Nonprofit Radio for Dec. 3, 2010: How To Cripple Your Career & Tax Policy

Big Nonprofit Ideas for the Other 95%

Compliance. Board relations. Fundraising. Technology. Volunteer management. Accounting. Finance. Marketing. Social media. Investments.

Every nonprofit faces these issues and big nonprofits have experts in each. Small and medium size nonprofits have Tony Martignetti Nonprofit Radio. Trusted experts throughout the country join Tony to take on the tough issues facing your organization.

Episode 18 of Tony Martignetti Nonprofit Radio for December 3, 2010

Tony’s Guests:

Robert Sharpe – Robert Sharpe, Jr. is president of The Sharpe Group. He has over 25 years of nonprofit fund development and consulting experience. He has helped hundreds of leading nonprofit organizations and institutions plan, develop, and implement successful major gift planning and endowment development efforts.

Topic: How To Cripple Your Career In 5 Easy Steps.  You’ll learn how Planned Giving fundraisers can shoot their careers in the foot. My interview with Robert from the National Conference on Philanthropic Planning continues with part 2.

Emily Lam & Perry Wasserman – Emily has worked in the Office of Tax Policy at the Treasury Department. Now she is with a prestigious D.C. law firm. Perry is a lobbyist who works exclusively with nonprofits.

Topic: “Tax Policy & The Future Of Philanthropic Planning.  These two also joined me at NCPP to talk about what a new Congress might hold for nonprofits. This was recorded before November’s election, but we were pretty certain the election would turn out as it did.

Here is the link to the podcast: 020: Career Killers and Legislative Update

When and where: Talking Alternative Radio, Friday, 1-2pm Eastern.

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Dahna welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent on your aptly named host tony martignetti last show, which was two weeks ago, and i hope you had a good thanksgiving last week we had bountiful bequests. My guest was susan dame green, and you’ll recall that we talked about why you should start a plan giving program with requests and how to do it. And when i was also joined by shevawn weber, we talked about thrift shops, ops, how your non-profit i should, how to get into the thrift shop business and whether it’s right for your non-profit this week, how to kill your career in five easy steps part to the second half of my interview with robert sharp from the national conference on philanthropic planning and the interview that i did at that same conference with emily lamb and perry wasserman, the subject tax policy and the future of philanthropic planning. Emily is a washington, d c attorney for non-profits, and she used to work with the treasury department in the internal revenue section, and perry wasserman is a lobbyist for non-profits and the three of us will be talking. About what’s likely to happen legislatively in washington and how that affects your organization’s bottom line. That’s this week on talking on tony martignetti non-profit radio. We’re going to take a break and after the break, how to kill your career in five easy steps. Stay with me. You’re listening to the talking alternative network. Are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics. Politically expressed buy-in, montgomery, taylor and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com i really need to take better care of myself. If only i had someone to help me with my lifestyle. I feel like giving up. Is this you mind over matter, health and fitness can help. If you’re expecting an epiphany, chances are it’s not happening. Mind over matter, health and fitness could help you get back on track or start a new life and fitness. Join Joshua margolis, fitness expert at 2 one two eight six five nine two nine. Zero or visit w w w died. Mind over matter. Y si dot com. Cerini buy-in is your marriage in trouble? Are you considering divorce? Hello, i’m lawrence bloom, a family law attorney in new york and new jersey. No one is happier than the day their divorce is final. My firm can help you. We take the nasty out of the divorce process and make people happy. Police call a set to one, two, nine six four three five zero two for a free consultation. That’s lawrence h bloom at two one two nine six four three five zero two. We make people happy. Hyre talking alternative radio twenty four hours a day. Welcome back to tony martignetti non-profit radio. I’m away this week, but we’re having interviews that i did earlier at the national conference for not for philanthropic planning, and the first of those is going to start very shortly right now. And that is how to kill your career in five easy steps with robert sharpe. What do you say? The board members who say, well, all right, that’s, a fine example thie and antillean and her niece. But where we’re a business were incorporated is a nonprofit corporation where we’re trying to run a business here, and we need to know what we can expect when someone says you’re in my will. Okay, then i’ll give you five names and you call him up, and then you come back and teach me how to do it. Yeah, you make five of those calls and see what you encounter and then come back and tell me to do it. You can’t say that that’s, that’s altum elearning cripple your career that will you? That’s an execution. But no, the point is you, you, you that’s where oftentimes you can bring in, you know not to be in any way self serving for what we do or what you do, tony. But you can get outside people to come in sometimes and make those points right a cz part of a known as part of an overall, you know, it’s part of talking to a board or a management group about, quote, plan giving this is a point that can be made. And you know what most people who reasonable once you personalize it and they use an example like until they get it because they wouldn’t call their own parents up and ask him that question it’s personal stuff and most of the bequest of residual ery bequest anyway, and they have no idea. And by jargon jacket i yes, residual request that relates to what we’re talking about foreign, that you’ve got three, basically, three kinds of requests that people can leave you. They can leave you a request of a specific amount, which tend to be small because if people have to guess at what they can afford to leave you it’s going to be on the low end or they can leave you a percentage of the estate, or they can some combinations of these. Or they can leave you what’s called the residue that most most charitable bequests come from residual ery estates from very wealthy people who have enough money to take care of their family. Pay the tax on that money, and then have some leftover or people that have no children, and they and their close to their nieces and nephews, and but they don’t want they’ve been involved with certain charities all their lives, and it’s really part of their family. That’s why saying, when people put you in the will their elevated to the status of a family member, and that’s what you should and from their perspective you are you are there somebody spends somebody’s eighty years old. And they spent fifty, sixty years acquiring what they have for them to choose your organization to be one of the places that they trust with their lifetime accumulation of assets. That is a very important thing. And it’s not a business transaction, right? That’s especially, is a family it’s a personal transaction? A residual. Ery bequest is where they leave one hundred thousand dollars each to three nieces and nephews, and all the rest and residue split between four five it’s normally six point eight charities in the will it’s, not just one charity it’s, the six that make the cut and what you’re really doing in the bottom line here is looking for market share among a relatively small number of people, the needle’s in your haystack, and you don’t know who they are, so you have to shake the haystack would put a magnet there, pull them out and you don’t have to go burn the haystack down and then find the needles that are left and there can be a lot of money in those residual area states, though, is the largest one, just just because it’s called residue thats the big ones that they’re five to six x times the size of the average specific request is probably ten to twenty five thousand dollars jump in if you disagree, tony, i mean that, you know, they’re the ones you see there are specific amounts they rarely over fifty thousand dollars, whereas the residual really quote something well hyre like twenty. Eight to thirty years somewhere in there i mean, the comedians about ten, if you look in an organization that has, like, fifteen hundred states a year, get one hundred million dollars, a lot of those estates or small, specific bequests, half of them are western. Fifteen thousand dollars, you know, listening. But one hundred fifty to two hundred thousand is not unusual for a residual request. Our guest is robert sharp, and you’re listening to the chronicle of philanthropy and tony martignetti non-profit radio coverage of the national conference on philanthropic planning robert’s kind enough to join us before doing his seminar at the conference, which is how to cripple your career in five easy steps, and we’re not gonna be able to get to all five of the steps. But let’s, talk about something that you did allude to earlier, which is working with other fundraisers. You said that there’s annual giving and this major giving this corporate in foundation giving and and often we see these operating in self contained silos that don’t seem to have a phone line to the others. What about what about working with integrating with other other fundraisers in your organization? Well, this is this is an example of where, ironically, the smaller charity is in this environment, they have advantages with the fewer fewer people on staff when you’re dealing with wealthy donors, when you’re dealing with people that major gifts or for plan gives proximity, those people and being able to manage the relationships are very, very important hyre now the big shops that have three hundred, people in them and they’ve got annual funds and they’ve got real estate departments, and they’ve got all these various things. They have advantages from a technical standpoint, but that’s not that’s a disadvantage when it comes to managing the relationship because a donor at a big university with three hundred people on staff, someone sends a card and ask him for information dahna state it could take two or three weeks to figure out. You know what your what? Your vector victor. You know, who’s got the goods you should answer what’s your clearance clearance, clarence, you know what? Do you know who can, who has clearance to talk? This donor is the small shop with the director development. One person they can get on the subway or a bus or in. The car we’re on a plane and b to c that donor within twenty four hours and or even just pick up the phone and not and not think of the concern that they’ve stepped on a board members toes or there are some some person that those of somebody they’d never met, right? So, you know, they can do what i call them, mohammed, all these school of fund-raising they could float like a butterfly and sting like a bee, but let’s, get to the shops that have more complexity where you do have to integrate sometimes, if you’re dealing with, like a smaller organization with a lot of may, a lot of big donors of all ages, they then your problem is integrating with with with major gifts. But if you’re dealing with a large organization has a big direct mail or annual fund or whatever you’re talking about integrating with that function in a lot of places, you have to do both the main point. I’m going to make it my session is that i’m going to show this with a lot of charts and graphs and whatever is that? Well, let me let me buckslip go. Backto little prior think the average age one major national health organization that gets one hundred million dollars a year, or maurin, request the average age of their donors when they make the first gift to that organization is seventy six years old? I worked with universities with thirty forty million dollars worth of the question come and you go look at the annual fund history and in minutes, not the average age at the first gift to the annual fund will be in the fifty’s half of the median will be in the fifties. A lot of these people it’s a short cycle from first gift, like the one i mentioned is seventy six it’s average twelve years from first gift until death, so during that twelve years they start out is like direct male donors, and then they stick on the file and then maybe there’s a capital campaign going on. But you’ve got to keep the eye on the ball and make sure that as donors are reach in the end of their natural life cycle, you began to turn down the asks for current money. I’ve never seen an eighty five year old who was giving fifteen dollars upgrade her e-giving so quit senator stuff about thanks for fifteen bucks, can you send me more? She may have turned her thermostat down to be able to afford to send you fifteen dollars. You’re turning her off? Why not pick up the phone and call her? And same is this zone? So we realised now that you’ve made over fifty gifts or you’ve given over a thousand dollars and thank you so much, we know in times like these, people are making sacrifices, recognizing the cumulative militant and longevity and then turning down the volume for gifts that are more appropriate younger and when they go through that match your match by integrating we mean t make sure that the donor is seeing different faces of your fundraising efforts, depending on where they are in their life cycle and every donor as a certain age and every donors a certain wealth. So depending on where they are wealth wise and age wise, you want to integrate sometimes when they’re young right out of college it’s just annual funds, but if they’re in eighty five year old and dwindling in their current giving, most of it may be talking to them about ways they can leave a legacy who are the typical planned gift donors we’ve we’ve talked around this little fun playing let’s go right, well, ok, who’s, the typical trust donorsearch no, now let’s not be that technical who’s most likely to include the organization in their will. Now, do you want to raise money in the next funny in fifty years when i want the money to come in? I wanted this to be long term fund-raising so maybe fifty years, but thirty years, so you’re bored wants to spend money now to generate money in thirty years? Yes, they’re willing to do that. Okay, well, then, you’re probably not you’re not going to be influencing much of that because most of the people that leave money to charities, they’re maximum e-giving cycle was like fifteen to eighteen years, and they died age eighty seven on average. So most of the people that make the end up leaving the bequest ultimately our people outside hyre education and religion, they tend to be people that are required relatively late in life. There you’re longer term flag your files, frequency, longevity, age and gender. You lou, look. For people who’ve given frequently over a long period of time who are going to die in the next ten to fifteen to twenty years? And keep in mind that a sixty five year old couple has about a twenty eight year life expectancy. So really, you’re talking about people that are pretty much over the age of sixty five forty five year olds are going toe fifty years, maybe look at the life story s o i don’t paint if you find a forty five year old it’s got you in there, will you probably have a budding major gift prospect because somebody that has the dough native intent to put you in there, will it fifty years old? Think about what it takes to elevate a person or even think about doing that. So the people it’s not how much they’re giving you it’s how many times that when the attorney says you any charitable interests you want to fire off in their brain and the more likely the more times they’ve written you checks in the more times they’ve made the decision to give, the more likely it is you’re going to be one of the six. Point eight. Charities that are included in their will e-giving anything tooting, getting thinking. You’re listening to the talking alternate network. Get in. Duitz e-giving you could are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com way look forward to serving you. Do you want to enhance your company’s web presence with an eye catching and unique website design? Would you like to incorporate professional video marketing mobile marketing into your organization’s marketing campaign? Monisha wanna one media offers a unique marketing experience that will set you apart from your competitors, magnify your brand exposure and enhance your current marketing effort. Their services include video production and editing, web design, graphic design photography, social media management and now introducing mobile marketing. Their motto is we do whatever it takes to make our clients happy. Contact them today. Admission one one media dot com hey, all you crazy listeners looking to boost your business, why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com welcome back to tony martignetti non-profit radio were listening to my interview with robert sharp on i was also joined by raymond flandez of the chronicle of philanthropy, and the subject was how to kill your career in five easy steps from the national conference on philanthropic planning in october of this year. Here’s the rest of that interview and also shouldn’t you be encouraging these gifts by will. With some regularity and frequency, so yes, that you will be top of mind when when they do go visit there, get that gets to that gets to step five to cripple your career is to ignore the economics. If you have limited resources, you need to spend them in ways that are going to produce the most return. Then when you start getting money in, then you can expand your efforts and do things that are a little longer term, our lord, our lower probability, the money that you, what you want to do is ok, let’s say you’ve got one hundred thousand donors are fifty thousand ten thousand and you’ve got enough resource is to handle twenty, five hundred. You can re sources that you could market request, for example, to your entire donorsearch base once a year, or you could go three times a year to the three thousand people that are over the age of to the to the small number who were in the right age and the longevity range. You’re better off to go four times a year, whether it’s, male or whatever you’re doing focusedbuyer money on frequency of contact with a smaller group of people rather than hitting your entire file once a year because different people are having different events in their lives and there’s this continuity is important. The more things they read about somebody who’s done this especially if you’re not a natural bequest recipient, a college or certain other types of organizations. Wilmore naturally come into someone’s mind than a very niche organization. Let’s say you’re an avid stamp collector, and when the attorney says, are you? Ah, do you have any charitable interest, your college or your religious affiliation or whatever may come more naturally top of mine to get for the american stamp collection foundation that raises money to to fund research and conferences and whatever on stamp collecting, there are people that will put that stamp collecting organization there will, but they’ve got to go out and communicate that idea more often and frequently so. When the attorney says it, you make it into the same slot because they made care more about stamp collecting, then they do their college in the final analysis, rehman’s continue to tie that in with the failure of marketing i think that’s that’s really this marketing marketing, right, miss? Marketing and failure to allocate your marketing resources correctly is another way to fail in this environment, there are people out there that are saying ignore people over the age of seventy because they’ve already made up their minds that and spend your time and effort on younger people. Frankly, that’s, because it’s easier to get a younger person to request a free will planning guide from any blast. And it is a seventy eight year old whose fingers don’t work well enough to work the keys on their computer. And so the fact the matter is they also based on surveys where they go out on the call a bunch of people and say, well, would you consider putting this charity in your will? Yes, i would that’s like when did you stop beating your wife? You know, so a forty five year old is more likely to say they would consider it yeah, way are starting to see more, more suggestions that people thirty five and forty should be should be encouraged include the organization there were wonderful, but you’re going to get money in seventy years and so and how likely is it that is going to? Change the aren’t the person’s philanthropic interests goingto charity priority’s gonna change up from thirty toa seventy eight. I have worked with clients, for example, a sponsorship organization where they have a lot of young donors in their twenties and thirties who give to this organization before they get married and before they have children, hundreds of thousands of them. But then they get married in their twenties and thirties. They have children. They start paying tuitions there, paying for houses in mortgages. All of sudden the discretionary income to spend thirty bucks a month for a sponsorship goes away and they disappear off the radar screen and maybe never come back. There’s, another group of people that it’s sixty to sixty three. When they’re empty nesters they start, they get acquired at that point, and then they start. They start giving at that point so it’s more the later acquired donors who are the ones that tend to actually do it. And that’s true with education, too, in many cases. Let’s see if we can maybe just approach one more. Well, you know what, before we do that you had a request marketing advice for organisations that have maybe ten or even fifty thousand suppose an organization just so now we are giving a deviating a little from career, but but we’re talking about marketing and organization that has maybe just a thousand donors and let’s say that they’re normally normally distributed across age, so a certain percentage of them are over sixty, sixty five, right? What can they do? Tow, promote request just a simple bequest. E-giving well, that organization is likely not tohave i’m a dedicated specialist argast certainly probono no, no way, unless it’s a thousand million dollar donors. Okay, now i’m not gonna happen, okay? So so what you’re trying to do there is educate those people on what i would do in that case is i would be incorporating messages about remember the organization in your will on stationery, on everywhere you can on every solicitation include something about remember the organisation that will or i have already included it would consider including don’t depending on good news is it doesn’t draco’s bad way that goes back to raymond’s question earlier what’s what’s the appropriate way to be asking depends what does depends certain certainly to some extent on on the age of those people. But the good news about having a thousand donors is it doesn’t cost very much money to be exposing the concept to everybody. So occasionally, you know, once or twice a year, you might want to send out something that’s ah, letter from somebody on your board that’s got you in the will and have include some information on the importance of keeping your plans up to date in case you’re terrible interest changed. So the that the good the good thing about being small is that you can if you can afford to go to everybody. But if you have five hundred thousand donors or five million or whatever the larger the organization is and the and the more precious the resources are, you have to do all kinds of things. Then you have to spend more time focusing in on the exact organization i have a question with what if a donor says no he’s, no. Here she has been contributing and giving gifts the organization but but then it’s, like i’m not able to. I don’t want teo are how what’s the next step. Where? Charity there. Well, i would say never say never because people’s someone who is someone who is seventy eight year old and has a sick spouse, i’m thinking of a particular situation where a person had asked about had sent information saying, i’m interested in maybe including this organization, my will, one of the people, but that this conference was telling me that she called this man about eighty years old and, you know, said, you entered you indicated interest in this, and i was just i was in orlando, and i thought i’d come by and say hello. He said, no, don’t bother, you know, i’ve just right now i can’t think about this. My wife is sick, i’m tired. I don’t feel like talking to anybody right now, okay? Let’s say, three years from now, he’s, eighty one years old, his wife dies a year from now and now, it’s, two years from now and he’s gone through his grieving mourning period and whatever and now he gets something else from you. He may then change his mind so events and people’s lives are changing all the time there and that’s. Another reason to be consistently focusing the message on the right group of people because things are changing their lives and things do happen, they do, they do lose a spouse, they do have children that has special needs or grandchildren are all sorts of things happen. So all you’re doing when you’re talking to a person at any point in time, their lives or movies, you’re just taking a snapshot of that moment. And at that moment, the picture may not include a bequest for you, but that can change over time as things happen in their in their lives, same token, somebody can say yes, you’re in my will and then take you out because something happens, they get an illness so they waste a lot of money on something or lose the money and they don’t have the resources that they have, and then they go their lawyer and the lawyer says, have your charitable interest change? Well, you know, since i lost all my money to main off, i just can’t i can’t do this anymore, so it works both ways. Some people that say no now will be yes later and some people that are telling you now on ly about seventy percent of request commitments come through in the end because things change and a lot of those commitments when they say you’re in the will remember their contention on one spouse pre decease in the other. And if the spouses die in the wrong order that you may not get the quote unquote wrong you may get you may not get a request, but they didn’t lie to you. Circumstances changed, but i’ll tell you this. The younger people are when they tell you, when people tell you that you’re in their will and they tell you when they’re under sixty years old, there’s only about a fifty fifty chance you’ll ever get to request. And i know that because i’ve studied thousands of the states where the people notified in advance and we look at the age of the people when they notified him. Then after they die, you look at the probability that they got the request and the older they are. When they tell you, the more likely they are to come through because there’s fewer life circumstances to change their minds that we have to leave it. There were no thank robert sharp very much for your advice. Think. Well, you’re welcome, tony and good luck, raymond. Thank you, too. This is the chronicle of philanthropy and tony martignetti non-profit radio coverage of the national conference on philanthropic planning. Coming from lake buena vista, florida, our guest has been robert sharpe, and our coverage will continue with future interviews later later, just just later today. Thank you very much for joining us, robert and agreement. That was my interview with robert sharpe. How to kill your career in five easy steps, and i was joined by raymond flandez of the chronicle of philanthropy after this break, tax policy and the future of philanthropic planning. Another not national conference on philanthropic planning interview. Stay with us. You’re listening to the talking alternative network. Are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. And i really need to take better care of myself. If only i had someone to help me with my lifestyle. I feel like giving up. Is this you mind over matter, health and fitness can help. If you’re expecting an epiphany, chances are it’s not happening. Mind over matter, health and fitness could help you get back on track or start a new life and fitness. Join Joshua margolis, fitness expert at 2 one two eight six five nine to nine xero. Or visit w w w dot mind over matter. N y c dot com do you want to enhance your company’s web presence with an eye catching and unique website design? Would you like to incorporate professional video marketing mobile marketing into your organization’s marketing campaign? Mission one on one media offers a unique marketing experience that will set you apart from your competitors, magnify your brand exposure and enhance your current marketing efforts. Their services include video production and editing, web design, graphic design photography, social media management and now introducing mobile marketing. Their motto is. We do whatever it takes to make our clients happy. Contact them today. Admission one one media dot com. Talking. Welcome back to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent. I have another interview for you. This is emily lamb and perry wasserman. Emily is a washington, d c attorney for non-profits perry is a lobbyist for non-profits, and we were talking about what’s likely to happen legislatively in washington and how that affects your bottom line from october of this year. Here’s that interview welcome to tony martignetti non-profit radio and the chronicle of philanthropy coverage of the national conference on philanthropic planning. We are outside orlando, florida, in lake buena vista, florida, for the national conference hosted by the bye ppp. The partnership for philanthropic planning and our guests today are emily lamb and perry wasserman there seminar is titled tax policy and the future of philanthropic planning, and i’m very glad that their practices bring them to our coverage of the conference, both of you, thanks very much for joining us. Thank you, thanks for having us. Emily lamb is a council at skadden arps slate meager in flom in the washington, d c office, and she advises non-profits on diverse tax issues, including tax controversy and tax accounting lots of tax. Excellent, and she is a frequent speaker and panelist, and her co presenter at the conference is perry wasserman and he’s, the managing director of five o one c three strategies, which is a washington, d c based lobbying firm. Working exclusively with non-profits perry is the chief lobbyist for ppp. The partnership for films, traffic planning again welcome, your your seminar is tax policy. See the future of philanthropic planning? What is happening in tax policy? The start just generally that is going to impact philanthropic planning. And let me just remind the audience we are recording before november third. November third is obviously a critical day, and we’re in late mid october right now. So let’s bear in mind that emily and perry are doing the best that they can tell us what the future looks like, but it could change after november third. So what’s happening generally apparent. Certainly. Well, you know, the better question tony might be what has not happened this past session? It’s congress, particularly the senate has been ah, overwhelmingly slow. Some might say negligent on tax issues so we haven’t seen ah lot happen. Obviously, congress is in recess right now. We’re about twenty days out into ah to the midterm elections, and when they come back, the next thing is they’ll come back on november fifteenth. We believe, for a lame duck session, they have a number of issues, they have to confront the three big tax issues as they may relate to non-profits would be certainly the estate tax, which we’ve been hearing a lot about this conference already, it would be the extension of the so called bush tax cuts, these two thousand one, two thousand three tax cuts for individuals, and it would also be this big package of extenders, which includes a host of provisions, including the ira charitable roll, over which a lot of non-profits have been have been watching. So, you know, in the in the short term congress is going to have to address those issues, they may choose to address him in the lame duck session, which starts in you know, we’ll go for about a week after the election and before thanksgiving, and then i’ll come back in december, perhaps they made aside just a punt those issues to the new congress in twenty eleven in january. S o we’re not really sure at this point, but that’s kind of the state of play, you know, as we’re talking, emily slow and negligent on taxes, this our congress, you agree? I probably shouldn’t speak to that, because during the last three years, i’ve actually been at the department of treasury in the office of tax policy. So i think my remarks here should be limited and not reflect that type of knowledge from my government service. I think it would certainly be fair to say that there were a number of very large matters on the congressional plate, obviously health care reform being one of them, which does have some significant impact for the nonprofit sector. Notably there was legislation enacted that impacts the responsibilities of charitable hospitals um, and obviously healthcare and the extremely large bill, there are a number of new non-profit type entities that are contemplated in that legislation, it’ll be interesting to see how that plays out. Certainly, i think there’s there’s the facts speak for themselves, you know, estate tax was not an issue that was taken up extenders, you know, were introduced but have not been enacted, mom and certainly no one can just see. From the political landscape that it has been difficult to get many different things accomplished. What about health care reform? Emily for non-profit healthcare organizations and this is, i think, tumultuous mai mai mai aptly stated, you can you could describe it differently, but for your non-profit clients that are hospitals, how did they get their arms around this enormous legislative change? Well, the changes certainly for hospitals are significant, as you mentioned, certainly my experience recently on the regulatory side, the irs and treasury are in the process of getting guidance out on those particular hospital provisioned i’m referring specifically to five o one r, which has a number of new requirements for hospitals to keep their exemption, and the government issued a notice requesting comments earlier this year. My understanding is that they have received numerous comments, they’re certainly working diligently to try to get guidance out there so folks will understand, you know how best to comply and when you refer to five o one are just give us the full name of the act that we’re talking about. Oh, i apologised five, five, one ours the new section of the internal revenue code. Okay, that was added in the health care isolation, okay, and can you can you give us one or two of the items that are significant there in five? Oh, one are that are going to impact healthcare non-profits sure there are requirements now that for the hospitals to keep their exempt status, they need to have in place at certain times of policies, for example, of financial, a written financial assistance policy and that has to be widely publicized they need to have adopted and in place on emergency medical care policy. There are limitations on the type of charges that the hospital’s may impose on underserved or indigent type patients. There are requirements regarding analysis of community benefit type activities and charity care. Mom, and there is, in fact, a new excise tax that is imposed for a failure to conduct that particular analysis on the community benefit activities carry your are our lobbyist on the panel. What do you foresee any of this changing for? For health care, for non-profits it was an enormous change in health care law. Is there any likelihood of this being revised it all? Emily said a lot of comments have been received or what? Do you think the future of this particular the five o ones fiveone are is? Well, certainly from a kind of macro level we have republicans in the senate and the house candidates running right now on a platform of repealing all are, you know, some of the health care reform bill? I don’t really think that pertains to the five oh one r provisioned but ensure i do want to mention want her vision in the health care bill, which was kind of like a sleeper provisions that will actually affect every single non-profit and that was a ah revenue raising provisions. You know, this bill, it was important and actually required by law that it be offset that it be so called revenue neutral to the government in one way that congress decided to raise revenue and offset the cost of the bill. Was teo tweaker requirement that any entity, including non-profits, will now have to file ah, form ten, ninety nine with the irs for any payment they make to a vendor for six hundred dollars, or more a year? That includes one time payments and cumulative payments over six hundred dollars. Six l thought it would be the provision was said teo have raised or will raise nineteen billion dollars toe offset the cost of of health care reform, so that kind of gives you an idea of the administrative, the nightmare that a lot of you know, every entity but you know, we’re talking about non-profits might face, so there certainly has been a move the last couple months teo to repeal that provision of health care reform. It doesn’t certainly doesn’t go to the subject substantive issues of health care, but there has been a a move teo to repeal that provision they haven’t been able to do it yet, in part because they have to find another nineteen billion dollars if they get rid of that provision. So it’s something that the partnership for filling topic planning has certainly been watching because when those new rules go into effect, which it’s set for twenty twelve, if nothing changes it’s going to be a huge shift for aa lot of non-profits particularly the small and medium sized non-profits who may be a little less sophisticated on some of these issues, tio start to comply with so that’s one issue of the health care bill i think that’s going directly impact non-profits and depending on what happens with the election, you know, we’ll see if it if he gets repealed or not. Yeah, and you allude to something very important for our audience. I mean, the audience for the show. It is small and midsize non-profits. And just how do they get their mind around something this this enormous what’s the timeframe of the sort of the comment period and then the and then the reformulation period. If if there is that reformulation how’s that process where for this provision for this provision ableto make comments and just generally what’s the the time frame? Well, it would be it would have to be a legislative fix. I mean, they would have to be legislation that that that changes the law. Since the president, you know, signed the health care reform bill into law, there has been ah, a lot of movement in the senate in particular, through amendments trying teo drastically raise the six hundred dollar limit. So, i mean, at this point, it’s still in the legislative spirit, hasn’t gone over to the regulatory side of things. So i mean, all i could really say is you know, certainly we’ll have information on the ppp website. I know some other kind of national umbrella charities are following this, but, you know, i would encourage members to reach out tio they’re members of their members of congress are your listeners rather to reach out to their members of congress and let them know that they find this provision to be to be troubling? Because i think there’s definitely a a movement on capitol hill, a bipartisan movement to repeal this provision, but the problem is that i alluded to earlier in order to do that in order to comply with other laws that are on the books. Congress has to offset this change, so they’d have to come up with nineteen billion dollars somewhere and ah, and that’s kind of the name of the game in washington on dh, so i think that’s going to be the potential roadblocks. My guests are emily lamb and harry wasserman, you’re listening to tony martignetti non-profit radio and the chronicle of philanthropy coverage of the national conference on philanthropic planning. Emily and perry’s seminar at the conference is tax policy and the future of philanthropic planning emily can we switch to the estate tax obviously critical. Nobody really knows what’s happening. We just know that this year two thousand ten there is no estate tax. Enormous repercussions, i think for fund-raising non-profits what? What’s your advice going, toby or what? You’re not advice. What do your word’s going to be around this for the for your seminar audience wow, that that’s a tough one. Obviously think many of us who work in this space and who watch it are just continue to be surprised by where things stand today. And, you know, certainly for the first half of the year, i was still inside at the department of treasury, where my colleague cathy hughes has responsibility for st gift tax matters and she’s, my ex colleague now, obviously, but certainly want to put a pitch out there. Kathy is fantastic and really a wonderful resource to folks who may be interested in this area or have particular concerns. Obviously, from the seat that i was in, as perry alluded to earlier, you know, this has not reached the regulatory side yet. It za legislative matter-ness needs to enact the law that will be on the books or certainly if if nothing happens, the way it works now would be, we’d go back to the two thousand one status. Could you remind us of what that is essentially fifty five percent rates of the death tax? And i think one million dollar exclusion amounts and those air significantly, the tax rate is higher, the exclusion amount is significantly lower than it was in two thousand nine because extra, the legislation that enacted this kind of ten year look forward system had had a system of of great changes and exclusion amounts. I’m just stopping once, emily, on my show, we have george in jail, and i’m warning you, i’m the warden know you know you don’t contribute that would only only sent your fine no door locking it. Sometimes i have keys, i don’t wear remote, so i don’t have my keys. But just for our audio, what is what? Remind us what avectra was boy, i’m not even sure i know the what the two thousand one wall, this tent this ten year look forward that that emily was talking about. It was the legislation, and i have to say, and and we were talking a little bit. About this last night, i mean, in two thousand won when congress was debating this legislation and coming up with this compromise that it would go away in two thousand nine. But she back-up in two thousand and ten labbate nobody or i’m sorry go away in two thousand ten, and she back-up in in two thousand eleven. Nobody thought we’d be in this position where we’d be in october on congress, you know, would be campaigning right now, possibly coming back for a lame duck and nobody knows what’s gonna happen with the state tax. So it’s a precarious situation to be in. I don’t know how this is all going toe going to shake out the house has ah passed last year at the end of the year, i believe they passed essentially an extension of two thousand nine levels. Senator baucus who’s, chairman of the senate finance committee, has ah supported that in the senate. But there’s ah, a coalition of senators of both parties who want a ah ah, you know ah, a different version of the tax so on what the house did is unacceptable to them. So it’s kind of this game of political chicken, you know, unfortunately, a lot of people are caught up in the middle of it, and quite frankly, i don’t know how it’s going it’s going to shake out? We’ve heard some reports congressional staff certainly indicate that chairman baucus, when they come back for lame duck, has a package ready to go that deals primarily with the these two thousand won in two thousand three bush tax cuts, and certainly many expect that a state tax will be dropped in there, but but it’s tough, you have to count them numbers in the senate and it’s very likely that senator baucus will not have sixty votes, which is the magic number in the senate. Teo to move the legislation forward. So unfortunate for this one, i think we’re going to have to wait and see how everything shakes out. I’m with emily lamb and perry wasserman at the chronicle of philanthropy and tony martignetti non-profit radio coverage of the national conference on philanthropic planning in lake buena vista, florida. I’d like to talk about senator grassley on the senate finance committee. Very activist around non-profit issues which perry do you wantto? What are you going to start? Okay. Okay. And then, well, then we will turn family. Okay, well, yeah, i would just agree with your assessment. Ah, that now ranking member grassley has been very active ill non-profit issues, probably more so than any any chairman or ranking member of senate finance that we’ve ever seen. Ah, and i think the sector has i think it’s actually transformed the sector, perhaps in ways he didn’t envision a lot of what he was talking about was not legislated the, you know, regulatory actors didn’t end up dealing with it, but the sector itself, i think, has really stepped up. Oh, and dealt with a lot of what he was talking about. And ah, i would say, is perhaps it’s proof of that? And since the two thousand six pension protection act, which i talked about earlier, that had a lot of these reforms in it, i think it’s kind of income quiet on the reform friend, i don’t think i mean, other than health care, i don’t know if we’ve seen a whole lot of ah ah, hold out of reform. So i think that’s how that’s that’s kind of working i do want to note on again. We’ll have to see how everything shakes out after the election, but from all indications that i’m aware senator grassley will be stepping off the finance committee. There’s a very complicated system in place in the senate for committee membership in committee leadership positions, there’s rules on each side about which committees people can serve on in the time limit. So it looks like, ah, senator grassley will be going in a ranking member, chairman capacity to the judiciary committee. Senator hatch will take his place, so i think he’ll still be involved on the issues, but he’s certainly not gonna have that kind of perch that he that he once had. Emily, please, absolutely. I think i absolutely agree, perry, that we’ve seen a lot of activity from senator grassley. He’s had a number of staffers who have been very, very activist and interested in these issues, and i would agree that certainly there were a number of significant reforms enacted not just in the pension protection act in two thousand six, but in a piece of legislation in two thousand five, which imposed a new code, section forty nine sixty five, which are basically tax shelter penalties on exempt organizations that engage in tax shelter transactions on what we had seen through the early two thousand’s was what people refer to as the tech shelter wars, mostly on the taxable for-profit side. But, you know, iris went out there and there were a lot of tax payers engaged in abusive tax shelter transactions, and there was a great deal of activity on that front, i think ultimately it’s pretty clear that the government won those wars, but i think you also saw a little bit of a trend where sametz empt organizations were engaging in that type of activity. So one of those, maybe the abuses that people are most familiar with is the the donation of automobiles, bond, the deduction around those is that is that one of the things you’re referring to that is, i think, definitely a charitable abuse that is not a listed or reportable tech shelter transaction. Thanks. Pension protection might have dealt with the automobile. Yes, i know, but they’re about tax shelter. Yes, which is ah, sort of a very specific, you know, kind of structure transactions that would take advantage of the exempt organization or exempt entities exempt status to help evade taxes. Essentially, you saw that in, oh five, and then clearly the pension protection act in two thousand six, it had a number of reforms. In addition to the incentives, i think is perry really referred to really change the landscape for certain types of charitable giving vehicles, especially supporting organizations and donor advised funds. I think on the regulatory side, quite frankly, iris and treasury are still dealing with that. They’re still in the process of working through regulatory guidance to get that legislative package enacted. And where is that guidance, emily? When will it be ready? One can never predict, but but i know that the folks some of that guidance i worked on while i was in the government, and i know folks are continuing to work very hard on that. Obviously, with healthcare coming down the pike, that’s another thing that really divert a ton of iris resource is because a lot there pieces of healthcare that were effective immediately, including the provisions related to the hospitals. You know, a lot of it is deferred till twenty twelve, but it’s kind of a whole new infrastructure, both for the world outside land for the government to build in order to make that system run. But the last thing i would just notice, i do think that the interest by senator grassley in these areas, even where it did not lead to actual legislation, has kind of transformed the sector and been helpful. The thing i would point tio would be the college and university conversation where senator grassley, i think, was very vocal about why are these universities not spending more out of their endowments? You know, looking at some of the tuition rates and all that he had some round table meetings where a number of very prominent folks came to the table. There was a fairly uniform view expressed at the round table and about the conversation that, you know, one size doesn’t fit. All a mandatory distribution would not be helpful. I mean, we see ultimately, at least to date that that has not being part of any type of introduced legislation. But during that conversation, i think you saw some very large institutions, you know, voluntarily announced that they were going to change some of their policies in terms of endowment spending. Save you no tuition scholarships in that space. And i think that’s clearly got to be helpful, and since grassley has been such a mover in these areas, what do we expect? Can we predict what it looked like when senator hatch takes grassley’s place? Emily, can you can you comment on the replacement? A better insight? I would say obviously, senator baucus has also expressed interest, you know, he’s been with grassley throughout this process, i know he in particular is interested in rural type philanthropy, a zit impacts, you know, his home state, obviously and caucuses from which the montana thank you, of course, in terms of the of the hatch, you know, move over. I don’t know if you have thoughts, parent. Well, i i think you’re exactly right, emily. Senate finances is a unique committee on, particularly with senators baucus and grassley, they worked very close together, they usually least publicly we’re on the same page. So i think regardless of what happens with the election in which party takes control of the senate, i think we’re going to see senator baucus certainly continue with his interest in the sector on dh, maybe even pick up some of senator grassley’s interest it’s also important. To know kind of in the day to day workings of washington. Andi, you may have made this point earlier, emily, that a lot of the staffers may end up sticking around on dh they carry a lot of the load, so certainly they work at the pleasure of the chairman and the ranking member on day work under their direction, but geever even an expertise that we now have on senate finance dahna with the staffers and tax exempt issues, i think we might see them continue toe work on, you know, in the space, so to speak, in terms of senator hatch, i mean he’s certainly known as as a partisan, perhaps a little bit more so than grassley, we know that he is concerned, leased in the last few weeks, we know that he’s concerned with the political issues, particularly how they feel how they relate to see fours and see fives and see sixes that may be an issue that he actually disagrees with senator baucus on, but i don’t i don’t think he’ll deal with those issues to the exclusion of other non-profit issues, but i think we’re going to continue, you know? I don’t want to leave your listeners with this feeling that because senator grassley’s moving over to judiciary, suddenly the tax writing committees may not care about tax exempt organizations? I don’t, i don’t think that’s true, but certainly he had a unique approach to oversight hey used his perch in senate finance to conduct ah, very aggressive oversight of the sector. Ah, and i’m not sure if we’ll see that continue, but they’re still going to know we’re out there and you know what we’re up to, all right? We’re going to leave it there. My guests have been emily lamb and perry wasserman. Emily is counsel for skadden, arps, slate meager in flum in the washington, d c office and perry is managing director of five o one c three strategies washington d c based lobbyist firm they’re seminar at the conference is tax policy and the future of philanthropic planning. Your listening to tony martignetti non-profit radio and the chronicle of philanthropy coverage of the national conference on philanthropic planning. I want to thank both of you for taking time out to join us. You’re you’re terrific team together. Thank you, thank you, thank you very much. You’ve been drinking, ending the getting dink, dink, dink, dink. You’re listening to the talking alternate network, waiting to get you thinking. Cubine are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics, politically expressed hi and montgomery taylor and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com talking alternative radio twenty four hours a day. This is tony martignetti, aptly named host of tony martignetti non-profit radio. 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