Gift Hub

Now You Plan the Gift for William and Victoria Hurley

 

Say their assets, net of pension, are as follows:

• Residence: $550,000 including land. Was purchased for $225,000. No mortgage.
• Vacation home: $205,000. Purchased for $86,000 Mortgage balance: $18,000.
• Portfolio: $1,750,000 with basis of 50%
• IRA $500,000
• Collection of antique engineering tools worth $100,000 with low basis

Say they are living within their income, but are concerned that with low interest rates and inflation, they will soon have too little income to cover expenses.

Check back here soon for the Professorial solution.  Meanwhile, feel free to leave your solution in the comments. 

This case study is from GS 849: Charitable Planning, part of the CAP program for which, in my more lucid moments, I am responsible. The ideal audience, sitting at small tables to discuss the case, consists of both advisors (tax, legal, financial), and also nonprofit gift planners.  The perspectives are so often misaligned that it is through the conversation across the disciplines that real learning takes place. We get that going through local study groups. What we are finding is that these study groups are morphing into action groups.  If you are a nonprofit with a gift planning advisory committee, such a study group can get them into action on your behalf.

Civil Society Book Club Cancelled Pending Cost Benefit Analysis by Guidestar

I started a book club to read up on civil society and how small groups of people meeting informally are the foundation for human flourishing and democratic participation.  We were going to start by studying how the coffee houses and and salons in 18th century London, Boston, and Paris were precursors not only to marvelous literary and philosophical traditions, but also to the Revolutions to which we owe our precious Freedoms, not only of the market, but the freedom to assemble, to petition government for redress of grievances, to have a speedy and fair trial (unless we are deemed persons of interest and given a show trial or secret trial or executed summarily by drone strike), and other liberties too, which I can't remember. I canned the book club idea, though, for good reason. First no one was interested in reading any books, much less serious ones, and more importantly it would have taken me months just to file my theory of change with Bridgespan, Markets for Good, Guidestar, Charity Navigator, Give Well, and the other public spirited agencies who quite rightly track inputs, outputs, and outcomes to optimizes Results in our Social Economy, where all is managed like a business pending systemic collapse. So, the reading group now is just me and The Happy Tutor, meeting hugger mugger in the Dumpster, reading Classics by the light of the moon.  The third person meeting with us declines to be named, and arrived uninvited. I am not sure what he is doing but he says he has to record us to get Big Data as a public good. So, since the tapes are likely to filed in Langley forever, I and Tutor have achieved at least a measure of immortality.

CAP-Share

Bulletins chronicling how advisors and fundraisers are collaborating to create meaningful gifts using the principles taught in the CAP program - senselessly treating fellow humans as active moral agents of their own destiny. Treating clients and donors as objects of desire, as Fools to be outwitted by Knaves, is also a proven strategy and is taught in passing, but without much conviction.  You can learn that elsewhere - just about everywhere else fundraising and sales are taught.

Fundraising Beyond Persuasion

 

Metrics in which the funder is seen an an object to be managed through moves management and a sales pitch is what in advanced planning in financial services we call "pitch selling," "track selling," or "package selling." Fundraisers insofar as they can bridge donor mission and the mission of the charity can serve as key players on the donor's legacy planning team, providing two services that many estate planning experts cannot or will not provide: 1) eliciting donor goals, vision, story, values and aspirations b) bridging from goals through a team-created plan to an outcome that fulfills the donor's highest aspirations for self, family and society. Today, even the best fundraisers often commit (and are taught to commit and are forced by their org's metrics to commit) two rookie errors: 1) pitching in a dehumanizing way to the org's highest potential donors 2) asking for a check rather than asking for permission to talk with advisors. The net result of these rookie errors is a reliable and cost-effective stream of small kiss- off gifts (deemed major gifts by the org) and many gifts blocked by client advisors who are not brought into the process as allies in a timely fashion. In this video, we see the benefits of taking a more humane, mission aligned and thoughtful approach. Amherst is mentioned in passing as an org that might benefit from a more humane approach to gift planning.  I suspect most liberal arts colleges, prep schools, arts orgs, and religious orgs could as well. How can you model humanity - for which your org stands - if you use sales systems and metrics designed by those who pitch consumer tangible products? This is morally insane as well as ineffective - yet I know! Look who is talking. A deranged moralist wearing an ankle bracelet courtesy of the criminal court (convicted of a host of petty crimes he did not commit) whose own begging has come to this.  Life in a Dumpster, along with the liberal arts themselves.

Collaborating in Charitable Planning for Ordinary People

I am at Advisors in Philanthropy's annual conference presenting a case study, Three Generations of Hurleys. You can get the flavor of it in the video. This is philanthropy and fundraising that won't make the Stanford Social Innovation Review, or Forbes, any time soon. But those like William and Victoria in this video, multiplied many times over, throughout our country, are a hopeful sign for the nonprofits that are essentially extensions of family, neighborhood, congregation, or tribe. Connecting those organizations, their fundraisers, and financial, tax and legal advisors is the drift of the case study. We can learn to work better together across our disciplines for our clients and donors, their families, and for the nonprofits they love, lead and support.

In a week or two in Memphis, I am doing another case study, The Case of Jill Donor, for Alliance for Nonprofit Excellence.  Their theme, for the conference, is how nonprofits can turn advisors who are often seen as gatekeepers to the wealthy, into allies. To my surprise, and to my embarassment in fact, they found me through Gifthub. I would not have thought my elliptical and often exasperated, not to say grouchy, writing would have clued them into my intent, but apparently it did. I believe advisors to families like the Hurleys are natural allies to faith-based and place-based nonprofits, and others devoted to human flourishing, such as schools. I teach/preach/espouse helping donors and clients plan for not only their needs and wants but also their highest aspirations for self, family, and society. Many advisors are incredulous. More than a few rally passionately. I hope that the program I teach, CAP, has that effect reliably and predictably when convened by or with a nonprofit sponsor.

I am happiest right here in my Dumpster, surrounded by the moldy books from moral and philosophical and literary traditions that have long since been innovated and disrupted, deconstructed, displaced, inverted, troped, trumped, diverted, displaced, and mashed up, by "the half learned witlings of our isle" (Alexander Pope, The Dunciad), but I plan to do more such pontificating here at Gifthub, standing up on my sack of garbage to promote the better treatment of us, the Bottom of the Pyramid (BoP) consumers of a culture gone mad - yes, look who is talking.  But the meds are kicking in and by time I give my talk after lunch, and put on the dark suit I will  soon be buried in, I can pass for normal enough in the crowd I will address. The third lobotomy is scheduled for Wed of next week and after that I should be accepted as normal in even the most educated company.

This is no place for my son

Parenting a successful child. Lessons from the mother of Mencius, via John A. Warnick.  You will notice how she jerked him right out of the market economy and into a better place for a future moral philosopher. Much to her credit! Would that more mothers and teachers would do the same.

Putting The CAP to Work

 

Global Philanthropy Begins at Home

Global Philanthropy from US funders - why?

• "We have business abroad, have outsourced jobs there"
• "We are citizens of the world"
• "We see how exploited workers are in our foreign factories. Some are even jumping off factory roofs. We must do a little something to ease their pain and the bad PR."
• "Good for our global brand."
• "We can sell stuff to the bottom billion and bring Neo-Colonialism 2.0 to the third world"
• "We can save a baby in Darfur for $1 and it costs $10 to save one in Detroit."
• "We can take our kids on philanthropic travel; far more interesting and picturesque than visiting Harlem, or having lunch in a local homeless shelter."

So, as austerity hits in the US, as wages are capped off, as innovation and disruption does away with skilled jobs and routine cognitive work,  as Social Security and other "entitlements" are cut, as student debt rises, as coporate profits and wealth disparity increases in the US to levels surpassing those in Rome at the height of Empire, we now move our philanthropy abroad - "Every life," as Gates intones, "has equal value." It is pure math. Your kids can die at rates equal to those in India. What is the difference? What makes your kids so special?

Against this onslaught of Enlightenment we have main street millionaires. They give back to their community. Every life has equal value, but their faith tradition says, "start with self and family, then with neighborhood." Philanthropy beings at home. These local, often blue collar entrepreneurs and family business owners are the best clients of local insurance agents, CPAs, CAPs, bankers, and brokers.  They are ideal donors to community foundations, faith organizations, health organizations, and umbrella charities. They may demand metrics, but metrics by walking around. They will accept personal experience eye to eye and belly button to belly button quicker than a report from Guidestar or GIIN. They are frankly intransigent. They do have guns, they are often right to life. They are more likely conservative, real conservatives with a commitment to family values, to their town, and to their country. They do give abroad in that their kids die there in our wars.  And some do give abroad based on their own ethnicity, family to family.

When the globe warms, the ecosystem crashes, oil peaks, supply chains break, and you are looking at a portfolio of worthless paper, including worthless short positions, and even more worthless derivatives, these folks will grow tomatoes, repair a bicycle, and fix your busted applicances, and make ethanol in a still. You can run your metrics on that, and barter your spreadsheet for a three apples and a slice of homemade bread. Big Data and other higher order ways to measure, manage, market and manipulate is a house of cards. Invest if you will just a little in keeping your home town going, with the little resilient charities, the voluntaristic, often faith-based ones who will hold your own hand, on your death bed, when all you have to barter in return is gratitude.  "Every life has equal value." Dust to dust and dirt to dirt.

Holding the Mirror up to Nature

"That is not how I see myself," said indignant Midas staring in his barber's mirror. "The fault is with the mirror," replied the barber, adjusting the crown to hide the ass's ears.

About Chartered Advisor in Philanthropy

Download CAP 2013 Curriculum. In my work life, which is also a second career, I am responsible for The Chartered Advisor in Philanthropy (CAP) designation at The American College for Financial Services.  It is a three course, masters level curriculum, designed to bring advisors and nonprofits together in common purpose to serve the high capacity people that some call donors and some call clients. Specifically, our target market is "the consumer of estate planning services," or increasingly the consumer of retirement planning or business transition planning services. Our philanthropists would disdain the term. They would be equally uncomfortable with high sounding terms like social entrepreneur. They tend to be self made, often blue collar, business owners. They are faith based often and place based. They would more often than not consider themselves patriotic (except maybe when it comes to paying taxes).  They do not follow the society pages and do not go to the Crystal Charity Ball. They are unlikely to be major donors to any organization right now. Most of their net worth, often, is tied up in non-cash assets, such as a farm, ranch, land, or closely held business. To them $1 million in liquid assets is big money. Net worth high enough to generate an estate tax is big money.  They are looking to do the right thing by family (leave enough but not too much) and they would rather help the community than send money to Washington.  They get advice from insurance professionals, their CPA, an attorney, investment advisors, or a financial planner.  They were born in town, plan to die there, and hope their kids will live there or return home. When educated money made in global businesses saves babies in another country, this money saves babies net door.  When the philanthropist or impact investor looks to raise the standard of living in Bombay, these local givers wonder about the man or woman down the street. 

In my opinion, these prospects are, if you are a place-based or faith-based nonprofit, "Acres of Diamonds in your own back yard." If you are a community foundation, these are ideal prospects. And if you are a faith based organization, these prospects are planning their legacy in the light of what they have gathered from what your tradition teaches, as well as in the light of what their advisors tell them about the money.

I grew up preppy, educated, and wrong. I thought that high board scores, high class rank, and an elite education made me some kind of special. Was I ever so young and stupid? Now, I see that those who make it on their own, perhaps after military service, perhaps after education in a junior college, or no college, have as much merit as anyone I met at Williams, Oxford or Yale.  At a time, when the meritocracy is in full cry about "the social economy," metrics, big data, and reengineering civil society as if life were big game of pinball and the elite could bang on the flippers(logic models and algorythms), I have cast my lot with the ones who stayed home and built a small business, a living, a family, a neighborhood.  CAP works fine for educated money, multi-generational wealth, trust fund money, for prep schools and universities and colleges, including the best, it works for the donor advised fund complexes, the family offices, and the banks. But the heart of the value proposition is pure Tocqueville. We work with the donor/client who has no interest in being called a philanthropist but who is willing and able to give back to his or her community, in the light of values, and in the faith that if we all do a bit more, the future of our towns and cities need not be as bleak as it may seem, in today's difficult times.  CAP trained advisors and fundraisers (now about 800 of them) can, by collaborating across the disciplines, liberate the money locked up in noncash assets, and in accordance with donor ideals send them back into the community for the good of others, in a well considered estate plan, financial plan, business transition plan, with giving tools integrated within it.  That is the aspirational goal of the program, though of course each CAP has his or her own strengths, weaknesses, markets, and processes.  Each client or donor has to put together his or her own planning team.

I mention all this on Gifthub, because it is not enough to stand on the corner, observing with dismay as things fall apart.  (Yes, I too have lucid moments, despite  thanks to the meds and my recent cranial bypass operation.) Like many others, great and small, from all walks of life,  I feel impelled to do a bit more, the best I can. CAP is my effort (four years in the making) to work from the grassroots up in a constructive direction. If you would like to learn more about becoming a CAP, joining or starting a CAP study group, or mobilizing CAPs to help your nonprofit, you can email me via this site.  pcubeta at sbcglobal.net.  Curriculum is attached.