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Recently, whenever I have talked to nonprofit leaders about changes in public policy that affect our sector, they have expressed concerns about accountability and oversight. I hear much less, however, about another issue that could have a truly profound impact on our work: the repeal of the estate tax.
Current estate tax regulations give wealthy individuals a strong incentive to make charitable bequests and to increase their public giving. Some people contend that repealing this tax will have a positive effect. They argue that such a tax cut would leave more money in the hands of the wealthiest Americans, allowing the philanthropists among them to be more generous.
Relevant research tells a different story. The Independent Sector concluded that removing the incentive the estate tax now provides would result in a net decrease in charitable bequests of between one tenth and one third. The organization also reports that "A recent study by the Congressional Budget Office estimated that charitable organizations would have received $13 billion to $25 billion less in 2000 alone if the estate tax had not existed."
Most of us in the nonprofit sector are all too aware of the difficulties presented by the most recent period of economic downturn. For those organizations that have been hoping to reach the light at the end of the tunnel, a $13 billion to $25 billion annual cut in their pool of potential funding could deal a crippling blow. And that means the most vulnerable populations in our society will be left with fewer places to turn for help.
Efforts are underway in the Senate to negotiate a bi-partisan compromise that would avoid a repeal of the tax. Now is a critical time to contact your senators to express your concern about this issue.
In this edition of LAPA News & Views, Raissa Smorol discusses how nonprofits can reach unserved clients, and Enid Harlow answers your questions about how foundation funding can complement government contracts. Thank you and enjoy!
Laurence A. Pagnoni, MA, MPA
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| 2005
is LAPA's Tenth Anniversary--It remains our privilege to help you
make a positive difference in your communities! |
By Raissa Smorol, LAPA Associate
At LAPA, we know that one of your chief roles is to make sure that clients walk through your door to avail themselves of your agency's services. Many nonprofits have tried various approaches to reach new clients: Consumer Advisory Boards (CABs), client incentives, Memoranda of Understanding with CBO partners. Still, a gap often exists between the number of people enrolled in an organization's programs, the need for services, and/or poor utilization rates.
Outreach marketing provides one means of helping you bridge that gap. While for-profit businesses generally are very sophisticated about their marketing, nonprofits still have a long way to go to catch up. A key to reaching deep into your community is building relationships with centers of community life--such as churches, food pantries, laundromats, restaurants, small businesses--that influence personal choices.
In one example of an outreach marketing initiative, LAPA worked with a major New York City public hospital to help it reach an unserved population of potential clients for its AIDS clinic. We created a bilingual outreach card that could discreetly fit into a wallet. Check-cashing stores and laundromats in targeted neighborhoods throughout all five boroughs distributed the cards, which not only informed new clients of the hospital's services, but also increased the hospital's credibility as a caring and effective service provider.
Because most emerging organizations have not considered outreach marketing as an option, the first step is usually to consider how such an initiative can help you integrate your communications with your program and organizational goals.
If you'd like to talk more about how outreach marketing could be relevant for your organization, contact Raissa at 212/932-8001, ext. 8.
Q. Dear LAPA,
Government contracts are the bread and butter of my organization. My development director wants me to hire a private foundation grant writer as well, but I am skeptical about pursuing foundation funding when the return seems so small compared with the size of government contracts. Is there really a sound organizational reason to do this?
- Charles in Manhattan
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A. LAPA Senior Grants Officer responds:
Dear Charles,
LAPA is going to side with your development director, for three reasons:
First, as you well know, government contracts do not cover all costs. Rent increases, cost-of-living adjustments for staff members, required trainings, and extra program enhancements will often be beyond your reach if you are operating on government funding alone. Private support from foundations and corporations can help you meet these needs. Leading organizations in the nonprofit sector are vigorously encouraging foundations to provide more general operating support money, which is what gives you the most flexibility in covering your needs.
Second, diversifying your revenue base makes good business sense. Initially, foundation support may not seem significant, but it can snowball over time. Even if gains are modest, few executive directors who pursue foundations and corporations regret increasing their revenue. In the long run, if you are recognized as a leader in your service niche and keep foundations updated about your program developments, they might actually surprise you with an unexpected grant when they have discretionary revenue available. (Yes, this really happens!)
Finally, securing funding from private donors adds legitimacy to your organization. Foundation support sends a signal to outside observers--and to government officials as well--that your agency is respected in your field. Support from the public is an indicator that you are living up to the definition of a "public charity."
All the best,
Enid
KEEP THE QUESTIONS COMING! Please contact
us by clicking here. Our team will answer as many of your questions
as possible in future newsletters.
Mark Engler, BA
Sheldon Bart, MA
Stacey Flanagan, MS
Bodi Luse, MS
Elsa Ríos, MSW
Julia Ritchie, CSW
Dwayne Sampson, BA
Melissa Shurkin, MMHS
Raissa Smorol, MPA
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