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.

“Venmo the Temple!”

Xerox is the first company I can remember that became a verb for the action it was best known for. For Baby Boomers, when Xerox’s duplicating technology became a staple in many offices, anytime you needed to copy a college paper or materials to be distributed at a meeting, you had to go “Xerox”. Even after Xerox’s patent ended, and the office copier was made by Canon or another company, “Xerox” rather than copy became the active verb.

As a quick aside, I just read an article that Xerox is in the process of being bought by the Fuji Film Company.

Of course, my daughter introduced me to Venmo. Not being of the writing check generation, she would owe me money for her cell phone or something she purchased using my credit card. She became frustrated when she wanted to pay me back through Venmo, and I was still preferring cash or check. This is how she and her friends pay each other back for food, treats, and other purchases they incur conducting the business of being friends and being social.

So with her encouragement, I downloaded the Venmo app. Entered in my bank account information. When my daughter pays me back through Venmo, once I receive a message that “Dani paid me $50”, all I have to do is open the app and with two clicks, the $50 is deposited in my bank account the next day.

Venmo is a company owned by PayPal. It was created by a couple of college freshmen at Penn who sold the company in 2012 to Braintree for $26 million. A year later, PayPal acquired Venmo for $800 million.

And now we are seeing ads everywhere for Zelle, a similar company owned by a number of banks – Bank of America, CapitalOne, among others. Makes sense! This is how Millennials, and even some parents of millennials, are conducting the business of their lives.

It was not too long ago that synagogues were only accepting dues/annual commitment payments by check. Then congregants wanted to reap the benefits of credit card mileage plans. And as organizational leaders became concerned about credit card fees, electronic fund transfers – “EFTs” came on to the scene, typically with no fee involved.

PayPal will soon be making Venmo available to not-for-profit organizations, and houses of worship, too.  It has been in a Beta test for a while. And initially, it may just be available to institutions that currently utilize PayPal as a payment option.

Venmo is really like an EFT. The money comes out of one bank account and ends up in another bank account. Once of course it makes the journey from the Venmo app on one’s phone. And you do have the option of paying with a credit card to take advantage of mileage programs – for a fee that typically runs between 1.8% and 3%.

Millennials are the generation now beginning to join synagogues. When Venmo, or Zelle, becomes available to not-for-profit organizations, your synagogue should incorporate it as a payment option. A financial transaction with the synagogue – “Venmo the Temple” – should be similar to the other financial transactions in their lives.

Interim or Permanent Rabbi: The Best Way to Go?

It depends.

Temple Ner Tamid is a 480+ family congregation in Bloomfield, NJ – about 12 miles west of the Lincoln Tunnel. When Rabbi Steven Kushner becomes our emeritus rabbi in June, he will have been our rabbi for 38 years.

Two years ago, he shared with the congregation his retirement plans. It wasn’t a shock. Synagogue leadership was aware of his plans and a Transition Committee had already been formed and involved in the planning of this important announcement. We consulted early on with the Central Conference of American Rabbis (“CCAR”) and the Union for Reform Judaism (“URJ”). We created a calendar of focus groups/parlor meetings to engage a critical mass of our community in a conversation about our synagogue’s strengths and weaknesses and our hopes and dreams for the future.

The rabbi’s retirement was really a natural occurrence. There was no crisis in leadership – no warring board or staff factions, no board meetings where people almost came to blows. And no serious financial challenges. There could always be a bigger endowment fund, so the congregation is not so reliant on dues and religious school tuition. And all of these issues were raised by congregants in our focus groups.

Our Transition Committee analyzed intensely the feedback from the 200 people who participated in focus groups. We read literature about transition and organizational change. We spoke to synagogue leaders who had engaged interim rabbis for 1-2 years before hiring a permanent rabbi, and those who were intent on hiring a permanent rabbi. And over the course of many weeks, we had some very intense discussions about hiring an interim or permanent rabbi.

The Transition Committee decided to move forward with conducting a search for a permanent rabbi. While we had issues, none were that critical. And we felt that engaging an interim would put our future on hold for a year.

Also, the way the search process works through the CCAR, should our search committee have been unable to find the right candidate for a permanent hire by the end of the calendar year, we would then be able to engage in a search process for an interim rabbi in the early months of 2018.

There are never any guarantees when you hire anyone. This is true when hiring a permanent rabbi or an interim rabbi. Especially such a critical position for a synagogue that has had one spiritual leader for nearly four decades. Like any work situation, there will be a period of adjustment. It will take time for leadership, staff, and congregants to get used to a new person on the Bima, a new sermonic voice.

I guess that is what people said 37 years ago when Rabbi Kushner came to our community. And things worked out pretty well, and we are confident that, in July 2018, our synagogue will continue to be a vibrant sacred community with Rabbi Marc Katz as our spiritual leader.

And there are synagogues that go the permanent rabbi search route where the person hired in fact becomes the “unintended interim”.

I am not advocating that conducting a search for a permanent rabbi is right for every synagogue. Read this and read this about interim success stories.

It just seemed right for us!

Bad Stuff Does Happen…

At any time. And most often when you least expect it.

When I was a teenager, my dad had shared with me that my grandfather – my dad’s father-in-law – had pestered he and my mom to buy cemetery plots with my grandparents, right next to each other at their synagogue’s cemetery on the Jersey Shore. In the 1970s, $200 per plot seemed like a lot of money to my dad. I am not sure if he went ahead and purchased the plots as a favor to my grandfather, or that he was just planning ahead.

It is good I remembered that conversation when my dad passed away a dozen years ago.

And it is also good that I was a part of a synagogue community. One call to my rabbi set into motion a funeral service, connection to a funeral home, Shiva (more cake than you could ever imagine), and community support.

Two years ago, our synagogue had a campaign to sell plots in its cemetery. The $750 price was about to double. And, remembering that conversation with my dad, it seemed like a good step in terms of end of life plans and one less thing for us, or our children, to think about down the road.

Recently, a tragic death of a young man in our community caused me to think about all of this again. His parents had been members of our congregation. And as with many people, as soon as their last child completed their B’nai Mitzvah, synagogue membership was no longer a priority.

A friend of the family – also a former congregant – called our rabbi to see if the funeral could be at the synagogue and if the rabbi and cantor could perform the funeral.

No one ever expects to outlive their children. Taking care of arrangements is hard enough to do when an elderly parent passes away. When you don’t belong to a synagogue and you experience the death of a loved one, you can call a funeral home for help and guidance. Knowledge of the loved one and the family will most likely be minimal.

Our synagogue was the site of this family’s funeral for their son. And the clergy performed the service. One view is this was the right thing to do for a family in need. This would be one important message to share with congregants.

An opposing view has to do with what are the benefits of synagogue membership. The grieving family chose to no longer be temple members. Does helping a family in need set a precedent for others still living in the community but who made this same conscious choice to no longer affiliate?

Then there are the practical, “bean counter” issues. The custodial staff had to set up the sanctuary and social hall for the several hundred people who attended, and then broke it down and cleaned it up later that day. What about the clergy’s time to prepare and conduct the service, to console the family?

What happens next week when calls and asks the rabbi to help him burry his mom or dad?

Clergy might do a baby naming or a bris “on spec”, that such engagement with a young family might lead to membership. Is that right? But what do you do when former congregants call and ask the rabbi or cantor to perform a wedding? Or a funeral?

There are no easy answers here.

2018 Tax Reform: Doom & Gloom?

I don’t think so.

Whenever there has been a change in the U.S. tax laws, I always consult with my accountant for a better understanding.  Arthur, who also happens to be my brother-in-law, always has the ability to explain such impact in understandable terms.

So, at last month’s family Hanukkah gathering, I posed the question to Arthur, and listened, with many other family members, to his explanation.

Arthur explained the increase in the estate tax exemption from $5 million to $10 million. For many years, there has been an industry created through various trust instruments – by accountants, lawyers, and financial advisors – for very wealthy people to avoid paying the estate tax. Now, at least some of those people might not need to seek such help. I asked Arthur about SALT, state and local taxes and the new $10,000 limit.

“Elections have consequences”, Arthur said.

There has been much written how the 2018 Tax Reform might impact charitable giving. In my mind, the jury is still out on this. We don’t really know. In terms of our synagogues, and really all houses of worship, I don’t think the primary reason people are fulfilling their dues – annual commitment obligations has much to do with tax deductibility. Belonging to a synagogue does foster in us, hopefully, a greater sense of community as well as responsibility through dues/annual commitments. I would like to think that people fulfill such financial obligations due to a religious belief, or for some even a higher belief, that being a part of a community has meaning.

It is for this reason that I believe that synagogues, and all houses of worship, may see minimal impact in terms of decreased charitable support.

Here are other reasons as to why there might not be anything to worry about:

  • Beginning in February, many congregants will see an increase in their take home pay.
  • People with children attending private school will now be able to utilize $10,000 for tuition from their 529 College Fund.
  • And of course congregants who are high earners will have a lot more disposable income.

More ominous articles are predicting that due to the SALT maximum deduction of $10,000, not as many people will itemize and simply take the standard deduction. And that this would affect charitable giving. But today, there is even a movement in some local townships in New Jersey for people to donate to the local municipality the same amount they would pay for property taxes. And this may catch on in other communities.

Maybe congregants approached for a significant gift to a capital or endowment campaign might have some hesitation. Such reasons might be more psychological than due to tax reform. I have read numerous studies regarding the reasons why people make major gifts. “Donative Intent” is always chosen more frequently than “tax deductibility” as a reason for such gifts.

But tax reform is new to all of us – not yet a month old –  and the jury is still out. Keep making the case as to the synagogue’s impact to touch people Jewishly and help them feel a part of a community. Fundraising success will continue and there won’t be any “doom and gloom”.

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