Internal Revenue Service

On Tuesday, the board of Glass Youth and Family Services in Los Angeles voted to file for bankruptcy protection, unable to overcome falling state reimbursements, rising costs and dwindling donations.

Tax time is approaching, but before you start complaining, talk to your favorite charity.

The Internal Revenue Service today released findings from a much-anticipated study of nearly 500 nonprofit hospitals that is sure to raise controversy over how much compensation hospitals pay to top officials and how hospitals set that compensation.

Investors aren't in a giving mood these days. But the deepening recession presents a rare opportunity for some people: By setting up a special trust, wealthy donors can seed favorite charities, pass money to heirs and shelter potential growth from taxes.

President Obama’s announcement this week that he plans to limit executive pay and perks at financial companies seeking federal bailout aid should send a message to nonprofit groups’ leaders and their board members.

A few years ago, one of my clients requested rush research on a prospective donor. The client, a development officer at an independent school, explained that the headmaster was planning to meet with a parent to ask for a gift. He believed that the prospective donor had the capacity to make a $300,000 gift, but the development officer thought the number might be higher.

For some months now, I’ve been collecting samples — giving small donations to a number of charities (in addition to those I usually support), so that I can get an idea of who’s doing what with their “post-gift” donor communications.

As noted in an earlier column, a charitable remainder trust (CRT) is a valuable tax-planning tool. However, Revenue Procedure 2005-24, issued on March 30, adds new rules to CRTs to address the problem of spouses “electing against the will,” which can arise in certain states.

A basic tenet of a CRT is that only the unitrust or annuity trust payment may be made to a non-charitable recipient.

As a general rule, inherited assets are not subject to federal income tax. But if a beneficiary receives a gift before the death of the donor, it is considered “Income in Respect of a Decedent” and will be subject to income tax in the hands of that beneficiary.

There are many of these IRD assets: savings bonds, lottery winnings, IRAs, etc. Since these assets carry income tax burdens, they’re excellent candidates for charitable giving.

For the past 27 years, I’ve been recruiting senior-level development professionals and training younger, aspiring individuals to be fundraising consultants and executive recruiters in the nonprofit world.

In all my years of consulting with nonprofit leaders and their boards, I’ve learned that finding and holding on to great talent is no easy feat, yet it’s one of the most pivotal factors contributing to an organization’s success in fundraising.