Monday, August 22, 2011

Here’s an Easy Charity Auction Tip: Use Surveys

Sherry Truhlar is the Diva of charity auctions.  Not only does she know what's she'd doing, she absolutely knows what you should be doing.  Knowing your constituents or customers (as I would call them) is vitally important to your fundraising efforts.  People have very different motives for supporting your organization.  Maybe they are absolutely emotionally involved in your work or perhaps they attend your events to social and have a good time. Knowing this and also knowing how well you performed can only help you build a "product" (your next fundraiser, next programming effort, next auction) that will appeal to your current donors and to future potential donors.  Thanks Sherry for the advice!  Bunnie

Here’s an Easy Charity Auction Tip: Use Surveys
by Sherry Truhlar, Red Apple Auctions

When it comes to incorporating a simple auction idea into your fundraising gala, don’t forget about one of the easiest ways to get feedback from your charity auction: surveying your auction guests.  I was reminded of this recently while listening to the radio.

On a recent morning show, the DJ was asking his co-hosts and callers about their preferred superhero power.

“If you could have one superhuman power,” he’d ask, “What would it be?”

Flying and invisibility were popular, but so was the ability to read minds.

The ability to read minds would be handy at a benefit auction. You could finally learn what guests really thought about your creation. Did they notice the theme? Did they understand where the money was going? Did they mind the cash bar? From a planner’s perspective, we want to know what the guests preferred. Knowing our guests preferences helps us plan a better event.

Some guests will comment about the gala when they check-out. Others will complain to an administrator. Some folks will make an effort to find and compliment the Auction Chair before they leave. But all three of these methods are haphazard ways to track data. 

Surveys are an excellent yet underutilized charity auction tool. Here are some questions you might ask:
  • Did you attend the gala as a sponsor, as a guest, or as an individual ticket holder?
  • What city / suburb is most convenient for you to attend a fundraiser?
  • How many fundraisers do you attend in a year?
  • What night of the week are you most likely to attend a fundraiser?
  • Where did the proceeds of the gala go?
You can also ask guests to rate elements of the night. For instance, on a 5-point scale, you might ask them to rate the registration, check-out, food, dress code, location, facility, benefit auctioneer, auction items, or entertainment.

For high participation in your survey, keep it short. And send your survey promptly, preferably within three to four days of the auction. That way, the gala is still easy for them to remember. 

To create your survey, consider SurveyMonkey.  It’s a popular service because the format is straightforward and the tool is free, as long as you work within the company’s designated parameters.

If you’ve got an event coming up, I advocate that you design and write your survey now, prior to the auction.  Then the survey link will be ready to email the day after the event. Outside of reading your guests’ minds, a survey is your best method for finding out what your guests most enjoyed about your benefit auction.

About the Author
Benefit auctioneer Sherry Truhlar's entertaining stories and advice is often picked up by publications (e.g. Town & Country, The Washington Post Magazine, AUCTIONEER, The Eleusis, The Virginia Auctioneer) and television (e.g. E! Style, TLC) where she inspires and teaches volunteers how to hit new fundraising records in their auction galas.  Enjoy her FREE Auction Item Guide(listing the 100 best-selling items to sell in your benefit auction) at .

Monday, August 1, 2011

IRS Announces First Round of Revocations for Nonprofits that Failed to File Form 990

The IRS is conducting the biggest crack-down on nonprofits in my memory.  I believe part of this is an attempt to make up sluggish revenues due to our recession.  The implication for nonprofits is great and the burden falls greater on small nonprofits.  Think garden club or the local Kiwanis Club.  Those with revenues below $25,000 per year are now required to file a 990 (pick the form).

According to Nonprofit Times, "In 2008, nonprofits known as “nonprofit institutions serving households,” a broad subset of the sector, generated 5.2 percent of U.S. GDP, representing $751.2 billion worth of output. Nonprofits’ share of GDP grew 0.4 percentage points from 1998 to 2008."

As a friend pointed out the other day, nonprofits are domestic because most work to benefit their local communities.  That means nonprofits typically are not shipping jobs off shore, but instead keeping them local, very local.

I get it...we need revenue, but cracking down on the small nonprofits may not be exactly the most efficient way to get there.  Thanks to the folks at Venable for another great article on trends in the nonprofit sector.  Bunnie
Audra J. Heagney
Kristalyn J. Loson
IRS Announces First Round of Revocations for Nonprofits that Failed to File Form 990 
by Audra J. Heagney and Kristalyn J. Loson 
On June 10, 2011, the Internal Revenue Service ("IRS") released the complete list of approximately 275,000 nonprofit organizations that have lost their tax-exempt status for failure to file Form 990, Form 990-N, Form 990-EZ, or Form 990-PF for three consecutive years. The list of revoked entities is available on the IRS website.

The list includes the organization’s name, Employer Identification Number, last known address, and effective date of revocation of exempt status; it will be updated monthly. In its announcement, the IRS indicated that it believes most of these organizations are likely defunct, however, it has issued guidance regarding the steps such organizations must take to apply for reinstatement of their tax-exempt status.

This is the first group of revocations resulting from the passage and implementation of the Federal Pension Protection Act (the "Act"), passed by Congress in 2006. The Act mandated annual filing requirements for virtually all tax-exempt organizations, including tax-exempt organizations with gross receipts of $25,000 or less that were not previously required to file an annual return with the IRS. The Act also provided for the automatic revocation of any tax-exempt organization that does not file the required returns or notices for three consecutive years, and requires the IRS to publish and maintain a list of all such organizations that are so revoked.

In conjunction with its recent publication of the names of the first wave of organizations with revoked tax-exempt status, the IRS also issued guidance regarding the impact that the revocations have on charitable contributions to revoked organizations, and the manner in which organizations may seek reinstatement of tax-exempt status, including retroactive reinstatement. The IRS also announced transition relief for certain small tax-exempt organizations.

In connection with the announcement and publication of revocations of exempt status, the IRS issued the following guidance:

Revenue Procedure 2011-33 (Contributions to Revoked Organizations) states that where an organization listed in Publication 78 ceases to qualify as an organization to which contributions are deductible under Section 170 of the Internal Revenue Code (the “Code”), as a result of loss of exempt status due to failure to file annual reports for three consecutive years, grants and contributions made to the organization by persons unaware of the change in the status of the organization generally will be considered allowable if made on or before the date of publication of the list of revoked organizations. The IRS may disallow a deduction for any contribution made after revocation of exempt status but prior to the published notice of the revocation where the grantor had knowledge of the revocation prior to publication, was aware that revocation was imminent, or was, in part, responsible for the revocation. Publication on the list of organizations whose tax-exempt status has been revoked is intended to serve as a notice to donors and others that they may no longer rely on a prior listing in Publication 78.

Revenue Procedure 2011-36 (Reduced Fee for Reinstatement) reduces to $100 the user fee charged for the reinstatement of exempt status of small exempt organizations that normally have annual gross receipts of not more than $50,000 whose exemption was automatically revoked pursuant to Code Section 6033(j).

Notice 2011-43 (Transitional Relief) provides transitional relief for small organizations that had their exempt status revoked because they failed to file a required annual electronic notice for the last three consecutive years. An organization with annual gross receipts of less than $50,000 that qualifies for transitional relief pursuant to the criteria set forth in this Notice, and applies for reinstatement of exempt status by December 31, 2012, will be treated as having established reasonable cause for failure to file annual returns and exempt status will be reinstated retroactive to the date it was revoked.

Notice 2011-44 (Process for Reinstatement) sets forth the steps that an organization must take to apply for reinstatement of exempt status and request retroactive reinstatement after an organization's tax-exempt status was automatically revoked under Code Section 6033(j). An organization must use the same form filed by other applications for recognition of tax exemption to seek reinstatement, and must pay the applicable user fee. If an organization is seeking retroactive reinstatement, it must submit information demonstrating reasonable cause for failure to file an annual report, among other supporting materials.

The Treasury Department and the IRS intend to issue regulations under Section 6033(j) of the Internal Revenue Code, implementing rules regarding the application for reinstatement of tax-exempt status and the request for retroactive reinstatement. Comments are currently being solicited on the materials and issues addressed in Notice 2011-44. Comments are due August 19, 2011. 
You can contact the folks at Venable, LLP at