Wednesday, April 14, 2010

Blog Switch Official

I have finally switched over to another blog format/website. I will no longer be posting on this site. Rather, all new posts will be on the following site:

Please check out the new site and sign up for email updates from that one!

Thank you again for reading!

Best regards,


Tuesday, March 9, 2010

Wealth transfer stuff

Please check out this post on my new blog about the alleged Wealth Transfer.

I am redirecting readers to this new site because it lets me post documents (like a chart or an outline) and it doesn't cost me anything to run my email subscription.

Just getting everyone ready for the eventual shut down of this site in favor of the new Word Press one.

Best regards,


Friday, February 19, 2010

Planned Giving Lesson of the Week - To Start (or Keep) a CGA Program or Not?

I struggle often about gift annuities ("CGA") - are they all they are cracked up to be (for nonprofits)?

Even before the market crash last year, various state regulatory struggles have made it more and more difficult to operate widespread, multi-state or national gift annuity programs.

Throw in market volatility and other investment uncertainty, and if you start to understand how pension investment/risk management should be handled, you really have to wonder whether it is worthwhile for charities to start new CGA programs or for smaller ones to continue stagnant ones?

This is coming from a guy who is paid to setup/run/oversee CGA programs and has done the licensing in New York, New Jersey, California, Florida, and lots of other places for multiple jobs and clients.

At the past planned giving group meeting in NYC this week, I was the moderator for a panel on CGAs with 2 panelists being from large established CGA programs and one being from a large investment/administration provider.

The panelists were terrific, exposed the audience to some of the higher levels of planned giving experiences out there. But, my question did not get directly addressed.

The answer to my ongoing question of whether CGA programs are worth it or not for many charities actually started to come to me during the networking, drinking stale diet coke session before the luncheon.

It was a conversation with an old friend, who is at a charity which myself and my firm had lost out to on a bid to provide planned giving consulting. Two years after we lost the bid, and they were already bringing in $1 million plus in CGAs a year. What were they doing? Two direct mail letters a year to an approx. 100,000 database of potential planned giving prospects (this is a well established national emergency aid charity that had just never gone heavily into planned giving but was already receiving a significant percentage of bequest revenue).

Then the panel started. The biggest institution represented was mailing 1.8 million CGA "solicitation" pieces a year. The other institution was marketing CGAs consistently to 137,000 members - no age overlay but likely that most were age appropriate.

I hope you are getting the message. Building a successful CGA program is numbers game. In the scheme of things, as great as your PGCalc/Crescendo illustrations look, most potential planned giving prospects will overwhelmingly not commit to irrevocable gift arrangements - people just don't part easily with their money.

But, if you have the numbers, I mean really large numbers of prospects and you commit to marketing intelligently to those prospects, you will close gifts and more than justify this "pain in the ass" CGA program.

Is there a magic number? No. And, of course it costs plenty of money to market to a 100,000 plus database. You better think about whether this database of prospects are really prospects.

And, what if you are raising a lot of money from a small amount of donors? Let's say a few thousand (like I hear in conversations all the time). Is a CGA program for your institution? Probably not, or at least not until you build large numbers of annual/direct mail donors into your database.

To be continued. Have a great weekend.

Tuesday, February 16, 2010

Finally - Charitable Insurance Fiasco Makes the NY Times

Thanks to David Moss who forwarded this story to me from the New York Times.

It is a must read for any fundraising professional who gets approached with any insurance deals that are too good to be true (as 99.9999% of them are):

This stuff is just rotten - and I remember clearly that the Oklahoma State plan was the poster child for this stuff!

See my older posts under insurance schemes.

Tuesday, February 9, 2010

Check out my white paper on planned giving

For my firm (Changing Our World, Inc.), I just finished writing a white paper/introduction pamphlet on planned giving. Here is the link to see and download it (a 12 page booklet)

I thought this would be a good time to start introducing email subscribers to my mirror blog on Wordpress. I called this one The Planned Giving Blog ( Eventually, I plan to switch completely to the Wordpress site. For now, I post identical pieces on both sites.

Why the change? Wordpress lets me link actual documents (like the white paper I hope you will check out). And, I actually have to pay for the email subscription service that you all have (right now only a few dollars a month but it's free for me on Wordpress).

My main concern though is for readers switching over to the new site and its email subscription. If you try it, make sure you choose daily or weekly updates. Otherwise, you might be subject to multiple emails a day (any time I change the site).

Thanks again for reading and spreading this blog.

Best regards,

Jonathan Gudema

Sunday, February 7, 2010

Interesting Articles on Madoff

For those who are interested in my previous posts regarding Madoff and clawbacks against charities (check out Madoff posts) , here are some interesting articles about this now old story.

This first article is really interesting - about how lawyers on behalf of net-winners from Madoff's scheme are fighting to be treated as victims! It's hard not to feel sorry for them but how could you take away recovered funds from the net-losers of the fraud!

What is interesting about this next article, is that it is only in the 5th paragraph that it mentions a side point that Madoff stole $325 million from a friend as executor of his estate.

Who would have thought that a little theft of $325 million wouldn't get much prominence? Well, I guess if you are in the business of stealing billions, what's another few hundred million?

The real irony is that Madoff was only stealing back false profits from his own fraud, presumably to keep the fraud going a little further. Apparently family of the deceased friend didn't disagree (they settled with Picard).

Monday, January 25, 2010

Too Many People in My Contacts Folder Going To Jail

Pretty depressing Monday morning when you find out that a very well respected tax lawyer, formerly from Ernst and Young ("E&Y") no less, is off to jail.

This would be the 3rd person in my outlook contacts folder heading off to a federal penitentiary for various white collar crimes this year.

Why a post? I am going to quote from the TaxGirl blog ( from where I got the story. I clicked through to the story from my email thinking I was going to see interesting stuff about E&Y - not a favorite of mine for various reasons.

Here is the quote from TaxGirl:

As part of their scheme, Coplan, Nissenbaum, Shapiro and Vaughn helped clients manufacture losses within the tax shelters. The four then solicited opinion letters from law firms that claimed that the tax shelter losses or deductions would “more likely than not” survive IRS challenge, or “should” survive IRS challenge. The IRS claimed that the four defendants were aware that the transactions did not meet those standards.

As I read this paragraph closely, it dawned on me that these former E&Y guys, all headed to the big house, relied on the age-old idiocy of the vaunted law firm opinion letter to justify their tax fraud schemes.

In other words, a letter from a law firm backing up some questionable tax avoidance scheme is absolutely worthless.

Why I am reporting this to the nonprofit world is that this is the typical proof of one of those newfangled get rich quick charitable schemes out there. It usually involves insurance, your donors lives, etc.. And, they always have a letter from a law firm explaining that the scheme is fine.

Well, the only letter that counts is a letter from the IRS - a private letter ruling. Period. Never be fooled by any promoter, of any scheme that is any bit questionable or risky, with one of these law firm letters. It doesn't matter which law firm. They are all garbage and if the promoters really feel that they have a worthwhile plan, they should go to the IRS for their opinion.

This is just a pet peeve of mine since I have had to sit through so many garbage meetings and presentations on such ridiculous plans. And, the next time one those idiots shows me an official law firm blessing letter, I am going to pull out this case and shove it down their throats (not literally, of course).

Maybe this week will get better, please G-d!