Fundraising Prospect Research Using Analytics

Prospect Research

Nonprofit managers and fundraising professionals acknowledge that effective fundraising has become more complex requiring more time and resources to cultivate sustainable donor relationships. We see the use of analytical technology as a priority for nonprofits interested in developing or strengthening philanthropic relationships. By using analytical technology, a nonprofit organization can collect, analyze and more efficiently use research data to develop better donor cultivation strategies. Research analytical tools, when used properly and ethically, can become fundamental in developing the right donor connections. Through creation of various rating profiles, an organization will have the ability to convert organized data into essential information on a range of variables such as a donor’s interest level, capacity, philanthropic priorities and anecdotal history. This information can be passed on to the organization’s development officer who can in turn better prepare for donor meetings and major gift discussions. The same collection of data can also be used to maintain interaction with key donors while at the same time become more responsive to donor interests. For instance, the organization can host meet and greet events that are especially tailored to specific donor interests discovered through internal donor research. In today’s information driven society, nonprofits who most successfully utilize data analysis techniques within their fundraising strategy will likely be the organizations that continue to thrive and expand. For more information on prospect research, contact us at

Planned Giving – Retirement Assets

Flower Garden

Retirement savings accounted for 34 percent of household assets in the United States in the first quarter of 2014 according to Investment Company Institute. The total value of such retirement assets is estimated to be $23 trillion. With such a large amount of wealth concentrated in retirement assets, charities working with potential donors may face issues pertaining to retirement assets. This is an area fraught with complexity and traps for the unsuspecting. Thus, it is important to seek out the guidance of an experienced professional. One challenge in this area may arise when a donor want to know how to best allocate testamentary assets to both family and charity. If the donor’s assets consists of a combination of non-retirement and retirement assets various issue must be addressed to achieve desirable results.

For instance, it may be advantageous for the donor to contribute appreciated long-term capital gains property to family members and retirement accounts to charity. Retirement assets generally generate income in respect of a decedent or (“IRD”). IRC Section 691(a)(I) of the Internal Revenue Code requires that IRD be included in the gross income for either the decedent’s estate or the beneficiary who receives the IRD asset by reason of death in the taxable year received. What this means is that when a donor leaves his or her retirement assets to a family member, that family member must report the retirement proceeds as gross income in the year such proceeds are received. However, if a donor makes a bequest of appreciated assets to a family member, that family member generally will receive a step-up in basis, a favorable tax result.

Consider on the other hand, if the donor left his or her retirement assets to charity. A tax-exempt charity is exempt from income taxation, thus receiving IRD assets is of no tax consequence for the charity.   A bequest of IRD to a charity can also result in an estate tax charitable deduction and an income tax deduction under Internal Revenue Code Section 642(c)(1) if the charitable bequest is structured properly. For donor estates that will be subject to both estate and income taxation, allocating IRD assets to charity may be the best tax option.

There are disadvantages and challenges involved when naming a charity as a beneficiary of a retirement account. For instance, spousal consent is required for certain retirement accounts such as a 401(k). If the donor’s estate is taxable, then family members may lose the opportunity to receive an income tax deduction under IRC Section 691(c )(1(A) which allows a person to deduct against taxable income the federal estate tax attributable to IRD items paid by the decedent’s estate. Also, if the donor is approaching or is over the age of 70 ½, naming a charity as a beneficiary will cause the donor to lose the option of stretching the IRA unless separate IRA accounts are set-up – one for charity and one for family members. For certain donors, the ability to stretch an IRA may be critical for several reasons, including the desire to reduce adjusted gross income. To stretch an IRA, the donor must name a “designated beneficiary.” If the donor is taking his or her minimum required distributions, and has named a designated beneficiary, then MRD is calculated based on the combined life expectancy of the donor and designated beneficiary resulting in a lower MRD. However, when a charity is name as beneficiary, only the sole life of the donor can be used in the MRD calculation. Segregating the IRA accounts between charity and family enables the donor to continue to receive the ability to stretch the IRA. It is important to consult with an estate planning professional regarding gifting retirement accounts because of the legal and tax complexities.

Medicare Provider Appeals

Dr Cover Folder

Recently, Brian Ritchie, the Acting Deputy Inspector General for Evaluation and Inspections, testified before the Subcommittee on Energy, Healthcare and Entitlements.  The hearing, titled “:Medicare Mismanagement: Oversight of the Federal Government’s Efforts to Recapture Misspent Funds”, focused in part on the Medicare provider appeals process.  The Medicare appeals process is currently suffering from huge backlog and delays due to an increase in the number of appeals by Medicare Part A providers. The Center for Medicare & Medicaid Services (CMS), which is responsible for ensuring that Medicare makes accurate payments, contracts with Recovery Auditor Contractors (RACs). RACs receive a commission when they identify and recover/return improper Medicare payments.  Each year, it is estimated that $50 billion is improperly paid from the Medicare program.  In August of 2013, the Office of the Inspector General (OIG) published a study which revealed that in FYs 2010 and 2011, RAC audits identified improper payments of $1.3 billion, of which $768 million was recovered.  RACs and other program contractors now play a major role in the government’s efforts to curve fraud, waste and abuse.

However, in recent years, there has been a strong surge in the number of successful appeals from Recovery Auditor overpayment determinations.  This dramatic increase in appeals has caused higher administrative burdens on the entire judicial system.  It was found that two percent (2%) of providers account for one-third (1/3) of all Administrative Law Judge (ALJ) appeals, with a few providers seemingly appealing almost every reimbursement denial.  One reason for the surge is due to the high level of success Part A providers have received at the ALJ level.  The probability of receiving a favorable decision at the ALJ level by Part A providers is approximately 56% according to recent testimony.  In agency comments released by CMS dated 06/12/13, there are several likely factors which attribute to the high appeal success rate: 1) ALJ are not bound by the CMS manual and local coverage determinations; 2) ALJ interpret Medicare policy less strictly; 3) ALJ are less specialized in the Medicare program and do not have clinicians on staff; 4) there is a low cost to appeal. 

Because so many RAC determinations have been overturned, this calls into question the viability of RACs in the future.  Recent lawsuits have surfaced which challenge the appeals process, which in turn put more pressure on CMS to take corrective action.  We will see what develops from the higher scrutiny pertaining to this issue.

Medical Malpractice Risk Management



Picture Surgeon 2

A study conducted by Stephen W. Heath, MD, MPH found that there is a correlation between our increasing litigious society and the reason litigants file malpractice claims.  Continuous consumer advertisements targeting medical providers has become commonplace. As such, a 2010 report by the American Medical Association found that 60 percent of doctors over the age of 55 have been sued at least once.  Moreover, medical malpractice jury awards are 17 time higher than general tort awards according to the U.S. Department of Justice Bureau of Justice Statistics. With the high probability of experiencing a medical malpractice claim, medical providers should address the risk of financial loss systematically.  By focusing on high risk areas such as informed consent, informed refusal and patient documentation, a provider can reduce the risk of claims filed against his or her medical practice.  It is equally important to implement new policies, procedures and forms that address high risk areas.  Finally, research studies show that patients rarely bring tort actions against providers they like.  For this reason, conducting patient satisfaction surveys should play a role in a provider’s risk management strategy.