Events: Fun or Funds?

My cousin Rob is an Optometrist. As a “side job”, he is an amazing woodworker and makes an assortment of wooden bowls of different sizes, usually from trees that have come down from snow and rain storms. Every year, Rob participates in a few Craft Fairs, one held at a synagogue as its annual big fundraising event.

It was either last March, or the March before, there was a huge rainstorm the day of the synagogue’s Craft Fair. Rob and many of the other vendors – who all had spent $200 upfront to reserve a table – made the trek in the rain to set up their wares. But attendance was significantly lower than in prior years. This of course impacted sales as well as the synagogue’s take, as the synagogue also received a commission on all sales. And of course they also sold refreshments.

So an event that generated $40,000 or so in the 3 prior years, and where the projected net income in the synagogue budget was $45,000, operated at a $20,000 loss. That might not seem like a whole lot of money to some. But with the end of the synagogue’s fiscal year approaching on May 31st, the $20K had to come from somewhere.

I have heard this story a lot. Weather certainly does impact the success of fundraising events. I cringe when synagogues in the Northeast tell me their big fundraising event is in February.

Success from year to year is unpredictable for other reasons besides weather. Having honorees at events with the hope that they will generate donations raises similar issues of unpredictability – for synagogues and big organizations, too. One year, the synagogue’s Person of the Year is Joe. He owns a company that makes corrugated boxes. He is on the board of the local hospital and the Chamber of Commerce. He provides you with a great list of his customers, his lawyer, accountant, and friends.

The next year, the persons of the year are Mimi and Dan. Mimi is a retired public school teacher and Dan retired 5 years ago as a school principal. Both are great people who have done so much for the synagogue in terms of being on the board and committees. Most of their friends are from the synagogue. The list they provide is of people with far less giving capacity than Joe’s list.

Everyone will have a great time. But the budgeted projection is for $70,000, based on the successful effort honoring Joe last year. The $45,000 income that is realized this year is great, but it leaves the synagogue’s board with end of fiscal year budgeting and fundraising challenges it wasn’t counting on.

The primary goal for synagogue events should be for fun and to build community. Costs should always be covered, and the expectations of fundraising should be modest at best.

Being short of budgeted income expectations from events means that synagogue bean counters will have to adjust line items, or approach the synagogue’s leadership – board members and other supporters – for additional contributions to make the budget. You can do this once in a while. People may become a bit concerned about the leadership’s budgeting prowess.

A donor centered approach to fundraising, asking people with capacity for meaningful gifts as part of a High Holy Day or end of year appeal will reap better results and will be more predictable in terms of budget projections.

 

P.S. Check out this Blog on this same topic.

 

What Are We Looking For?

A few years ago, we moved. “Downsized and modernized” was my mantra. We lived on a small block with a lot of activities – annual Labor Day Block party, December holiday gatherings. There was even a communal snow blower. Picture a Norman Rockwell painting of a New England neighborhood.

But in New Jersey.

One of the downsides of our current condo development with 78 units in an enclave right off of Main Street is the lack of community feel. People are certainly nice, but there is no natural opportunity other than the annual Condo Association meeting to bring people together.

Our synagogue, Temple Ner Tamid, remains a vital anchor in our quest for community. The move brought us a little further away distance wise – 2 ½ miles more and a couple of steep hills. But the synagogue remains a big part of our lives, and of course our support system. To us, it seems logical that feeling a part of a community is part and parcel of synagogue membership. As many of you know, there have been many many blogs and articles written and workshops offered about how often this doesn’t happen.

When it comes right down to it, most people throughout their lives are looking for community. Parents want their young children to be a part of a playgroup – and they want to form a bond with the other parents. In college, we gravitate to people with similar interests with whom we could solve the problems of the world, play basketball, listen to music and hang out. As adults we want to get to know our neighbors or even the people on our commuter train.

When my parents, in retirement, moved to Florida, they became a part of a self-directed group of retirees with weekly breakfasts, book groups, interesting speakers and social gatherings.

Joining a synagogue follows this theme.

Millennials are finding community through Facebook and other forms of social media. I posit that they can solely rely on their laptops and smartphones for community. At some point, a desire for human contact will kick in. There will be the rare individual who would rather be a total recluse and choose most often to keep to him or herself. At some point, one needs to physically be with others.

When it comes to building community in synagogues today, we use a lot of buzzwords:  “engagement”, “relational Judaism”, “outreach”, “membership”, and now “Small Groups”. Perhaps the Chavurah movement in the 1970s was in incubator for this.  Small Groups bring people together to pray, to eat, to do social justice projects, and really to be a part of the synagogue in meaningful ways. Many churches today are also using Small Groups in similar ways. The challenge to engage people so that they feel a part of a community is similar, no matter the size of the synagogue or church.

The biggest challenge for synagogues is starting up such a program. Involvement of clergy to initially bring groups together and lead initial programs and provide ongoing ideas to help nurture Small Groups is critical to success.

Words and Tone Matter

My doctor’s office is filled with signs as to the “Do’s and Don’ts”. And it often seems more are about the “Don’ts”.

“If you need a referral, we need at least One week”.

“You need to provide your co-pay at the time of Check-In”.

“As of July 1, 2015 (3 years ago! – really) we no longer accept ABC Insurance”.

“Don’t come for bloodwork after 10:00 AM”.

I have been a patient with this practice for many years. The medical care is pretty good. The doctor calls with the test results, good and not so good. But in all of this time, I don’t think anyone from the office staff, or my doctor, has ever commented “it was great to see you; or thank you for being a part of our practice for more than 20 years”. Even a sign among the others that said “We care for you and care about you – Thank you for being a part of our practice” would be a nice touch.

Words matter. And so does tone. This is especially true for synagogue communities.

Many synagogues begin their new fiscal year in either June or July. I have a hunch that many of us recently received a statement, as the financial cycle begins, that has language similar to this:

“Dear Temple Member,

Attached is your monthly statement. If you have an outstanding balance due to the temple, a reminder of the dues payment terms follows:

2016-17 or prior balances are all now past due and are due in full.

2017-18 dues: 1/3rd by Sept 1st, 2/3rd by Nov 1st and 100% by February 1st. Payment in full is of course welcome.

If you are receiving this invoice, it is presumed you are continuing your membership with the temple. If this is not the case, please contact us at office@temple.org.”

An opening paragraph that simply thanks congregants for being a part of the synagogue community would certainly convey a welcoming and appreciative spirit. It is the first invoice of the year.

I think an invoice from Amazon is even more of a “warm and fuzzy”.

For synagogue communities, it can’t just be about collections, or about money.  The ”Thank You” shouldn’t be hidden in the last line of the last paragraph. Congregants should be recognized for being a part of a sacred community – as well as for their generous financial support.

During the coming weeks, there will be many opportunities to communicate with congregants. The weekly email, the monthly newsletter, as well as various snail mail and email packages about the High Holy Days. I know it is at times appropriate to remind congregants of the importance of financial obligations. But it is also certainly appropriate – and very beneficial – to thank them for being a part of a synagogue community as well as for their money.

A synagogue invoice should focus on more than just the transactional aspect of a congregant paying money. It is the relationship that makes the synagogue special.

Highlight this in the words you use, in invoices and in all communications.

High Holy Days: It’s an Opportunity

Many of us have the annual debate: whether the High Holy Days are early or late this year. If Rosh Hashanah falls soon after Labor Day – as it does this year on September 9th – pundits comment that the High Holy Days are early this year. When Rosh Hashanah starts after September 15th, many of us speak of the High Holy Days being late.

The reality is, of course, unless we are in a Leap Year of the Hebrew Calendar, when there is a second month of Adar, the High Holy Days are always right on time.

So now – 60 days to the High Holy Days – is the time to begin to create your High Holy Day Campaign plan. You will have several opportunities to communicate with congregants preparing for the High Holidays, whether it be about financial statements, recipes, and worship schedules. You will have a captive audience for worship, with people being in a synagogue frame of mind. And studies I have read – and more importantly, my fundraiser’s gut – tell us that people are most likely to make contributions to the synagogue at this time of year.

The important thing here is to do something.

Here is a “fundraising toolkit” that you might follow. Maybe the end of summer for your congregants doesn’t happen until Labor Day. And reaching out to congregants with capacity as well as a history of support of the High Holy Day Appeal is a challenge before that.

So one option is to compress what you do between Labor Day and the first day of Sukkot. You still need to target persons with capacity and if possible, speak with them in person. Congregants with any High Holy Day giving history should be asked for an increased gift over what they contributed previously.

While technology can make the various ways we communicate easier, personalization for both a mail merge for a snail mail letter or email always helps. Add a personal handwritten note on a letter, even if it is simply “thank you for all that you do for our synagogue community”. And send out the letter, with a response form and return envelope, so it arrives in congregants’ homes just after Labor Day.

Have emails prepared and ready to be sent to arrive when people arrive home on Rosh Hashanah afternoon, and the morning after Yom Kippur. Don’t be afraid to incorporate short video messages from the clergy and other synagogue leaders. Most importantly, be sure to have a link to your donation webpage, and even a “radio button” with that same link interspersed throughout the concise copy.

Like anything in life, the more planning you do ahead of time, the more effective your campaign efforts will be. If you procrastinate, Labor Day will be here before you know it, and your High Holy Day campaign will happen by the seat of your pants.

If you need help to brainstorm ideas and to develop a plan, feel free to reach out.

Ask Rabbi, Ask!!!

The best synagogue campaigns are when the rabbi is actively involved in all aspects.

Helping to write the case for giving and vision statement, Prospect identification, creating strategies for engagement, and soliciting. We often think of rabbis as the “Chief Spiritual Officer”. But the reality today is this: not only is the rabbi the CSO, he/she should be the Chief Engagement Officer, the Chief Program Officer, and the Chief Development Officer – even when there is a development professional on the synagogue’s staff team.

I have often used the analogy that the role of the rabbi in fundraising is much like that of a college president. In a fundraising campaign of significance for capital or endowment needs, the focus will most often be on major gifts – those persons with five and six figure capacity, at least in the campaign’s beginning stage. The adage that 90% of the funds will come from 10% of the people still holds true, even for synagogues. Especially for campaigns with goals of 7 or 8 figures.

A recent Blog I read about church fundraising through bequests challenges this thinking. Firstly, a recent study of Southern Baptist pastors showed that 86% of respondents stated that their church provides no information to congregants about estate planning. If we were to do a similar study of congregational rabbis -for all denominations – it would not surprise me if results were similar.

But what really struck me about this blog was the thesis that pastors need to be careful to not use their influential position for fundraising purposes with their congregants.

Rabbis (and pastors) do often know confidential information about congregants. They visit with congregants at times of their lives when they are vulnerable because of the challenges of life.  The author of this blog shares his opinion that a pastor should not take advantage of a congregant’s vulnerability when asking for significant support.

Rabbis and development professionals would all agree that asking for a significant gift to the synagogue when a congregant’s spouse has just passed away is not the smartest thing to do. Or even the most ethical. So you wait.

And it is always important to ask.  Because if you don’t ask, you don’t get. Or what you get is based on luck rather than an outcome of your own action.

Many organizations have been the recipients of bequests from estates of people who had little or no involvement in the organization. It is probably a rarer thing for this to happen at a synagogue. I told this story in a Blog a few months ago. A very generous guy to many different organizations passes away and leaves $1 million to several Jewish and non-Jewish organizations. For the synagogue he leaves $500,000. The rabbi, after receiving the notification from the gentleman’s estate attorney and a listing of beneficiaries and amounts asks the attorney why the synagogue received less than the other organizations. The lawyer responded, “because the other organizations asked”.

I still believe the rabbi is the congregation’s chief development officer. But like everything in life, common sense is often the best guide to figuring out the right time and right way to approach a congregant with a significant ask.

 

Synagogues Paying Taxes?

It may happen for some.

When I see the word “PILOT”, the immediate thought that comes to mind is the person who flies a plane. When I have my synagogue hat on, I also think of a new program or initiative for the synagogue that is being offered for the first time.

For people involved in municipal governments, “PILOT” takes on a whole new meaning, specifically related to money: Payment In Lieu of Taxes.

Many leaders of municipalities with government land (state or federal national parks), private and state universities, hospitals and even houses of worship are thinking about PILOT often.

Universities and Hospitals/medical centers have large footprints and often have large endowments as well. But while they have not-for-profit status, critics have suggested they operate like businesses. And in many cases, such institutions are providing no financial support for local services – like police, fire, schools, and road maintenance.

Is this right?

There are a number of universities and medical centers throughout the United States that do make such voluntary payments.

In a previous blog about PILOT, I opined that the separation of church and state would be the major concern when this issue was raised for houses of worship in a particular community. Recently, I have been exchanging emails with the treasurer at a Massachusetts synagogue. He received a letter from the local tax authority which I believe asks for the synagogue, and all houses of worship in this municipality, to make a voluntary PILOT.

There seems to be a lot of voluntary PILOT happening in cities and towns throughout Massachusetts. After all, in Boston, Cambridge and in towns throughout the Commonwealth there are many colleges and universities. And think of the medical complexes throughout Greater Boston.

And now, there is precedence during the current century of houses of worship making a voluntary PILOT to local municipalities.

In 2013, the First Parish Bedford, a Unitarian Church in the Boston suburb of Bedford, MA made a $1,000 PILOT.  Not much money of course, but a symbolic gesture nonetheless. Houses of worship benefit greatly from local services. I have the vision of the police car that is often idling in the parking lot of my synagogue as an example of such services.

But what about synagogues? I did some Internet research and came across a 2015 document from the Town of Northampton, MA. Smith College is located in Northampton and owns land and property that has a value of more than $420 million. In 2015, Smith College paid the City of Northampton more than $90,000 as part of the PILOT program, which was tied to the college purchasing buildings from the City of Northampton.

Similarly, Congregation B’nai Israel in Northampton, purchased a developable parcel of land from the City in 2002. The synagogue in 2015 paid the City of Northampton more than $7000 as part of the sales agreement so as not to totally remove the property from the tax rolls.

What does this mean for your synagogue? Who knows. It does make sense that municipal governments will be turning to property owners whose property has been taken off of the tax roles for some type of financial support.

And I am not sure the argument about separation of Church and State will carry the day.

Tax Reform: Moving for a Job – It’s Not Good News

Early in my career, we moved twice due to the requirements of a job. When we were newly married, we moved from Boston to Brooklyn. We had a small apartment and didn’t have a lot of stuff. I connected with the “Art Movers” who moved furniture on the trip back from moving Art for museums between Boston and New York. The New York UJA Federation covered the moving expenses which cost about $500.

Two years later, a job took us to Montclair, NJ. Our movers were the 7 Santini Brothers, who follow the laws governing Interstate Commerce.  My best recollection is that the bill to move was around $3000 – with a 10% discount. If you move within a state, moving companies charge a combination of the number of boxes and furniture as well as by the hour for 3-4 guys who are moving your stuff. Between states, prices are governed by weight and distance.

And if you moved for a job and your employer didn’t reimburse you for moving expenses, you would be able to deduct the full cost of moving on your tax return.

So what’s the big deal about moving expenses?

I have been wondering about the impact of the “Tax Cuts and Job Act of 2017”. An earlier blog took a look at tax reform and charitable giving. Of course we really won’t know anything for sure until the end of the calendar year and we have statistics and analysis.

But what we do know is that the tax laws governing moving expenses have now changed.

Check this out: Your synagogue had hired a new rabbi. The rabbi will be moving from Boston where she is working as an Associate Rabbi to Northern New Jersey where she will become the rabbi of a 400-family synagogue. Her contract states the synagogue will cover moving expenses for which the estimated amount is $6,000.

According to an article in Church Law and Tax Report, the synagogue’s payment of the $6,000 for moving expenses must now be considered as taxable income for the rabbi.

And the costs associated with moving – home inspection, legal fees – that would have been deductible as moving expenses that were job related in 2017 are no longer deductible in 2018.

For profit companies, especially the Fortune 500, are supposedly reaping the gains of lower tax rates. So covering such added costs for employee moves are not a big deal. Not the case for not-for-profit organizations and houses of worship.

As always, it is important to consult your own tax professionals regarding the new treatment of moving expenses. But unlike the question as to how the new tax law will impact financial support of the synagogue, such changes in the treatment of moving expenses will directly impact newly hired clergy and other synagogue hires.

For synagogues hiring new employees for whom you are covering the costs of moving expenses – you may wish to add an extra 20%.

“$9 Trillion…..”

Is a lot of money, for sure. By 2027, that is the amount of money projected to transfer from Americans’ estates to the next generation.

If just 5% of that amount is designated for charitable purposes – a mere $441 billion – that would be an amazing accomplishment.

But rather than leave it to luck or happenstance, our congregants still need to be asked.

The jury is still out as to whether recent tax law changes will impact the utilization of various planned giving instruments. The Federal estate tax exemption in 2018 has increased to $11.2 million for individuals and $22.4 million married couples – almost double from the 2017 rates. Of course, this does not impact a whole lot of people.

But what about the typical “Jew in the Pew” who might be transferring wealth? Congregants in their 60s, 70s, and 80s who have been a part of the synagogue community for most of their adult lives. They have bought plots in the synagogue’s cemetery. Financially, they are comfortable – able to do a bit of travelling while they are still healthy, for fun and to visit with grandchildren. They show up for the High Holy Days, for Yahrzeits on 3 or 4 Shabbats, and maybe for a special program. Over the years, when there has been a special capital campaign, they have contributed $10,000 or $25,000 – the higher amount when they were at their highest earning capacity.

Regardless of the tax law changes, donative intent remains the most important reason why someone makes either a straight contribution to a not-for-profit or synagogue. The second most important reason is because they were asked.

A few years ago, a prominent wealthy Jewish businessman passed away. He and his wife had created an estate plan early on in their marriage. And a part of their planning was to provide for various charitable organizations in the community. Through his estate, he had arranged for gifts of $1 million to the Jewish Federation, $1 million to his college, $500,000 to the JCC, and $500,000 to a community teaching hospital affiliated with a State University medical school.

He had also left $100,000 to his synagogue.

When an organization is named in a will like this, they receive from the estate’s attorney a distribution list of all recipient organizations and amounts. The synagogue’s rabbi couldn’t help but wonder why the synagogue was to receive only $100,000. He was certainly grateful, but the lesser amount earmarked for the synagogue, where this man and his family had been congregants for years, was gnawing at him.

So the rabbi called the attorney and asked him why. The attorney responded that he was very familiar with this man’s thinking in terms of his philanthropy through his estate, and simply said that all of the other institutions had specifically asked him to name their institution as a beneficiary. He didn’t want to leave the synagogue out.

This is one of my favorite stories that highlights that people like to be asked.

Back to the typical congregants: seldom will they name the synagogue in their will. And the reason that it doesn’t happen more frequently is the same as for the wealthy businessman above –  because they are not asked.

This generational transfer of wealth by 2027 – just 9 years from now – is a “call to arms” for synagogue leaders to establish legacy initiatives that, at a minimum, ask long time congregants to name the synagogue in their wills.

It will be a shame to miss out on this opportunity.

A Plaque in the Bathroom? Really?

Maybe there is some truth to the story my former boss once told me. He said the best place to post a plaque acknowledging a significant contribution was in the Men’s’ or Ladies’ Bathroom. It would be hard for people to miss it.

Maybe he was right, but most might think – including me – such a move lacks class or decorum.

Recently, I read with interest a New York Times article about the renovation challenges at the main concert hall at Lincoln Center. David Geffen, of music and Hollywood fame, gave a naming gift of $100 million. The renovations are now on hold for a variety of reasons, including fundraising challenges. The cost to complete the project significantly exceed Mr. Geffen’s generous support. And, when I read between the lines in this article, Mr. Geffen’s generosity, and the fact that naming of the project has been given to him, might have scared off other prospects from being supportive in line with their capacity.

Here is a case study to consider:

You are the synagogue president. The rabbi calls to say that Rob and Debbie Levine want to contribute $10 million to your synagogue. Their one request is that the Sanctuary becomes the Albert and Sadie Levine Sanctuary, after Rob’s parents who recently passed away. The sanctuary is in need of some sprucing up- chairs to replace the pews, new carpeting, lighting, a new sound system and painting. The rest of the synagogue is in very good shape. Maybe all of that costs $2 million. Leaving you with an $8 Million Endowment Fund to secure the synagogue’s financial future.

The synagogue has a Tree of Life in the lobby where congregants make gifts of $180, $360, or $540 to buy leaves of various sizes. And there is plaque on the wall by the front door from the capital campaign from 5 years ago listing donors is several giving categories when the synagogue raised $3 million to renovate classrooms and offices and install a new HVAC system. The synagogue bulletin sent by email each month lists all of people who made tribute gifts. And the October Bulletin always lists alphabetically those who contributed to the High Holy Day Appeal.

No other room or area has a name attached to it.

The Levines have been congregants for 20 years. The synagogue and the community are important to them. They felt such strong support when Rob’s parents recently passed.  Two years ago, they sold their regional chain of high-end furniture stores, that his father has started, to Berkshire Hathaway. They have done well and want to give back.

Do you honor their request?

All of our congregations should have such problems.

In an earlier blog, I wrote about the push-pull of the egalitarianism of congregational life and the elitism of fundraising. Maybe it is counter intuitive for the Levines to want such recognition because of the synagogue’s low-ley nature and hamishness. But they are feeling generous, and they asked.

A few questions to ponder:

Do you tell the Levines that naming rooms in the building is not a part of the synagogue’s DNA, or culture?

Will you bring this to the board of trustees and have an in-depth discussion about naming, egalitarianism-elitism, and the pros and cons of naming gifts?

Do you think the Levines’ generosity will inspire others to be generous in their giving to the synagogue?

I welcome your thoughts.

Advocacy in the Gun Debate: Strategic Investing

It is hard not to be impacted by the young people from Parkland, FL and their actions and advocacy for safer gun laws. They have certainly been impressive. The March 24th March for Our Lives in Washington and throughout the U.S. will hopefully continue to influence this debate.

Several times since February 14th, I have asked myself the question “What can I do?” On the gun issue, history has shown that marching and advocacy efforts en masse have often had little impact due to the power of the NRA. Perhaps this time will be different.

The jury is still out whether the economic focus by companies that sell guns – Dick’s Sporting Goods, Walmart, and REI to name a few – that have changed the minimum age to 21 in order to purchase an AR 15 will have an impact. The same is true for airlines, hotels, and banks that are no longer offering financial discounts to NRA members.

I wrote to Scott, my retirement advisor, to inquire how much of my IRA – and the more than $500 million that their firm has under management – is invested in companies that manufacture guns. Like many firms managing retirement investments, they invest in a variety of Index Funds (Mutual Funds) that include many different companies. And they invest with the goal that their clients’ retirement funds will grow, and not to achieve social change through investing.

So during the past week, Scott had sent me a number of articles on socially responsible investing. And I am not alone in my questions. A recent article in Sunday’s New York Times business section was specifically about retirement funds that divest from gun stocks. Apparently, Blackrock, the owner of the I-shares exchange traded funds, is in conversations with gun manufacturers and is exploring creating funds that exclude gun manufacturers and retailers.

The field of socially responsible investing is growing. But the more screens you have, the more fees investors will incur. And the returns are often not as great. In terms of guns, how far do you go? No gun manufacturers? How about gun sellers like Walmart, Dick’s Sporting Goods, REI, even with their recent change in policy restricting all gun sales to persons over 21?

Scott also shared that they tell clients that when they buy various asset classes via index funds, it is likely to include stock in a few companies that clients don’t approve of. He suggests that they can calculate a rough percentage of overall returns from these companies and clients can use this amount as a contribution to gun control advocacy groups.

What about synagogue endowment funds? At the same time that many of us are calling our financial advisors about a “gun screen” to our retirement funds, shouldn’t Synagogue investment committees make similar inquiries to their investment advisors and consultants? I realize that not every synagogue has an endowment fund. But many do and are in differing amounts from $100,000 to several million.

Imagine if synagogue leaders came together to divest their endowment funds from gun manufacturers!

Such social change is not just on the backs of synagogue leaders and congregants. But a group of progressive minded organizational leaders can and should set the example. If such an action became contagious , the economic impact of other organizations following this lead – Teachers and Public Worker retirement funds, university endowments, even the Reform Pension Board (the retirement fund for Reform rabbis and other Reform synagogue employees), just to name a few – would be tremendous.

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