By: Hunter Atherton, Lee+ Associates College Intern

In a previous article, I discussed the opportunities that New Markets Tax Credits can bring for investors and how they leverage those investments to their own success. As I mentioned, there is little to no information on the success or failure rates of these projects funded by NMTCs, but I want to outline what NMTCs could look like for you and your nonprofit organization should you  want to consider the opportunity.

The Community Renewal Tax Relief Act was passed in 2000 allowing investors to receive federal income tax credits as compensation for their investment into Qualified Active Low-Income Community Businesses (QALICBs) for a variety of project types through the Community Development Financial Institutions Fund (CDFI) and Community Development Entities (CDEs).

So how does it work from the organization’s point of view?

The CDFI gives CDEs tax credits that they can dole out to private investors like national banks and venture capital funds in exchange for an investment of cash. The CDEs then allocate the investments to QALICBs that have requested funding through NMTCs. Important to note here that though the title of the invested includes the word ‘business’, the inclusion of nonprofit and tax-exempt organizations is approved in seeking funding through NMTCs. Along with their role as the invested, nonprofits can also take on roles as CDEs, leverage lenders, or developers.

NMTCs allow projects to be funded if they are struggling to get financed traditionally. They accept non-traditional collateral which is a strong positive for nonprofits, and the program has many options for payment and end-of-term exiting such as the option to purchase the interest on the loan for a negligible amount. The arrangement is contracted for  seven years during which the investor is paid back by the QALICB through interest payments on the principal at a rate that is at or below 50% of the fair market value. The QALICB is required to continue the arrangement throughout all seven years. During this time, the QALICB will be monitoring and reporting for compliance through the NMTC program.

While this sounds like a great opportunity (and depending on circumstances actually may be), there are some weighty negatives that should be considered alongside the positives. The constant compliance monitoring comes with expensive fees that should be researched before entering an agreement. The NMTC program requires repayment to the investor; there is no option other than to pay even in crisis. Indemnities must be provided to the investor from the QALICB meaning the “nonprofit unconditionally agrees to pay, reimburse, exonerate, indemnify, and hold the investor harmless against any loss, damage, liability, cost or claim incurred by the investor as a result of the loss, recapture, disallowance, or inability to claim the tax credits ” in case anything violates the program’s agreement. Also, if the investor chooses not to  release the investment at a “put” rate below fair market value to the QALICB after the seven year period, then they will be forced to assume it at a “call” rate equivalent to fair market value, resulting in a significantly larger purchase price.

Michael I. Sanders, a partner in Blank Rome LLP’s tax department and an author on NMTCs, lists other possible “snares.” He mentions that  an unforeseen shift in project focus from the original conception and investment that could change the NMTC eligibility for the investor leading to alterations in the arrangement terms for the QALICB. Also, in order to qualify for NMTCs, an investor can not formally agree to forgive a loan at the end of the seven year period for any QALICB, so if the investor retracts that informal agreement, the project can be left in a very bad spot with huge and unexpected payments to make.  Sanders notes that each CDE  involved  in any single project will also charge its own fee for the allocation and oversight of the tax credits and investments, which can rack up a big bill for an organization.

The Nonprofit Timeswrote that a nonprofit “should consult with its advisor to weigh the financial benefits against the related costs and burdens” when considering funding through New Markets Tax Credits, and I agree wholeheartedly. The NMTC program is a unique opportunity that nonprofits should investigate if their projects require funding. They offer significant financial opportunities in ways that can benefit many. But in your organization’s research into NMTCs and how they could apply to you, bear in mind that they are incredibly complex and require extensive knowledge of the program and its limits for an organization.

I would also urge you to remember that all reports given for compliance are internal; there are no articles or data on success and failure rates of NMTC program projects because that information is not available to the public making it harder to understand just how they work. New Markets Tax Credits can offer you everything in terms of funding, but make sure to protect your organization with ample research into the program and those involved just in case something doesn’t go as planned.

By Karen Kegg

I had a business professor in college who would refer to us fun-loving, extremely extroverted marketing majors as “Do you want fries with that?”  Nice! Granted, he was a finance and business policy guy and I respected him very much, but at the time his attitude didn’t help our confidence as business majors.  Who did he think had the right interpersonal skills to successfully build relationships with clients and prospective clients in order to get a business off the ground? I felt he did not value a marketing person’s desire to be out from behind a desk and get in front of buyers/investors to convince them to buy whatever the business was selling! 

Unfortunately, that same perception of the marketing major of my college days may exist about today’s fundraising professional.  After speaking to Development Officers and other development professionals and hearing stories of how Board members and staff question their expertise, I think that there is a perception that all development folks do is plan parties and send out letters asking for money.  They think, “How hard could it be?”

Well, we all know that’s not the case!  Managing a gala and crafting a successful appeal letter take skills that are vitally important, and so are these traits that successful development professionals possess:

• Being current on industry best practices;
• Understanding ever-changing (and often confusing) tax laws;
• Managing people (donors, staff members, executive directors, and board members, to name a few) and their expectations, and
• Knowing and practicing ethical fundraising.

There are many facets to the development professional’s job, and continuing to be knowledgeable about the business side of things is crucial to success. 

What other skills are needed to be a valuable development professional?  The following thoughts come from my colleagues at Lee+ Associates:

• Empathy – the ability to put yourself in the donor’s shoes is a must
• Patience – it’s called “development” for a reason; it takes time and patience to build relationships on behalf of your nonprofit
• Perseverance – whether it’s spending time listening and relating to donors or waiting for the Executive Director and the Board to approve your fundraising appeal, a good development professional needs to focus on the end goals
• Energy – Development Officers work long hours motivating donors, staff and volunteers
• Passion for the cause – even with all of the above skills and traits, belief in one’s cause and the people it serves is essential for a Development professional to truly be successful and to inspire others to support it.

Clearly, the development professional’s job requires an array of skills and characteristics in order to advance in one’s career and in order to advance the cause he or she serves. 

Michael D. “Mike” Davis, veteran fundraiser and nonprofit “legend” in San Antonio, will retire at the end of February after serving 47 years in various development roles for several area nonprofits. 

Davis began his career at University of the Incarnate Word when it was still an all-women college, as an admissions counselor and “road runner” representing the school to enrolling high school students.  He then took over development responsibilities and served at UIW for 10 years.  He moved from there to Oblate School of Theology where he was Vice President of Advancement.

He then travelled north to San Marcos to what was then Southwest Texas State University before returning to San Antonio to work for Cancer Therapy and Research Center (CTRC).  Davis then moved to Alexandria, Louisiana to head the Foundation of the Christus St. Frances Cabrini Medical Center.

He and his late wife, Joan, returned to San Antonio when they learned she had cancer and Davis was hired into his final development role at Assumption Seminary from where he will retire on February 28 after six years there.

Members of the Association of Fundraising Professionals honored Davis with its first ever “Outstanding Fundraising Executive” Award in 1997, recognizing his commitment to the fundraising profession, his willingness to mentor new development officers, and for his leadership to the San Antonio Chapter as President in 1992 and 1993.

What does Davis think of his nearly 50-year career in nonprofit fundraising? “One interesting thing about working in nonprofits, whether it’s for a university or a cancer center or a hospital, is the impact a development program has on an institution.  When you land a $5 million gift it changes the institution, not only financially, but it changes the people who work there.  It tells them that they’re important, that the work they do is significant.”

Davis said that development professionals have a responsibility to help teach their administrators and boards about philanthropy and the importance of donor cultivation.  “We have to teach them that two phone calls don’t close a deal.  It takes time and effort.”  And, he says, seeing one’s work come to fruition is gratifying when one sees that making a significant gift “helps change the donor, too.”

Davis plans to be present at the birth of his 14^thgrandchild in New York City in early March.  “Other than that, I have no big plans in retirement,” he says. 

To mark his retirement, several colleagues commented on his impact on their careers:

Michael Bacon, CFRE, Vice-President, Alumni Relations & Development, Trinity University

I remember going to meet Mike Davis when I was a senior in college.  He was at the Oblate School of Technology.  He very kindly listened to all my dreams about a future career and encouraged me to consider fundraising as my career.  Throughout the years, Mike has been a mentor, a colleague and a friend.  His natural humor at many AFP events is legendary.  You won’t find a better emcee for an event than Mike Davis.

Marion Therese Lee, Chief Executive Officer, Lee+ Associates

Mike Davis will always be the man with the laughing eyes who always makes people feel safe and positive. Mike would answer my questions honestly, thoughtfully and with a joke or a laugh that relieved my concern of asking a dumb question.  I value his ability to put people at ease.

Dianne McAlister, former Director of Development, Daughters of Charity Services

Mike Davis has been a friend to many in the not-profit/fundraising community. I was introduced to Mike in the early 80’s through San Antonio Society of Fund Raising Executives. During those early years Mike was the “go to” guy for jobs in fund raising. Mike counselled many a seasoned professional and gave advise to those looking to start their careers. Mike was the one to call if you were moving to San Antonio or if you were hiring for your team. Mike practiced “the best way to influence is to listen.” And listen he did. It was an invaluable service in those early days. Mike always had a funny story to share and he loved being able to laugh with his friends and colleagues. Retirement is a wonderful reward for all your hard work, Mike. Enjoy your family and enjoy yourself!

Joyce Penland, Senior Associate, Lee+ Associates

Mike Davis was one of the first people I visited when I first came to San Antonio as a new development officer. He encouraged me to believe in myself and that ours was a noble profession.  Most of all, he made me laugh!  His quick wit, his affable nature, and his commitment to the profession have always made him a favorite among fundraisers in the area.  He remains a great friend to this day.

Marc Raney, former Vice President of Advancement, Trinity University and former Senior Vice President of Resource Development, Methodist Healthcare Ministries

If there were a “Dean of Fundraising Professionals” Mike would be appointed unanimously by his peer throughout our community.  He would find the title humorous (and he’d never wear the robe) but he’s earned it.  No one is respected more for his high ethical standards and ability to organize and encourage others to work for the common good…while keeping us laughing at ourselves along the way.  Without a doubt San Antonio is a better place because of Mike’s work in philanthropy for the last 47 years.

Barbara Anne Stephens, former Director of Development, Mission Road Developmental Center and former Senior Associate, Lee+ Associates

Mike has been a generous mentor and colleague to many fundraising professionals. He is appreciated for his quick wit and has served as a Master of Ceremonies for countless organizations. One of his unforgettable quips happened at an AFP conference. A development professional held the winning ticket for a door prize. Mike recognized her as she stood up and he said, “The winner is Mary and she is with Meals on Wheels. Roll on down here Mary and claim your prize!”  Mike’s kindness knows no bounds. He is an exemplary father and grandfather, a consummate professional and a treasured friend.

By Amy Phipps

There is no way to spread good feeling faster than by sharing a little gratitude.  I found this out several years ago, when I was asked to chair a small committee at my church called “Attitude of Gratitude.” 

I have to admit I thought the name was a little corny, but I found that the work of the group was incredibly meaningful.  It centered on “stealth gratitude.”  Every month, the group would hand-write thank-you notes to congregants who had done something helpful or noteworthy.  The “stealth” element was that we signed the notes not with our names, but as “The Attitude of Gratitude Committee.”

Being thanked is usually not the reason that people give gifts – of themselves, their time or their money.  But it is the little extra glow that lets them know that their giving is noticed and appreciated.  And, sometimes, that’s what keeps givers going.

In this season of Thanksgiving, I reached out to some colleagues to ask which expressions of gratitude were most meaningful to them.  Here are their responses:

I received a thank you note personally signed by the entire Executive Board of our school’s PTA for working on the school’s directory.  Just a simple note that you are appreciated for what you do helps you to continue to volunteer. –Karen Kegg

Foundation work changed me.  A simple sincere hand-written note signed preferably by a volunteer, client, family member of someone receiving services, makes my day.  A simple statement that says, your gift will…doesn’t have to change the world, just let me know that a life is better because of my gift is more than enough. – Marion Lee

I appreciate when the organizations I support send acknowledgments that include a personal note.  For example, even though the thank you letter may be standardized, when a staff member takes the time to scribble a quick “Thanks Joyce!” it means that somebody is paying attention and makes me feel valued.  Simply put, THANKING MATTERS!! – Joyce Penland

The most meaningful sentiments of appreciation I have received have been personal, simple, and sincere. A warm handshake or hug from a client and a “thank you for helping us get better” means everything to me and serves as inspiration to continue to add value to vision to those organizations we serve. – Alexis De Sela

After I left the Attitude of Gratitude Committee to move on to other parish service, you might guess what I received in the mail.  Yes…A beautiful notecard with a simple message, signed by “The Attitude of Gratitude Committee.”  Even though I knew where it came from, I was humbled and moved by the fact that they had reached out to me.  And it made me more determined than ever to remember to be thankful, and to express those thanks frequently and sincerely.

As you plummet headlong into the holiday season – especially hectic in the nonprofit world – remember the message of the Attitude of Gratitude Committee – we see you, we appreciate you, and Thank You!

By Marion Lee, CFRE

 A thief has three characteristics: first a thief is not recognized by you as being a thief; second, he robs you of what you have without your realizing it at the time; and third, a thief leaves you feeling foolish after you have been robbed.

–N. Ravichandran

In this article, I ‘d like to explore why theft happens, how to work smarter to prevent this happening in your nonprofit and how to recover when it does happen. This article is over 18 years in the making.  I have lived the devastating discovery of a theft, assisted in the discovery process, and watched as the perpetrator was prosecuted.  It changed my life.  For many years, the questions, the grief, and the feeling of responsibility and betrayal were my close companions.  Money was stolen, people I was responsible for were hurt, people I trusted betrayed trust and I had to face my own inadequacies as a leader. There is more peace now, but it was hard fought through important internal battles of trust and self-confidence.

Since January of 2017, our organization has direct knowledge of six cases of theft in Central and South Texas with an estimated loss of just under $5 million dollars.  All but one nonprofit will probably recover from the loss, but when people steal from a nonprofit more than money is lost.  Services to children and fragile populations are diminished or cut altogether.  Quality of life programs for everyone in the community are affected.  And the people closest to home, the donors, staff, volunteers and volunteer board will suffer loss of trust, jobs, fear, insinuation and rumor, investigation and a level of stress that is for some, unbearable.

Since 2011, there have been 1,100 reported cases of embezzlement (misappropriation of funds committed to one’s trust) in the nonprofit sector (IRS).  This figure may seem small compared to the 1.5 million nonprofits operating in the United States today until you begin to dig deeper.  The 1,100 reported cases are documented only through the IRS electronic filing of 990s.  They do not include cases reported through paper filing, which are hard to compile, nor do they include the cases that are not reported to the IRS or to legal authorities. The number of unreported cases is conservatively estimated to be at least ten times greater than those recorded (IRS).

In a 2006, a documented study conducted by faculty from New York University, in conjunction with the Association of Certified Fraud Examiners, estimated that charities had suffered a theft in charitable funds of $40 billion or 13% of total gifts to charity in 2005.  Twelve years later, the study has updated losses to approximately $49.6 billion, the majority of which go unreported and unpunished. 

We live in a time when if you make it easy for someone to steal from you, someone will.

–Frank Abagnale (focus of the movie “Catch Me if You Can”)

 And he would know.  Mr. Abagnale is one of the most celebrated confidence tricksters in America, lecturer for the FBI and now leads his own consulting company which focuses on financial fraud. In his article, “Embezzlement”, published in the Financial Fraud Law Report, Mr. Abagnale discusses the primary reasons fraud and theft occur in nonprofit and forprofit environments:

• Lack policies and procedures that govern how money is tracked, receipted, deposited, and invested, which includes the oversight of basic accounting practices such as bank statement review and reconciliation, audit practice and correct and timely financial statements
• Lack standards and procedures in hiring and employment tending to rely on the “good ole boy/girl network”
• Rely on volunteer board members and staff members who do not have experience, expertise or understanding of their roles and responsibilities
• Expand program services without the adequate number of administrative staff to manage the system
• Have a pervasive culture among both board and staff members that: 1) standards and procedures normally found in a corporation are not needed in the administration of a nonprofit, and 2) passion for the mission equals goodness, honesty, and kindness
• Rarely report the theft, prosecute the perpetrator or provide an appropriate response when asked for a reference on the perpetrator*
• Face a legal system that does not support the investigation or prosecution of theft within nonprofits. On three occasions, I have been told by detectives, FBI and IRS representatives, and staff from District Attorney offices that the funds reported stolen were not enough to pursue an investigation. In each of these cases, amounts ranged from $150,000 to just under $1 million. One officer told me: “It is just not enough money to warrant the paper work, or the costs associated with the investigation.  After all, we probably are not going to get the money back. It is just not worth it.”

While “not worth it” to law enforcement, to the nonprofit, those lost funds meant cutting a program, potential reprisals from the funding source (government funds) and last, but not least, the thief would face no repercussions and live to steal another day. To another organization that needed the funds to provide hot meals and a safe place for the elderly in their community, it meant the closing of the center until they could regroup. Mr. Abagnale believes that prevention is truly the only recourse, as punishment and recovery of funds is very rare.

Wisdom cannot be stolen…it can only be shared

–Jefferson Smith (no, not Jimmy Stewart, although he might have said it)

 Putting policies in place

It only takes one step to change.  Sometimes in nonprofit organizations the smallest step means so much, but it seems to take an army to make it happen. Small administrative, overworked staff are frequently unable to face one more task, but let’s parse this out: 

• Policies and procedures
  • Conduct a mini assessment that follows a check or a gift through your organization.  Does one person pick up the mail, enter the gift into the system, make the deposit and receipt the gift? Does anyone log in a gift ledger separate from the financial software?
    • Split these jobs up. Have another staff member pick up the mail and enter the check or gift into a ledger or Excel spreadsheet
    • Check your daily deposits against the ledger on a weekly basis at the minimum (this also keeps gifts from being lost)
  • Bank and Financial Statements – The single easiest and most used way to steal is the direct route: writing a check
    • Review the bank statements monthly.  Look for checks that do not clear or for duplicate checks. Do not rely on printed statements-review statements electronically
    • Make sure that the bank statements balance with the reconciliation – out of balance due to timing, etc. is understandable, but not for months
    • Produce monthly correct financial statements from the financial software including a balance sheet, profit and loss statement and year-to-date comparison. DO NOT LET ANYONE TALK YOU INTO DOWNLOADING TO ANOTHER FORMAT (Excel) AND FOR GOSH SAKES-DO NOT ROUND UP!
    • Watch for odd or consistent amounts posted under miscellaneous or other headings

• Hiring and employment
  • Create a job description based on realistic needed skills and post it in the appropriate venues
  • Ask for three references from at least two current or past employers and check the references*
  • Run criminal and credit background checks for positions that will be handling money or that will have access to funds. Run criminal and credit checks once a year.
  • DO NOT let anyone -staff or board-talk you into hiring friends without vetting them: “They are friends of friends, family, employers so you don’t have to check into their references. The staff or board member is not trying to lead you astray, but they truly believe in the recommendation of their friend- “who should know and can be trusted.”
  • The best embezzlers are frequently the hardest workers in the office.  They’re in early, last to leave, never take vacations, prone to over-deliver and never want or accept help. Establish policies that require staff to take vacations and share information.  (Alexis De Sela will have an article in the March newsletter with more on this topic.)

• Board members and support staff
  • Do not place undue reliance or responsibility on the shoulders of volunteers even if they present as the most revered, best board treasurer in the world.  Do your own work and follow the standards and guidelines that you can find at www.councilofnonprofits.org
  • Do not count on the bank, accountant or auditors to catch your thief.  They can act as a limited safeguard, but it isn’t their primary responsibility
  • Help board members learn their roles and responsibilities through educational classes, resources and good modeling

• Skilled administrative staff to manage the system
  • Running the organization on a dime is admirable, but not having enough people to do the job, and thus allowing theft due to lack of oversight is not. The executive cannot do it all well.  Ask for help.
  • Do not assign tasks, particularly financial oversight, to unskilled staff
  • Do not grow the program, even if urged by board members or funders, beyond the capacity of the staff to manage
  • Don’t over estimate your own capacity. Admit what you don’t know and either educate yourself or find professional support
  • Be aware of odd behavior or inappropriate relationships or alliances
  • Open your eyes and if it walks like a duck, looks like a duck and sounds like a duck, it’s a duck or an embezzler; either way, listen to your instincts

• The very culture within nonprofit organizations is what draws us to be a part of something that betters lives.  That’s why it’s so wonderful to work in and for a nonprofit.  Sadly, in an economy that moves over $390 billion (2016) we can no longer afford to be innocent.
  • Educate staff and board in acceptable business practices
  • Teach board members to read the financial statements and create an environment where asking questions about the finances is acceptable
  • Promote responsible reporting, hiring, polices and processes
  • Establish high standards and avoid the pitfall of trading accountability for kindness
  • The easy way is not always the right way

• Reporting the theft, prosecuting the perpetrator and being honest (within the law)** when asked for a reference on the perpetrator is the toughest part of the discussion. The decision to invest the time, energy and money into investigating the theft and then potentially prosecuting the perpetrator is a decision that has to be made by the nonprofit’s leadership.  The organization has to take into account issues related to:
  • Liability (replacement of funds if government grant)
  • D&O insurance (costs associated with the investigation and prosecution and/or replacement of funds)
  • How the funds were stolen and how to secure the system
  • If the perpetrator was working alone or if there is an accomplice within the organization or support organization such as a bank or audit or investment firm
  • Public perception and donor reactions
  • Effect on staff, volunteers and board members

• Some nonprofit organizations are reluctant to report a theft and to prosecute the perpetrator because:
  • They are fearful of damaging the nonprofit’s reputation in the community and with donors. This has not been proven true when organizations are transparent with the public
  • They are fearful of damaging their personal or professional reputations or being held accountable legally and financially. It is human nature and is actually more prevalent than the first reason, and
  • We have a legal system that does not support the investigation or prosecution of theft within nonprofits because if the amount stolen is not in the millions, it is simply not worth the work

Making the decision to investigate and prosecute is very difficult.  When asked, my opinion is the same as it was many years ago and I can only state my own beliefs – the beliefs of a person raised by my great grandfather, a District Criminal Judge in Bexar County for 32 years.  A crime is a crime.  No matter how you dress it up, it’s a crime to steal and if you hide it, for any reason, in my opinion, you become a part of the crime. If you fail to report it and fail to do everything in your power to bring the individual to justice, then you are accomplice to the crime.  If you do it to protect your reputation, then you lack integrity. I paid dearly for this opinion, but it is the one decision I made years ago that I do not regret. 

But he that filches from me, steals my good name.

— William Shakespeare

 So, let’s talk about the people that get caught in the vortex of an embezzlement.  Not the donors or the people you serve, but that quiet group: the board, the staff and the perpetrator.

Why do they steal? When I interviewed some perpetrators, the answers are oddly the same:

“They owed it to me,” tops the charts. People who steal from nonprofits feel that they work long hours for low pay, little-to-no recognition and they are owed the funds for their dedication.

“I had to so that I could support the image expected of me.” Maybe this says something about the messages we are sending in our work environments. This tells us that our interview questions should focus on asking candidates about about their values and how we fulfill our mission.

“It wasn’t their money anyway, somebody gave it to them so…”  

And my personal favorite, “It is no big deal, because no one got hurt.”

Collateral Damage

We don’t often hear about what goes on behind the scenes when fraud is discovered.  The focus always seems to be on how much money was stolen, sometimes who stole it and how, but rarely do you hear about the people who are left to pick up the pieces, staff and board members who share in the aftermath.

For all members of the nonprofit, initially there is a profound sense of shock and disbelief.  The successful embezzler is usually someone who is well liked, fun, charming, compelling and the go-to person in the office. Get rid of your image of the dark loner working in a small office, keeping to themselves. Board members ask each other and themselves how they could not have seen it.  Staff gathers to compare notes and ceaselessly examine how they could have kept it from happening.  They have a sense of guilt, self-doubt and helplessness.

And, finally, comes the fear.  In a fraud situation, the staff sadly, is guilty until proven innocent.  Unless the mode of theft is clear cut, there is always the chance that more than one person was involved.   They along with everyone connected to the situation should be vetted and cleared.  It is a lengthy, time-consuming process which is distracting, often feels degrading, and instills a sense of distrust within the remaining group.  Additionally, staff members worry that they will lose their jobs, lose respect within their community and be tainted in a way that will harm them professionally as well as personally.  They wonder, should they stay or seek employment elsewhere.  Some leave as soon as possible but most remain, true to the mission and the people they serve.  Their hearts and minds are focused on keeping the programs alive and helping the people they serve.

Board members experience all of the above and for some, this includes a profound sense of responsibility. Upon their shoulders lies the decision on next steps: sweep it under the rug, or grapple with the full gamut of discovery and prosecution?  Over the years, we have found that approximately one-third of the board resigns upon the discovery of the fraud hoping to escape liability, notoriety and responsibility. One-third will remain, but take an inert position, heads buried in the sand, just hoping it will be over soon, and one-third, brave souls, step up to actively support the organization through the troubled times.  They support the staff, accept interim positions, make hard decisions that may lead to facing the media, communicating with law enforcement, and taking the heat.  

Profile of an Embezzler

In a study conducted in 2005 (updated in 2016), The Hauser Center for Nonprofit Organizations at Harvard University in partnership with the Association of Fraud Examiners, developed a profile of an embezzler.  They found that the majority of individuals who committed fraud were married women, median age of 41, with children.  They steal on average, $160,000.  Men who steal are usually married, with children, between the ages of 35 and 55, and steal considerably more, with an average of $350,000.  Embezzlers have many of the characteristics that remind me of front line responders and fighter pilots. Intelligent, perceptive, highly skilled in predictive behavior, with a high-threshold for anxiety and risk-taking.  Most understand that nonprofit leadership will not prosecute due to their own fear of exposure.  Although the embezzler realizes if caught that their employment will be terminated, (in 5% of the cases, the individual is not terminated), but they will keep the money or the goods and lay low in a job outside of the nonprofit sector until enough time passes, and they can step back into a position where it is made easy for them to steal again.

So where do we go from here?

Nonprofit organizations are likely to discover a theft or fraud situation more quickly and endure it with less trauma if they have taken the measures outlined above and established the clear, definitive policies and procedures they need before the fraud occurs.  We are blessed to work in an industry that changes the world on a daily basis where we: laugh often and much, find the best in others, try to leave the world a better place, and know as we turn out the lights that one life may have breathed easier because of our mission.***

*Organizations should have scripts when providing references to make sure they are being factual.

 ** Be sure to have a policy on providing references and consult an attorney on how to best provide a reference for someone who has stolen from the organization.

 ***Exerpt from What is Success? By Ralph Waldo Emerson.

 Nothing in this article should be construed as legal advice. If you have specific issues with theft or suspect theft at your organization, please consult with legal counsel or the authorities.

The Lee+ Associates team recently completed a fun (but surprisingly challenging) poll of some of our favorite things. The resulting responses will give you a snapshot of each of us, including a quirk or two. We hope you will enjoy getting to know us a bit better!

Priscilla Cortez, Associate

• What’s your most memorable fundraising related experience? 
While working at UT Austin, a student in the College of Natural Sciences passed away -too young – from brain cancer.  I worked with her family to establish a scholarship in her name that would benefit students just like her with a passion for the arts and sciences.  It was a beautiful way for her family to honor the memory of their daughter/sister.

• Who were/are your professional mentors? 
Marion Lee, Principal at Lee+ Associates;  Jim Noffke, Associate Vice Chancellor for the Center for Enhancing Philanthropy at The University of Texas System; and Cookie Ruiz, Executive Director of Ballet Austin.

• What’s the best place you ever ate (and what did you eat)? 
A restaurant my husband and I stumbled upon in Siena, Italy, while on our honeymoon 10 years ago.  I don’t remember the name of the restaurant, but our meal of peposo (akin to beef stew) and chickpeas was unforgettable!

• What’s your favorite movie of all time? 
Steel Magnolias:  “I’m not crazy, M’Lynn, I’ve just been in a very bad mood for 40 years!”

• What’s your favorite book? 
To Kill a Mockingbird

• What is a quirky trait you possess that no one knows about?  
As a former ballet/tap/jazz dancer, I choreograph most everything I do in my head.

Alexis De Sela, COO

• What’s your most memorable fundraising related experience?
Since my background is in Organizational Development and Human Capital Management, my most memorable professional experience has been related to these: turning a deeply fractured, siloed, and ineffective division into the organization’s most profitable and effective division within a 12-month period. Our efforts saved the organization over $1.5 million in turnover reduction alone! Seeing this division flourish and developing a strong cadre of future leaders was one of the most rewarding professional experiences I’ve ever had.

• Who were/are your professional mentors?
I have had three outstanding professional mentors: Jackie Gordon, Steven Flanagan, and Victor Azios. I learned important lessons that helped transform my approach to dealing with issues, motivating others, and helped me become a more effective leader.

Jackie taught me about being true to yourself, acting with integrity, and being kind. She always did what she said she was going to do and treated everyone respectfully and fairly. Steve taught me to be strategic and patient. He had a remarkable ability to plan and wait for the right moment to make an important ask or move a project forward.
Victor taught me to be present and to lean into the “messiness” of a situation. I learned to enjoy organic situations and found the creativity that percolated as a result was worth throwing a “set agenda” out the window.

The one quality they all had in common was their ability to clearly articulate their expectations of my performance, trust that I would perform, and hold me accountable. I felt their trust and did everything I could to deliver on my promise.

• What’s the best place you ever ate (and what did you eat?)
I love to eat and have eaten some pretty spectacular meals at some of the best restaurants in the world. One of the fondest memories is eating mojarritas (Tilapia) on the beach in Acapulco. My dad would fish for and cook the mojarritas on a grill, season with lime and salt, and we would devour them. Nothing has ever come close to this culinary experience: it had flavor, ambiance, and tons of love!

• What’s your favorite movie of all time?
Godfather I and II

• What’s your favorite book?
Try as I may, naming ONE favorite book is impossible! Here are five of the most meaningful books I’ve read: 20 poemas de Amor y Una Cancion Desesperada, Pablo Neruda; The Poet, Kahlil Gibran; The Little Prince, Antoine de Saint Exupery; The Art of War, Sun Tzu; and A Prayer for Owen Meany, John Irving

• What is a quirky trait you possess that no one knows about?
I have to enter an airplane in a certain way always.

Karen Kegg, Senior Associate

• What’s your most memorable fundraising related experience?
While working in Maine, President George H.W. Bush called me personally at my hotel.  He left a message with the front desk with a number. I called it back and he answered!

• Who were/are your professional mentors? 
Mary Kathryn Cooper, my supervisor at M. D. Anderson Cancer Center and my colleagues at Lee+ Associates.

• What’s the best place you ever ate (and what did you eat)? 
Pappas Bros. Steakhouse in Houston.  The best steak I’ve ever had!  As well as the sides…

• What’s your favorite movie of all time? 
It’s a tie between Steel Magnolias and When Harry met Sally.

• What’s your favorite book?  
Beach Music by Pat Conroy.

• What is a quirky trait you possess that no one knows about? 
I start talking the minute I get up in the morning!

Shannon Kingman, Associate

• What’s your most memorable fundraising related experience? 
In college, I participated in Dance Marathon, a benefit for the Children’s Miracle Network at UVA Children’s Hospital.  It was a very “active” fundraising tactic; participants raised money by dancing for 10+ consecutive hours.

• Who were/are your professional mentors? 
I’ve had several over the years, but I worked in strategy at a hospital system directly out of graduate school; my boss during that time served as a wonderful mentor for me.

• What’s the best place you ever ate (and what did you eat)? 
Bodo’s Bagels in Charlottesville, Va.  It’s nothing fancy, but they make the most delicious bagels and it will forever remind me of my college days.

• What’s your favorite movie of all time?
That’s hard to say….Lion was the best movie I’ve seen recently, but My Best Friend’s Wedding was a favorite for years.

• What’s your favorite book? 
To read with my kids at night – The Wonderful Things You Will Be by Emily Winfield Martin.  Another favorite is The Hiding Place by Corrie Ten Boom; it was first recommended to me by a woman I greatly respect, and her recommendation did not disappoint.

• What is a quirky trait you possess that no one knows about?  
Juggling!  I tried to teach my three year old recently…you can imagine how that went.

Marion Lee, CEO

• What’s your most memorable fundraising related experience?  
An elderly woman reached out to me at the San Antonio Area Foundation, and over the course of a year, we spent time together. A staff member or I regularly picked her up and took her home after our events, and we even took her to the grocery store when needed, although she rarely asked for this kind of help.  So, I was very surprised when her attorney called me to say that she had passed away and had left the Foundation $6.8 million to establish a fund.  The circumstances under which she lived did not demonstrate that she had this kind of wealth.  We knew she had some wealth, but not like that, and what we did for her, we did out of respect and just general kindness to an elderly person.  The staff enjoyed her so much.

• Who were/are your professional mentors?  
Maria Eugenia Cossio Ameduri is hands down the best strategist and best fundraiser I ever met.  She was my former boss, known as “Boss” at the San Antonio Public Library Foundation, and, to this day, she is a mentor and is an inspiration to me.

•What’s the best place you ever ate (and what did you eat)?
The very first time, probably 1973, at the Quarterdeck in San Antonio, it was a meal of   King crab legs with sautéed mushrooms.  I was a college student, working two jobs and eating rice and beans and scavenging through the mall on Saturdays to eat samples at Dunderbacks.  To this day, this meal stands out as the best meal I have ever had, and it started me on my life-long love of Tanqueray and Tonic.

• What’s your favorite movie of all time? 
Rear Window, Big Jake or Fried Green Tomatoes

• What’s your favorite book?  
The Hobbit and the Lord of the Rings Trilogy. It was the coming of age book.

• What is a quirky trait you possess that no one knows about? 
When I am alone, I have a book or my kindle in my hand and I read while I cook, clean, bathe, watch TV, sit on the porch, and if I could, I would read while walking the dog. But with my three dogs, I would end up in the hospital!

Covita Moroney, Associate

• What’s your most memorable fundraising related experience?
In the 1990s, while at the Symphony, a group of office volunteers came every Thursday morning. The group included Laura Richmond, who was the ring leader. The group included wives of corporate CEOs and had organized themselves to assist my department. Every Wednesday the team fell into a panic, scrambling to prepare enough meaningful work for as many as six very capable women who would arrive the next morning. I had a saying back then: “Hell hath no fury like a group of volunteers with no work.”

• Who were/are your professional mentors?
Early on I learned everything from scratch from my executive directors— including my first nonprofit boss, the Symphony’s Executive Director Rick Lester. Later Jo Long (Carver Center) informed me that foundations don’t award grants based on the word count. Margaret King Stanley has been a wonderful mentor, and we stay in touch. More recently I’d say that Rebecca Brune opened my eyes to numerous key organizational strategies and best practices when I was at Methodist Healthcare Ministries. Our own Alexis De Sela worked over a period of time as a professional coach and was very impactful. Nowadays Marion (Lee) and Alexis are my “go-to” resources since between the two of them everything is revealed.

• What’s the best place you ever ate (and what did you eat)?
Kohinoor on Fredericksburg has absolutely the most authentic, delicious, to-die-for Pakistani / Indian cuisine. It’s such complicated food to prepare with a jillion steps and spices. The Butter Chicken and the aloo palak are amazing and the naan is ridiculously good. Best cooked cuisine I’ve ever enjoyed.

• What’s your favorite movie of all time?
Close Encounters of the Third Kind

• What’s your favorite book?
If I had to choose one for the desert island, Liberation in the Palm of Your Hand by Pabonka Rinpoche is a vast survey of traditional Tibetan Buddhism and culture. It’s so much fun to read and re-read this dive into the old Tibetan world view.

• What is a quirky trait you possess that no one knows about?
In the late 1970s I played and sang pop music in cocktail lounges with my (now) husband, in and around Boston and Cape Cod.

Joyce Penland, Senior Associate

• What’s your most memorable fundraising related experience?
As Development Director at Trinity University, our team introduced various giving levels between $100 and $1000. It seems simple, but we didn’t have that essential “pathway” at the time to influence donors to upgrade their gifts. So, we created the $250 and $500 giving “clubs” as well as the higher $2500, $5000 and $10,000 giving levels. As the saying goes, “If you build it, he will come” and donors readily began contributing at the new giving levels.

• Who were/are your professional mentors?
Margie Kintz hired me at Trinity University and gave me the tools and training to become successful in the world of philanthropy. For most of my 22 years at Trinity Marc Raney was my boss and provided all of us the freedom to create programs and initiate new fundraising ideas. In addition, especially in the early years, I learned so much from other fundraising colleagues through the Association of Fundraising Professionals…Mike Davis, Frank Elston, Barbara Anne Stephens, and many others, and I never hesitate to recommend AFP to newcomers.

• What’s the best place you ever ate (and what did you eat)?
I had never had breakfast tacos before arriving in San Antonio in 1984 and now it’s my favorite food. I’m a big fan of the migas taco (with a strip of crisp bacon) at Panchito’s on McCullough Avenue here in San Antonio.

• What’s your favorite movie of all time?
Dave – I could watch this again and again–an intelligent and funny movie.

• What’s your favorite book?
The Guernsey Literary and Potato Peel Pie Society by Annie Barrows & Mary Ann Shaffer.

• What is a quirky trait you possess that no one knows about?
I can play the saxophone, but rarely get called upon to do so!

Amy Phipps, Associate

• What’s your most memorable fundraising related experience?
Being on the incredible team of volunteers and staff that raised $14.1 million for The Children’s Shelter’s new campus on West Woodlawn during the first campaign in the organization’s 100-year history.

• Who were/are your professional mentors? 
Being surrounded by other AFP Presidents in the “early days”, including Kathy MacNaughton, Larry Tuttle, Joyce Penland, Ellen Lueck, Connie Munn…and others…you know who you are! …we all mentored each other and cemented lifetime friendships.

• What’s the best place you ever ate (and what did you eat)?  
Knowing that hunger is the best sauce, one of my most memorable meals was a fried-fish lunch at Canyon Lake after spending three hours wrestling a disabled sailboat back to shore.  We fell on that food — fish, fries and cole slaw — as if we hadn’t eaten for days.  It was restorative and brought us back to life.

• What’s your favorite movie of all time?  
O Brother Where Art Thou

• What is a quirky trait you possess that no one knows about?  
This one has me stumped.  It would be like picking a favorite child.

• What is a quirky trait you possess that no one knows about?  
I can say the alphabet backwards in less than 6 seconds.  Also I can whistle with a blade of grass.  And recite the opening of the old “Superman” TV show.  This is what hours of childhood idleness spawns!

Rhonda Serna, Senior Executive Assistant

• What’s your most memorable fundraising related experience?
When I worked at the corporate office of HEB, in Public Affairs, our department was responsible for coordinating hundreds of HEB sponsored events each year, the largest of which occurs during the holiday season, The Feast of Sharing. The Feast of Sharing serves communities across Texas in fighting hunger. Along with the delicious holiday meal, guests enjoy music, health screenings, children’s activities and Santa even joins in the festivities. It truly takes a “village of volunteers” who gladly give of their time to make this event successful. One year an elderly woman approached me at the event to ask if she could give me a hug as a “thank you”. She said that she had no family and the Feast of Sharing was her only holiday event to attend. I was pleased to play a part in giving so many people a sense of belonging and joy during a season that otherwise can be very lonely.

• Who were/are your professional mentors?
Marion Lee and Alexis De Sela, here at Lee+ Associates, and Debbie Sutton, Manager of Occupancy Planning Services at USAA.

• What’s the best place you ever ate (and what did you eat)?  
Restaurant Paradis, Rosemary Beach, Florida. Truly a religious experience!

• What’s your favorite movie of all time?  
Steel Magnolias (Laugh, cry, laugh, cry some more…) and On Golden Pond (Who doesn’t love Katherine Hepburn and Henry Fonda?)

• What’s your favorite book?  
To Kill a Mockingbird

• What is a quirky trait you possess that no one knows about?
I cannot drink something hot when I am eating something hot!

By Joyce Penland, CFRE

The Giving USA report on last year’s charitable giving in the United States has been released and we have reason to be encouraged. Americans gave an estimated $358.38 billion to charity in 2014, surpassing the peak last seen before the Great Recession that began in 2008.

That’s the good news coming from the 60th anniversary edition of Giving USA. The 2014 giving total topped a 2007 benchmark, when giving reached an estimated inflation-adjusted total of $355.17 billion. The 2014 total marked the fifth consecutive year in which giving increased.

The report stated that the four sources of total giving—individuals (72 percent of the total); corporations (5 percent); foundations (15 percent); and bequests (8 percent)—all increased their 2014 contributions to America’s million-plus charities. Giving USA Foundation officials saw this “across the board” increase as a sign of resilience and perseverance.

W. Keith Curtis, chair of the Foundation and president of Virginia Beach, VA nonprofit consulting firm The Curtis Group said, “Individual giving is affected by available disposable income at the household level, wealth, and growth in the S&P 500. All three increased last year as did the amount people spent in general—not just on charitable donations. Corporate giving decisions, on the other hand, have historically been driven by changes in pretax profits and GDP. Other factors might be affecting how much they donate; time—and further research—will tell.”

“With virtually every economic indicator that gets measured showing growth, I think it’s safe to conclude they played a large part in making 2014 a banner year for giving from every source,” he added.

What does this mean for our region?

Heather Diehl, President of the San Antonio Chapter of the Association of Fundraising Professionals, said that our region reflects the growth in giving seen elsewhere in the country. “The reaction to the Big Give SA mirrors that growth. We raised $2.1 million last year through the Big Give and this year’s total was $4.3 million, and that’s primarily from individual donors.”

Diehl said that the San Antonio Area Foundation, where she serves as Donor Relations Officer for Engagement, has also seen an uptick in gifts, citing the recent gift from San Antonio real estate and theatre magnate John Santikos to SAAF. The San Antonio Area Foundation has distributed more than $6 million from the new Santikos Charitable Foundation. Diehl said the gift’s impact “has had an enormous effect on nonprofits in our area.”

She also said that area nonprofits are adding staff in their development offices again and “That’s always a good sign.”

“Giving in Austin and Central Texas is strong,” says Mike Nellis, CEO of the Austin Community Foundation. “In 2014 we saw a nearly 20% increase in giving over 2013. I see the growth trend continuing this year as I meet with individuals, families and companies which have experienced great success and want to invest some of their wealth into making our region stronger. While we are grateful for our community’s generosity, it’s important to also note that the rapid growth in our region is not providing prosperity for everyone—many individuals and families are struggling due to a growing lack of affordability. Philanthropy will continue to be essential to preserve a vibrant and diverse Austin and Central Texas.”

Stay tuned for next month’s summary of Giving USA’s report on the donors and recipients of charitable gifts in 2014.

Giving USA is published by Giving USA Foundation, which was established by The Giving Institute to advance philanthropy through research and education. The report is researched and written by the Indiana University Lilly Family School of Philanthropy. More information about the report is available online at http://www.givingusa.org