Episode 292: Are We Giving Donors All the Options, Vehicles, to Give?
What a terrific day right here on this edition of Around with Randall. I had a fascinating conversation with a client as they were looking to make a major, major ask in the middle part of a campaign. Knowing the donor’s circumstances and knowing a little bit more about the world around them, personally and professionally led us to a discussion about how to maximize the gift.
That’s what we want to use as a lesson today: asking how we get to gift levels might matter just beneath the why. We always want to focus on the connection. But if we want to maximize, sometimes we have to help our prospects, our donors, and the people we work with see a broader perspective. In doing so, we can elevate not just the gifts they might be able to give to our nonprofits, but philanthropy in general.
But really, what should be our goal? How do we maximize what they want to accomplish? Not forcing them to do something they don’t want to do, but giving them an opportunity to feel completely awesome about making a difference in this world. So let’s talk about that specific example, then we’ll talk about the bigger picture and jump into the tactical, as we try to do in every episode.
There are six things in this case that can help you think about it in a little bit different way. The client had built a tremendous relationship with a long-standing, long-term donor, but the donor had never really maximized to the level that could be possible. In part, that was because they saw their philanthropy through a narrow lens. They saw it through the foundation the family had set up and funded through both the company and some smaller individual gifts they made.
It was that pool of money that the family company and the multiple generations involved really focused on when philanthropy was discussed. As the client was getting ready, we were doing a collaboration session—which I do quite often with clients—talking about how they can maximize different conversations. We got to the point where, and I want to give credit where credit is due, the credit really belongs with the client.
We certainly walked through some of the scenarios, but they delivered. They did it brilliantly. The conversation moved to the company, and this is a fairly large company that is completely family owned. Most people don’t realize the value or the impact the company has because of its size. As the conversation continued, they talked about the particular project and laid it out. There was a lot of interest in the project, an understanding of its incredible value, and actually some personal family buy-in as to why this might be important.
Then the conversation got to the how, because they had kind of passed over that challenge—that hurdle—of the why. They understood it. My client laid out the strategy we had built in the session, and they executed it even better than I had recommended, because they usually do. They’re a high-level client. They put out this million-dollar offer, and the donor said, “Well, our foundation only has so many assets,” which brought us to this pivotal moment.
This is where we start talking about the idea of pivoting, or opening the door—or the garage door, or the whole side of the house. Bad metaphor, but it speaks to what the options are. The pivot was this: while you may not be someone who wants your individual family name on things, the company name is pretty important.
They value their employees. They value their reputation. They absolutely value the brand of the company. So the question was: what happens if we look at this through a little different lens? What if we look at a naming opportunity in a prominent area from a marketing perspective for the business—a brand-recognition opportunity—where you could combine philanthropic dollars already in the family-company foundation with company assets they were going to spend on marketing in the community anyway?
Fortunately, the client is in a place that a great deal of the community goes through every day. This will be an incredibly high-profile, highly visible asset. By putting the company’s name in this area, it would actually be a marketing and brand exercise—not quite a billboard on an interstate, but certainly a high-traffic area.
At that moment, the donor really sat back and thought, “Wait a minute, is this possible? What would it mean to have the company name—not even the family name, but the company name the family owns—on this particular area?” They were going to invest in brand marketing throughout the community anyway.
Why wouldn’t they do it here? The answer shifted from “We can’t get to that level” to “How many years can we do this? How do I think about my annual budgeting in this area to allow this to occur?” That led to other conversations in short order, and the outcome was: “We’re in. Let’s do it.”
It became a multimillion-dollar gift. Think about it: same project, same impact, same conversation. But the outcome became contingent upon a different way of funding it. And, as I said at the top, it maximized what the donor family wanted to do anyway.
Probably not only this, my client, the organization who had been kind of try to figure out how to we've been trying to figure out how to do this in a more meaningful way, but also another nonprofits that were certainly coming to them. The impacts the same. The dollars are the same. The, you know, the client, my client, the nonprofit doesn't care.
$1 million plus is $1 million plus, whether it comes from their marketing budget or their philanthropic budget. We don't care. The point is, that most people don't think about philanthropy in the ways in which we might be able to help shepherd them toward it. And that's the big picture today, that we know that 85 plus percent of assets in the world, and in particular in the United States, aren't in checking accounts or stocks, i.e. like stocks of like individual stocks, they're not in savings accounts.
85% of the assets are in retirement accounts, closely held businesses. They are in real estate. They're in small private companies, larger companies. They're in appreciated assets. They're in the car collections. There are all kinds of asset classes, but we always seem to only look at the cash. And more importantly, we allow our donors to think about it that way.
And what ends up happening is most conversations around that cash check and publicly traded assets or securities, and it limits all of these things. When we have only one funding source, we're unintentionally partnering with the donor or the prospect to limit what they want to do.
And really, we have a responsibility here not to make the decision for the donor, not to try to trick them into something, not even to push them towards something they don't want to do. Naturally, we have a responsibility to present options. We are not attorneys. We are not CPAs. We're not financial planners. Well, some of us aren't those things.
Most of us aren't those things. But why can't we broaden the conversation? Why is that limited? Our real responsibility is the term that I use as Sherpas. Carrying the load is to bring them these options. And in this case, it was in the business, fairly decent sized family business where they're spending millions and millions and millions of dollars in marketing to open that option.
But this also applies to plan giving conversations to the conversations that maybe we should really reclassify as pseudo plan giving, i.e. things like Daffy's donor advised funds, charitable qualified charitable distributions out of IRAs or 401 case. Our role is to think about it differently. It's not how can they give the question we should ask ourselves and ask them is, what are the ways in which this gift could happen that meet with the donor's approval, that are aligned with what their desires were?
And thus we come to the six things that I would recommend around expanding donor options when you get to that level. Now, remember a whole lot of podcasts, a whole lot of education in my 21st century classroom here where I've talked about all the cultivation and qualification and stewardship and all those things, you can go back and find those other podcasts.
Today. I'm limiting this into a very narrow space, a very narrow conversation that you're almost into negotiation for a gift. They've crossed the threshold of I'm in and all of a sudden it's a matter of how. And we're trying to then get to the best way to maximize what the donor wants to do, which probably benefits us. But if we do this in the right way, really is about benefiting them.
So let's start with number one, and that is their objectives, the donor prospects objectives. What are they accomplish? Is it about legacy? Is it about family involvement? Is it about business viability? Is about tax planning is about community leadership? Is it just pure passion? In our example that we started with, with the individual who has a family company that he oversees and the marketing dollars, the real intent of the individual was to make a meaningful contribution based upon some family connections to the project.
But the other part of the intention, the family does not like attention. The family is not looking to put their name on anything but the company, its brand, its reputation. The patriarch of this family bought into this company, bought out the others 60 years ago. He's still alive. And its reputation that matters to the family. Are we good citizens?
Does our company provide not only a great service and product for what they do, but are we engaged in the community? Do we take care of our employees? Do we understand how important our community is to our success? And to be honest, this is not a huge community, so they are a major player in knowing that community is moving forward in a positive way.
Will you put the two things together which this particular gift officer did brilliantly and they were able to change the conversation? I also think, give you another example on a more personal level, about my mother and some of the decisions she's trying to look at in life as she's doing great, play golf 3 or 4 times a week, but there are decisions to be made about money.
And what's interesting is, is that when you really get into this conversation with her, which I kind of feel like her personal Sherpa, she's more than capable of making the decisions and does it better than I would. But when you get into this, you get into conversations around what is she really trying to accomplish? And it opens different avenues to make the things she wants to do possible.
And she's a wicked smart person. Wicked smart. I mean, she heroically so. Broadcast journalist in the late 1960s when women weren't on television. She's got it. She doesn't know about these things. Just no idea I can do that. We assume people know what we know, but we have to start with what are their objectives. And when we get to those objectives, we can then learn a little bit more to create other options.
Which brings us to number two, understanding loosely, not to the penny, where the donors prospects wealth resides. Is it in qualified accounts IRAs 401? Is it in real estate? Is it in a closely held business? Is it in some type of family foundation? Is it in a community foundation for donor advised funds? All of these things play different roles in the way people think about their money, and that's a good thing.
They're thinking about, how do I protect myself? How do I protect my family? How do I accomplish what I want to do with the assets that I have? And the older you get, the less likely you are to be making more. I mean, there's some few examples where that's true, but you get to a certain point, you start towards retirement, you stop on the income side most of the time, and you start spending going to the spending side.
So they're thinking about this. So if you can understand the largesse of where people's generic assets are, what options are available. Do you have more things to talk about and how to make this possible? We go back to our example. We start at the top of the show with and it's business owner. It was very evident. Everybody knows this family owns this company, but nobody's ever brought the company into the conversation to say, look, instead of thinking about it philanthropically, the value of the brand, the contribution the company makes to its employees, to the community as a whole is critically important.
Would you ever think about elevating that as a part of this conversation? That's a huge move that if you don't know and don't think about, you can introduce and this donor incredibly intelligent, you know, 50 ish. So individual had never thought about it making the connection because most people don't. So you need to understand where those wealth moments wealth areas lie.
Number three you need to ask about timing. Timing is really important because it opens these options. Let's take like my mom for example, is is that she makes these decisions. In her case, like many 60, 70, 80 year old people makes decisions on these distributions that come timing wise, come out of her retirement accounts because they didn't have Roth IRAs and Roth for one case, when she and dad were in the position to be able to save for their retirements, it didn't exist.
So now she's being forced to take money because it's required 72.5. She's over that. She's got to make decisions. You got to know about the timing. That's a full conversation. Maybe it's a business issue. They're budgeting. One of the brilliant things that I had nothing to do with my client, they figured this out was is they timed it fairly well because the company was going through a budgeting process for the next year, which means they're allocating mentally, if not physically on a piece of paper, the resources that are going to be part of the discussion around marketing and branding.
Well, now the owner who has complete control or the one representing the family who runs it, he has the ability to say, I'm targeting X amount of dollars in that pool for this project every year for the next ten years. Well, if you miss that window, you don't can't have that conversation. Maybe it's about retirement. Maybe they're selling a company.
Maybe it's an issue of a liquidity event. They're selling a house, or they've trying to figure out what to do with paintings, pictures, cars, things they don't want to deal with. A second home just dealt with another client who we had the discussion. They asked me to kind of sit in on some discussions with this particular donor, and I began to figure out that they had I mean, we knew they had multiple homes, but what I figured out was, is they don't like multiple homes anymore.
They've gotten to an age where it's more of a burden than it is a blessing. And that led us into some discussions. Wait a minute, wait a minute. If you could make some moves with that house that you don't want anymore. The family doesn't want and cut down on your taxes, the capital gains of it and make a gift.
Would that be something that might elevate your thoughts about what you want to do? Naturally, they were like, that was possible. So timing is important. What's going on in their life? Number four continuously, if you're building a long standing relationship, be willing to offer alternatives. And we've talked about these but it's not a one time shot. It's a multi series of conversations around corporate support estate issues appreciated as issues, retirement assets real estate which we just talked about with as an example with a client on a third, basically a third home life insurance where the person says, yeah, I'm going to point out need more.
But I got this whole life policy, I don't know what. Are you constantly engaging? One of the genius things that this particular client does, and probably does it better than anybody else I've experienced, is they're constantly in conversation with their donors and always kind of probing, is this the right time? Have you thought about this? And they're doing some of these discussions around what's going on in your life.
And they're waiting until those moments are right, but you can't just show up once a year. We really value the idea of transformation, transformational giving opportunities. We need a constant relationship. Just can't show up once a year and say, well, tell me everything that's going on. There's no trust. It's not a real relationship. It's an ATM. Can't do that at these levels.
Number five is you may need to bring in other people because there may need to be support. So I'll give you a couple of examples. Many years ago I was dealing with a client where they owned a very, very successful known company in the community in which they lived. And it was a very large community, and they wanted to do something.
But once we kind of figured out that the business could be a part of it, I also began to sense that there wasn't a total commitment to the ability to make the decision, even though they owned all the company. And I naturally pivoted and probably took a leap of faith, but was able to recover fairly quickly that it was the spouse that was missing.
And when I asked that question, the in this case female prospect business owner large business said, my husband does other things. It turned out to be the CFO. She wanted the cfo's blessing to say, yeah, this is going to hurt the business. It's your money, go do it. Which we got. It could be a it could be a financial advisor in our situation.
We spoke about with the business in my client. We started the show with it wasn't. But remember I mentioned a patriarch who's older in life and enjoying success that he worked his tail off for, but very low key about it. But there could have been a situation where the sun says, I'd like to add into this conversation. Maybe it's a CPA or any you have no idea.
But but be be open to the discussion that someone else should be in the room that someone else is. Blessing is necessary. And my final one, number six.
Be ready to wait. Because as you expand the different, I'll call them pools of dollars that someone might be looking at, the more thought will require it in our circumstance that we started with regarding the marketing budget and some branding opportunity, that was one in which wasn't necessary, but I would argue more often than not, when you start talking about retirement funds, you start talking about business funds.
You talk about different asset pools. The closer it is to someone's heart in terms of their own retirement, their own well-being, their own protection of assets, the longer those decisions take. So you might have to have multiple conversations. You can't just say, well, we didn't get it here. We're going to go back, give them time, let them think about it.
Remember, as I talk about often in many of the podcasts and education sessions that I do, next step, what's the next step? The next step may be can I come back in a couple of weeks after you have a chance to think about it? Six tactical things. Figure out what their objectives are, what's really at the heart of this.
And it's maybe multi-level. Number two is, is that you've got to think about where their wealth resides, which means you need to build a relationship based on trust to find that out, because they're going to tell you if you do it correctly. You need to be talking and thinking about timing. When are things actually happening? Which means you can't just show up once a year.
Number four is, is you have to have a genuine sense of their well-being. Bike bring up different alternatives, different options. Number five is you may need to bring in other people that might be helpful or provide a blessing in this if necessary. Not always, but sometimes. And number six is you might have to wait a little bit longer.
That next step might be let's talk about this in a couple of weeks after you've had a chance to kind of ponder it, to kind of let it sense of reflection in the back of your mind of, is this a good thing?
If we think about the opening story in all of this, about this moment where this donor is going to make a seven major, seven factor impact, some bigger impact on a really important project, and not a huge community that's going to have a huge impact on families. Nothing changed about the generosity. Nothing changed about the organizational need. Nothing changed.
In the case statement, the only thing that changed was the funding strategy. By just providing options, we have the responsibility, and I mean that responsibility to give donors options that they may not understand. And in doing so, allowing them to do what they want to do. No one's tricking anybody into anything. Sometimes the greatest inspiration or contribution for a larger gift comes from nontraditional conversations or thoughts.
It opens up a bevy of just a better way where their gift, their desire to make a difference, which is already there, can be possible. The donors that want to give have a reason to give. And we always start with that. What is it they're trying to accomplish?
But where we can maximize the conversations, the discussion, the trust, the options, it's by helping them discover a better way of doing it. Not by telling them, but by asking questions and presenting different scenarios that allow them to do what they want to do. And at the end of the day, that's kind of a cool moment when you allow someone to smile even bigger, even more heartfelt emotion where they know that they're making a difference in the community in which they live, for the things that they believe in.
Don't forget to check out the blogs at Hallett Philanthropy .com. Two per week. 90-second reads on all kinds of things I read about from different things in the industry, which don't really get to a podcast level. Two personal things that I see in terms of leadership and what's going on in our world, not the political, all usually related to either growth, philanthropy, family, things that are probably things we can all agree upon are worthy of thought.
If you'd like to reach out to me, it's podcast@hallettphilanthropy.com. We need nonprofits. Don't forget nonprofits fit into the hole that exists between for-profit enterprise which wants to do things for money and sometimes doesn't do them because they don't make money. And government where it's maybe not all that efficient. There's a hole between the two.
That's where nonprofits live. That's where philanthropy lives. How do we make our community a better place? And don't ever forget my all-time favorite saying, some people make things happen. Some people watch things happen. Then there are those who wondered what happened. We live in a world where we need more people to make things happen. You're someone who does this every day when you show up.
Board member, major gift officer, chief philanthropy officer, infrastructure specialist. Whether it's the database, prospect management, finance, whatever, any type of volunteer, you're someone who's making things happen for the community of which you live, for the things that you believe in and you partner with others in the community are wanting to do the same. You're doing so for the people who are wondering and the things that are wondering what happened.
And all too often there's more and more of those. And that's where philanthropy as a is at its best, and that's where you're at your best. So thank you for what you do. You may not be in my community, but you make a big difference in your own, and that is a worthy way to spend every day in our professional world.
I look forward to seeing the next time right back here on the next edition of Around with Randall. Don't forget. Make it a great day.