American Recovery and Reinvestment Act: What Nonprofits Need to Know

On February 17 Barack Obama made his first big move as the President of the Unites States, he signed into law the American Recovery and Reinvestment Act. Once intact, this hefty piece of legislation will provide more than $787 billion in spending and tax cuts that are intended to stimulate the economy. The act includes new or expanded government grant programs designed to provide assistance to communities or individuals affected by the economic crisis. While such a movement is designed for lifting America out of the recession, the stimulus package also is designed to create renewable energy, improve infrastructure, adopt universal healthcare coverage, and make college more affordable for students. Such a change will require a new philanthropic frontier to prevail with new modes of soliciting donations, new demographic of volunteers, and new organizations to sprout to support the reborn again nation. The act will do more then provide a short-term solution- it will lay the foundation for a robust and sustainable 21st century. With such a lofty agenda nonprofits need to be informed about what anticipated changes will result and affect them in such a rapidly evolving economic climate.

The Foundation Center has compiled a great collection of resources about how nonprofits may be able to access stimulus package funding. A very interaction new website called MapShot: Best ARRA Funding resources by State connects philanthropists to information about funding and other opportunities in each state.

Once on the website the viewer can select a state in order to peruse how money from the Recovery and Reinvestment Act is being allocated and specifically to what organizations. Furthermore on the site you can click a news or blogging tab to hear what is happening and how citizens are reacting to current fundraising events. For example a survey conducted by the Alliance for Children and Families and the United Neighborhood Centers of America released information describing how some states are delaying payments to nonprofits. The tardiness of payments for 19 states have negatively impacted cash flow, which has lead to job cuts and reductions in services, causing organizations to be reliant on lines of credit to make up for cash shortfalls. Moreover the study shows which states are struggling more then others and in what way. Late payments in Michigan, for instance, paired with decline in donations and an increase in demand for services have created an ideal climate for nonprofits branch out and create new grants and funding strategies to survive. Contrastingly Wisconsin has been having problems with the Medicare resulting from the computer systems and poor software implementation that has moved citizens to instate new legislation and create nonprofit organizations to help develop a more efficient record keeping system.

Other State and Agency Recovery sites have provided nonprofiteers information about how to seek applying for grants and how for-profit organizations can find recovery procurement and contracting opportunities. A particularly interesting site was the National Council of Nonprofits report on tips and thoughts on the stimulus grant.

The site discusses new ways to fundraise and different demographic of donors to reach and recruit as volunteers. The most needed change the website states is for young students to become involved in philanthropy. By understanding the politics and the current events that come with being involved in a nonprofit, the President of the National Council of Nonprofits believes a new generation of informed and active youth will emerge and thereby create a more sustainable and educated America. Moreover the site explains that volunteering for college students is a double reward, first, students gain the experience and knowledge of running a service by helping an organization, and then it benefits them later as they have more edge in the work force and will provide more vitality in a career which can potentially produce brilliant and socially sensitive minds that can change America. Especially concerning the Recovery and Reinvestment Act, the youth of the nation is encouraged to participate so as to benefit the country now and themselves later.

Smart Giving: Technology Meets Philanthropy

Once upon a time computers were a luxury item that only the wealthiest individuals could afford to use; now they are a staple in practically every office, home, and school. In fact technology has become such an integral and ingrained feature of Western societies that at any given moment there is a student with a laptop in his backpack or an adult with a Blackberry or a similar device in her pocket. The boom in users online has not only restructured the planes of socialization, but it also has created a new demographic of easily reachable participants. Social networking websites such as Facebook and MySpace, which boast upward of 175 million active users, allow members connect with each other by uploading photos, joining groups, and creating events. Technology therefore has become the way of the future with its increasing ability to spur mass mobilization, and utilizing this knowledge, non-profit charities are sprouting all across cyberspace marking an age of "social giving." While traditional fundraising is composed of calling, mailing, or going door-to-door to seek donations, the internet has created a new platform that has revolutionized fundraising and inspired a large new demographic of individuals to donate money through social networking for thousands of different philanthropic causes.

Just last month the social networking site Twitter prepared for its first annual "Twestival," an occasion in which 200 cities around the world held events to promote networking within local communities as well as raise funds for charity: water, a nonprofit that installs wells and rainwater harvesting systems in developing countries (See logo to the right.) In one day over 10,000 worldwide attendees donated approximately a quarter of a million dollars to help improve the water quality in Africa and India. The overnight success of Twestival has superceded all of the conventional standards of fundraising. The first modification is the time distribution for the campaign; unlike philanthropic galas that have a team working for an entire year planning and preparing for the event, Twestival operates under extremely short time frames with no infrastructure or staff in order to quickly and effectively reach the online masses. Secondly, Twestival makes simple and direct requests for donations unlike other organizations that convolute their purpose amidst elaborate dinner parties other such round about efforts to get money for the cause. The changes in fundraising brought about by online social-giving reflect the needs of the time by offering a more salient message to the donors. With the current state of the economic crisis online fundraisers eliminate the excess red tape that surround charities and remove the additional manual labor needed to prepare and promote events, which result in quick, easy, and money-making events.

Additionally online fundraising do more then just raise money, it also fosters a sense of community and connectedness among users. Both Facebook and MySpace have incorporated a "Causes" application on their sites that allows users to create causes, take donation, and recruit members (example screen pictured left.) This feature is one of the most popular on the site with over 12 million users supporting more than 80,000 nonprofit causes worldwide. The application has generated about $2.5 million dollars of donations the year of its launch and has an array of different organizations ranging from political, religious, and social cause charities. Approximately 60,000 users utilize this function daily on Facebook and about 25,000 per day on MySpace which reinforces how influential of a resource social networks have been for attracting users to online fundraising. The application incorporates some psychological principles of reinforcement and incentive to motivate members to participate as well as encourage their friends to join a particular cause. The system works as follows: first an individual chooses any charitable cause that he or she is interested in, then the information of the person's selection is broadcasted on his or her news feed for others to see. Then if one user recruits a friend to the same cause the total amount of "money raised" increases. Therefore people who are passionate about a cause will attempt to recruit peers to join a particular cause and continue to engage in ongoing participation on the site.

Following the success of the previously mentioned models of online fundraising, there are currently many new cyber charities blossoming to cater to the needs of today's socially aware citizens. Two of the most prominent site include Kiva.org, which permits users to donate directly to those in need, and Change.org, another successful social action network. These sites have remained popular due to the interactive nature of the content such as incorporating blogging ad video posting. Another promising site SocialActions.com where regular challenges are posted to encourage participants to come up with "innovation for distributing opportunities to make a difference across the Internet and mobile devices." Finally, the most recent online fundraising installment is ActiveCause.com, a site in which donors can not only interact with one another, but also track the giving patterns of major corporations. In Stephanie Storm's article for the New York Times, Tobia Smith- director of online communication for the charity CARE details online giving and explains its main shortcoming, "Online giving is higher than offline giving, and the demographics of online givers are more attractive - better educated, higher income, yet how you get people to routinely give online is a nut no one has cracked yet." The article breaks down the facts and states that people come online to give a gift once such as responding to disasters like the Asian tsunami or Hurricane Katrina, and then do not continue supporting the group or returning to their website. Nonetheless philanthropy has typically operated by attracting individuals to a cause, and these new form of online fundraising are more aggressive modes of delivering the cause to the masses. Nonprofits in many ways must operate like a business; to survive they must understand their audience, market to their constituents, and employ the most effective and current tools. For now the fusions of technology and philanthropy have had prolific results, and users maintaining ongoing interest and participation as well as web developers consistently specializing philanthropic sites to the specific needs of the time will determine lasting success.

Obama's New Tax Proposal: Who Does it Really Help?

The current economic crisis has caused individuals to reevaluate how to spend their money, and reassess what organizations, if any, they can continue to support. Recently President Obama has presented a controversial idea of a tax adjustment that essentially transforms public donations into private government reserves for healthcare. According to Obama's Organizing for America campaign site, the President expressed three goals for changes in healthcare during his presidency: first, provide affordable and accessible healthcare for all Americans; second, lower health care costs; and third, promote public health. While Obama's hopes to help the poor by providing government-regulated health care is commendable, his plan to pay for it may not only cause those same people harm, but it will also cripple the organizations that are currently helping citizens in need. Should such legislation be approved charities will face even larger drops in donations which will correspondingly worsen the already feeble structure of charitable institutions. Although President Obama's plan to itemize tax deductions for charitable giving is intended to help gradually save money and expand healthcare to American's in need of coverage, his proposal is an immediate threat to charities because it increases the price of donating and makes it even more difficult for donors to give in a time when charities need the most assistance.

The President's 2010 budget blueprint is designed to reduce tax-deductions among individual donors who make more than $200,000 and married couples that earn $250,000 or more annually from the current rate of 35% down to approximately 28%. To best illustrate Obama's proposal consider Martin Feldstein's example in his article titled A Deduction From Charity in The Washington Post. Suppose a high-income individual donates $10,000 to a charity with a 35% deductible rate, the deduction would decrease his or her taxable income by $3,500. Now imagine that the deductible rate is lowered 7%, meaning that a donor pays 7% more in taxes, the individual now will only save $2,800 from the charitable gift. The change would reduce charities receipts by a dollar for every dollar of extra revenue that the government collects, and in effect it will tax schools, hospitals, medical research budgets and arts organizations. Therefore the proposal will impact both social services and donor's wallets greatly. While no one makes a charitable contribution solely for the tax deduction, the fact remains that deductibility of donations reduce the cost of giving and thereby enable individuals to give more generously. Thus Obama's proposed tax transformation acts as a disincentive and deterrent for individuals to give to charitable foundations. In a recent press conference when asked about the matter, President Obama (pictured right at a conference in the White House) stated that such a tax change is "fair" because it only affects the top 5% of household and it creates an equal deduct for all income brackets. In fact, those individuals in higher income tax brackets are paying up to 15% more in taxes (39% marginal tax rate at the highest level) than those in lower tax brackets. Yet Obama explains in his speech in Washington that scaling back the tax deduction for the wealthiest Americans is "not going to cripple them; they'll still be well-to-do. And ultimately, if we're going to tackle the serious problems that we've got, then in some cases those who are more fortunate are going to have to pay a little bit more." Additionally, some will argue that higher income households will give more dollars per capita than those at lower income brackets. Therefore if the Obama administration wants to make sure that low-income donors enjoy the same tax benefits they should raise the deduct amount for charities contributions to the higher rates if they truly believe that non-profits are providing valuable services to society. Ultimately, under the new tax codes both the people and the charities that are taxed. Those who give at higher rates will also have less control over how their earnings are spent which essentially enables the government to determine how people should spend their money.

While Obama feels that if people are giving for altruistic reasons that the tax deductibility rate should not affect donations, he is naïve to think that some people would not welcome an added tax bonus for charitable giving to offset their income. AFP President and CEO Paulette V. Maehara explains in a news release, "It is incorrect to suggest that incentives do not play a role in charitable giving," she adds that, "While people decide to give for any number of reasons, incentives are a critical factor in determining how much someone gives, especially as gifts get larger." Sadly regardless of people's reasons for giving, in tough economic times like today charities will be handicapped with 7% reduction in revenue with incomes falling the effects would be compounded and crippling for some charities. Supporters of the tax change, such as the Tax Policy Center, argue that the net impact to giving will only be 1.3%, assuming this figure equates to $7 billion dollars a year. Although the President says the change will affect a mere percentage of fundraising the amount is still substantial and will cause individuals at higher income rates to reduce their charitable contributions to maintain their current standard of living. The full impact of the tax change will go into effect in 2011 giving some time for the economy to recover. The $7 billion dollars per year charity tax is part of the Obama administration's goal to create a $634 billion dollar health care reserve fund over ten years to reform and support the current Medicare system and move the country a step towards universal healthcare (the model below illustrates Obama's healthcare saving system.) Half of the money for the fund will come through health care spending efficiencies by the government and the other half will come from tax increases on charitable giving and mortgage deductions among higher income households.

By issuing this proposal, the Obama administration is creating a rift between the government and the non-profit world. While now is the time that charities and the government should be partnering to provide social services, this movement is causing anger and negativity to brew among philanthropic organizations. The impending tax change has created a stir in the news this past week, causing reporters and economic analysts to question the destructive potential of such a severe change. For example CNN documented the impact the tax proposal is having by examining how it is affecting the Direct Relief International Warehouse in central California, an institution that provides medical supplies to the needy around the United States and around the world in response to natural disasters. This organization relies heavily on donors and will be hurt by the Obama budget proposal restricting charitable donation tax write offs. Many organizations in the nonprofit world say they were blind sighted by the proposal and fear it will hurt contribution levels at a time when they have seen donations drop to their lowest point in the past decade and demand for help go up. Furthermore Ken Berger, the President and CEO of the website Charity Navigator, reports a shocking statistic that " For many charities 80% or more of their individual contributions come from the wealthy," he postulates that "A reduction in such giving could have horrific consequences." The tax increase is being referred to as a "sin tax" by Robert Sharpe, a consultant on charitable giving, and Forbes columnists Daniel Indiviglio says Obama is "short-changing charities." Both Republicans and Democrats alike feel that the tax proposal defies logic and will make an already bad situation worse for charities that are currently suffering as a result of the desperate state of the economy.

This issue ultimately questions what the size and the scope of the government should be in the matters of an individual's spending. If the movement becomes a law the government will essentially generate a surplus of $7 billion a year towards Obama's "health care piggy bank." By reducing tax deductibles less money funds the organization of a person's choice, and more money goes straight to the governments hands- an event that the Wall Street Journal has affectionately dubbed "For the Rich, Government is the New Charity." While government intervention may oftentimes be helpful in other social and political causes, when it comes to issues in philanthropy it is common knowledge that the organization itself is more efficient in allocating resources and actively engaging with those in need more then the government. However, is Obama's proposal passes the funding priorities will shift from the private sector to the public sector and ultimately encourage fewer donations to charity in favor of higher taxes to support government programs. Thus private citizens will have less control over where their money goes and how it is spent thereby enabling government bureaucrats to take America's tax dollars and decide how to spend other citizens hard earned money however they see fit. This sends a powerful and presumptuous message- the government knows best and will decide what to do on behalf of every American- which is a dangerous notion for fundraisers that are in dire need for privatized giving to survive through these difficult times.

Golden Hearts or Gilded Intentions: How Celebrities Impact Charities

Something's naturally have perfect complements: salt and pepper, peanut butter and jelly, and oil and vinegar; while other unexpected pairs yield phenomenal outcomes like peaches and cream or strawberries and chocolate. Similarly in a previous post, I examined how the merge between two prominent pillars of society, technology and philanthropy, has completely restructured the non-profit world and has resulted in scrumptious profits for many online charities. Social networking is built upon the fundamental psychological principle that all people need to belong. Whether it's the feeling of being connected with buddies on campus, tweeting daily updates, or poking a friend to say hello- humans have an inherent desire to know what people around them are doing. Furthermore, when celebrities are integrated into social media Americans vigilantly observe every action, voraciously devour what they see, and are oftentimes painstakingly driven to emulate the star that they are most fascinated by. Thereby celebrities become "role models" passing their behaviors and beliefs to their admiring fans. On one hand this can be a beneficial tool to inspire viewers to follow suit with reputable stars, while on the other hand placing celebrities on the top tier of an illusionary hierarchy can cause viewers to behave recklessly and demean the institute of charity.

The first report I chose to comment on is called "Smackdown for Charity," a ten day competition that occurred last month in which celebrities promoted their favorite cause in order to raise the most money for their charity of choice. The event was promoted on several social networking sites and allows participants to interact with stars in a more intimate way as well as have more control over the causes they support. Stars like Alec Balwin, who supports Actor's Fund of America, and Brea Grant, who is a supporter of the Girl's Rock Camp Austin, explain the tenants of the organization they support as well as share their passion for the specific charity. By providing insight to the audience, celebrities make themselves more personable and are able to engage and incite competition among viewers. Thus an individual may be motivated to donate because he or she feels strongly for the cause Save the Whales or an individual may donate because he or she is a Hayden Panettiere (pictured left sporting a poster for her favorite cause) fanactic and wants Team Panettiere to triumph in the challenge.

Celebrities Go Head-To-Head For Charities:

Thank you for the brief yet informative report on Smackdown for Charity. While technology has vastly increased the success of fundraising, this event was uniquely successful because not only does the utilization of social media create accessible information to a large demographic of participants but it also integrates celebrities to captivate users to join the cause. By incorporating celebrities in philanthropy, charities correspondingly are able to make themselves more marketable for to the public. In this way celebrities become figureheads for a charity and cause admirers to identify with the organization. A well-known and reputable star has the ability to transform the appeal of an organization, which translates into more attention and donations. For example, model Molly Sims and singer actress Jessica Simpson are both celebrity ambassadors for the organization Operation Smile. The seamless match between the charismatic and beautiful celebrity representatives along with the aim of the organization to heal children's smiles present a well rounded and appealing charity that hits the public's soft spot and moves them to give to the cause. Picking the right spokesperson for the organization is of central importance in order to accurately represent the cause and broadly relate to the public. Websites such as Look to the Stars examine the world of celebrity giving with frequent updates about which charities celebrities support, promote, and attend. Reports about athletes mentoring children, actresses auctioning dresses worn on the red carpet or donating clothing from their personal closet, and singers volunteering to perform at a charity gala are common headliners on the website's news tab. With such a broad array of celebrities, each individual has a particular skill set that makes them most suitable for a particular organization. The most important feature necessary to inspire and mobilize the public to support a particular cause is that the audience must believe that the celebrity believes in the cause. Therefore selecting a celebrity that both fits the profile and passionately supports the organization, positively impacts philanthropy by inspiring American's to follow suit and do the same things the celebrities they admire are doing.

The next report I chose to comment on discusses Khloe Kardashian's recent reckless behavior and I will explain how celebrities- especially the wrong ones-can be detrimental to philanthropy and demean the institute of charity.

Khloe Kardashian Gets Fired On Apprentice For DUI:

While Donald Trump's decisions to fire Khloe Kardashian because she was irresponsibly drunk driving seems hypocritical judging by his lenience on former underage drinking Miss America, I felt the most glaring flaw of the whole situation is that Khloe Kardashian is getting publicity from it. Unlike celebrities who do good for community out of compassion, sincerity, and desire- Ms Kardashian is being mandated to do community service and on to of that being commended for it! Whether reality television is the vice in this situation is unknown, but what is known is that many public celebrities are adored for nothing and falsely given the limelight to be viewed as a role model. Examine what Khloe Kardashian is famous for: having a father who was a lawyer in the OJ trial, having a sister who posed for Playboy, and being a part of a reality series in which her families life of glamour and dysfunction is broadcasted across America- clearly a gem of a choice to be a poster child for society. Sarcasm aside, Khloe Kardashian and other such socialite celebrities are a marketable crowd and are constantly photographed and pictured in magazines to showcase the latest trends. Seemingly getting in trouble for deviant activities and then having to pay the consequences is this season's fashion. In Kardashian's cause she is working her debt to society off by doing charity work for The Brent Shapiro Foundation for Alcohol and Drug Awareness. This defies the most important principle of having a celebrity spokesperson be a good role model for the organization. It is hard to believe that Kardashian believes in the cause she is volunteering for, rather it seems that she is doing some great public relations work to try to clean her reputation. Thus when others view the actions of careless celebrities such as Kardashian, they do not pick up on the deeper meaning of giving and just emulate what they think is approvable and do the dirty work after. This illustrates the damaging impact celebrities can have on charity and shows how they threaten the long term well-being and good natured aspect of giving.

Obama's New Tax Proposal: Who Does it Really Help?

The recent economic crisis has caused individuals to reevaluate how to spend their money, and reassess what organizations, if any, they can continue to support. President Obama has presented the idea of a tax adjustment that essentially transforms public donations into private government reserves for healthcare. Should such legislation be approved charitable organizations will face even larger drops in donations and correspondingly worsen the already feeble structure of charitable institutions. While President Obama's plan to itemize tax deductions for charitable giving is intended to help gradually save money and expand healthcare to American's in need of coverage, his proposal is an immediate threat to charities because it increases the price of donating and makes it even more difficult for donors to give in a time when charities need the most assistance.

The President's 2010 budget blueprint is designed to reduce tax-deductions among individual donors making more than $200,000 and married couples earning $250,000 or more annually from the current rate of 35% down to approximately 28%. To best illustrate Obama's proposal consider the following example: suppose a high-income individual donates $10,000 to a charity with a 35% deductible rate. The deduction would decrease her or her taxable income by $3,500. Now imagine that the deductible rate is lowered 7%, meaning that a donor pays 7% more in taxes, the individual now will only save $2,800 from his or her charitable gift. While no one makes a charitable contribution solely for the tax deduction, the fact remains the deductibility of donations reduce the cost of giving and thereby enable individuals to give more generously. Thus Obama's proposed tax transformation is comparable to a sin tax acting as a disincentive and deterrent for individuals to give to charitable foundations.

In a recent press conference when asked about the matter, President Obama (pictured right at a conference in the White House on March 24) stated that such a tax change is "fair" because it only effects the top 5% of household and it creates an equal deduct for all income brackets. In fact, those individuals in higher income tax brackets are paying up to 15% more in taxes (39% marginal tax rate at the highest level) than those in lower tax brackets. Furthermore, some will argue that higher income household will give more dollars per capita that those at lower income brackets. If the Obama administration wants to make sure that low-income donors enjoy the same tax benefits for their giving as high-income donors enjoy the same tax benefits for their giving as high-income donors they should raise the deduct amount for charities contributions to the higher rates is they truly believe that non-profits are providing valuable services to society.Ultimately, under the new tax codes both the people and the charities that are taxed. Those who gives at high rates will have less control over how their earning is spend. Essentially, the government is determining how people should spend their money.

While Obama feels that if people are giving for altruistic reasons that the tax deductibility rate should not affect donations, he is naïve to think that some people would not welcome an added tax bonus for charitable giving to offset their income. Sadly, regardless of people's reasons for giving, in tough economic times like today charities will be handicapped with 7% reduction in revenue and with incomes falling the effects would be compounded and crippling for some charities. Support of the tax change, such as the Tax Policy Center, argue that the net impact to giving will only be 1.3%, assuming this figure equates to $7 billion dollars a year. Although the President says the change will affect a mere percentage of fundraising, the amount is still substantial and significant and will cause individuals at higher income rates to reduce their charitable contributions to maintain their current standard of living. The full impact of the tax change will go into effect in 2011 giving some time for the economy to recover. The $7 billion dollars per year charity tax is part of the Obama administration's goals create a $634 billion dollar health care reserve fund over ten years to reform and support the current Medicare system and move the country a step towards universal healthcare (the model to the left illustrates Obama's healthcare saving system.) Half of the money for the fund will come through health care spending efficiencies by the government and the other half will come from tax increases on charitable giving and mortgage deductions among higher income households.

By issuing this proposal, the Obama administration is creating a rift between the government and the non-profit world. While now is the time that charities and the government should be partnering to provide social services, this movement is causing anger and negativity to brew in the non-profit world. The impending tax change has caused a stir in the news this past week, causing news reporters and economic analysts to question the destruction potential of such a severe change. The tax increase is being referred to as a "sin tax" by Robert Sharpe, a consultant on charitable giving and Forbes columnist Daniel Indiviglio says Obama is "short-changing charities." Both Republicans and Democrats alike feel that the tax proposal defies logic and will make an already bad situation for charities that are already suffering from of the desperate state of the economy worse.

This issue ultimately questions what the size and scope of the government should be in the matters of an individual's spending. If the movement becomes a law the government will essentially generate a surplus of $7 billion a year towards Obama's "health care piggy bank." By reducing tax deductibles less money funds the organization of a person's choice, and more money goes straight into the governments hands- an event that the Wallstreet Journal affectionately has dubbed " For the Rich, Government Is the New Charity." While government intervention may oftentimes be helpful in other social or political causes, when it come to issues in philanthropy it is common knowledge that the organization itself it more efficient in allocating resources and actively engaging with those in need more then the government. However if Obama's proposal passes the funding priorities will shift from the private sector to the public sector and ultimately encourage fewer donations to charity in favor of higher taxes to support government programs. Thus private citizens will have less control over where their money goes and how it is spent thereby enabling government bureaucrats to take American's tax dollars and decide to spend other citizens hard earned money however they see fit. This sends a powerful and presumptuous message-the government knows best and will decide what is best for every American- which is a dangerous message to fundraisers that are in dire need for privatized giving to survive through these difficult times.

Smart Giving: Technology Meets Philanthropy

Once upon a time computers were luxury items that only the wealthiest individuals could afford to use; now computers are a staple in practically every office, home, and school. In fact technology has become such an integral and ingrained part of Western societies that at any given moment you can find a student with a laptop in his backpack or an adult with a Blackberry or a similar device in her pocket. The boom in online users has not only restructured the planes of socialization, but it also has created a new demographic of easily reachable participants. Social networking websites such as Facebook and MySpace, which boast upward of 175 million active users, allow members to connect to each other by uploading photos, joining groups, and creating shared online events. Technology has become the way of the future with its increasing ability to spur mass mobilization. Utilizing this knowledge, non-profit charities are sprouting all across cyberspace marking an age of "social giving." While technology was once an elite novelty granted to a stratified segment of the population, the burst of popularity of the internet has revolutionized fundraising and inspired individuals to donate money through social networking for thousands of different philanthropic causes.

Just last month Twitter, the social networking site, prepared for its first annual "Twestival", an occassion in which 200 cities around the world held events to promote networking and to raise money within local communities as well as raise funds for charity: water, a nonprofit that installs wells and rainwater harvesting systems in developing countries (see logo to the right). In one day over 10,000 attendees around the world had donated approximately a quarter of a million dollars to help improve the water quality in Africa and India. The overnight success of online giving sites like Twestival has superceded all of the conventional standards of fundraising. One change in convention is the time distribution for a charity campaign; typically charaties hold philanthropic galas that have a team working for an entire year planning and preparing for the event. However, Twestival, for example operates under extremely short time frames with no infrastructure or staff in order to quickly and effectively reach the online masses. Secondly, Twestival makes simple and direct requests for donations unlike other organizations that convolute their purpose amidst elaborate dinner parties other such round about efforts to get money for the cause. Therefore the changes in fundraising brought about by online social-giving reflect the current needs of the time by offering a more salient message to the donors. With the current economic crisis online fundraisers eliminate the excess red tape that surround charities and remove the additional time and overhead needed to prepare and promote events, resulting in low cost quick and easy money-making events.

Additionally online fundraising does more then just raise money, they foster a sense of community and connectedness among their users. Both Facebook and MySpace have incorporated a “Causes” application on the site that allow users to create causes, take donations, and recruit members (example screen shot pictured left). This application is one of the most popular on the site with over 12 million users supporting more than 80,000 nonprofit causes worldwide. The application generated about $2.5 million dollars of donations the year of its launch and has an array of different organizations ranging from political, religious, and social cause charities. Facebook has approximately 60,000 daily users of the application and MySpace reports about 25,000 users per day which reinforces how influential of a resource social networks have been for attracting users to online fundraising. The application incorporates some psychological principles of reinforcement and incentive to motivate members to join as well as encourage their friends to join a particular cause. The system works as follows: first an individual chooses any charitable cause that he or she is interested in, then the information of the individual’s selection is posted in his or her news feed for others to see, if the individual recruits a friend to the same cause the total amount of “money raised” increases. Therefore people who are passionate about a cause will attempt to recruit other peers to join a particular cause and continue to engage in ongoing participation on the site.

Following the success of the previously mentioned models of online fundraising, there are currently many new cyber charities blossoming to cater to the needs of today’s social citizens. Two of the most prominent sites include Kiva.org, which permits users to donate directly to those in need, and Change.org another successful social action network. These sites have remained popular due to the interactive nature of the content such as incorporating blogging and video posting. Another promising site is SocialActions.com where regular challenges are posted to encourage participant’s to come up with “innovations for distributing opportunities to make a difference across the Internet and mobile devices.” Finally, the most recent online fundraising installment is ActiveCause.com a site in which donors can not only interact with one another, they can also track the giving patterns of major corporations. While philanthropy has typically operated by attracting individuals to a cause, these new forms of online fundraising are a more aggressive modes of delivering the cause to the masses. Nonprofits in many ways must operate like a business; to survive they must understand their audience, market to their constiuents, employ the most effect and current tools. For now the fusion of the technology and philanthropy have had prolific results and its lasting success will be determined by users maintaining ongoing interest and participation as well as web developers consistenly specializing philanthropic sites to the specific needs of the time.

Angels (or Devils) in Waiting: The Controversy Over Helping (or Exploiting) the Suleman Octoputlets

This week I choose to explore the controversy surrounding "octo-mom" Nadya Suleman and examine her ability to care for her children. Over the past two weeks the unemployed single mother of 14 children has sold photos of her children to tabloids and magazines around the world and has collected approximately $367,000. While her recent celebrity appearances and interviews have generated fame and fortune, it seems that Nadya Suleman still does not have the means to keep even her bare-boned lifestyle intact. As she is on the verge of loosing the home that she shares with her mother, Nadya Suleman has wishful ambitions to go back to school to become the provider for her family. Her poor judgment has alarmed the nation and caused various organizations to intervene and volunteer their services to help the family. Recently, both the Los Angles Times and the Long Beach Press Telegram reported that a charity called Angels In Waiting is willing to offer the octuplets housing, counseling, and care for 6 months at no charge. There have been many blog comments debating if the charity is using its offer as a publicity stunt to exploit the octuplets and gain exposure or if they are sincerely trying to help the children. Furthermore, Nadya Suleman has set up her own online donation page and many have blogged about the merits of her page and speculated about where the donation will actually go. Ultimately the question remains who is really benefiting from whom?

"Octuplets Grandfather pleads for money on Oprah: Angels in Waiting offers home and full time care"
Comment

You argue that the donations given to Angels in Waiting go to Nayda Suleman. In reality it will be her children that will receive the direct benefit through care and services, as no money will be given directly to her. Giving to charities that are run by professional nurses and caretakers such as “Angels” are a much better alternative than giving directly to “Nadya Suleman Family Website” where “donations” are more likely to go directly toward enabling Ms. Suleman’s maniacal and narcissistic behavior. Few would argue that Nadya Suleman lacks the capacity to raise these children, but the children should not be punished for their mother’s ineptness. I think it is wrong to argue that there will be a drop in donations to “Angels” because ultimately the Suleman children are the ones that need help more than any children I can think of. There is no doubt that some donors will be turned off by the association of “Angels” with the cause célèbre of the octuplets, but ultimately the press and publicity associated with helping with octuplets will be a springboard to raise more donations and in turn help more families and children than the charity would not have been able to support with its previous donor base. These children may group up to change world and by providing them with proper care at this stage in their development we can insure that they have the right foundation to live healthy productive lives.

"Octuplets' Mother Gets a Giant Babysitting Offer"
Comment

It is shameful to see charities such as “Angels in Waiting” and people like Gloria Allred try to exploit the Suleman octuplets for publicity and fame. The offer made by “Angels” is neither sincere nor realistic. It is reported that the monthly cost to support these children is $135,000 and it a hard to believe that a charity like “Angels” has the funds to provide such support to the Seleman’s. Furthermore, the offer was given via e-mail and has an expiration date for this Thursday (2/26/2009), a few days after the babies are expected to be released from the hospital, which leads one to believe that the neither the delivery method nor ability to respond to the offer are realistic. There is an implicit ethical morality that charities are not supposed to profit from the people they are trying to help. Offering free services to Nadya Suleman enables her to use more of the money she is receiving from exploiting her children through the sale of pictures to tabloids to fuel her need for celebrity. There will be a time when Ms. Suleyman will no longer be able to care for her children and child welfare services will take on their care. Although Ms. Suleyman has her own issues, society needs to stop creating celebrities out of people with problem and in this case need to stop exploiting eight innocent children. I applaud the Learning Channel for not pursuing a reality show with Nadya Suleman and networks for turning down her demands for $2 million dollars for her first interview . It is a poor reflection on our society when media outlets stop exploiting issues and non-profit organizations try to gain off them. To be quite honest, blogging on the subject is likely to further perpetuating exploitation of the octuplets and inflate the celebrity of Nadya Suleman.

Stop the Recession: Volunteer to Save the Economy

These days the primary topic of conversation is the current worldwide financial crisis. Every day newspaper headlines report about the declining stock market, the continuing rate of home foreclosures (pictured left), and the decrease in GDP. Just as the recession is causing increased levels of unemployment in the corporate world, it is also creating strife in the non-profit sector. Cuts in non-profit organizations hit society twice as hard- not only do they result in job losses, but they also correspond with a diminishing level of vital services in the community. Clearly this downturn has contributed to more than just the overall negative mood of the economy- it has also hurt the American morale and diminished the spirit of fundraising. With "Hope" and "Change" as his credo, President Barack Obama recently encouraged active citizenship and has drafted legislation in the most recent Economic Stimulus Plan in order to regenerate a sense of community involvement and in turn create resurgence in the economy.

It is imperative to first understand the current economic fluxes in the non-profit sector, then to examine how these changes have adversely effected fundraising, and finally discuss ways to ameliorate the present situation. A report from the Association of Fundraising Professionals explained that the 4th quarter of the year is typically the most lucrative season for non-profit organizations. From October to December charities typically raise up to one half of their yearly monetary donations, however, 2008 proved to be lackluster in comparison to previous years as most organizations fell significantly below past years donation totals. As a result of these shortcomings, food banks are now running low on resources, homeless shelters are over capacity, and nursing homes and hospitals are understaffed to name just a few social services that have been hit hard by the economic crisis. Thus a severe imbalance has been created: more people need to utilize social welfare services, yet fewer organizations are capable of accommodating the growing needs of society.

While companies in every industry are laying off members of their staff, the plunge in employment in non-profit organizations is a serious threat to the nation’s job market. Less commonly known, non-profit organizations make up ten percent of the American work force. With 9.4 million employees and 4.7 million volunteers nationwide, non-profits consist of more people then the auto and financial industries combined. Therefore the effects of staggering employment rates and evaporating funds in non-profits trickle to other larger segments of the workforce causing a domino effect of hardships in the overlying economy. Yet with all of this information readily available, non-profits have only recently been considered a topic in the economic debates.

Following negotiations in Congress, the House of Representatives passed the compromise version of the Economic Stimulus Plan last week. The $787 billion American Recovery and Reinvestment Act of 2009 passed both branches of Congress and is very likely to be signed into law by Obama this Tuesday. The purpose of the Act includes, "to preserve and create jobs and promote economic recovery as well as to assist those most impacted by the recession.” While the bill grants $50 million for the National Endowment of the Arts, $50 million for a new program designed to strengthen non-profit groups, and $200 million for AmeriCorps, critics of the bill feel that not nearly enough has been done to support the non-profit sector. The bill does not include money for either the Low-Income Home Energy Assistance Program or for Social Services Block Grants, which give money to states to offer social services to vulnerable people among other potentially beneficial charities that can help the economy.

Understanding the dynamics of the current fragile economy and the importance of community service work, Obama (pictured below) seeks to emulate his predecessors to motivate as well as provide incentive for citizens to volunteer. In an advertisement in this weekend's NBA all-star games Obama requested small favors from the citizens of America hoping that such small actions will improve the economy from the bottom up. Restructuring the format of philanthropy, Obama does not ask American’s to open their wallets to spur change, instead he asks for people to donate their time and services. Although such actions do not produce immediate monetary gains, the impact of reading to a child or assisting a youth group to beautify a community park may offer the feel-good bond needed to unite people in such a bleak economic situation as well as enable American’s to confront and surmount their present struggles together.

Following the precedent of John F. Kennedy’s legendary “Ask not what your country can do for you” speech, Obama plans to create more opportunities for Americans to serve their country and hopes that the American will to help will prevail and conquer the perils of the current economy. His websites USAservice.org and MyBarackObama.com present a multitude of options to support charities and organizations in which people can volunteer their time rather than their money. Building off Clinton’s AmeriCorps Foundation, the Serve America Act aims “to expand and improve domestic and international service opportunities for all Americans.” Creating such an act enables individuals in every stage of life and with any type of interest to have a position in addition to an obligation to meet specific national challenges. Moreover, Obama provides incentive to citizens for their contributions. The President hopes to incorporate service learning early on in the education system so that children will be inspired and committed to a lifetime of service. Additionally Obama wants to employ programs in which student volunteers earn a college tax cut of four thousand dollars off annual tuition for every hundred hours of community service completed while a student is in high school. For working adults Obama also plans to enact a tax incentive for employers who allow employees to take paid leave for full time service. Lastly, Obama hopes to structure service programs with the needs of retirees in mind by providing legislation that will enhance incentive for retirees to give a year of service.

By giving every individual a position in society and a forum to contribute in not only boosts American’s morale, but also contributes to increasing levels of productivity. Thus each individual that volunteers has the potential to alleviate the present financial hardships and remove the current constraints imposed by this recession.

Building the Basics: Entering the Blogosphere and Assembling my Linkroll

Whether an individual is financially thriving or caught amidst economic hardships, every person ultimately faces the same question: to give or not to give? Each individual has a different reason to give, for some it may be out of religious command or out of the desire to memorialize a loved one, while for others giving can be a way to discover the meaning of life or even a way to benefit from tax advantages. Whatever the motivating force, the fact remains that charity is a pillar of society and through this blog I hope to educate readers about the current events in fundraising, encourage readers to scrutinize the principles of charities, and inspire readers to embark in their on charitable causes.

As a new blogger and an experienced philanthropist, I would like to first introduce myself and share my background in fundraising. My name is Sherri Moradian and I am in my final year at the University of Southern California studying psychology. My passion for fundraising developed thirteen years ago with the birth of my cousin with cerebral palsy. After observing the difficulties, both financially and emotionally, for families with children with disabilities my family established a non-profit organization to raise money for various children's hospitals and organizations that help individuals with special needs. For the past ten years the organization has been flourishing with its annual events hosted by notable speakers and celebrities such as Stevie Wonder, Deepak Chopra (pictured left at the 2005 Looking Beyond Gala), and Team Hoyt. Since then I have been driven to be involved in a variety of other charitable organizations and have gained first hand experience volunteering and organizing events in the non-profit world.

Thus as the topic of non-profit organizations is close to my heart, I scoured the web to find recent and relevant information using various search tools such as Google Directory, BlogScholar, Cuil, and Metacrawler in order to generate the linkroll to the right that boasts blogs and websites of the utmost depth and quality. By applying the standards of the Webby Awards and IMSA I was able to discern between the information I encountered on the web and selected over twenty sources of the highest caliber for my linkroll. I was surprised and delighted when I discovered a plethora of resources on my topic ranging from religious organizations such as the World Relief Fund and the American Jewish World Service Fund, to foundations safeguarding wildlife and the environment such as the World Wildlife Fund and organizations for children such as the Ronald McDonald Foundation.

The best website that I came across is Charity Navigator. This site upholds the requirements set forth by the Webby Awards as it presents a wealth of information, it is easy to navigate and it is aesthetically pleasing to viewers. Additionally, the best blog that that I encountered is PhilanTopic, as it too fulfills the IMSA standards and presents authorship, sophistication and depth on the topic.

I am excited to be a part of the blogosphere community, and hope that the work I present will be of value to the readers as well as help me establish a position as an influential and informed member of the blogosphere in the field of philanthropy.