How Will the New Tax Law Affect Your Nonprofit, Your Employees, and the People You Serve?

Yesterday Congress passed the $857 billion tax package negotiated by President Obama and congressional Republicans. President Obama is expected to sign the legislation today.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act (H.R. 4853) has numerous components of interest and concern to nonprofits – as employers and as mission-based organizations involved in local communities. This list presents portions of interest to most nonprofits, nonprofit employees, and the people they serve:

• Tax Rates Maintained: All of the individual tax rates put in effect in 2001 and 2003 are maintained through 2012, including those for upper-income tax brackets. Most immediately, this means that nonprofit and other employers will not have to adjust employee withholdings for income taxes.
• Individual Payroll Taxes Reduced: Employees receive a two percent reduction in the Social Security tax they pay. For 2011, nonprofit and other employers will need to reduce the individual's share of payroll withholding from 6.2 percent to 4.2 percent. To illustrate what this change means, an individual earning $50,000 will see $1,000 in tax savings.
• Estate Tax: The bill restores and reduces the federal estate tax at a rate of 35 percent and increases the exemption level to $5 million, two changes that many fear will eliminate previous incentives for the wealthy to give.
• Charitable Giving Incentives: The IRA rollover and other expired charitable giving incentives (promoting donations of food, land, computers, and books) are restored for the remainder of 2010 and through the end of 2011, which should help promote giving.
• Unemployment Benefits: The legislation extends the enhanced program of 99-weeks of unemployment benefits through 2011. This allowance may prevent additional strain that would have hit many nonprofits that provide services to those with no income.
• Alternative Minimum Tax: Middle-income taxpayers will not be subject to the alternative minimum tax in 2010 and 2011 because the bill renews a "patch" that limits the application of the AMT to approximately four million upper-income individuals. Without this patch, many taxpayers would have seen an automatic increase in their tax rates.

The following link will take readers to a 12-page summary that provides greater detail about the bill, including provisions that might be of interest to particular nonprofits (e.g., those providing child care, adoption assistance, certain education): Summary of the Reid-McConnell Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.

Also, the IRS just released instructions to help employers implement the 2011 cut in payroll taxes, along with new income-tax withholding tables that employers will use during 2011. See Notice 1036.

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SBA, Microsoft create technology guide, online course

The U.S. Small Business Administration (SBA) today announced a new technology resource is available for small business owners.

The SBA and Redmond, Wash.-based Microsoft Corp. have teamed up to create "Business Technology Simplified," a free guidebook that offers tips on how to use technology and innovation to make businesses work more efficiently, the SBA said in a news release.

The guidebook includes material on simplifying work tasks, do-it-yourself marketing, time management, and finding and cultivating customers.

"Business Technology Simplified" is available in a printed format at the SBA Syracuse district office. Computer users can also access the guidebook online at the Microsoft website.

It's also available as a free distance-learning course, according to the SBA.

The course is available at www.sba.gov/training.

Call for Participants: The Business of Art

The ARTS Council of the Southern Finger Lakes and Southern Tier Economic Growth have issued a Call for Participants for a series of art-related business workshops to be held in 2011. The Business of Art will train visual artists and fine craftspeople to think of themselves as businesspeople, and to learn and apply business-related skills to enhance their careers.

Funded in part by a grant from The Community Foundation of Elmira-Corning and the Finger Lakes, ten workshops will be held at Elmira-based arts and cultural venues between February and June 2011 and will culminate in an exhibition of participants' art and craft in the fall

The workshops will be facilitated by Elmira artist Allen C. (Denny) Smith, and will feature expert presenters on various art-specific small business topics, including: goal setting and documentation; portfolio basics and presentation packages; basic business plans and business resources; budgeting, financial management and taxes; legal and insurance issues; real estate and architectural considerations; human resources; business models; sales, marketing and new media; and community resources.

Program participants will be chosen through a jury process, conducted by The ARTS and Mr. Smith. There is no cost to submit an application. Applicants should submit the following to BusinessofArt@eARTS.org by January 3, 2011:

• Full contact information, including name, mailing address, email address, telephone and website URL, in the body of the email
• Two (2) digital images of current work (made within the past year), in JPEG format, resolved at 72 dpi and sized no larger than 600 x 800 pixels
• Current resume, including exhibition record, in PDF format
• Current artist statement, in PDF format
• Statement of intent for participating in the program (in the body of the email or in PDF format), answering the following questions:

1. Why do you want to participate in these workshops?
2. How do you think these workshops will assist you as a working artist/craftsperson?
3. Do you intend to participate in all ten (10) workshops? If not, which workshops do you wish to attend?

Applications will be reviewed during the week of January 3 and selected participants will be notified as quickly as possible.

Accepted participants who commit to attending all ten workshops will be asked to pay a nominal fee of $50.00 (fee will be waived in cases of economic hardship). Accepted participants who do not wish to attend all ten workshops will pay fees of $10.00 per workshop. All fees will be due in full before the workshop series begins.

Only those who complete the full workshop series will be eligible to show their work in the culminating exhibition.

Full program information is available for download from The ARTS' website or by emailing BusinessofArt@eARTS.org.

Questions about the program should be directed to Ginnie Lupi at The ARTS, at 607-962-5871 x225 or director@eARTS.org.

Broome County Arts Council's Cultural Fund gets $45K injection

The arts are food for the soul, yet it can be challenging to rally support during tough economic times.

That's the outlook of Judith Peckham, executive director of the Conrad and Virginia Klee Foundation, Inc., who was an honored attendee Wednesday at the Broome County Arts Council's United Cultural Fund Campaign Kick-Off.

The foundation gave the Broome County Arts Council a $45,000 general operations grant. With those funds, the council will be able to continue its day-to-day operations, while raising money for the 2011 United Cultural Fund.

The council administers the United Cultural Fund, the only locally-funded combined campaign for the arts in the Southern Tier. It's one of only about 56 active campaigns of its kind in the country, and provides support and project grants to eligible artists and nonprofit organizations in Broome County, according to Sharon Ball, the council's executive director.

The Roberson Museum and Science Center, Endicott Performing Arts Center, Cider Mill Playhouse, Tri-Cites Opera, Binghamton Philharmonic, Art Mission & Theatre and the BC Arts council were the major recipients of United Cultural Fund grant money in 2010, with the remainder going to community projects and individual artists.

Money raised for the 2011 fund to date is $268,925. That's about 75 percent of the council's goal of $356,626, said Mike Neal, 2011 campaign chairman for the fund and district manager of Weis Markets.

Reed Smith, general director of the Tri-Cities Opera, said the $71,000 received last year from the United Cultural Fund was about 8 percent of the opera's budget.

"Without the funds we would either be out of business or would have to cut way back," he said. "Certainly, we wouldn't be viable."

A similar sentiment was shared by Stephen Wilson, executive director of the Binghamton Philharmonic, who said the fund is about 8 percent of his budget.

Ball and Broome County Arts Council Board Chairman Fred Xlander said they hope the fund would reach its goal by Feb. 1.

"With the economy the way it is, we didn't expect this level of commitment," Ball said.

"As a board, we are grateful to the individuals, businesses, foundations and the Broome County government for all of their support," Xlander added.

According to research done by the council, United Cultural Fund grant recipients return nearly $4 million to Broome County's economy every year.

Original article at pressconnects.com.

How to Donate like a Pro

In a Time of Tighter Budgets—For Benefactors and Charities Alike—It's More Important Than Ever to Make Your Gifts Count. Here's How

Investors demand a good return from their assets. Now donors are increasingly seeking the same for their charitable dollars.

Many philanthropists, large and small, are anxious about writing checks—and many endowments have yet to recover fully from the bruising they took during the financial crisis. Finding the worthiest, most-efficient organizations to maximize the impact of your donations couldn't be more pressing.

Yet identifying the best charity can be as difficult as picking a good money manager, with philanthropists left to navigate a world of tax forms, ratings systems and often misleading jargon. It's easy just to write a check and hope for the best—but you stand the risk of getting a poor return on your charitable investments.

Making matters more complicated: Many long-cherished tax breaks are coming under fire. Next year could bring the return of limits on itemized deductions, including those for donations, if Congress doesn't extend the Bush-era tax cuts for couples earning more than $250,000 ($200,000 for individuals). Even if Congress extends the cuts for all, the idea of cutting back charitable tax breaks is still in play: President Obama's deficit commission this week proposed limiting the deductions for large gifts to amounts above 2% of adjusted gross income.

All this is making donors rethink their giving strategies, says Patrick Rooney, executive director of the Center on Philanthropy at Indiana University. "They want to make sure now more than ever that they're using their money wisely."

Overall giving is down sharply from its recent highs. Among high-net-worth households—who account for the bulk of individual charitable dollars—average giving dropped 34.9% to $54,016 in 2009, from $83,034 in 2007, according to a survey conducted by the center and sponsored by Bank of America Merrill Lynch.

The downward trend appears to be continuing. One in five people say they are giving to fewer organizations than in the past, according to a November poll from Harris Interactive. A third are giving in smaller amounts this year than last. And the percentage of people not giving at all has doubled to 12% in 2010 from last year.

There are a host of charity-rating agencies to consult, but to get a more-accurate picture, consider volunteering your time before giving money. Do your own research: Talk to beneficiaries, visit work sites and study a group's finances yourself to judge the effectiveness of its programs.

That's what Denise Winston did. The former business banker "always just wrote a check," she says. But after leaving her job and starting her own financial-education business in 2009, the Bakersfield, Calif., resident became more frustrated over how little of her donations were going to beneficiaries. She decided she would spend time volunteering with different organizations before giving, partly to get a better sense of her time and money's impact.

"I'm closer to the person receiving support," she says. "Anyone can write a check. But I like to give things you can't buy."

Here's how to navigate the system and make sure the dollars you donate are making the biggest impact possible.

Article continued at Wall Street Journal.com, includes ways of gauging donor's impact and red flags that donors should watch out for.