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News You Can Use

News You Can Use
Issue 123/March 2013

Giving Institute and Giving USA Foundation Board Meeting, Spring 2013

Jeffrey D. Byrneby Jeffrey D. Byrne
President + CEO

Last week at the Giving Institute and Giving USA Foundation Spring Board meeting (the publisher of the Giving USA annual report on philanthropic giving) where I am a Board member, we had the pleasure to engage with Dr. Una O. Osili, PhD, Director of Research for The Center on Philanthropy at Indiana University. Una’s presentation was around tax policy changes proposed in the U. S. Congress on itemized charitable giving.

As you may know, Congress enacted the charitable giving deduction in 1917, four years after instituting a federal income tax. Changes over the past 96 years have occurred in various ways, but the charitable deduction, as we know it, has not been in jeopardy of elimination until recent discussions by Congress.

Congress is currently debating a number of options to close “loopholes” in the tax code to raise revenues. Philanthropic Industry Leaders are watching closely these actions and are quickly reacting and mobilizing their constituencies to inform their Congressmen and Congresswomen and Senators about the impact that their votes can have on constituencies in their districts and states.  

Recently, C. Eugene Steuerle, the Richard B. Fisher chair, an Institute Fellow at the Urban Institute, a cofounder of the Urban-Brookings Tax Policy Center and the Center on Nonprofits and Philanthropy, in his testimony before the Committee on Ways and Means of the House of Representatives (2/14/13) said: a tax subsidy like that for charitable contributions should be treated like any other government program, examined regularly, and reformed to make it more effective. The good news is that the charitable deduction can be designed to strengthen the charitable sector and increase charitable giving at the same or even lower revenue cost.

 Steuerle further stated that to increase giving, Congress can:

  • create a charitable contribution for all taxpayers, not just itemizers;
  • allow people to make contributions until the filing of their tax returns or April 15;
  • make it easier for people to donate from accumulated amounts, such as retirement accounts and lottery winnings; and
  • remove or reduce and certainly simplify the dysfunctional excise tax on foundations.

Congress can more than pay for these changes with little or no reduction in giving if it would:

  • put a floor under deductions, which would have little effect on giving incentives;
  • reform subsidies that tend to be highly ineffective and invite abuse, such as the deduction for household goods and clothing; and
  • provide a better information system for charitable giving.

Our responsibility is to participate and actively engage with our elected officials. The stakes are too high. Our elected representatives need our active involvement and expertise because they will use our input in their calculations on how to maneuver through the maze of policy options. Don’t be shy. Engage.  

For more information on how to become involved, reach out to me directly through Jeffrey Byrne + Associates, Inc. at

Financial Anxiety in Senior Living Industry: An Incentive to Fundraise  

Jean Bacon
By Jean Bacon
Senior Living Consultant  
The uncertainties of the financial climate have spread to the senior living industry. Although there is limited financing of new projects and loan refinancing for refurbishment of existing projects and interest rates remain lower than they have been for awhile, there is widespread anxiety. It is truly a time for serious fundraising, primarily from residents and families. It does not matter if the residents are actively involved in community activities yesterday, today, or tomorrow, or whether their families have been donors in gratitude for the care received by a loved one, the history of this country has always been that charitable giving fills the gaps in times of serious belt tightening. And yet management is not exploring and capitalizing on this resource to assist with necessary projects. This is a golden opportunity for a successful CEO.

Initially, a CEO might feel reticent about providing leadership in fundraising because of census targets. Most bond documents require 95 – 100% occupancy, but due to high expenses, many communities are unable to maintain mandated census. But this is the golden opportunity in a nutshell. Residents are the best able to improve census by “talking up” the community to their friends, potential residents. There may be a special club with dues organized to interest these “tomorrow” residents in the services offered by the community. These “dues” will reflect the level of services required and will provide a serious alternative for those who do not or cannot sell their homes, their one substantial piece of equity. This is the concept of a CCRC (continuing care retirement community) without walls, and is organized as an insurance policy. Fundraising can take all sorts of perspectives.

A recent case study illustrates all this. Last month, a faith-based community in Williamsburg, Virginia, declared bankruptcy. This is a beautiful senior living choice with VIP residents, many retired military and diplomats. They opened in 2008 sponsored by a faith based umbrella corporate organization. Since opening, they have not made census targets, and it was time to reorganize. It was noted that the residents would not be affected by changes and their Entry Fees would remain as designated at entry. Interestingly, this community had its own Foundation and continues to raise funds to fill the gap. This is a contradiction to a bankruptcy filing, and yet demonstrates stakeholder dedication to the community.

How does a CEO turn attention to fundraising? A comprehensive Development Plan is the first step, followed by realistic timelines to organize donor participation. Resident participation is mandated in order to make the Plan work. An experienced consultant with a track record in the senior living industry should be made available to all stakeholders to ensure success!

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