Strategic Source Online

September 2005

Just Released!  Children of Paradise   Second Edition

Dr. Lee Hausner offers a comprehensive parenting guide for financially advantaged families. This fresh and updated book offers a clear nine-step program for affluent parents to improve their skills and inspire healthy values in their children. You will learn: How to make the time with your children count. How to motivate your children to develop confidence and competence - essential elements of self-esteem. How to listen effectively to your children. How to talk openly and honestly with your children. When to say no and when to create boundaries for your children. How to teach your children the value of money and to prepare them for the responsibilities of wealth. How to create an effective disciplinary plan when problems arise. You will benefit from Dr. Hausner's four decades of experience, and you will especially appreciate the humor, clarity, and practical suggestions that will make the challenges of your parenting easier and more effective.

"A great book for parents at any income level!", February 19, 2005, T. Brown (Miami, Florida).  -Amazon.com Customer Review

IFF Advisors, Inc.: Buy Children of Paradise Second Edition Today!

Amazon.com: Search Inside "Children of Paradise: Successful Parenting for Prosperous Families"

Disaster Strikes Again

This time the disaster has struck home. Unlike the tsunami of South Asia, Hurricane Katrina has unleashed catastrophic damage to the Gulf Coast. Disaster grantmaking is both difficult and challenging. A recent report on the tsunami relief effort, conducted by the nonprofit Fritz Institute in San Francisco, indicates that logistical barriers, administrative inefficiencies, and lack of adequate tracking capabilities, has hampered the effectiveness of the effort. In a statement issued by the Institute’s managing director, "(i)f there is one lesson here it is how important logistics is to effective relief operations and how important it is to fund world-class logistics operations, including trained logisticians and new technology."

Fritz Institute: "Logistics and the Effective Delivery of Humanitarian Relief"

Cash Donations for Immediate Relief

 

The choices available to individuals and foundations seeking to contribute to the disaster relief and recovery effort in Louisiana, Mississippi, and throughout the Gulf Coast, are extensive. The Southeastern Council of Foundations is issuing a list of recommended organizations:

 

Southeastern Council of Foundations: Where to Give to Help with Immediate Disaster Relief

 

Contributions for Long-Term Needs

 

"A number of funds are also being established at community foundations in the Gulf Region to meet the short- and long-term needs of those affected. A grant to a community foundation will count as a qualifying distribution for your foundation as long as two requirements are met.  First, the recipient foundation must meet its normal 5% distribution requirement for the year in which the grant is received, as well as the preceding year. After meeting both of these payout requirements, the recipient foundation must expend the total amount of the grant from your foundation within 12 months after the end of the tax year in which it was received." Statement issued by the Association of Small Foundations, September 1, 2005.

Southeastern Council of Foundations: Long Term Relief Funds

Southeastern Council of Foundations: Disaster Relief Reports From Our Collleagues in the Field

 

Keep in mind that the real economic crisis for those affected is long term, including reconstruction, rebuilding, and relocating. The watchdog groups, too, have set up lists of charities working on Katrina relief, with details on their evaluations and tips on how to give wisely. Charity Navigator features a list of relief agencies on its home page that get three- and four star-ratings -- the highest the group gives out -- including Feed the Children, World Emergency Relief and Church World Service. The Better Business Bureau Wise Giving Alliance and the Internal Revenue Service also provide information on recommended charities.

 

Council on Foundations:  Disaster Grantmaking Guide

Report on Administrative Costs

A study conducted by Guidestar, the Urban Institute, and the Foundation Center of the administrative costs of the 10,000 largest private, community and corporate foundations reveals an average 7 percent expenditure. But, the costs varied from zero expenses charged to the foundation (usually because the sponsoring organization, such as the corporate founder, absorbed the expenses) to as much as 50%. The study was done as part of a report to Congress and examined the specific expenses that were used as part of the foundation’s obligation to distribute at least 5% of its assets to charitable purposes. Under current law, a foundation can allocate certain administrative expenses, such as staff compensation, travel, office expenses, legal, and accounting fees, as part of its minimum distribution requirements.

The key findings of the study are very interesting:

• Median salary of executives at the foundations was $100,209, but the range was as wide as $88 to over $2.0 million;
• 24% of the private foundations paid their board members, while only 7.6% of corporate foundations did so;
• Only 1/3 of the foundations actually used the compensation paid to staff or board members in computing their charitable distributions;
• The median administrative cost was $16,935;
• Foundations that engaged in proactive grant making, such as research, direct scholarships, awards and conferences, as well as those that engaged in international grant making, had the highest median of compensation and administrative costs.

 Urban Institute:  Foundation Expenses and Compensation, Interim Report 2005

Participation in Private Compensation Survey

In 2002, IFF Advisors conducted the largest and most extensive compensation survey of family and independent foundations ever done in California.

IFF Advisors, Inc.: 2002 California Foundation Compensation Study

Several foundations have requested an update of that study and are participating in a private survey throughout the state. Foundations interested in participating may contact IFF Advisors at (866) 833-1112 or compstudy@iffadvisors.com.

Numbers Keep Going Up

The Internal Revenue Service (IRS) reported that the number of organizations classified under Section 501(c)(3), which includes both public charities and private foundations, rose in 2004 by 45,947 or 4.8%, to a total of 1,010,365.  This included 102,634 private foundations, an increase of 2% over 2003.  These numbers are always off a bit, since churches and religious organizations don’t have to apply for separate tax exemption in many cases, and some secular organizations that have previously registered are no longer operating. But, the bottom line is that organized philanthropy continues to grow.

National Center for Charitable Statistics at the Urban Institute: Number of Nonprofit Organizations in the United States

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