SHARE:  

Richard C. Peck Consulting, LLC & The Philanthropy Guy, LLC


Providing consulting and educational services to nonprofits, donors, and professional advisors related to impactful charitable giving

CONTACT RICK

Charitable Giving Newsletter

05/17/24


In This Week's Issue:


Hiding in Plain Sight!


Weekly Tips for Nonprofits, Donors, and Professional Advisors

Hiding in Plain Sight!

I am trying something new this issue...by featuring a guest author, the esteemed and seasoned Brad Caswell, on the topic of non-cash assets, which are really hiding in plain sight (just like this cute creature above). Brad frames his thoughts below in two parts: Why/How/What and Opportunity. Read on!


****


Why/How/What: I am a logical person. I try to fit the pieces of a situation together in an orderly structure. In the world of planned giving, estate planning, and campaign & major gifts solicitations, I try to make sense of the goals, the task list, and the discussions with prospects.


Here is a variation on the "Five W’s" framework, which helps clarify my thinking, and hopefully it helps you, too. I call it the Why, How, and What:


Why – is the donor thinking of making this gift? He or she has an energy for the mission and strategies of the charity, so what is the foundation of this passion? Focusing on "why" helps keep the discussion on one's interests and enables a deeper validation of the possible, and importantly, what is most meaningful.


How – would the donor like to make this gift? Might an outright donation of cash meet their personal financial situation? Are the tax consequences of the gift important? Do they want an income stream from the gift that would be available through a charitable annuity or trust arrangement?


What – is in their broad portfolio of wealth that they can leverage in a smart way to make their gift?


These three are distinct, and if managed purposefully, shouldn’t cross over into each other. Leading with a discussion of what assets a donor has in his or her portfolio, when the donor has first raised an interest in supporting a food pantry, is a bit out of order. Likewise, taking a preliminary discussion of the benefits of a charitable gift annuity right into the funding possibilities of an Individual Retirement Plan Required Minimum Distribution payout to meet philanthropic goals muddies the water, too. So, establishing the "Why" is step #1. Once the charitable intent has been established, stepping into each of the "What" and "How" follow easily.


Opportunity: There is data that suggests large opportunities in pools of untapped donatable assets. The “Cash is not King in Fundraising” analysis by Dr. Russell James asserts that focusing on cash donations keeps a charity’s gifts small, both individually and in the aggregate.


Discussing non-cash opportunities with prospects opens doors to larger gifts. Dr. James’ good work shows that 98% of the wealth in the US is held in non-cash assets. That includes publicly traded securities, so even entertaining gifts of publicly traded stocks opens the curtain significantly – by another 45%+ of the wealth pool by some estimates.


For those charities focusing on cash gifts, that’s a small pool to be fishing in, with lots of competitors asking for $50-$250 donations. The big cash gift ask may present the donor with a cash flow dilemma, in that a $2,500 cash donation might complicate the donors’ cash plans for the next 30 days.


But a $10,000 gift from a stock portfolio or IRA bequest represents a very different set of decisions for the donor. Not every charity should be accepting non-cash assets directly. There are costs, risks, long-term liabilities, and other factors that may be involved. Options exist, as there are a number of support organizations and partners that can enable gifts a charity may run from. A bank or a local brokerage firm is certainly willing to help process donations of public securities. Another popular bucket of assets are cryptocurrencies, and organizations are available to make those gifts a reality for a charity. Real estate and business interest inquiries should be welcomed, not turned away.


The moral of this story? Don’t say “no” to non-cash donations! Rather, embrace the generosity of your donors and bring in knowledgeable outside resources to assist with the gift conversation.


Read Brad's bio below:

Brad Caswell

Brad Caswell loves teaching and problem-solving. He has spent 12 years as the COO of Vanguard Charitable, a large national donor-advised fund. His engaged and talented teams managed a wide variety of activities, from assisting donors with asset contributions to completing grantee organization due diligence within IRS regulations and norms, resulting in regularly issuing more than 10,000 grants in a single month! Before joining Vanguard Charitable, he worked with nonprofits to think creatively about accepting alternative contributions while continuing to keep risk and liability top-of-mind. Read more about Brad and what he is doing now with his Acadia Squam team:

Helping Charities use DAFs and handle illiquid asset gifts. (acadiasquam.com)

A Tip for Nonprofits: Do you find that your job postings are leading to lackluster results when trying to create the crackerjack fundraising team you dream of? Maybe it's the way you are writing it...it lacks punch and may actually be turning off your best potential candidates! Get some writing tips here via the red hyperlink: 7 Examples of Well Written Job Descriptions [With Tips!] | Ongig Blog

A Tip for Donors: Does your favorite nonprofit listen to those who are benefiting from its work---the beneficiaries? How would you know? The link here brings you to an article that is over ten years old but really gets to the heart of what impact is all about---and hearing it directly from the target constituency: Listening to Those Who Matter Most, the Beneficiaries (ssir.org)

A Tip for Professional Advisors: A new dawn has arrived: the Impact Philanthropy Advisor (IPA) certificate. From the mind of Dien Yuen, formerly of The American College and now with Daylight (Advisors), comes a team of creators, curators, and teachers to walk you through a multi-week training like no other out there! You'll also make new connections, receive CE credits, and get first access to Advisor Hub and Learning Labs. Groups are launching in September, October, and January, and the first 250 registrants will receive a special discount! Register now by clicking on the link here: Daylight Advisors | philanthropic advising

“At the end, it’s not about what you have or even what you’ve accomplished. It’s about who you’ve lifted up, who you’ve made better. It’s about what you’ve given back.”

~Denzel Washington

Richard C. Peck Consulting, LLC and The Philanthropy Guy, LLC

About Rick

228 Park View Drive

Belmont, NC 28012

+1 (603) 387-3897

Facebook  Instagram  Twitter  YouTube
Please forward this e-mail to others if you think they would like to sign up for this newsletter (using this blue button here)!