NEWS FOR NONPROFITS

Small portion of donations benefit the poor

Of the $250 billion in charitable donations from U.S. households in 2005, less than one-third of the money actually benefited the economically disadvantaged. According to a recent study conducted by the Center on Philanthropy at Indiana University and financed by Google, only 8% of the donations were given to charities to meet the basic needs of the poor.

The largest amount of donated money was given to religious organizations to fund congregational operating expenses (40%), and the remainder was given mostly to private schools and universities (education — 18%), hospitals (health — almost 9%) and arts organizations (9%). Combined purpose funds receive contributions that are then allocated to a number of different types of charities, including United Way (almost 16% total) and others at about 8%.

In addition to these findings, the study also revealed that a donor’s income is a good indicator of how much that person will be willing to donate to the needy. Households with an income of less than $100,000 gave an average of 36% of their donations to help the poor. Those with an income of $1 million or more averaged only 22%.

YouTube helping nonprofits

If your nonprofit is looking for a way to broadcast your message to a larger audience, the YouTube Nonprofit Program might be just the vehicle. Through the 2007/2008 Clinton Global Initiative commitment, YouTube is offering a free Internet channel to 501(c)(3) organizations that register for the program.

The premium YouTube channel can act as your not-for-profit’s connection with YouTube users through videos. You also can get enhanced channel branding features and increased upload capacity. You’ll be designated as a nonprofit on YouTube’s “Channels” page and can opt to receive the ability to use a Google Checkout donation button on their pages. Google has promised to process all donations through this Checkout for free through at least the end of 2008.

To apply, visit http://youtube.com/nonprofits.

Election year reminder

As the presidential elections approach, the IRS has issued a reminder to charities and churches about the ban on political campaign activity. Federal law prohibits these organizations from becoming directly or indirectly involved in political candidates’ campaigns.

Issued by the IRS, Revenue Ruling 2007-41 gives a number of scenarios to provide guidance on the ban. For more information, visit http://www.irs.gov/pub/irs-irbs/irb07-41.pdf.

New incentive can help recruit and retain nonprofit workers

The recently enacted College Cost Reduction and Access Act includes a provision that would forgive the federal student loan debt of nonprofit workers. The employee must make qualifying loan payments for 120 consecutive months (generally starting after Oct. 1, 2007) and during that 10-year period must be employed full-time for a “public service job,” which is defined as one with a 501(c)(3) organization. After the 10-year period, any remaining debt, including both principal and interest, will be forgiven.

While this law won’t provide assistance for another 91⁄2 years, it’s a helpful tool for not-for-profits to use as a recruiting and retention device for future employees with college debt. •