This article from ThirdSector discusses a new concept in Britain to help channel more money to those that need it. This solution addresses a growing concern in the United States as well that lower-income populations are not being served well by nonprofits.

Call to give philanthropists tax breaks when they donate to poor areas

Major donors should pay less tax if they make donations to charities based in disadvantaged regions, according to the Community Foundation Network.
The network represents charities that support local communities. The recommendation is one of 29 made in its Manifesto for Community Philanthropists, published this week.

The manifesto proposes the creation of ‘special giving zones’, modelled on social exclusion zones, that would encourage investment in services to disadvantaged communities. Any individual or company giving to charities that work in these zones would get favourable tax treatment.

Other recommendations include the creation of bank-gifting accounts to simplify giving and a £30m philanthropy infrastructure investment fund to help smaller charities set up online donation systems.

Stephen Hammersley, chief executive of the network, said the manifesto was drawn up to promote grassroots giving. “Community charities need to receive independent and sustained funding,” he said. “The manifesto is an exploration of possible ways they can achieve that.”

Four Important Lessons Learned
The combination of the severe recession, coupled with the Bernard Madoff debacle, has made headlines and brought fear and deep anxiety throughout the nonprofit sector. There are a number of critical lessons that should guide us all going forward:

1. Few individuals or organizations are immune from current difficulties. Reflect compassion and a commitment to move ahead strategically to maintain your place and position in the community.

2. If it seems too good to be true, it probably is. While this may be interpreted as an effort in stating the obvious, avarice often impacts negatively on financial decisions. Through time, people have repeatedly been hurt responding quickly to unrealistic promises proffered by those with dishonest and greedy intentions. Organizations and individuals who followed a man portraying himself as a “pied piper” knowing how to beat the markets truly paid a hefty price! And the entire story has yet to be told.

3. There are no shortcuts. Proper financial oversight is an important element of a strong nonprofit. While donors drive and propel campaigns, nonprofit organizations should commit to investment strategies that reflect thoughtful and conservative institutional management. Too many stories coming out of the Madoff mess relate caution being “thrown to the wind” in pursuit of a fleeting promise of an inflated return.

4. Keep your case for giving simple, relevant and impactful. Organizations that frame and present a compelling case for giving are in a far stronger position to continue receiving financial support from existing and new (or lapsed) donors. Those nonprofits that feel guilty, hold back or hesitate to promote their “selling propositions” in terms of how they impact on the lives of people will face reductions in support that will take years to recoup.

WAKE-UP CALL

1. Review and update Gift Acceptance Policies and Investment Policies for your endowments as well as for pension dollars, making certain that your organization has a balanced portfolio and effective and empowered internal “checks and balances.”

2. Tighten your organization’s budget and consider how you can fashion a 10% cutback in expenses that are not critical to the running of the organization. Share your belt-tightening measures openly with stakeholders for all to understand.

3. Update and contemporize your organization’s Mission Statement and Case for Giving to communicate compassion and responsibility. Make certain that your programs and services are seen as critical and necessary to the lives of people and communities and eliminate any perception that your mission or programs might be seen as, luxuries or extravagant. This applies to capital campaigns as well as on-going efforts for operational support.

4. Update and formalize your Donor Recognition program, reflecting that you are not taking your donors for granted. Understand that many donors may wish to be understated or anonymous right now so as to appear appropriate and to not open them up as targets for other causes.

5. Make fuller use of technology by promoting giving on line and introducing social networking as a method to keep your constituents and friends connected. This will enable you to cut costs without compromising a necessary commitment to excellence.

RESOURCE: www.EHLconsulting.com