If the organization is not now working from a sound long-range strategic plan---and it surely looks that way to me---then they must get busy with the development of that critically important “road map.” From that exercise they will have identified clearly the programs, services, and projects they wish to do according their their Mission Statement. They would as well have the costs of doing the organization’s “business,” along with setting timelines and the naming of who does what.
Maybe only a semantics thing, but I question the thinking that the organization is, “... to organize and offer programming/services that attract additional support.” It seems to me that the purpose of any non-profit is to fill a definite need first while researching and searching for prospects who would care about the things the organization is doing. Not the other way around.
The only way the organization will be able to pass the “Public Support Test” with the IRS is to get busy with practical and doable fund-raising plans. Again, such plans can only come from from the directives of the long-range plan.
As it is presented, the $750,000 donation appears not to be of the “unusual” type---strange as that seems. How the IRS would view it in regards to their metrics, is anybody’s guess, due to the many ways such gifts are accounted for in terms of exceptions and exclusions. Someone from the organization must be close, working with the IRS, or the organization risks losing its public charity status.
From the friendship between the donor and the founder, I do not believe the gift can be regarded as “unusual and unexpected,” thus the donation could very well adversely affect the Public Support Test when that donation far overshadows what is received from other public donations. As I understand it, such donations can be excluded when they are truly “out of the blue,” and given by someone who was previously distant, having no apparent interest in the organization.
It may make it even worse to include the same donor’s stock gift, i.e., enlarging further the percentage he accounts for against the very low level of other public support. But, my guess is that you cannot use the value of the privately-held stock until the donor "buys" it back from the organization. Right now, it’s “only” paper.
Tony Poderis http://www.raise-funds.com
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