This past August, the IRS announced some proposed new guidelines to further define their requirements for documenting the value of both cash and noncash gifts that are submitted to them as tax deductible. These proposed rules would not only affect the deductions allowed on monetary donations, but also further describe when a qualified appraisal for a noncash gift is required.

For cash gifts, the new rule states that “No deductions on gifts of cash, check, or other monetary gift will be allowed unless the donor keeps a record of the donation in the form or either a bank record or written communication from the charitable organization.” This means that donors will need to maintain clear records that include the name of the charity donated to, the date of the contribution, and the amount of money they gave. In addition, the IRS will require all gift amounts to be authenticated with either a bank record – a bank image of a cashed check will suffice – or a letter from the charity acknowledging the gift. Because charitable remainder trusts and certain out-of-pocket expenses associated with the rendition of services can be more complicated than the standard monetary gift, certain exceptions have been proposed by the IRS to apply specifically to these situations.

The proposed rules for noncash gifts are slightly different. Donors who make a noncash gift of less than $250 are not required to obtain a receipt from the charity in order to qualify for tax deductions. However, if the donor makes a noncash gift valued between $250 and $500 they must obtain a written acknowledgement from the organization at the time of the gift. If the noncash gift is valued between $500 and $5,000 the donor not only needs to obtain a written acknowledgement at the time of the gift but must also file a completed Form 8283 (Section A). When the value of the noncash gift falls between $5,000 and $500,000 then the donor must obtain a qualified appraisal along with the written acknowledgement for their gift and Form 8283 (Section A or B) must be completed before tax deductions will be allowed. Finally, if the noncash gift is valued at more than $500,000 the donor must attach a copy of the qualified appraisal to their tax return. Just in case you’re unfamiliar with what a qualified appraisal is, the IRS defines a qualified appraiser as “an individual with verifiable education and experience in valuing the relevant type of property for which the appraisal is performed. An appraiser with a designation from a recognized professional appraiser organization is acceptable under the criteria.” 

Even if you follow all the proposed rules the IRS notes that they reserve the right to challenge the amount of any claimed deduction, even if the donor substantiates their deduction with a qualified appraisal.

These proposed rules are open for public comment until November 5, 2008, and the full text of the proposed regulations can be found here. 

Good Shepherd School for Children is an organization dedicated to providing quality, inclusive education for children with special needs and typically developing children from ages six weeks through six years. Exceptional learning and growth experiences are supplemented by therapeutic services, as needed, up through age eighteen. Good Shepherd School for Children currently provides Occupational Therapy, Physical Therapy, Speech and Language Therapy, and Developmental Therapy along with regular early childhood education to over 300 children each year.

Before Good Shepherd School for Children was formed in 1967, there were no early childhood services available for children with special needs in the Saint Louis area. (At that time, the St. Louis Special School District didn’t accept children less than six years of age). Parents and members of the Church of Good Shepherd recognized a need for the education of these children, and the Good Shepherd School for Children was formed. As the years have passed the school has continued to grow and evolve in order to meet the needs of the Saint Louis community.

Today they are one of the few “fully inclusive” early childhood programs in the area. Children who attend Good Shepherd School for Children are integrated into classrooms with children of all abilities including those with special needs. By having an inclusive environment Good Shepherd School for Children believes that: 1) Children learn to appreciate the similarities and differences among all people, 2) the typically developing child grows up with no biases regarding children of differing abilities, 3) the typically developing child serves as a role model to the special needs children, helping to accelerate their growth and learning, and 4) all the children learn to form a wider circle of friends. 

Good Shepherd School for Children employs many Therapeutic Intervention Specialists on their staff including developmental therapists, speech and language pathologists, and physical and occupational therapists. By having these specialists support the regular early childhood teachers in the classrooms, Good Shepherd School for Children is able to maintain very low teacher to student ratios in all of their rooms.

In the future, Good Shepherd School for Children hopes to provide not only outstanding services for typical and non-typical children at their Center, but to also add outpatient and home-based therapies for their students. Paradigm Shift Studio, llc originally partnered with Good Shepherd School for Children in 2004 to help build capacity which included a Board audit, Board engagement strategies, and fundraising training for both their Board and development staff. Paradigm Shift Studio, llc has more recently helped Good Shepherd School for Children with some additional fundraising support including grant writing services. Marian Wolaver of Good Shepherd School for Children recently told us, “The Good Shepherd School for Children Board is outstanding and growing with the support and mentorship of Paradigm Shift Studio, and the grant writing services we receive are outstanding!”

Good Shepherd School for Children has their first Annual Halloween Carnival coming up on Friday, October 24th from 5:00 – 7:00 pm. This carnival will include games, prizes and raffles for children of all ages. To learn more about Good Shepherd School for Children or to RSVP for their Halloween Carnival please call 314-469-0606 or visit their website.

New Product Announcement - Framework For Success

As a non-profit professional have you ever wondered: How do I identify, create, and prioritize new opportunities for success? How do I engage and leverage board and donor relationships? How do I successfully diversify my fundraising efforts? Where can I find a resource book of systems and templates to help me get started? Well, wonder no more!

Paradigm Shift Studio, llc, proudly presents a new program that brings together the systems, resources, knowledge, and real-life examples to help all organizations, even the smallest and newest, build capacity quickly! This all-in-one user-friendly resource provides bite-size implementation strategies, customizable electronic forms, evaluation tools, customized coaching, and additional resources designed to strengthen organizations and lead staff and board members to greater fundraising success.

At just under $300, the complete Framework for Success™ program provides you with the tools you need to help build a strong non-profit with a successful fundraising program. The complete Framework for Success includes customizable coaching, 4 units, each containing 3 modules, a CD containing all the customizable forms included with this resource, plus the bonus module Measurable Outcomes! Topics include: Development plans, Board Engagement, Volunteers, PR & Marketing, Technology, Annual Fund, Grants, Prospecting, Making the Ask and much, much more.

Still not sure - See it for yourself on our website. Once there you can download a sample of the Measurable Outcomes module, or even place an order today!

As part of our Paradigm Gives Back program, Paradigm Shift Studio, llc, will donate $10.00 for every complete Framework for Success book ordered during the month of October to AFP's Every Member Campaign.

Some Things You May Want to Take Note Of:

IRA Rollover Provision Reinstated Through 2009

President Bush recently signed the $700 billion economic bailout bill which includes a two-year extension of the IRA Rollover Provision. This provision will now be made retroactive to January 1, 2008 and will apply to any gifts made from that date through December 31, 2009.

This provision is important to nonprofit organizations because it exempts from taxable income any funds transferred from an Individual Retirement Account (IRA) to a charitable organization. The provision originally expired at the end of 2007, and it has been a chief legislative goal of the AFP to have it not only reinstated but to make this provision permanent. AFP says they will continue to push for changes to the rollover provision in 2009, including lowering the age for donors (currently set at 70.5 years of age), increasing the cap on gifts (the current cap is $100,000 on annual IRA rollovers), and making the provision permanent. For more information see AFP’s site here. 

JMT Consulting Group Completes Acquisition of NFP Consultants

NFP Consultants, a Saint Louis based organization (and partner of Paradigm Shift Studio) who often supported tribal and government organizations as well as the nonprofit community, was acquired recently by a New York based organization, JMT Consulting Group. With this acquisition, JMT Consulting Group will now be able to support over 2,000 nonprofit clients around the United States, Canada, and Puerto Rico. Andy Harleman, JMT’s Consulting Group’s contact for Paradigm clients recently shared that his new company is happy to continue the relationship with Paradigm Shift Studio clients by offering them a substantial discount on their software products. For more information about JMT Consulting Group, click here.  For more information on Paradigm Shift Studio partners, click here.

Ensuring Fundraising Success During an Economic Crisis

Please take note of Paradigm's newest workshop to be held on October 30, 2008. For more information see the Workshop Spotlight section of this newsletter or visit our website.