Effective fundraising Feed

Sojourners

Emerging leaders for justice, with a gospel message. (Via Dr. Larry James.) More  at Sojourners: Faith, Politics, Culture. Here is what they say about Planned Giving:

Planned giving possibilities include trusts, bequests, and insurance options. Including Sojourners in your will is a way more and more subscribers and supporters are making a substantial and lasting gift to a ministry they trust and believe in.  Our planned giving experts can assist you in documenting your intention to strengthen Sojourners with a gift from your estate.  Contact us at donate@sojo.net, or call (800) 714-7474.

Kind of dry, right? What if they, and organizations like them, approached Boomer constituents in the spirit of Christ, social justice, and social change and asked, "What are final things? What are the ultimate things in your life and your society, with your family, community, and God? Have you done your estate planning, your last Will and Testament in that sacred spirit, with an eye to what you have and what you owe and to whom, or have you done it with the Scribes and Pharisees of tax planning and those alone?' OK, I am too polemical. The point is that colleges, prep schools, social justice organizations, houses of worship, arts organization have a life affirming message that needs to guide the planning process from the top down, not be retrofitted to some little tactic of philanthropy. The spirit of a group like Sojourners can bring a death time plan to a life that is not snuffed out with death. You don't get that from the tax attorneys.


Are Fundraisers Overpaid?

Give and Take:

Jeremy Gregg, development director at Central Dallas Ministries, on his blog, The Raiser’s Razor, blasts his peers for talking about how much more they could earn if they worked in the business world.

Since they are always asking others to give, why do fundraisers get paid at all? Seems hypocritical me. As Morals Tutor to America's Wealthiest Families I take no money. I count myself lucky to be allowed to wander the streets.


Always Be Closing Planned Gifts

I am here on a mission of mercy. - The man from downtown

Steps to Success

  1. Meet with donor
  2. Gather 2 facts (donor age 65 owns appreciated property) 
  3. Gather no goals
  4. Assume goals are tax reduction and income
  5. Suggest Charitable Remainder Trust
  6. Wait several days as donor consults advisor
  7. Express surprise when deal is rejected
  8. Go back to step 1 with new donor
  9. Repeat until deal is closed and quota met
  10. Write paper on best practices for National Committee on Planned Giving.

How to Fail Miserably

  1. Get to know donor as human being
  2. Gather through open-ended conversation the donor's goals for self, family, and society
  3. Encourage the donor's best instincts
  4. Help donor weigh the joy of a gift now or gift later or at death
  5. Help donor weigh inheritance to kids versus philanthropy
  6. Help donor weigh the benefits to children of a philanthropic inheritance, or a family tradition of current gifts, or through a foundation or donor advised fund
  7. Help donor reduce goals, including but not limited to philanthropic goals, to talking points for advisors
  8. Serve as resource to advisors as overall financial, giving, and estate plan is created
  9. Express gratitude as massive current gift, or legacy commitment, is made to your organization
  10. Abandon this process when it comes out that the donor also made a massive gift to some other organization
  11. Slap yourself for having helped society, donor, family, and your organization
  12. Return to proven Steps to Success listed above.

I am not sure planned giving as a career option can be saved. But there are jobs open in the financial services bidnis pitching product. If you are a planned giving officer who is finding Charitable Remainder Trusts a hard sale these days, I would be happy to line you up with a financial sales recruiter.  If you are going to play pitch and putt to meet a quota you might as well at least have a decent commission structure, along with basic sales training. If you knew how to answer objections you would not be in this mess. There are only four objections to any financial product or service, including a Charitable Trust. Master the answers and you will succeed like a champ.  I will cover these answers to objections in another lesson. By way of preview: The fourth and hardest objection to answer in any sale of a financial product or service is "No Confidence." The No Confidence Objection is best met by wearing an expensive suit. You can rent one if you cannot afford to purchase one.

Forgive me.  Don't rent the suit. You would do better to buy it on a credit card with a good low teaser rate.  Remember, no one will do a Charitable Remainder Trust with a planned giving officer in a cheap suit.  Stay away from Glengarry plaids too. 


Inspired Philanthropy: Collaborating for The Commonweal

Competing or Completing? Beyond Planned Gifts as Transactions

In 2002 Robert Sharpe wrote an interesting article for Trusts & Estates, "Competing or Completing? Balancing the roles of various professionals in planning charitable giving maximizes the benefits for all."  I would like to second the spirit of his piece, while recommending that we as diverse professionals go beyond collaborating on specific "gift transactions" to collaborating on an overall legacy planning process of which the specific gift transaction is but one tactic or strategy. My sense is that such a collaborative process would transform our field for the better, move more money, and make our donor clients much happier and more fulfilled. In the process we advisors and gift planners will do ok too.

When we think of planned gifts as  specific  vehicles, like a donor advised fund, or a charitable remainder trust, offered by both nonprofits and for-profits we might ask, as Robert Sharpe does, whether the two distribution systems are competitors or complements.  Considered in that way, a life insurance agent "selling" a Charitable Remainder Trust payable at death to charity Y is competing with charity X who might have written the CRT payable to them. Likewise, Fidelity might compete with a community foundation for donor advised fund assets.  But let us say that the topic is not promoting a specific gift vehicle, or making a sale, but helping the donor client create an overall plan that is both prudent and inspired. (Prudent means a plan that takes care of the client and the client's family come what may. Inspired means having a positive impact on the community.) How then do the players arrange themselves around that program or process?  A case study may help us get the issues in perspective.

Case Study: Beyond Transactions to Prudent and Inspired Collaboration

Mary and John are worth $10 million, most of it in their closely held business. They are both 55. Both are active in the business and own 100% of the stock. They have two children, Alan and Marcie. Alan is a painter in NYC, barely getting by. He is single. Marcie is married with two children. She is the Comptroller in the family firm.  John and Mary are active in Holy Name Cathedral in Chicago where they live.  They have thought about spending more time working with the Church and less time in the business.  They dream of devoting their lives to working with disadvantaged children, instilling faith and character in children at risk.  Not only would they like to do more volunteering, they wonder if they might fund or endow a program and a facility. A local competitor has been making overtures to the family to sell the business.  Here are the questions on Mary and John's  mind. (These questions have been elicited in part by their lead advisor and in part through their own reflections.)

Questions

  • Should we sell, retire, and spend more time on volunteer work with the Church?
  • If we do sell at the proffered price will we have enough to live on for the rest of our lives?
  • Are we protected against major downside risks (death, disability, falling markets, liability, lawsuits, sickness, long term care needs, property and casualty losses)?
  • If we both die tonight, we owe what in estate tax? $3 million?
  • Can we reduce estate taxes in favor of the Church?
  • If we sell out to the buyer, where does that leave Marcie? Will she be out of a job?
  • If we sell to the outsider what will be the capital gains tax?
  • Should we find a way to keep the business in the family?
  • If so should it go to Marcie? And if so what do we give to her brother, Alan?
  • Should we divide our estate half and half for the kids? Or should Marcie get the bulk of it because she has helped us build the business?
  • If we let Marcie run the business when we retire, and she pays us some consulting fees so we have money to live on, and she then runs the business into the ground where does that leave us?
  • Can we afford to do more for Holy Name today? If we sell? At death?
  • How can we structure our affairs so we could do more now, later, and at death for Holy Name, minimize income tax and estate tax, while also taking care of ourselves and our children?
  • How can we balance all this?
  • Where do we start?
  • Who can help us?
  • Should we ask Marcie and Alan what they think? (If only they ever agreed about anything!)
  • Who should be at the legacy planning table when we sort all this out?

Exercises

  1. Check the questions you think need to be answered by someone.  Put a Y by those you can answer all by yourself from your seat at the table.
  2. Ask yourself which professionals are needed to do justice to this fact pattern? Attorney, CPA, Financial planner who can do a comprehensive financial plan,  financial product salesperson, planned giving consultant, banker, business valuation expert, other?
  3. Is there a logical order as among: goal clarification, fanning philanthropic intent, running financial scenarios, explaining planning concepts (including but not limited to giving opportunities), communicating with children, finalizing the overall plan, implementing products, legal documents, and gifts?
  4. Is the logical order the order you employ in your work with donor/clients?

Observations and Suggestions

  • Most financial salespeople and most gift planners working for nonprofits "pitch" rather than plan. They lead with a solution before understanding the pertinent context. ("Prescription before diagnosis is malpractice.") We as a field have to get past this package sale mentality for larger client/donors who have complex needs and whose potential gifts merit lots of tender loving care.
  • The family above might need a charitable remainder trust, or a foundation, or a donor advised fund, or a charitable lead trust, or an outright gift, or a bequest, but it is way premature to pitch any of those. We have not even finished the fact-finding and goal setting.
  • Well over half the challenge in working with complex situations like the one above are the human dilemmas, not the financial conundrums.  The issues in the case above are those of love and money, of fairness, and the push pull between self interest and giving, between playing it safe for self and family, and doing something wonderful for the Church as soon as possible.
  • To resolve such dilemmas good planning will run scenarios and quantify the possible consequences of all the permutations and combinations of tools, tactics, and techniques, but in the end the family must wend its own way in this "dark wood" of moral and prudential choices.
  • Some family decisions are made with advisors. Others on our knees in prayer, or in the dark of the night, tossing and turning. What is at issue here is the trajectory of many lives.   
  • The family needs an open ear. They need someone they can trust, not just to run the numbers, do the legal work, plead for the needs of the Church, sell financial products, or close various aspects of the "case." They need a friend with an open ear, who will listen as they feel their way through this dark wood.
  • The trusted advisor, or confidant, can be anyone on the team. But the trusted advisor cannot just be a special pleader. He or she will get paid in one way or another, and will represent this or that position at the table, but the trusted advisor rises above his or her professional specialty and his or her way of getting paid, and earns the right to be the trusted advisor by simply listening, processing the information, and allowing the family to make its own best decisions. The trusted advisor may also slow down the process, involve other needed specialists, or towards the end, gently urge the process to a conclusion.
  • The default choice in a case like the one above is for the family to play it safe. They might well say, "Charity starts at home," if the Church is too urgent about philanthropy. Given the parents unresolved dilemmas, given the murk and uncertainty, the most likely outcome is to do not much, or not much right now.
  • If properly planned a case like this could well result in a gift to the Church of several million dollars. But the Church won't get it for asking. They won't get it for pleading. And they are not likely to get it by pitching Charitable Trusts in a vacuum. They need to be at the planning table, or within earshot of it, as the whole plan comes together.

Competition or Collaboration?

  • So, if you represent the Church, as a fundraiser, what is your next move with this family? My sense is that the best move is to presume upon the common bond of religious faith, and the common bond of Holy Name Cathedral, to simply listen. Emerge as trusted advisor, or as confidante, or as an advocate for the fellow parishioner's better angel, the client's best self. Then, convene the team. Stay quietly involved as the team works forward.  Continue to cultivate and to act as sounding board.  As the team plans the options, your role  as  gift planner will come into focus, and you will get your chance to discuss the gift options in the context of the overall plan.
  • If you are tax, legal, or financial advisor, what is your next move, if you are first person to whom these clients turn? Will you or won't you contact the Cathedral? Maybe that will depend on how the Cathedral has positioned itself in town and with you. Do you think of their Stewardship Committee as fellow professionals who will assist in a team effort, or do you think of them as special pleaders with a one track mind, or as well meaning people who have no sense of the proper process, and who are always closing for action prematurely?
  • Ideally, Holy Name has cultivated the professional community and positioned itself as a caring team member. If so, whoever gets the case going will feel at ease involving the others who need to be at the table to do justice to this family's plan.
  • If we all were to operate in this spirit we would do better for our donor/clients and they in turn would do better for their heirs and for the community.

Practical Steps for Nonprofits, Donors, and Advisors

  1. Check out the Resources tab at Inspired Philanthropy.
  2. Appendices A and B outline a simple process for bringing donors, advisors, and nonprofits together in common purpose.
  3. Consider an event or series of events to educate all three groups.
  4. Tracy Gary and I have intentionally put this material out there for all to use. We believe in cooperative advantage and in public goods. We don't want to corner the market on philanthropy. We know that others can adapt these materials to their own communities and make them their own. We want that. Out of such experiments, we want to create an informal learning community so we can uplift giving and givers. The spirit is not unlike "Leave a Legacy."
  5. Per Tracy, the materials in the Appendices go over well with their intended audience. In her words, "They love it and money is moving."
  6. If you do improvise your own approach to the issues discussed above, please share the results with me, either in comments left on the blog or by email, so we can learn together.



Fundraiser as Philanthropic Advocate in Our Commonwealth

His eyes alert, though bloodshot, his face red with philanthropic passion and habitual boozing, Phil Cubeta, pro bono Morals Tutor to America's Wealthiest Families, pops up naked in his Dumpster to harangue his fellow philanthropic advisors and fellow citizens as follows....

Questions for major gift and planned gift officers:

  • Have you ever been close to closing a large gift only to have the donor's advisor kill it?
  • When you ask for a large gift do you do so with a full understanding of the gift's impact on the donor's overall financial situation and his or her other goals for self, family, and society?
  • Do you always make it a point to engage the donor's advisors early in the gift cultivation process?
  • When the donor plans his or her overall financial and estate plan, do you have a seat at the table?

Now, reflect on your answers.   Do you see a pattern? You push on the donor to close the gift. She needs advice. She asks advice from her advisors. The advisors know more about the donor's situation than you do. They have a seat at the table; you do not. They kill the deal to protect the donor, or for some other reason. And you are left frustrated and in the dark.

Why Advisors Kill Charitable Proposals

  • "Not invented here." A trusted advisor who is not involved early in the gift cultivation process may by reflex kill a deal simply because he or she did not think of it first, or feels threatened.
  • An advisor who has done a good estate or financial plan for the client may clearly see that the gift as proposed will upset those prior plans and leave the client's other goals under funded.
  • An advisor may see that while the gift size is feasible, the proposed structure is not optimal.
  • The advisor may be paid in part by money under management. The proposed gift may reduce the total money managed by the advisor and hence the advisor's own income.
  • (On the other hand, the proposed gift may require redoing the donor's overall plans and may drive significant fee income, particularly for fee-based planners and legal advisors.)

Counsels of Perfection for Fundraisers

  • Begin with philanthropic motivation and education.
  • Rather than trying to close the gift, suggest that you might contact the donor's trusted advisor to discuss the possibility of a gift and to see how best it might be structured, all things considered.
  • Go to advisors with a range of ideas for gifts now and later.
  • Seek your place at the table as a team mate.
  • Bring to the table not just your own cause, but the overall responsibility to speak for philanthropic motivation, for the benefits of giving for the family, for the positive effect on children, for the meaning and purpose it gives the donor's life.
  • Bring to the table whatever specific gift proposals (Charitable Trust, Outright Gift, Charitable Lead Trust, Bequest) you might have, but also listen to other scenarios and ideas from the advisors. (Educate yourself about as many of the tools as possible, and try to learn at least some of the financial and estate planning lingo that goes with them.)
  • See as the ideal outcome not just a gift to you. See as the ideal outcome the best possible financial and estate plan that works for the donor, family, and society, by the donor's own best judgment - a judgment illuminated by the noble considerations you have kept uppermost.

Practical Tips

  • Do not stop doing whatever works for you now.
  • Add this multi-disciplinary approach as a long term project.
  • Recognize that the process recommended here can take 12-18 months to close from the time that the donor first sits down with advisors.  (It can be much faster than that, but the larger the case, the longer the planning time, generally.)
  • As the larger gifts mature from that process, spend more time on the larger gifts and less time on your current giving process.
  • Seek out the best advisors in town. Have lunch. Build bridges. Make friends.
  • If you don't have a Board of Professional Advisors, start one.
  • Consider events for advisors. In those events elevate the advisor's own vision from tools and techniques to vision, values, meaning, purpose.
  • Make referrals to advisors. That is how you get get referrals (or more referrals) from advisors.

Expanding your Donor Pool

  • In every town and city there are high profile big money people who are philanthropic. All nonprofits have then on their list of prospective donors. But take a walk down Main Street. Every small business that is successful is worth something. What do you think a lumber yard goes for? A McDonald's franchise? A car dealer? A Roto-Rooter franchise? A plumbing supply store?
  • From experience, I can assure you that the most successful life insurance agents, and tax planners in your town are making their living working with Main Street closely held businesses.
  • These businesses are not liquid. The owner can't write a big check today. But as the owners consider their exit strategies and their estate plans, they sit down with advisors to plan. In those plans philanthropy can and should play a big role in reducing taxes (income tax and estate tax). Philanthropy can also provide the owner with something productive and fun to do when he or she goes through "the founder's transition," passing the business on to kids, or selling it to outsiders.
  • The time to make the gift plan is before not after the business interest is sold. Why pay capital gains tax when it can be avoided by selling the property in a charitable trust, for example?
  • So, as you call on the advisors in town, ask them about these Main Street Millionaires. Offer to do client briefings for them or client appreciation nights.
  • If you know your business, the advisor will see that together you and the advisor can bring real value to these Main Street clients. You won't push your charity, you will push for wise and inspired planning with an eye to benefits for self, family and society.
  • Your nonprofit will surface naturally as the client gets to know you and becomes a small donor, a volunteer, an active participant, and then a major donor as the business goes through its once in a lifetime transition.
  • Given that the Boomer are in their fifties, and given how many Boomers need this kind of work, you might find yourself getting in early on a major demographic "wealth wave."

Thought Leaders

Philanthropy and Democracy: The Role of the Fundraiser in This Our Commonwealth

  • Speaking of Jay Hughes, I constantly harp on the elitist, dynastic "suck up," or Machiavelian, or Courtier-like, element in his work. (Takes one to know one, really.) I see him as a serious thinker, and also see his ideology and the rapid propagation of it among advisors and wealthy families as a serious threat to democracy. But then again so were Aristotle (Morals Tutor to Alexander the Great), Ezra Pound, T.S. Eliot, and more recent political figures I will refrain from naming.
  • Concentrated dynastic wealth with a lock on the language of high culture, or covered in the mantle of religion and patriotism, and with preferential access to those in power, is a nightmare, not a dream to me, though it is a dream I have partly lived (as an over-educated super-prep who figured he would be teaching the rising Jay Hugheses all about moral philosophy around an oak table in some Ivy Classroom) and from which I awakened in a Dumpster, born again, though not necessarily for the better.
  • By way of caveat: I prefer a good, well educated Aristocrat, like Jay, to an Oligarch, Plutocrat, or Mafioso Godfather. I don't mean to run down Aristocracy in comparison with Tyranny, or even Anarchy, just to put in a plea for representative democracy, even at this late date, when the game is about over and the victors are dividing the spoils, whether it be the newspapers, the internet, the airwaves, our legislatures, or anything else that can be bought.
  • I see philanthropy, that is, social change philanthropy, as does Tracy Gary, as the best in our American tradition - call it largess, or magnanimity, or largeness of soul, or identifying with the underdog, or call it the living ferment of democracy. In stressing Main Street philanthropy in this post, I mean to gesture from within the high-toned thought world of a Jay Hughes or other suck ups to Dynastic Wealth towards giving from the bottom up, not just the top down.
  • Giving from peer to peer, and from blessed to those less blessed is central to the Christian tradition ("Faith, hope and charity and the greatest of these is charity.") Who is our neighbor? Not just those in our gated community. Tsedekah in Judaism and the heart of compassion in Buddhism speak to the centrality of giving in making us successful as well-socialized human beings in whatever spiritual tradition we were raised. As we give so it will be given to us. As we seek grace so our gracious giving is rewarded, whether from on high or from the kingdom within.
  • As fundraisers working with all kinds of wealth, blue collar as well as preppy, self made as well as inherited,  religious as well as secular, conservative as well as liberal,  Main Street as well as Wall Street, big money and small, you and your peers are stirring the great stew of democracy, as well as serving your particular organization.
  • Out of our differences come a resonant order, as from dissonance comes concord in music. (Concordia discors, the underlying dynamism of open society.) Our gifts and giftedness we bring to the hurly burly of the public square to create a culture and a community where there might have been only a society or a market. Nonprofits are at the center of that enlivened experience of our shared humanity.
  • As a fundraiser you serve your organization, but also the donors who make common cause with you. Through you and your organization, the donor serves the larger community to which the donor belongs.
  • Your organization may be central to a donor's identity and instrumental in sustaining the world donors want for themselves and their heirs, every bit as much as they might want anything sold in stores or brokered (or betrayed) by government.
  • Rich or poor, whatever your role in the great game of wealth, love, and power, stop by the Dumpster any time. What do we owe one another in this our Commonwealth?

....A big garbage bag, full of old books, magazines, stale bread, lemon rinds, coffee grounds, chicken bones, cigarette butts, and beer bottles, ends this oration, burying the speaker before he can beg for spare change, as had been his intention in what was to have been the closing section on "giving back to those less fortunate."


Jerry Chasen's The Advisors Project

I met Jerry Chasen, JD at a "Summit" of philanthropic advisors organized by Steve Johnson of The Philanthropic Initiative and Albert Ruesga then leading New Ventures in Philanthropy. Jerry, like many of us there, has been working ever since on getting other advisors more active in philanthropic planning. To that end Jerry has started a pro bono project, The Advisors Project. As an advisor or nonprofit leader, or for that matter as a donor, you can register at his site and download some excellent free materials that will make it easier for the advisor, the client, and the nonprofit leaders to converge. The materials include a values-based client "fact finder," some photographs that will get a person thinking about what matters most, some flash cards on personal values, and flash cards on social causes. Jerry is speaking around the country to advisors. I will be hearing him in Dallas when he speaks for Dallas Foundation on January 25. The man and the materials are an excellent resource to the field.


How Nonprofits can Enhance their Greatest Resource, their Key Donors

The November Giving Carnival hosted by The New Jew poses the question, "What Business Practices should nonprofits adopt to maximize their resources?" One suggestion: If you are a fundraiser or executive director look upon your organization, key donors, and their professional advisors as part of a single loosely organized system or team. Recognize that the donor gives to many organizations, not only yours. Recognize that the donor plays many roles in life, not only donor, but, say, mother, mayor, CEO, Red Sox fan, daughter, and usher in her church. You can present yourself as one who makes a case and makes an ask, or you can position you and your organization as key players on the donor's team, as she thinks through and implements her plans - a prudent plan to take care of her and her loved ones and an inspired plan to positively effect her community, including your organization. Look for opportunities to reposition yourself in the donor's brain, from the box marked "honored obligations," to the box marked "mission partner" or "trusted ally."

How can you emerge as the donor's mission partner?

  • Well, you might take a cue from Tracy Gary's Inspired Philanthropy. You can download worksheets at her site, under Resources. And within the Resources tab, under Appendices, you can find materials for use by donors and advisors to help them partner together, perhaps under your auspices, if you convene events with that topic. Tracy has been speaking recently on this topic.
  • For other speakers who might advance such a donor-oriented message, you might consider, say, Perry Cochell, Rod Zeeb, Lee Hausner, Doug Freeman, Charles Collier, or Jay Hughes.
  • To get a critical mass of donors and to bring in first rate national speakers, consider teaming up with allies from both the forprofit and nonprofit sector. Other nonprofits might invite key quests, and foot some of the bill. Forprofit financial, tax, and legal firms might co-sponsor. A community foundation might host.

More generally, as a nonprofit, ask yourself, "Are we perceived as adding value in our fundraising process, or would our best donors be happier if we never went through that process with them again?" Given that all these key donors work with financial, tax and legal advisors, when and if they make big gifts, particularly legacy gifts, ask what value you can add to the team.  For example: by inspiring the donor to go to her team with her philanthropic motivation clearly articulated, and by encouraging her to to create a plan that represents her well as a human being and a citizen, not just as a "wealth holder." As an advisor, I can tell you that nonprofit people are often more convincing as exponents of the public good, and of large-mindedness, or of civic engagement, than are we as advisors. We do need your idealism on the team; just don't over-sell your own organization. Let go of special pleading, if you can. Speak up for philanthropic intent, for what is best for the donor, her family and for society, and let the process take its course. If you are at the table, or near the table, when the plans are created, your organization will likely be included. Such well-planned gifts can be substantial, often a big fraction of net worth,  once the donor is fully engaged in the process and her high ideals have been activated.