Friday Five! For more information on the Universal Declaration of Human Rights, the controversy surrounding its adoption, and the many ways it is still relevant in our world today, check out this article from NPR.

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