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News You Can Use
Issue 142/October 2014

Strengthen Year-End Giving by Preserving the IRA Rollover

Jeffrey D. ByrneJeffrey D. Byrne
President + CEO

The year is winding down. Wrapping up those final year-end gifts is on everyone’s mind, but once again, the charitable IRA rollover is not a giving option. At least not yet anyway!

This on-again, off-again tax incentive that allows individuals 70½ or older to make gifts by rolling over funds from their IRA directly to a charity without tax penalties was created in 2006. The 2006 legislation expired in 2007 only to be extended again in the fall of 2008, retroactively from the first day of 2008 to the last day of 2009. It expired again in 2009 only to be extended in December 2010, retroactively to January 2010 through December 2011. And yet again, it expired in 2011, only to be revived in early 2013 for the 2012 and 2013 calendar year.

Now, it has expired again, making it impossible for donors to plan those donations that would maximize their giving by using IRA assets. Unless an IRA is a Roth, the account owner must take distributions starting at age 70½ and pay tax on the withdrawals. With the charitable IRA rollover, the donation, of up to $100,000, can count towards the minimum required distribution an owner would otherwise be required to take.

Legislation is pending to extend and make permanent the tax credit, but the clock is ticking… on this giving incentive that has been an overwhelming success at a time when demand for services from nonprofits is increasing and government resources for nonprofits are shrinking. No further action is expected on pending legislation until after the November elections.

The EXPIRE Act of 2014 (S. 2260) creating another two-year extension was approved by the Senate Finance Committee in April. It would retroactively extend the current Charitable IRA rollover from January 1, 2014 to December 31, 2015. It mirrors the extensions approved in previous years and is considered to be the most likely to be approved.

A more positive option, though, is the America Gives More Act (H.R. 4719) making permanent the charitable IRA rollover. It passed the House of Representatives in July and now awaits consideration by the Senate. Despite its success in the House, it is still a long shot in the Senate. While representatives generally support encouraging gifts to nonprofits, it’s difficult to get support for a tax law change that could permanently cut tax revenue.

As industry experts, we have to act now to expand and make permanent the charitable IRA rollover. We must advocate for those laws that support nonprofits’ success. We “hire” our elected representatives with our votes. We must make sure our “employees” understand that tax incentives promoting charitable giving serves the greater good. There are three actions to take now, to create a short-term and long-term plan to support giving opportunities for older Americans:

  1. Contact your congressional leaders and urge them to reinstate the charitable IRA rollover by passing tax extension legislation as soon as possible through quick consideration of S. 2260.

  1. Contact your Senator to ask for support in the passage of H.R. 4719 to make the charitable IRA rollover permanent.

  1. Encourage your peers to let their Congressional Representatives and U. S. Senators know the impact that the charitable IRA rollover has had on their organizations. Keeping elected officials informed on the positive impact of legislation within their district is critical to persuading Congress to pass a permanent version of this proven charitable giving incentive.

The charitable IRA rollover is an easy gift for older Americans to make. It enables many individuals to support their favorite nonprofits in ways that they wouldn’t be able to otherwise. Now is the time to push through the tax incentive for 2014, while working for a permanent solution that makes planning for a charitable IRA gift a possibility year-round.

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Tony Glowacki
CEO of WealthEngine
Tuesday, November 11 
Kauffman Foundation Conference Center
7:30 - 9:00 a.m.
Coffee and a light breakfast will be provided
 Nonprofit Connect Members: $25
General Admission: $50

When you think fundraising, do you think big data? Tony Glowacki does, and he will join us in Kansas City to lead a discussion about using analytics to grow individual gifts. As the CEO of WealthEngine, the leading provider of wealth identification and prospect research, Tony brings years of experience in information technology. And as an advocate of the nonprofit sector, he's ready to share how your organization can use big data to fundraise more efficiently and effectively. 

Jeffrey Byrne + Associates is committed to ensuring you have access to solid, informative and thought-provoking discussions on topics that affect your daily work in the nonprofit sector. 501 (c) Success is bringing the brightest national thought leaders to Kansas City, to discuss progressive topics that are relevant and timely in our industry. We are happy to share this opportunity with you, and look forward to seeing you November 11. Click here to register online. 

Strategic Planning:  The Pathway for Fundraising Success

John F. Marshall

John F. Marshall
Senior Vice President

Over the past couple of years, our firm has had the opportunity to conduct Territorial Development Audits for both the Western and Central territories. Both were terrific exercises in which both Jeffrey Byrne and I had the occasion to meet with divisional leadership and development personnel throughout each division.
Our task was to discuss and evaluate every component of development/fundraising programs in an effort to help determine strengths as well as areas of challenge. It truly was an enjoyable experience and both of us emerged feeling that the Army was, overall, really performing at a successful level.
As you can imagine, we probed into numerous areas. One of those that stood out was regarding the presence of a Strategic Plan to serve as a road map for the development program. We found that only about 25% of the divisional development programs had created and were following a Strategic Plan. Those who did have a plan tended to be among the higher performing programs.   
I recall visiting with one divisional director of development who, when I asked “Are you operating under the direction of a Strategic Plan?” the response was “John….are you kidding me? We barely have enough time to keep up with everything we have been charged to do. We just don’t have the time.” My suspicion is that that is a sentiment shared by many of those who fall into the other 75%.
There is no question that correctly engaging in Strategic Plan development can be a time consuming commitment. It is not a one-day process and will require the participants to become fully-engaged in covering a broad swath of topics. Yet, I can tell you from my own experience from when I was a director of development with the Army several years ago, establishing and following a well crafted strategic can have a significant impact, in many ways.
Engagement in Strategic Planning is a statement by the Army of its desire to bring about organizational change and development with the intent of increasing the Army’s ability to more completely fulfill its mission:  in this case, through the enhancement of securing financial resources. Strategic Planning is definitely a management tool, one which will enable the Army to respond to a changing environment and to help ensure that all members of the development team are singularly focused on attaining new goals and objectives.
The overall objective of the planning exercise is to bring to the development team a game plan – a road map, if you will – to address strategic development direction over a two- to three-year timeframe. And, yes, it will take time; you should expect to commit time over a 45- to 60-day period to go through both pre-planning and actual strategy development components.  <Click here to read more about an effective Strategic Planning process>
The Strategic Planning Process
The Strategic Planning process consists of two steps: Pre-Planning Components and Strategic Direction. It is essential that participants conduct the planning process by following the steps in the order they are presented. Engaging in short cuts could result in an incomplete plan.
STEP 1: Pre-Planning Components
In order to develop a fully-comprehensive Strategic Plan, the process will require four (4) specific Pre-Planning components: Issue Identification, Stakeholders Analysis, a S.W.O.T Analysis and a Competitors' Analysis.
  1. Issue Identification
Participants will identify issues critical to development which must be addressed as part of Strategic Planning. Participants will also assign relative priorities (i.e., critical…important…nice.) Examples of issues may include:
  • Adequate financial resources (budget)
  • Adequate human resources (staffing)
  • Community relations
  • Existing development services
  • Morale
  1.  Stakeholder Analysis
Participants need to identify individuals and/or groups of individuals (Army leadership, Corps Officers, Advisory Board members, donors, prospects, the media, etc.) who have a reasonable right to believe that their values, expectations and needs will be met. Failure to do so could lead to sanctions. It is important to accomplish the following:
  • Identify critical stakeholders
  • Profile critical stakeholders as to their needs and expectations
  • Identify drivers and satisfiers
  • Determine where stakeholders are on the “satisfaction line”
  1. S.W.O.T (Strengths, Weaknesses, Opportunities, Threats) Analysis
  • Strengths – current conditions
  • Weaknesses – current conditions
  • Opportunities – future conditions
  • Threats – future conditions
Participants must build on strengths, address weaknesses, capitalize on opportunities and avoid weaknesses.
  1. Competitors' Analysis
Participants must identify:
  • Who the competitors are
  • How strong or vulnerable the Army is to competitors
  • Whether competitors are friendly or adversarial          
STEP 2: Detailed Approach
Participants should see planning as achieving at least three (3) outcomes:
  1. To create and support the concept of shared outcomes
  2. To secure group acceptance of the strategic direction
  3. To serve as a vehicle to achieve culture modification, department unity and strategy integration through team building
The various components of the Detailed Approach consist of Mission/Department Preoccupations, Goals and Objectives, Targets and Tactics and Monitoring System.
Mission/Department Preoccupations
Simply stated, Mission is Development's reason for existence and it must respond to stakeholder’s expectations. It should be no more than a paragraph in length with the choice of wording critical. Organizational preoccupations are the two or three preeminent concerns as it relates to long term success. Vision is what Development hopes to become.
Goals and Objectives
Goals should be limited in number (four to seven) and must be achieved if Development’s Mission/Vision is to be met. Objectives are measured outcomes and are directly tied to goals.
Targets and Tactics
Targets and tactics are “how” objectives and goals are accomplished and must address:
  • Overview
  • Action Steps
  • Timing
  • Responsible Parties
  • Resource Requirements
Monitoring System
This is the formally accepted system for keeping the Strategic Plan on track and to communicate participant’s accomplishments, setbacks and obstacles.
As stated earlier, engaging in a Strategic Planning process is detailed and will definitely require a commitment of time by the participants. Fitting it into an already busy schedule will require careful planning in itself. However, creating a rock-solid Strategic Plan which the development team has created together can result in a terrific pathway to follow towards achieving ever greater development success, for your stakeholders and the Army.
Jeffrey Byrne + Associates, Inc. has led several Strategic Planning initiatives and would be thrilled to have the opportunity to partner with you in crafting a Strategic Plan, tailor-made for your Development organization. For further information, contact me at: or give me a call at 816-914-3780.

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