Developing and Managing a Successful Fundraising Campaign. April 29, :00 3:00 p.m. ET

Transcription

1 Developig ad Maagig a Successful Fudraisig Campaig April 29, :00 3:00 p.m. ET Veable LLP th Street, N.W. Washigto, DC Moderator: Jeffrey S. Teebaum, Esq. Paelists: Paulette V. Maehara, CFRE, CAE Kristaly J. Loso, Esq. H. Art Taylor Lee Klumpp, CPA

2 Presetatios

3 Developig ad Maagig a Successful Fudraisig Campaig April 29, 2011 Moderator: Jeffrey S. Teebaum Speakers: Paulette V. Maehara Kristaly J. Loso H. Art Taylor Lee Klumpp Developig & Maagig a Successful Fudraisig Program Paulette V. Maehara, CFRE, CAE Washigto DC April 29, 2011

4 START WITH THE BASICS 3 What We Thik We Kow Philathropy is a emotioal decisio, ot just fiacial A process, ot a evet Ivestmets follow iformatio, iterests ad ivolvemet People give to people, ot projects 95% Plaig, 5% Askig pmaehara@paulettemaehara.com 4

5 What We Thik We Kow (cot.) No such thig as a average gift Success breeds success Needs of the door ad the orgaizatio must meet Biggest Mistake: NOT Askig pmaehara@paulettemaehara.com 5 Fudraisig Effectiveess HIGH Perso to Perso Perso to Group Telephoe Iteret Direct Mail Mass Media LOW People Give to People! pmaehara@paulettemaehara.com 6

6 The Fudraisig Process Idetificatio Reewal Evaluatio & Research Recogitio Door- Cetered Iterest & Ivolvemet Ackowledgmet Solicitatio Commitmet 7 Fidig Potetial Doors Rock i the Pod Theory Start with those closest to the orgaizatio ad work outward pmaehara@paulettemaehara.com 8

7 Fudraisig Programs Plaed Givig 9 Layig the Groudwork 10

8 A Sequetial Process INTERNAL REALLOCATION Strategic Plaig Aalyze Situatio Defie the Strategic Visio Strategic Needs Aalysis Quatify & Prioritize Needs Aalyze Fudig Sources GOVERNMENT SUPPORT PRIVATE SECTOR Prepare a Case for Support Test Case with Key Prospects Obtai Results ad Adjust Desig a Pla ad Act Track ad Report Results Feasibility Study Major Gifts Campaig pmaehara@paulettemaehara.com 11 Six Elemets of Success STRATEGIC PLAN AND STRATEGIC NEEDS ANALYSIS Feasibility Study Major Gifts Campaig Essetial Need Compellig Case Ifluetial Leadership Sufficiet Prospects Detailed Pla of Actio Soud Maagemet pmaehara@paulettemaehara.com 12

9 A Essetial Need Strategic Visio (Pla) Cotais a clear visio of the future Specifies ew or improved beefits for costituecies Provides impetus for istitutioal advacemet Determies fudraisig goals pmaehara@paulettemaehara.com 13 A Compellig Case for Support Establishes a uique idetity Defies competecies ad stregths Defies missio, goals ad costituecies Becomes a effective marketig statemet for the istitutio pmaehara@paulettemaehara.com 14

10 Ispired ad Ifluetial Leadership Is of top quality based o ifluece ad affluece Requires commitmet ad ivolvemet Requires sigificat peer relatioships (people give to people) pmaehara@paulettemaehara.com 15 Sufficiet Prospects to Meet the Goal Idetifies idividuals, corporatios ad foudatios with: A philosophical ratioale for ivolvemet Effective methods of cultivatio ad solicitatio Provides a marketig perspective addresses programs i which doors are iterested (theory of eeds) pmaehara@paulettemaehara.com 16

11 A Pla of Actio Is a blueprit to reach specific fudraisig goals Provides a schedule to carry out strategies Describes the most productive approach based o tested priciples ad experieces Achieves success by matchig quality voluteers with prospective cotributors pmaehara@paulettemaehara.com 17 Soud Maagemet Is geerally the resposibility of the seior developmet officer Relies o ethusiastic voluteers of ifluece ad affluece Motivates, stimulates, coordiates ad sustais voluteers pmaehara@paulettemaehara.com 18

12 Accoutig for Private Gifts Door Itet Restrictios Maagemet Accoutability 19 DEVELOPMENT DATABASE RECORDING, TRACKING AND REPORTING Membership Maager Type (beefits, subscriptios) Terms Commuicatios Dues history Evet Maager Geeral iformatio Budget Vedors Committees Idividuals Alumi Doors Parets Studets Faculty Staff Frieds Costituet Iformatio Geeral Biographic Relatioships Employmet history Fiacial iformatio Matchig gift iformatio Ivolvemet Cotacts Photos Costituet Types Orgaizatios Foudatios Corporatios Commuity/State/Federal orgaizatios Associatios Voluteer Maager Assigmets Geeral iformatio Voluteer iformatio Progress iformatio Campaig Maager Assigmets Trackig commitmets Fiacials (goals, budget versus reveue) Prospect Maager Assigmets Ratigs Persoal assets Strategies Actios Projects Correspodece Research iformatio Gifts ad Pledges Gift ad paymet processig Pledge processig Adjustmets to commitmets Ackowledgemets Recogitio credit Split trasactios Matchig gifts processig Iterface with geeral ledger Plaed Givig Purpose Beeficiaries Allied professioals Preset/future value Distributios Trusts/Pooled icome fuds Life icome gifts 20

13 Beefits of a Fudraisig Campaig Provides additioal fiacial resources over a 3-5 year period to advace the visio, missio ad goals Develop stroger relatioships betwee the istitutio, commuity leaders & doors Expad/ehace public relatios programs Develop a traied cadre of dedicated voluteers pmaehara@paulettemaehara.com 21 Beefits of a Major Gift Fudraisig Campaig (cot.) Develop a pool of qualified potetial members for boards, advisory coucils ad foudatios Ehace skills/expertise of developmet staff Build base for aual givig, plaed givig, major gifts Lay groudwork for future campaigs pmaehara@paulettemaehara.com 22

14 Thak You. Questios? 23 Raisig Fuds, Not Eyebrows: Legal Cosideratios i Fudraisig Kristaly J. Loso, Esq. Veable LLP April 29, 2011 Washigto, DC 24

15 Ageda What Is Fudraisig? State Regulatio of Fudraisig Federal Tax Cosideratios Raffles / Sweepstakes Mobile Givig Social Media 25 Curret State Regulatio A. Charity / Noprofit Orgaizatio B. Professioal Solicitor Professioal Fudraiser Professioal Fudraisig Cousel / Cosultat C. Commercial Co-veturer 26

16 Curret State Regulatio Charitable Orgaizatio About 40 States Require Charities to Register Triggerig Defiitio -Geerally triggered by solicitatio affirmative act of askig for a gift ( cotributio ) or sellig goods/services that will beefit a charitable cause. broad by ay meas may iclude grat solicitatio Typical Exemptios Religious orgaizatios Orgaizatios that do ot raise more tha a specified amout from public (all states) if fudraisig coducted by voluteers Orgaizatio solicitig oly withi membership Hospitals Named idividuals Uiform Registratio Statemet curretly accepted by 38 states (ot CO, FL, OK) 27 Curret State Regulatio Charitable Orgaizatio Commo Requiremets Registratio ad reewal Disclosures whe solicitig (i.e. idetificatio) Aual reportig requiremets 28

17 Iteret Solicitatios Do I Need to Register Everywhere?!? Charlesto Priciples - set of volutary priciples drafted by the Natioal Associatio of State Charity Officials (NASCO). Adopted ito statute by oly a couple of states Requires registratio of: (A) Charitable orgaizatios domiciled i state (B) Charitable orgaizatios ot domiciled i state that: - offlie activities would be eough to assert jurisdictio (e.g. sed letter or make phoe calls ito state) - solicit doatios o iteret ad (1) specifically target those withi that state OR (2) receive cotributios from the state o a repeated ad ogoig basis or a substatial basis through their websites 29 Charlesto Priciples - Applicatio Example a oprofit, the Southwest Aimal Charity, is headquartered i, has its pricipal office i, ad holds all physical evets withi Texas. The orgaizatio provides fudig to idividuals throughout the US (or grats to orgaizatios throughout the US). The orgaizatio has a website through which it accepts doatios from throughout the US. Some of the idividuals o the mailig list for s ad for US mail are located outside of Texas. 30 Techically must register i: Texas States where sedig US mail / messages States from which receive substatial or repeated ad ogoig cotributios Cosequeces for ot-registerig Most of the time states will be leiet for first offese BUT o-registratio could be feloy with fie of up to $10,000 Reputatioal harm coset orders

18 Curret State Regulatio Professioal Solicitor / Professioal Fudraisig Cosultat Professioal Solicitor - for a fee, solicits the geeral public o behalf of a charity OR has custody ad cotrol of fuds Professioal Fudraisig Cousel maages, advises, plas, produces or desigs a solicitatio, o direct solicitatio ad ot holdig fuds About 41 states require registratio ad other requiremets Registratio Bod Filig of Cotracts Disclosures 31 Curret State Regulatio Professioal Solicitor / Professioal Fudraisig Cosultat Ofte madatory requiremets from states for iclusio i cotracts: Charity right to rescid Gross collectios delivered to charity Door list is itellectual property of charity Listig of fee calculatio Sigature of two charity officials 32

19 Curret State Regulatio Commercial Co-Veture Commercial Co-Veture ( CCV ) A arragemet betwee a charity ad a commercial etity uder which the commercial etity advertises i a sales or marketig campaig that the purchase or use of its goods or services will beefit a charity or charitable purpose Every time you buy a bottle of Ethos Water, you cotribute 5 cets to the Ethos Water Fud, part of the Starbucks Foudatio About 20 states have laws that specifically regulate CCVs Registratio Bodig Writte Cotract Advertisig Disclosures Accoutig & Recordkeepig 33 Curret State Regulatio Commercial Co-Veture Commercial Co-Veturer must have for cotracts Bradig & Itellectual Property Terms Term & Termiatio Reps ad Warrats Re: Compliace With Laws Advace Approvals Clear Tax Treatmet & Descriptio of Activities Bifurcate Activities with Differig Tax Treatmet or Eter ito Separate Agreemets Idemity & Isurace Coflict of Iterest & Cofidetiality 34

20 Federal Tax Treatmet Gift Rules Geeral Rule charitable cotributios to 501(c)(3) orgaizatios ca be take as deductios o door s federal icome taxes if (1) doative itet ad (2) exceed fair market value of beefits i retur Requiremets A. Recordkeepig ay amout - door resposibility B. Substatiatio more tha $250 door resposibility C. Quid Pro Quo Disclosure Statemet goods or services provided ad door cotributio more tha $75 charity resposibility For more iformatio see IRS Publicatio Federal Tax Treatmet Capital Campaig Projects Whe carryig out a capital campaig project, be sure to avoid sufficietly direct exus with amout pledged ad ay capital facilities for which taxexempt fiacig sought Solicitatio materials should be broad i scope avoid desigatig specific project fuded Avoid geeral publicity that suggests coectio betwee fudraisig activities ad fiacig of project. 36

21 Federal Tax Treatmet UBIT & Corporate Sposorship Geerally, orgaizatio must be exclusively orgaized ad operated for tax-exempt missio, take to mea substatial part of activities must be for tax-exempt purpose. More tha isubstatial amout could lose exemptio, eve if isubstatial could pay UBIT (regularly carried o trade or busiess ot substatially related to tax-exempt purpose) Exceptio for Qualified Sposorships - ay paymet made by ay perso egaged i a trade or busiess with respect to which there is o arragemet or expectatio that such perso will receive ay substatial retur beefit other tha the use or ackowledgemet of the ame or logo 513(i) Less tha 2% fair market value of cotributio Ackowledgmet vs. advertisig 37 Other Forms of Fudraisig Raffles / Sweepstakes Most states gover raffles defied differetly by states If permit or applicatio required, allow lots of time (weeks or moths) Federal Tax Issues May be cosidered UBIT exclusio for icome ad gamig evets staffed by voluteers ad bigo - IRS Code 513(a)(1) / 513(f) File Schedule G with IRS Form 990 if raise more tha $15,000 i gamig evets Private Beefit Cocers 38

22 Other Forms of Fudraisig Mobile Givig Area where the techology is ahead of the law Telephoe Cosumer Protectio Act prohibits usig automatic dialig systems to make calls to wireless devices without express prior coset Text messages icluded i calls Satterfield v. Simo & Schuster must have prior coset from the cosumer to receive messages from that specific etity (ot affiliate) Prior door or membership does t cout as coset FCC Rulemakig text messagig could require express writte authorizatio Carrier Rules ad Regulatios have additioal requiremets for egagig i mobile givig campaigs size of charity, years i existece, etc. 39 Other Forms of Fudraisig Social Media Social Networkig sites Facebook, Twitter, LikedI have their ow rules for promotios that may apply to oprofits. E.g., Facebook s Promotio Guidelies: Restrictios are differet for admiisterig vs. publicizig a promotio: Admiisterig a promotio o Facebook: Promotio may ot be admiistered directly o the site, must be admiistered through a Facebook Platform (util 12/1/10, eeded coset). Caot coditio etry to the promotio upo takig ay other actio o Facebook, for example, likig a status update or photo, commetig o a Wall, or uploadig a photo, or directly or idirectly idicatig that Facebook is a sposor or admiistrator of, or i ay way associated with, the promotio Publicizig a promotio o Facebook: Requiremets less restrictive to publicize a promotio o Facebook The guidelies other requiremets ad restrictios iclude specific disclosures regardig Facebook s o-affiliatio with the promotio ad the promotio sposor s collectio of data from etrats E.g., Sweepstakes ad Cotests o Twitter: Caot structure a sweepstakes so it requires/ecourages retweetig Must also cosider state registratio for sweepstakes, charitable registratios, ad how ay icome treated for federal tax purposes. 40

23 cotact iformatio Kristaly J. Loso t Washigto, DC Jeffrey S. Teebaum t Washigto, DC Developig ad Maagig a Successful Fudraisig Campaig H. Art Taylor Presidet & CEO BBB Wise Givig Alliace April 29, 2011 Washigto, D.C.

24 Charity Watchdog Merger 2001 Merger of 2 Groups Natioal Charities Iformatio Bureau (1918) Philathropic Advisory Service of the Coucil of Better Busiess Bureaus (1971) Over 100 Years Combied Experiece i Charity Review Charity Watchdog Role Beyod the Law Ehacig Public Trust Fosterig Ethical Practices Addressig Door Cocers

25 BBB Charity Review Iquiry Based Reportig System However, Charity Ca Request Evaluatio at Its Ow Iitiative Does Not Commet o Worthiess of Ay Charitable Orgaizatio or Cause Volutary Charity Participatio How Does the BBB Differ from Other Charity Moitors? More Tha Just a Fiacial Review Charity Review Experiece Comprehesive Stadards I-Depth Evaluatios & Reports Stadards Developmet Process

26 Charity Reportig Activities Produce Evaluative Reports o Charities BBB Wise Givig Alliace atioal charities BBBs local charities Educate Doors o Wise Givig Practices No Charge for Charity Evaluatio No Charge for Public Access to Reports Developmet of BBB Charity Stadards BBB Stadards Review Pael - July 1999 Distributio of Discussio Documet Seekig Advace Iput - April 2000 Watchdog Merger - March 2001 Survey of Geeral Public - Sprig 2001 Small Busiess Survey -Summer 2001 Release of Exposure Draft - Jauary 2002 Fial Stadards Released - March 2003

27 Stadards for Charity Accoutability 20 Volutary Stadards Addressig: Goverace ad Oversight Measurig Effectiveess Fiaces Fud Raisig & Iformatioal Materials Stadards for Charity Accoutability Followig Slides Oly Show a Summary of Selected Stadards Go to for Complete List & Applicatio of Charity Stadards

28 Goverace ad Oversight Board reviews audit, 990, budget Five Board Members Three Board Meetigs No More Tha 10% Compesated No Coflict of Iterest Trasactios Measurig Effectiveess Board Policy of Assessig, No Less Tha Every Two Years, Orgaizatio s Performace ad Effectiveess ad of Determiig Future Actios Required to Achieve Its Missio

29 Fiaces Sped 65% of expeses o programs Sped o more tha 35% of cotributios o fud raisig Audit Report if Icome > $250,000 Accurately Report Charity Expeses Solicitatios & Iformatioal Materials Truthful & Accurate Appeals Produces a Aual Report Charity Website Disclosures Door Privacy Cause Related Marketig Disclosures Respod Promptly to Complaits

30 Olie Charity Reportig & Evaluatio System Charities Eter Iformatio Olie Data Automatically Evaluated Coclusios Verified by Staff System Geerates Draft Report BBB Accredited Charity Seal Log Stadig Policy o Use of BBB Name Charity Seal Bega i 2003 Optioal For Charities That Meet Revised Stadards Licese Agreemet & Seal Fee

31 BBB Wise Givig Alliace Wat More Iformatio? Website: Developig ad Maagig a Successful Fudraisig Campaig Cotributio Accoutig April 29, 2011 Lee Klumpp, CPA Assurace Director BDO Noprofit Group Techical Leader (301) lklumpp@bdo.com

32 Cotributios What is a Cotributio? A formal, irrevocable doatio to a orgaizatio. Ca be from i idividual, foudatio or other etity. Ca be either geeral use fuds or restricted (i.e., time or purpose). It is ot a vedor receivable, a split iterest agreemet or membership dues. Page 60

33 Distiguishig a Coditioal Pledge From a Restricted Pledge Both have door stipulatios attached to them: Oe (coditioal) is a ucertai future evet that must occur before the recipiet is etitled to the gift at all; Future is usually uambiguous, but Ucertai is ofte ot (How ucertai is the evet?) Examples: I ll give the Red Cross $100 if there is aother earthquake i Los Ageles is this [certai or ucertai]. I ll give you $1,000 if you raise a matchig amout by [date] is ucertai. I ll give $100 if the su rises tomorrow is ot ucertai [trivial coditio]. The other (restricted) is a (time or purpose) limitatio o the use of the gift after receipt. Page 61 Distiguishig a Cotributio From a Exchage Trasactio: The Key is whether the payor receives somethig of roughly equal value i retur for the paymet. Whose program is it? Is it the orgaizatio s program, which a fuder is helpig to fud, or is it the fuder s program which the orgaizatio has bee hired to ru? Note: Some believe that all govermet grats are exchage trasactios ( govermets ever give aythig away ); others believe that each grat must be cosidered o its ow terms. Page 62

34 How do you Accout for Urestricted Cotributios? Whe formally committed, record a receivable ad reveue. Formal commitmet is geerally i the form of a letter or related agreemet statig amout, restrictios (if ay), date, door. To audit a cotributio, you eed to review the agreemet, door (i.e., ability to pay), ay cotigecies, etc. Page 63 Cotributios Receivable

35 Cotributios Receivable Log term receivables. What are restricted cotributios? How to accout for cotiget receivables. Page 65 Log Term Cotributios Receivable Same accoutig but. Receivable must be discouted to NPV usig the discout rate at time of cotributio. Record the calculated discout ad amortize ito reveue over the term of the receivable. Commo mistakes to avoid: Recalculatig discout each year Discoutig usig a average rate for all log term cotributios Page 66

36 What are Restricted Cotributios? Cotributios which are required to be used for specific purpose or held for a period of time at door s request. Geerally delieated i door agreemet. Example 1: The $100 cotributio is to be used for geeral use over the ext five years (time restrictio) Accoutig at receipt: Dr. Cash $100 Cr. Temp restricted assets $100 Year 1 accoutig (through year 5): Dr. Temp restricted et assets $20 Cr. Reveues $20 Page 67 What are Restricted Cotributios? (cot.) Example 2: The $100 cotributio is to be used for buildig the ew recreatio ceter (rec ceter to be built four years i the future) Accoutig at receipt: Dr. cash $100 Cr. Temp restricted assets $100 No activity i years 1-3 Accoutig whe buildig costs icurred: Dr. Temp restricted assets $100 Cr. Operatig reveues $100 Page 68

37 How to Accout for Cotiget Receivables Cotributio that is revocable i ature ad requires additioal commitmets to become irrevocable Typically related to a matchig campaig (i.e., Erst & Youg will cotribute dollar for dollar up to $500 to XYZ Uiversity if employees of the firm cotribute to XYZ Uiversity. Disclosed i fiacial statemet foototes, but ot recorded due to revocable ature. Page 69 Special Evets

38 Whether or ot the Reveue Stream is a Special Evet Is the evet ogoig, major ad/or cetral to the orgaizatio Evets are cosidered ogoig, major ad cetral if: They are ormally part of a orgaizatio s strategy ad it ormally carries o such activities, or, The evet s gross reveues or expeses are sigificat i relatio to the orgaizatio s aual budget. If the evet is ot ogoig (is ot happeig every day, week or moth i.e. regular basis), major ad/or cetral the it would be cosidered a special evet as log as the evets is peripheral or icidetal meaig it is ot a itegral part of a orgaizatio's usual activities or if their gross reveues or expeses are ot sigificat i relatio to the orgaizatio's aual budget Page 71 Whether or ot the Reveue Stream is a Special Evet (cot d) Evets are peripheral or icidetal if they are ot a itegral part of a orgaizatio's usual activities or if their gross reveues or expeses are ot sigificat i relatio to the orgaizatio's aual budget Page 72

39 Special Evet Example Let s assume the followig as to ABC s aual Gala ad Awards Dier: The price of dier is $100. The cost of dier is $ $25. The fair value of the dier is $30. Additioal costs icurred with promotig the dier is $10. Page 73 Three Examples of Reportig a Special Fudraisig Dier Example 1 Example 2 Cotributios $ 0 Special evet reveue 100 Less: Cost of direct beefits to doors (25) Net reveue from special evets 75 Total cotributios ad et reveue 75 Fud-raisig expeses 10 Cotributios $ 0 Special evet reveue 100 Total reveue 100 Cost of direct beefits to doors 25 Fudraisig expeses 10 Total expeses 35 Icrease i urestricted et assets $ 65 Example 3 Cotributios $ 70 Dier sales 30 Less: Cost of direct beefits to doors (25) Gross profit o special evets 5 Total cotributios ad et reveue 75 Fud-raisig expeses 10 Icrease i urestricted et assets $ 65 Icrease i urestricted et assets $ 65 Importat Poit These three examples assume that the special evet is part of the orgaizatio s ogoig major or cetral operatios ad therefore the reveues ad expeses from such evets are reported gross. If the special evet is peripheral or icidetal, the orgaizatio is permitted to report the activity et of related direct costs. Page 74

40 Gifts I-Kid Gifts I-Kid The questios is would the recipiet of the doated services have to purchase the services? What is meat by have to purchase? Have to, or what? Cosider Cetral ad importat vs. Icidetal or peripheral, from FASB Cocepts Statemet No. 6. Almost uique i accoutig, this deals with a hypothetical situatio, which will likely ever occur. Case by case judgmet eeds to be applied ad it eeds to be reasoableess. Cosider the followig for example: Nurse i blood bak Usher i commuity theater Museum docet: Art museum A Livig Museum (e.g., Coloial Williamsburg) Page 76

41 Bequest What is a Bequest? A bequest is a special kid of pledge that is ultimately coditioal upo a future evet that although is certai it ca ot usually be predicted whe it might happe. Therefore the pledge ca ot be recorded util which time the door dies. Page 78

42 Items to Cosider The pledge should be recorded as soo as the orgaizatios receives ot of the pledge ad the release of the coditio or upo receipt of the fuds. There ofte questios about what to record. The questio that should be asked: Are the other beeficiaries. Has the estate cleared probate. Are the claims by disiherited relatives. Page 79 Joit Cost Allocatio

43 Guidace The Guidace for Joit Cost Allocatios was origially promulgated by the America Istitute of Certified Public Accoutats i Statemet of Positio 98-2 Accoutig for Joit Costs Activities of Not-For-Profits ad State ad Local Govermetal Etities that Iclude Fud-raisig ad ow ca be foud i the Fiacial Accoutig Stadards Board Codificatio to Note: The Appedix to the SOP icludes flowcharts ad examples that ca be extremely helpful. Page 81 Joit Cost Activities - Defied A Joit Cost Activity is a activity that is part of the fudraisig fuctio ad has elemets of oe or more other fuctios, such as program, maagemet ad geeral, membership developmet ad other fuctioal categories used by a oprofit orgaizatio. Additioally, joit costs are costs of coductig joit activities that are ot idetifiable with a particular compoet activity. Page 82

44 Example of a Joit Cost Activities If you have a mailer that is providig missio related material to your mailig list ad o the back of the flyer is a request for doatios (those little check-boxes that ecourage $75, $100, $150 pledges), that mailer is possibly a joit activity (also referred to as joit cost). Other joit activities might iclude special fudraisig evets that also fuctio as member drives or serve educatioal or awareess purposes. Joit activities ca create some accoutig cofusio i terms of how to allocate the expeses betwee program membership developmet, maagemet ad geeral or fudraisig. Page 83 Fud-raisig Expese Fud-raisig expeses are the costs related to activities that ivolve iducig potetial doors to cotribute assets, services or time. Fud-raisig activities iclude the followig: Publishig ad coductig fud-raisig campaigs, Maitaiig door lists, Coductig special fud-raisig evets, Preparig ad distributig fud-raisig mauals, istructios ad other materials, ad Coductig other activities ivolved with solicitig cotributios from idividuals, foudatios, govermets agecies ad others. Page 84

45 Proper Treatmet for Fud-Raisig Expeses Per FASB ASC , a Fud-raisig expese is a period cost ad should be expesed as icurred regardless of the fact that the cotributios resultig from these activities may be geerated i a future period. Page 85 Types of Fud-Raisig Activities May oprofits solicit all if ot most of their fuds from the public. Some of the various fudraisig activities that they perform are as follows: Direct mail Door-to-Door cavassig Telephoe solicitatio Telethos Special evets Page 86

46 Types of Costs Fud-raisig Costs: Fud-raisig Cosultats Pritig Mailig Joit Costs (ot meat to be iclusive): Postage Paper Evet Advertisig Air Time Mailig Commuicatio (Telephoe, Iteret, etc.) It is sometimes difficult to distiguish betwee the two types of costs. Page 87 Program Activities These activities are the activities that result i goods ad services beig distributed to beeficiaries, customers ad/or members that fulfill the purpose ad missio of the for which the oprofit orgaizatio exists. Page 88

47 Maagemet ad Geeral Activities These activities are those activities other tha program, fudraisig or membership developmet activities, but that are idispesable to the coduct of those activities ad to the orgaizatios existece. Page 89 Membership Developmet Activities These activities iclude solicitig for prospective members, membership dues, membership relatios ad similar activities. Page 90

48 The Three Basic Criteria Purpose Audiece Cotet If criteria of purpose, audiece ad cotet are met, costs of a joit activity idetifiable with a fuctio should be charged to that fuctio, ad joit costs should be allocated betwee fudraisig ad the appropriate program or maagemet fuctio. Except: costs of sales for exchage trasactios (e.g. direct door beefits of special evet) are ot fudraisig. Page 91 Allocatio Method The cost allocatio methodology for distributig costs betwee fudraisig, program, missio or admiistrative fuctios should be: Ratioal ad systematic; A reasoable allocatio of joit costs; Applied reliably give comparable facts ad circumstaces. Page 92

49 BDO Resources BDO s Istitute for Noprofit Excellece - Resources For almost 100 years, BDO has provided assurace, tax, fiacial advisory ad cosultig services to a wide rage of publicly traded, privately held compaies ad oprofits. We offer a sophisticated array of services ad access to global capabilities combied with a local presece ad the persoal attetio of experieced professioals. Below is a summary of just some of the may resources BDO makes available at o additioal charge to our cliets. Cliet Advisories Our Cliet Advisories are cocise documets that provide timely commetary, aalysis ad isights o evets ad treds of iterest to maagers ad directors. To subscribe to future cliet advisories, please use our RSS (Really Simple Sydicatio) Feeds or sed a to BDO s Natioal Assurace practice at assurace@bdo.com. Noprofit Fiacial Reportig ad Tax Webiars BDO coducts regular webiars for our cliets ad frieds o curret oprofit issues ivolvig timely ad relevat oprofit accoutig, auditig ad tax updates ad issues. We make the archives of our calls available to our cliets ad cotacts. To receive ivitatios to future coferece calls, please sed a to lklumpp@bdo.com. Page 94

50 BDO s Istitute for Noprofit Excellece Resources Newsletters BDO s Istitute for Noprofit Excellece issues a quarterly ewsletter discussig curret issues ivolvig oprofit accoutig, auditig ad tax updates, which iclude ew accoutig ad auditig stadards, executive compesatio ad beefit issues, areas of cocetratio of the Iteral Reveue Service, idustry best practices ad iformatio for those that are required to have a OMB Circular A- 133 audit (Sigle Audit) to ame a few. Idustry Publicatios BDO s idustry publicatios are umerous ad iclude the oprofit, techology, retail ad cosumer products, ad real estate sectors to ame a few. For a complete listig of services, publicatios, archives of various webiars ad evets, ad other iformatio regardig BDO, please cotact Lee Klumpp at lklumpp@bdo.com. Page 95

51 Speaker Biographies

52 our people Jeffrey S. Teebaum Parter Washigto, DC Office T F jsteebaum@veable.com AREAS OF PRACTICE Tax ad Wealth Plaig Atitrust Political Law Busiess Trasactios Tax Tax Cotroversies Tax Policy Tax-Exempt Orgaizatios Wealth Plaig Regulatory INDUSTRIES Noprofit Orgaizatios ad Associatios Fiacial Services Cosumer Fiacial Protectio Bureau Task Force GOVERNMENT EXPERIENCE Legislative Assistat, Uited States House of Represetatives BAR ADMISSIONS District of Columbia EDUCATION Jeffrey Teebaum chairs Veable's Noprofit Orgaizatios Practice Group. He is oe of the atio's leadig oprofit attoreys, ad also is a accomplished author, lecturer ad commetator o oprofit legal matters. Based i the firm's Washigto, D.C. office, Mr. Teebaum cousels his cliets o the broad array of legal issues affectig trade ad professioal associatios, charities, foudatios, advocacy groups, ad other oprofit orgaizatios, ad regularly represets cliets before Cogress, federal ad state regulatory agecies, ad i coectio with govermetal ivestigatios, eforcemet actios, litigatio, ad i dealig with the media. Mr. Teebaum was the 2006 recipiet of the America Bar Associatio's Outstadig Noprofit Lawyer of the Year Award, the iaugural (2004) recipiet of the Washigto Busiess Joural's Top Washigto Lawyers Award, the 2004 recipiet of The Ceter for Associatio Leadership's Chairma's Award, ad the 1997 recipiet of the Greater Washigto Society of Associatio Executives' Chairma's Award. He also was a Fellow of the Bar Associatio of the District of Columbia ad is AV Peer-Review Rated by Martidale-Hubbell. He started his career i the oprofit commuity by servig as Legal Sectio maager at the America Society of Associatio Executives, followig several years workig o Capitol Hill. REPRESENTATIVE CLIENTS America Academy of Physicia Assistats America Associatio of Homes ad Services for the Agig America Associatio of Museums America College of Radiology America Forests America Istitute of Architects Air Coditioig Cotractors of America America Society for Microbiology America Society for Traiig ad Developmet America Society of Aesthesiologists America Society of Associatio Executives America Society of Civil Egieers America Society of Cliical Ocology America Staffig Associatio Associatio for Healthcare Philathropy Associatio of Corporate Cousel Associatio of Private Sector Colleges ad Uiversities Automotive Aftermarket Idustry Associatio The College Board Coucil o Foudatios Foudatio for the Malcolm Baldrige Natioal Quality Award Homeowership Preservatio Foudatio

53 J.D., Catholic Uiversity of America, Columbus School of Law, 1996 B.A., Political Sciece, Uiversity of Pesylvaia, 1990 MEMBERSHIPS America Society of Associatio Executives Califoria Society of Associatio Executives New York Society of Associatio Executives The Humae Society of the Uited States Idepedet Isurace Agets ad Brokers of America Moey Maagemet Iteratioal Natioal Associatio of Chai Drug Stores Natioal Athletic Traiers' Associatio Natioal Coalitio for Cacer Survivorship Natioal Defese Idustrial Associatio Natioal Falle Firefighters Foudatio Natioal Hot Rod Associatio Natioal Propae Gas Associatio Natioal Retail Federatio Natioal Studet Clearighouse Natioal Telecommuicatios Cooperative Associatio The Nature Coservacy Professioal Liability Uderwritig Society Project Maagemet Istitute Public Health Accreditatio Board Public Relatios Society of America Recordig Idustry Associatio of America Romace Writers of America Texas Associatio of School Boards Trust for Architectural Easemets Voluteers of America HONORS Fellow, Bar Associatio of the District of Columbia, Recipiet, America Bar Associatio Outstadig Noprofit Lawyer of the Year Award, 2006 Recipiet, Washigto Busiess Joural Top Washigto Lawyers Award, 2004 Recipiet, The Ceter for Associatio Leadership Chairma's Award, 2004 Recipiet, Greater Washigto Society of Associatio Executives Chairma's Award, 1997 Legal Sectio Maager / Govermet Affairs Issues Aalyst, America Society of Associatio Executives, AV Peer-Review Rated by Martidale-Hubbell Listed i Who's Who i America Law ad Who's Who i America, 2005-preset editios ACTIVITIES Mr. Teebaum is a active participat i the oprofit commuity who curretly serves o the Editorial Advisory Board of the America Society of Associatio Executives' Associatio Law & Policy legal joural, the Advisory Pael of Wiley/Jossey- Bass Noprofit Busiess Advisor ewsletter, ad the ASAE Public Policy Committee. He previously served as Chairma of the AL&P Editorial Advisory Board ad has served o the ASAE Legal Sectio Coucil, the ASAE Associatio Maagemet Compay Accreditatio Commissio, the GWSAE Foudatio Board of Trustees, the GWSAE Govermet ad Public Affairs Advisory Coucil, the Federal City Club Foudatio Board of Directors, ad the Editorial Advisory Board of Aspe's Noprofit Tax & Fiacial Strategies ewsletter. PUBLICATIONS Mr. Teebaum is the author of the book, Associatio Tax Compliace Guide, published by the America Society of Associatio Executives, ad is a cotributor to umerous ASAE books, icludig Professioal Practices i Associatio Maagemet, Associatio Law Compedium, The Power of Partership, Essetials of the Professio Learig System, Geeratig ad Maagig Nodues Reveue i Associatios, ad several Iformatio Backgroud Kits. He also is a cotributor to Exposed: A Legal Field Guide for Noprofit Executives, published by the Noprofit Risk Maagemet Ceter. I additio, he is a frequet author for ASAE ad may of the other pricipal oprofit

54 idustry orgaizatios ad publicatios, havig writte more tha 250 articles o oprofit legal topics. SPEAKING ENGAGEMENTS Mr. Teebaum is a frequet lecturer for ASAE ad may of the major oprofit idustry orgaizatios, coductig over 30 speakig presetatios each year, icludig may with top Iteral Reveue Service, Federal Trade Commissio, U.S. Departmet of Justice, Federal Commuicatios Commissio, ad other govermetal officials. He served o the faculty of the ASAE Virtual Law School, ad is a regular commetator o oprofit legal issues for The New York Times, The Washigto Post, Los Ageles Times, The Washigto Times, The Baltimore Su, Washigto Busiess Joural, Legal Times, Associatio Treds, CEO Update, ad other periodicals. He also has bee iterviewed o oprofit legal issues o Voice of America Busiess radio.

55 Paulette V. Maehara, CFRE, CAE Retired Presidet ad Chief Executive Officer Associatio of Fudraisig Professioals (AFP) Paulette V. Maehara, CFRE, CAE, served as the presidet ad chief executive officer of the Associatio of Fudraisig Professioals (AFP) for thirtee years retirig i March AFP is the professioal associatio of idividuals resposible for geeratig philathropic support for oprofit orgaizatios. Prior to joiig AFP, Maehara served as chief executive officer of the Epilepsy Foudatio. She has also held executive positios with Project HOPE, the America Red Cross (both at its atioal headquarters ad at the Natioal Capital Chapter), the March of Dimes Birth Defects Foudatio (Hawaii Chapter) ad the Uiversity of Hawaii Foudatio. Maehara s backgroud combies extesive fudraisig kowledge with strog associatio maagemet experiece. Her leadership abilities were uderscored i 1994 whe The NoProfit Times amed Project HOPE (where she served as vice presidet of developmet) as the fastest growig oprofit orgaizatio i the coutry. At both the Epilepsy Foudatio ad the America Red Cross, she successfully completed iitiatives that uified ad cosolidated the orgaizatios ad their affiliates, leadig to sigificatly streamlied services ad activities. Maehara s work has led to a umber of hoors. I 1994, her work for Project HOPE led to a Best Direct Mail Program award from the Direct Marketig Associatio of America. She has wo the America Red Cross Distiguished Service Award twice for her work at both the atioal headquarters ad the Natioal Capital Chapter Maehara has bee selected by The NoProfit Times as oe of the Top 50 Most Ifluetial People i Philathropy for the last te years, , ad she was oe of 100 wome chose to participate i the 2000 Leadership America Program. Most recetly, Maehara was awarded the prestigious Hak Rosso Medal for Ethical Fudraisig by the Ceter o Philathropy, at the Uiversity of Idiaa i Idiaapolis. Maehara served as chair of the board of directors of the America Society of Associatio Executives (ASAE) August ad as immediate past-chair i She has also served o the ASAE board as Treasurer i 2003, ad as past chair of the Executive Maagemet Coucil of ASAE. I additio, Maehara has served o the executive committee of the Iteratioal Bureau for Epilepsy, as well as the board of directors of the Natioal Health Coucil. She has also bee a member of the executive committee of Iteratioal Service Agecies ad chaired its Membership Committee. Ms. Maehara was bor i Happy, Texas, holds a Bachelor of Arts from the Uiversity of Hawaii, ad is married with two childre. She is a Certified Fud Raisig Executive (CFRE), a Certified Associatio Executive (CAE) ad has bee a member of AFP sice 1987.

56 our people Kristaly J. Loso Associate Washigto, DC Office T F kjloso@veable.com AREAS OF PRACTICE Regulatory INDUSTRIES Noprofit Orgaizatios ad Associatios BAR ADMISSIONS District of Columbia Florida EDUCATION J.D., with hoors, The George Washigto Uiversity Law School, 2009 The Public Cotract Law Joural, member George Washigto Uiversity Domestic Violece Project Cliic B.A., cum laude, Uiversity of Miami, 2005 Departmet of Political Sciece Hooree Kristaly J. Loso is a Associate i Veable's Regulatory Practice Group. She focuses her practice primarily o oprofit orgaizatios, assistig charities, membership associatios, ad other oprofits o a wide array of legal issues, icludig icorporatio ad tax-exemptio applicatios, tax-exemptio compliace ad IRS audits, corporate goverace, membership issues, cotracts, ad charitable solicitatio regulatio, amog others. Prior to joiig Veable, Ms. Loso served as a pro boo staff attorey for the Guardia ad Litem Program, 20th Judicial Circuit of Florida. While earig her law degree, she also completed iterships with the U.S. Departmet of Justice s Civil Divisio, ad the U.S. Attorey s Office. She also served for a year as a judicial iter i the chambers of the Hoorable Fer Flaaga Saddler of the District of Columbia Superior Court. Prior to eterig law school, Ms. Loso worked as a fudraiser for a large multiatioal oprofit orgaizatio. Through her experiece i the oprofit sector, she has gaied perspective o the uique eeds of these orgaizatios, both legal ad otherwise. PUBLICATIONS April 13, 2011, Cosideratios i Mergers ad Asset Trasfers of Credit Couselig Agecies October 18, 2010, Avoidig UBIT Pitfalls October 2010, Key Steps to Formig ad Operatig a Noprofit, Tax-Exempt Charity Jue 3, 2010, A Lesso i Compliace: IRS Releases Iterim Report o Noprofit Colleges ad Uiversities Compliace Project (Short Versio) Jue 3, 2010, A Lesso i Compliace: IRS Releases Iterim Report o Noprofit Colleges ad Uiversities Compliace Project (Log Versio) May 7, 2010, Massive Loss of Tax Exemptios Loomig February 5, 2010, Mortgage Assistace Relief Services Targeted i Federal Trade Commissio Rulemakig, Credit Couselig Alert 2009, Improvig Privatizatio: How Federal Procuremet Cocepts Ca Solve Ligerig Problems i State Cotracts for Child Welfare, 38 Pub. Cot. L.J. 956 SPEAKING ENGAGEMENTS April 29, 2011, October 18, 2010, "Cofusig Stuff You Need to Kow to Keep You ad Your Chamber Out of Trouble for the Wester Associatio of Chamber Executives (WACE)

57 September 21, 2010, "Noprofit 101" at Howard Uiversity Busiess School, hosted by Delta Sigma Phi

58 H. Art Taylor Presidet ad Chief Executive Officer BBB Wise Givig Alliace Herma Art Taylor is presidet ad chief executive officer of the BBB Wise Givig Alliace. As its head, he oversees all aspects of the orgaizatio s work, which icludes settig stadards for solicitig orgaizatios, evaluatig idividual atioal charities i relatio to these stadards, promotig charity accoutability ad providig a variety of materials o iformed givig to idividual, istitutioal ad busiess doors. Mr. Taylor is a respected ad sought after voice i the o-profit sector o charity accoutability ad issues affectig the sector s health ad viability. He has several times testified before cogress. He is a featured speaker at charity meetigs ad has cotributed to umerous prit ews stories. He appears regularly o broadcast ad cable ews programs. The No-Profit Times amed him four times oe of its Power ad Ifluece Top 50 people i the o-profit sector ad is a member of the Power ad Ifluece Top 50 Hall of Fame. Uder Mr. Taylor s leadership the Alliace developed a olie charity evaluatio tool that has allowed the orgaizatio to expad radically its capacity to report o charities at the atioal ad local level. I additio, the orgaizatio itroduced ad implemeted a charity seal ow used by atioal ad local charities to idicate adherece to the comprehesive stadards for charity accoutability. The Alliace estimates that more tha 1 billio impressios of the charity seal exist i the public domai o solicitatios, web sites ad other charity publicity givig doors a clear cocise ad accessible meas of kowig whether a orgaizatio meets the WGA stadards. Before joiig the Alliace, Mr. Taylor headed the Opportuities Idustrializatio Ceters of America, Ic. (OICA) from 1990 to Durig his teure, the OICA etwork of employmet ad traiig programs grew to serve more tha two millio disadvataged ad uder-skilled Americas, with affiliates i 70 cities. He ow serves as OICA s Board Chair. He has bee a trustee of Frakli & Marshall College sice 1996 ad is a member of the Associatio of Fudraisig Professioal s Ethics Committee. He served as vice chair of Idepedet Sector, where he was a Board member from 1998 to Early i his career, Mr. Taylor worked for Keystoe Foods Corporatio, UGI Corporatio ad Deloitte & Touche, where he obtaied the status Certified Public Accoutat (iactive). He is a graduate of Frakli ad Marshall College (1980) ad i 2002 he received a hoorary Dr. of Laws from his alma mater. He also has a JD from Temple Uiversity School of Law.

59 Greater Washigto, DC Lee Klumpp, CPA Natioal Noprofit Idustry Group s Accoutig ad Auditig Techical Leader Experiece Areas of Experiece: Not-for-profits Higher Educatio HealthCare State ad Local Govermet Employee Beefit Plas Lee is a Director with BDO Seidma ad has bee with the firm for over five years ad prior to joiig BDO; Lee worked i the audit practices of Erst ad Youg, LLP ad KPMG. His represetative cliets have icluded the State of Marylad, Uiversity of Marylad System, Howard Uiversity, Educatio Fiace Coucil, the District of Columbia, INOVA Healthcare System, Childre s Natioal Medical Ceter, the America College of Cardiology, World Wildlife Fud, The Greater Washigto Educatioal Telecommuicatios Associatio (WETA) ad Uited Way Worldwide. Lee speds a extesive amout of time: Researchig, writig ad dissemiatig iformatio related to recet accoutig ad auditig prooucemets promulgated by the Fiacial Accoutig Stadards Board, the Govermet Accoutig Stadards Board, the Office of Maagemet ad Budget (OMB), the Govermet Accoutability Office, the Auditig Stadards Board ad others that provide guidace for the oprofit idustry. Providig cosultatio to BDO egagemet teams ad our alliace firms aroud the coutry o various fiacial, accoutig, auditig ad reportig issues related to the oprofit orgaizatios. Additioally, Lee provides assistace to our iteratioal offices o OMB A-133 topics ad issues for their cliets that are foreig sub-recipiets of fuds from Uited States Federal Agecies. Preparig ad presetig speeches, semiars ad webiars o various accoutig, auditig, iteral cotrol, goverace, fiacial reportig ad Sigle Audit Issues (OMB Circulars A-133, A-122, A-87 ad A-21) topics related to oprofit orgaizatios aroud the coutry. Listed below are a few of the orgaizatios that Lee has spoke for: America Istitute of Certified Public Accoutats America Society of Associatio Executives The Evirometal CFO Roudtable The Noprofit CFO Roudtable The Kowledge Cogress ad over forty state societies. Lee s work experiece icludes: Workig with orgaizatios i the govermetal ad ot-for-profit commuity with multiple divisios, reportig uits ad oprofit ad for-profit etities Sigificat expertise i compliace auditig of orgaizatios receivig federal fiacial fudig i accordace with OMB A-133

60 Preparig, reviewig ad auditig idirect cost rates proposals Presetig audit reports ad maagemet letters to Boards of Directors ad Audit Committees. Professioal Affiliatios Member of the America Istitute of Certified Public Accoutats ad serves as Natioal Istructor for various Noprofit ad Govermetal accoutig ad auditig topics ad is a member the Ethics Committee s Techical Stadards Subcommittee Member of the Fiacial Accoutig Stadards Board s Noprofit Resource Group Member of the Greater Washigto Society of CPAs ad serves as the Chairma of the Not-for-Profit Committee Member of the Marylad Associatio of Certified Public Accoutats Member of the Greater Washigto Society of CPAs ad serves as the Chairma of the Not-for-Profit Committee Lee also serves o the Board of Directors ad is the Vice-Presidet of Budget ad Fiace of the Bethesda Chevy Chase Chamber of Commerce, Board of Directors of the Cogressioal Awards Foudatio ad is the Presidet of the Board of Directors of Motgomery Commuity Televisio. Educatio B.S., Accoutig, Uiversity of Marylad

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