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Paul Schervish: Coronavirus & Nonprofits
Coronavirus needs no introduction. We’re recording on Monday, March 23rd. Nonprofits are scrambling and struggling. The scrambling to adapt to workflow and personal upheavals will subside. The struggle will get worse: The need among those you help has increased and will become greater. Expenses of all sorts, from helping those in need, to disinfecting offices, to increased reliance on technology, are rising. At the same time, there’s financial pressure on your individual donors, in the face of firings, layoffs and work reductions. Your institutional funders are also pressured, whether private or public. Is it wise to spend? Can you count on your donors when this is over? Can you fundraise in the midst of the crisis? My guest is Paul Schervish, retired director of the Center on Wealth and Philanthropy at Boston College.
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Transcript for 481a_tony_martignetti_nonprofit_radio_20200323.mp3
I’m your aptly named host. This is a special short episode of non profit radio Corona virus and non profit fundraising. Corona virus needs no introduction We’re recording on Monday, March 23rd on profits are scrambling and struggling, scrambling to adapt to workflow, and personal upheavals will subside. The struggle will get worse. The need among those you help has increased and will become greater expenses of all sorts from helping those in need to disinfecting offices to increased reliance on technology are rising. At the same time, there’s financial pressure on your donors in the face of firings, layoffs, work reductions as the individual donors is also financial pressure on your institutional funders. Is it wise for you to spend? Can you count on your donors when this is over, whether individual or institutional, can you fund raise in the midst of the crisis? My guest is Paul Schervish, retired director of the Center on Wealth and Philanthropy at Boston College, were sponsored by wegner-C.P.As. Guiding you beyond the numbers wegner-C.P.As dot com. My Cougar Mountain software Denali Fund is there Complete accounting solution made for nonprofits. Tony-dot-M.A.-slash-Pursuant Mountain for a free 60 day trial and by turned to communications, PR and content for nonprofits is their mission. Turn hyphen to DOT CEO. It’s a great pleasure to welcome back to the show. Paul Schervish. He’s professor emeritus at Boston College and retired director of their Center on Wealth and Philanthropy. He’s the author of seven books on Giving and wealth. He’s been studying philanthropy for over 35 years. He’s at Paul Schervish. Great pleasure to welcome you back, Paul. How are you, [00:02:32.87] spk_6:
tony? It’s a pleasure to be back. I’m just doing fine. Laying low, being an elder statesman, or at least another. [00:02:38.77] spk_2:
No, you’re You’re here to provide context. Historical context. Which eyes going to reassure all of us. So the elder statesman is appropriate on. Where are you? Ah, where you staying? In place. [00:03:04.57] spk_6:
We’re in Chapel Hill, North Carolina, where we moved from Boston. Ah, for 1/2 year. We live in Boston the other half of the year where our two boys live. But down here, um, is where our first grandchild arrived. And so we spend half the year down here. [00:03:12.10] spk_2:
All the reason to move only only half the year. I’m surprised your wife, your wife would like to stay longer. I’m wondering. [00:03:15.98] spk_6:
No, not at all. Because they’re two boys live in Boston. Grandchildren there, too. So, uh, there we go. [00:03:22.82] spk_3:
Okay. Well, I’m, uh I’m several hours east [00:03:36.84] spk_2:
of you. I’m on the coast in Emerald Isle, North Carolina, also also in place. And the governor today just ah, closed. Um, what [00:03:37.22] spk_3:
did you do [00:03:40.54] spk_0:
today? Today was just Ah, we already had. Oh, that was a local. Yeah, the governor today. Locally, they [00:03:59.24] spk_2:
had they had done some things. But the governor of North Carolina today, Governor Cooper just closed. Um, beauty salons, massage therapists, barbershops, movie theaters, Jim’s, um right Cooper, Governor. Right, Cooper. Um all right, [00:04:09.48] spk_3:
So what, uh, what’s your star general know? What’s your what’s your sense [00:04:10.18] spk_2:
of what non profits are facing and should look forward to? [00:07:06.64] spk_6:
Well, I hate to quote Rumsfeld, but what we’re facing is those I’ve known unknowns that he talked about, remember? He said they were known unknowns, and there were unknown unknowns, remember? And this is a biological event of an unprecedented nature. Not in the extent that we haven’t had major plagues in history, and we can certainly trace back to the 2018. Clue 2019 flu. I’m in 1919 1918. Um, but this is unprecedented in that this is taking place in an age of dramatic globalization and interaction, coupled with the dramatic situation of biological and scientific progress and and potential insight. So right now, what we do know is that this spreads quickly. It has a death rate that we’re starting to learn may not be as great as we had once feared. But what we don’t know is its termination date and how it will exhaust itself. And so anything we’re going to talk about for charity’s contributing to their, um ah, receiving money from their sponsors or charities contributing to those that they support Our, uh, philanthropy is contributing. We don’t have a time frame for this, like we might have had for recessions and so on. And even for 2011 29 11 when we, um, actually had, uh, on increase of giving within a year. So, uh, sound like Zach and, uh, the great recession of 2007 2008 29. Um, we had about a five year decline and terrible giving. It went up in some of those years, but the trajectory of charitable giving was down for about five years. If you looked at it as going up from a year 2000 2 2007 and if that had continued to grow, um, we would have had 350 billion more dollars given to charity from 2008 to 2013. So we lost a year. Charitable giving if, um, the, um, trajectory from 27 had continued unabated. So that was a longer hiatus and terrible giving. We lost about it. Ah, whole year’s worth. Over those five years, [00:07:13.64] spk_2:
the trajectory of charitable giving is always positive that the long term trajectory [00:07:18.80] spk_6:
that’s correct, [00:07:20.44] spk_2:
okay, that that in itself is grounding and and reassuring. We always it always does come back. [00:07:37.31] spk_6:
And I also think it’s important to note that something that Patrick Rooney and I Patrick from the Center on Philanthropy in Indiana and I have talked about is that even giving us A is a low ball estimate. We think there’s a lot more giving then what we can measure Ah, in a meaningful and in a sober manner. And this giving, of course, does not include all the informal giving that accelerates at this time that people don’t realize she could be recorded his formal giving or that people are giving and shouldn’t be recorded as formal giving. And it isn’t so. There’s a lot of intra family help at times like this that actually does make up for quote unquote the decline and formal giving. Oh, [00:08:24.54] spk_2:
interesting. Yeah. So you’re you’re yes. You’re bringing now family family support. It’s just private support. Me. Could be family. Could be friends. [00:08:33.22] spk_6:
That’s right. [00:08:33.89] spk_2:
That’s not recorded as a CZ. You and I talk about non profit fundraising. [00:08:39.43] spk_6:
That’s right. [00:08:40.30] spk_2:
Yeah. Yeah. All right, [00:08:42.54] spk_3:
All right. So then, you know, the non profit community [00:09:00.24] spk_2:
has greater expenses. Like I was saying in the intro, whether it’s technology or disinfecting offices or, you know, uh, you are, of course, greater need to, uh to the to those who were serving and [00:09:13.35] spk_3:
that just that doesn’t apply only to, uh, institutions, organizations that serve individuals. But, you know, culture is important. Yeah, Theater’s air closed now, but cultural institutions need to keep themselves going, whether It’s a museum or a theater group. Okay, These these air both closed now, um, but they’re gonna come back. And so the theater group theatre company needs to have ah ah. Pipeline of directors and shows planned. Um, the museum needs to think about, you know, curating for the future on being opened again. Will they will open again. So I’m not only [00:09:44.31] spk_2:
thinking of individuals and, you know, bring in arts groups and environment of course. Mean so [00:09:53.94] spk_3:
the work has to continue. And, um, in some cases, [00:10:05.77] spk_2:
there’s a special, special, greater need, but the upset cause is greater expenses, too. Like I said, possibly reliance on technology irrespective of what kind of mission. So [00:10:11.24] spk_3:
in the face of these greater needs, whatever form they take, um, are we safe to be spending [00:10:14.24] spk_2:
beyond what we anticipated? Beyond what we what we budgeted? [00:14:11.09] spk_6:
Well, the answer that I told my students over all the years that is the first answer of wisdom is that it depends. It depends on what kind of organization we’re talking about. Depends on whether a hospital depends on whether we’re receiving as a nonprofit organization or as a public organization. State funds to keep going. Let’s think of it as what we’re hearing from the federal government. What we’re hearing from state governments. There’s two arenas. One is the, um the people, the employees. And there’s a certain amount of expenditure that charities are going to need to support their employees. They way they want to support people in the community. It’s hard to treat your employees more harshly. Then you want a treat. You’re, um uh, the people in the community, Uh, these are your family members, so to speak. And so Charity’s first of all have an obligation, too. And we’ll find, I think, happy response among thunders for keeping employees uh, engaged and hired. Now we’re gonna have to work out the way there is the government non profit partnership here because of people are quote laid off that has some of their salary played paid for by unemployment benefits. And so maybe there’s unemployment benefits that the state the government will provide, and then the non profit makes up for that difference. To keep people from quitting or joining another, uh, employment opportunity. You see how this can get complex In a second area is the institution itself the survival of the institution. And just as the government is providing money for businesses to continue to exist so that there’s places for employees after the troubles are over, um, the nonprofit sector has to keep going in a way that there’s a place for the employees to be working and their jobs to be contributing to the community when the crisis is over, if there is a need for layoffs and we can talk about what donors may think about, but let’s just take one place to start. Let’s start with organizations that have no endowment versus for those with the small endowment versus for those with a grand endowment and what they can do. I think most universities they’re not laying people off, especially those with it was a great endowment. Um, they have the tuition for the year, even if their tuition driven. They have there the most of their revenue already in the coffers. They’re going to continue to grant credits, and they’re going to be able to keep their income stream alive at least until the beginning of the next semester. So that’s just one example. Often organization that may not need a dramatic infusion of charitable dollars at this point, and that takes us to the donor. The donor is goingto have to be picking and choosing maybe one that has contributed ah, large amount over years to uneducated l Institution might for the next six months shift that giving away from an organization that doesn’t need the money it much immediately to an organization that is proceed to be much more in need immediately [00:14:15.78] spk_3:
now. So, historically, have we seen a shift like that? Have we measured that? [00:14:56.45] spk_6:
Yes, wenn er the great recession took place 2008 2009 We found, as I said, a decrease in charitable giving overall. But giving too social service is was sustained much better. And after after 9 11 1 of the reasons why charitable giving didn’t go down. It was before we had this kind of crisis Fatigue, charity, fatigue. [00:14:59.44] spk_7:
Um uh, [00:15:27.84] spk_6:
9 11 produced a lot of charitable giving, and if it did it for the people that were, uh, immediate loss for their, um, family life and way of making a living, and it did it for communities and for businesses that were caught in that trap. And so the money shifted in 20 in the great recession. And it also shifted for crisis relief in on 9 11 [00:15:47.24] spk_2:
Okay, Yeah. 9 11 is a bit of a different case, because the funders, whether institutional or individual, we’re not enormously impacted the way we are are all now impacted. [00:16:02.64] spk_6:
One time shock. Yes, rather than an indefinite period of time that effects that the wealth of the donors, um, directly run in. And you’re very correct about that. [00:16:07.33] spk_2:
Yeah. Um, so that I don’t want to discount 9 11 lessons. I’m not. No, [00:16:12.26] spk_6:
no, no, you’re not. You’re not, But it’s a very good point [00:16:23.24] spk_2:
context. The great recession seems Maur. Ah, more of an apt analogy. Um, for that reason, if [00:17:18.68] spk_6:
you ever want to know what’s going to happen, the philanthropy look at the income and wealth. Gross or declines that fire outstrips any tax effects that are written about all the time in the nonprofit sector. Worries about all the time. Um, we had a natural experiment after the great recession. Um, there was no change in the tax laws that took place for those five or six years. No, except the tiny bit in the marginal tax rate for capital gains. But that was not that important. Okay, so without any tax change, we saw a dramatic decrease and terrible giving due to the decrease in wealth and an income. And the income effect and the wealth effect far outstrip any of these tax effects that the charity’s air always be moaning. Whenever they hear that there might be a decrease in taxes. They feel that the discount rate for donors is going down, and they’re going to give less. Well, in the past, that may have been the case. But today, wealth is growing normally so greatly that far outstrips any effect that the tax rates have. [00:17:45.94] spk_2:
All right, now, people don’t feel so wealthy right now. [00:17:49.09] spk_6:
That’s right. And that’s why that’s very important. [00:17:51.42] spk_2:
They don’t write and they don’t know for how long. They’re not gonna feel so wealthy. [00:17:58.24] spk_6:
Are these so wealthy? Yeah, [00:17:58.95] spk_2:
I was. Yeah, [00:18:03.40] spk_6:
I was returning. Dollars have been lost in the stock market, right over 1/3 [00:18:04.35] spk_2:
of value in the [00:18:05.30] spk_6:
market has been lost. [00:18:37.04] spk_2:
Yeah, you’re right. I’m I’m thinking of the perception you’re grounding in the reality, but e I mean, they’re both The reality creates the perception, your question of how long after the reality subs theat reality improves, Does the perception linger? But right now we’re in the midst of the reality, the reality of the perception of equal. Now we’ve lost a lot of wealth. Couple trillion dollars. Um, people are concerned about their jobs. Whether the jobs will continue or or just be reduced. Working hours be reduced. So incomes reduced so over people are not feeling wealthy. [00:19:29.04] spk_6:
Well, I’m gonna command Is that that for that insight about the sensibility of it did not in addition to the objective reality, because our own research has shown that over a period of time, very wealthy, um have an objective view of their financial security, but also a subject of one. And the lower the subjective you, no matter what their objective circumstances, the less they give to charity. And it is also true for people who are not wealthy, for whom income studies have been done. And when people feel that their incomes were going to rise over the next few years, um, they will give more to charity than those who feel that they’re not going to be rising. So it is even without the objective circumstance. Your note about the sensitivity is very important. And that does linger just as you suggested. [00:19:51.74] spk_2:
I’m talked to a lot of experts. I’m trainable. I’ve heard this a few times, so I Hi, I’m trainable. Um [00:19:54.36] spk_3:
all right. So what does that mean [00:19:59.74] spk_2:
for fundraising? Look, I don’t mean this week or this month, even still March, [00:20:08.64] spk_3:
but what does it mean for fundraising? Thio help counter [00:20:13.31] spk_2:
some of these increased expenses in Let’s say, you know, April, May June, do we [00:20:17.05] spk_3:
have to just wait and see? Ah, how people feel or or can we go out and test our our constituents for for fundraising messages? [00:24:48.84] spk_6:
I think that what we have to do is have a fundraising message that’s functional. Are we disappearing? And are my workers disappearing? Or are we going to be able to survive? Now there’s two sides of this when we talk about a arts organization, a museum or theater, they have funding from fundraise from by fundraising, but they also have revenue from attendance. And so those that are losing revenue by attendance from lack of attendance are going to be suffering more than those that are just able to keep their revenue alive. Um, for instance, hospitals will be able to keep their revenue alive over this period of time. While arts groups may not be able to, universities may be able to keep the revenue stream alive Attn least until the fall, until we find out more of what’s happening. While some social service organizations may not be able to a large community foundations with endowments, um, we’ll be able to do better than those without endowments. Um uh, organizations that have AH connection to people with donor advised funds will do better because donor advised funds are are terrible savings accounts that people will be able to contribute from even if they can’t add to them at this point. So there’s all these dimensions. But what I would advise charities to do is to be very honest about two things. Their employees and there beneficiaries are their beneficiaries being taken care of without them at this point, and they can cut back on those service is or are those service is remaining the same? Are they increasing their employees? Are their employees going to be able to because of the revenue stream, mainly continue to be employed. Supermarkets, food banks, perhaps, and so on because they’re being supported by the community, Um, or by government, um, places where school systems air, providing our continue to provide the breakfast and lunch programs. They’re different from communities that are dropping those programs and need private funding for them. You follow all of this and I hope our listeners are So what I would do if I were a donor, as I would look to a charity and how honest it is to be about its two major instrumental needs. Its beneficiaries And those programs on the one hand and the second instrumental need its employees, and I would see what needs to be done about that. And you know what’s happening out there? Is that some donors air actually contacting charities and saying, What do you need? I know one family that contributes to an inner city school in Detroit, and we were talking with them, and what they did is they found out that that inner city grade school is using the chromebooks that that family has contributed two grades five through eight, and they asked, Do you need more chromebooks for your youngsters? that the parents can use with the kids. The answer came back. Not yet, but we may. But that was something that the donor asked about a specific thing that was specifically needed for continuing education for the lowers, the lowest grades in school, the way they’re continuing education for the middle school. And uh huh. So those things are happening. [00:24:57.01] spk_2:
Yeah. So that’s right. That’s the individual that the donor reaching out to the charity. Maybe. Can we say, you know, I don’t know. Six. Well, [00:25:02.35] spk_3:
there’s value in keeping in touch [00:25:03.96] spk_2:
with your your major donors. You’re [00:25:21.78] spk_3:
even if this is not the time to be asking them to give, but explaining what the needs are. You know, like that that example. You know, we don’t need Chromebooks now, but maybe in the future, you know, we’re stable now, but six weeks from now, we the needs, maybe X y z [00:25:26.64] spk_6:
So, yes, that’s really [00:25:28.31] spk_3:
being not asking, but communicating the needs, sort of like you would do with a friend or a family member, you know? No, I’m okay right now, but six weeks from now, I might need some help, [00:26:06.14] spk_6:
you know, be in touch. Done kind of messages. Yeah, we call you. Yes, and I think that’s a great week. See, sometimes donors feel, um, neglected by not being asked. Isn’t that a strange thing? You know, you know, that’s one of the major things I call the new physics of philanthropy that instead of donors having to be approached and squeezed, donors are looking for a good opportunity to give. And especially if you’re already giving to an organization. You know, they value you and approach you just mentioned is a very good one to pursue. [00:26:20.04] spk_2:
Same same as the board members who we find unsatisfied because they’re not sufficiently asked to contribute their their time and time and talent to the accusation that not asked to do enough. It’s the It’s a paradox that I’m asked. I’m not asked to do enough, so I’m losing interest in being a board member on the charity side. They’re afraid to ask the board members to doom or because they feel they’re over taxing them. Same. But [00:26:50.19] spk_6:
I ran into a paradox one of the Kennedys at an event, and, uh, we’re [00:26:52.04] spk_2:
dropping names now. Look, a dropping names, Kennedy family. [00:27:25.44] spk_6:
Oh, no, no. There are in the Boston area, and it was one of the one of the younger kids and and we were he said, What do you do? And I’m going on He said, You know, one of things that happened the other day, I was really anxious to give to such and such, and they never asked me, and I was really kind of upset about that. You know, it’s just what we’re saying, and it’s a strange thing you may think, but you want to be valued for what you can do. And if you could do something, you want to be asked about it, [00:27:28.74] spk_2:
right? And if now is not the time to be asking, now is a good time to be [00:27:33.76] spk_3:
communicating about what’s happening at the organization, you know, telling your stories [00:27:57.84] spk_2:
about employee dislocation. Um, parent employees who are now have kids at home that used to be in school, um, and telling the needs of the stories of your beneficiaries the stories of your building that you can’t access, but you’re still to pay rent on, um, you know, [00:28:13.64] spk_3:
telling these stories the needs are just gonna be be evident and you’re not asking now, but you’re sort of laying the groundwork for asking when it’s, you know, six weeks of past or so 4 to 6 weeks of past. You’re starting to lay the groundwork. Not conniving Lee, but just being honest with laying, laying out the stories of what’s happening now, so that when the need is there, um, it’s not a surprise to your funders. [00:30:07.20] spk_6:
Well, take you picking up on exactly what you’re saying. If I were to make one recommendation to charities and I have received from charities and from newsletters and from financial advisors, I’m on all these lists because I like to read and I’m reluctant to miss anything. And and most of them are telling us about the covert virus and what’s gonna happen and wash your hands and and we don’t know exactly what’s gonna happen. But you know, it’s time for the charities to start sending letters to their donors about themselves and their beneficiaries, where we may not be in need right now, but here’s what’s happening to us. I would be interested to learn from some charities what’s happening to us. Um, if Boston College were to send out a, um ah, a letter saying financially, we do an annual report, and, uh, but this is what’s happening at Boston College these days could be partly financial. It could be party, uh, in Roman issues. It could be partly added expenses, and it may not be a request for donations at this time. But to hear about what’s happening to the groups and the beneficiaries for whom you care is, I think, a new kind of communication that can be part of this Corona virus communications network and content [00:30:26.09] spk_2:
and then in the in the medium to long term. Um, and we don’t know what that term is. Um, the history shows us that giving will recover. [00:31:15.48] spk_6:
That is correct. Let’s think of churches right now. Um, it is kind of a paradigm they’re not holding. Service is, um, now a lot of churches get their revenue by the collection basket each Sunday. Others get the major portion of theirs Bye pledges in November, December, and so on. Those that get their revenue by pledges and have regular communication and maybe are doing service is on the Web, or so one are gonna be more in connection with their donors and those that are supporting it. But church is an interesting thing. See churches, an organization that the donor uses, the donor and the recipient to a church [00:31:17.83] spk_9:
is the same person, the same [00:31:43.58] spk_6:
family. Yeah, and so there’s a close identification there. But there’s also the fact that if you’re not using the service is at the present time, does that distance you more then from the organizations whom you contribute to but you don’t use? The service is from so we’re gonna have to see right or will people say their church can continue? I don’t mind it if we have to cut back a little bit as long as our pastor is paid or our pastors air paid. [00:31:55.27] spk_7:
Um mmm. But [00:33:37.24] spk_6:
maybe other things are a priority, But we’ll see. And this is the uncertainty that’s plaguing the stock market. It’s played in charity. It’s plaguing donors. It’s plaguing charities. It’s plaguing foundations. Everywhere you look, it’s playing in the medical world, this uncertainty and it would just be maybe a miracle. Maybe a great lesson, maybe just the way things play out. Or maybe all of those that if this were to have a shorter six week duration in the United States or across the world. Um, it’s section of the world having a six week duration of this in which it peaks and then true tales. Or there’s some biological discovery or scientific breakthrough. Um, this could change this whole crisis. And I think behind everybody’s anxiousness is also this maybe even on reasonable hope. That is also at play. And so there is some of this. We’re in crisis now, but maybe there won’t be a crisis in two months or six weeks. I will begin to see this curtail. Um, the stock market does not seem to be saying this is short life or this is turning the corner. [00:33:51.34] spk_2:
Yeah, they didn’t seem to be. There’s not commentary suggesting that, but that’s that is reasonable. I know you’re you’re capturing it. You’re calling an unreasonable, unreasonable hope. It’s all the All the medical commentary is that we haven’t seen the worst. It’s gonna get much worse before it gets any better. [00:34:47.99] spk_6:
Yeah, and, ah, But if there is a biological breakthrough with some of the medications that they talk about low key at the present time, even today again, they say there’s close to more than 1/2 a dozen that they’re starting to experiment with and mixtures and so on. There just might be something there, but we’re not. We’re not a piece. By finding out the young people are perhaps more vulnerable than we thought. Our at least. Ah, the carriers more more being carriers and them congregating and not stopping to congregate could be a factor. That’s just gonna leave this to continue longer. We don’t know people after 14 days are still contagious the way they were previously. All these things you’re gonna make all the difference in the world. But I’m not a medal. [00:35:48.74] spk_2:
Right? So bring it, bring it back to nonprofits, you know? Yeah, there’s enormous uncertainty. Um, but we don’t want you to lose your head heads. And it’s not what individual one collective head. We don’t want you to lose your heads. We don’t want you to lose your humanity. Um, share the share. What’s happening with your funders, including institutional. Um, and, um, and, you know, be grounded in the confidence that your major donors will be there for you when they can, and that giving overall will recover in the in the mid to long term And I understand. You know, we don’t know what that what those terms are, but it will. So, you know, I think you go about your work in Ah, you know, in a in a thoughtful, uh, in a thoughtful way. Even even with, uh, you know, even with uncertainty [00:36:36.53] spk_6:
now, there’s, uh, four areas that, while hindered and lessened by the drops in the stock market, remain good potential. Um, sources of giving. Let’s start with donor advised funds. Most people in their donor advised funds have, ah, their investments invested in various kinds of stock funds, mutual funds. But that doesn’t mean that they’ve been emptied out and you can give from them a second source that charities ought to be asking and reminding people about is the required minimum distributions [00:36:48.47] spk_2:
All right, the IRA? [00:37:31.36] spk_6:
Yeah, that’s right. And that money has to be taken out this year. No matter what’s happening in the stock market, you’ve got to take out what they designated from last January 1st right is the amount. And if you are above a certain amount of wealth, that $100,000 that you can contribute that limit from your r. M. D is not much to you and can really be activated for large numbers of people that are pretty wealthy or higher, affluent. And the charities can educate about that. They can also put on their websites a buttons that are now being developed to contribute from RMDS and to contribute from donor advised funds [00:37:41.81] spk_2:
before we go 23 and four. Where can you name any place where you’re seeing these [00:37:52.43] spk_6:
buttons? I can’t. All I know is that I’ve seen in the past, um, discussions about them and advertisements for them. I don’t think it would be hard for any charity to say. Um how do I, [00:38:03.58] spk_7:
um uh, [00:38:05.52] spk_6:
website button for a donor advice fund for gifts from donor advice when they’re gonna be advertising to make sure you know about it so they won’t be hard to find. [00:38:15.72] spk_2:
Okay. Okay. What’s what’s number three? [00:38:41.72] spk_6:
Number number three would be foundations that despite a decrease in their assets right now, I still have large pools of money. They can, since they can average over a period of years, their quote 5% requirement of donation they can, without worrying about keeping us up forever, contribute 7% this year and give less next year. If the crisis doesn’t continue, Our that becomes a possibility because of the ability to average out over three years. That 5% column me on that. Okay. [00:39:24.22] spk_2:
Again? Yes. So keep in touch with your institutional funders again. This may not be that this is not the week or maybe even the month or the couple of several weeks to be asking, but keep in touch. You know, institutions are made of people. Institutional funders are made up of people, project officers, program officers. Um, let them hear from you. Okay, what’s your number? Four? [00:40:12.21] spk_6:
Number four is something that is really connected in a way to all the others. Um, and that’s your endowment spending from your endowment. What else is it for? I mean, it can be, ah, security blanket, but it’s time for people. Two makes some may be emotional sacrifice not just a financial one, but an emotional one that says that I don’t have to keep accumulating in my endowment. I can spend some of it for a crisis, and that’s what it’s for. In part, it’s not just to provide long term security, but don’t forget without spending from your endowment. Your long term security maybe undercut by this short term crisis. [00:40:41.41] spk_2:
That’s a very good point. Yeah, because I’m of course, that requires board action and thoughtful planning, but yeah, that’s a very good point. You’re You may undercut your long term by being, ah, to, um, too cautious in the immediate term. [00:40:45.01] spk_6:
That’s right. We may [00:40:55.01] spk_2:
not be the may not be a middle long term for you if you’re not cautious in the short term. And if you have the endowment wherewithal Ah, that maybe that’s that’s worth looking at through. [00:41:06.31] spk_6:
And And, of course, you know that’s not a bad message to your donors that you’re willing to put quote your money on the line as well. Yeah, [00:41:10.31] spk_2:
we’re not just asking for you, right, But we’re we’re dipping into our own long term savings [00:41:13.12] spk_6:
yet instead of grown on, have made us a good institution. And we’re going to come out of this a great institution, you know, [00:41:58.05] spk_2:
and, ah, A footnote for organizations that don’t have an endowment when we’re through this, uh, endowment growth or endowment creation is something for you to go to make a priority again. When we’re through this planned giving can be very good at that. However, you’re gonna do it if you don’t have that endowment. That forthe problem that you just mentioned. Paul, Um, it’s it’s something to make a priority for the next the next crisis. [00:41:59.27] spk_6:
And you will say that’s why we’re raising, you know, And then people will understand it at this point, [00:42:05.84] spk_2:
especially after this, right? All right, again, a footnote. I footnoted. I think that’s where it belongs. Uh, footnote not an end note. I prefer footnotes. Then I want to flip to the back of the book all the time. I don’t know. I have more footnotes over in there. [00:44:10.99] spk_6:
One more footnote would be something you hinted at earlier. So we’ll move in from the back of the book to the page. And that is, um, treating your donors in the way that you want to treat your beneficiaries. Um, I always say this to universities. When I give talks, you have the students in front of you yet Boston College and Holy Cross at Harvard wherever and Emerson College. I just think a few of University of Detroit where I will and you want to treat this student, not only to information you want to treat them to personal formation. And when they graduate, you sometimes forget that you still want to be part of their personal happiness in formation, and all you want is their money. And so this is a time to remember what you ought to be doing all the time. And you were suggesting being in contact with your donors, you’re being in contact with your donors and maybe asking him how you do it. You’re part of us. I’m not just asking you this because you’ve given us money and we hope that you will continue to honor us with your gifts in the future. We’re sincerely interested in you, and we know that those that donate tow us are as anxious and worried about their families as we are about our own. And we are about the people we serve. How about a letter like that that is sincere to the very bottom of your heart? Because these are your constituents to your donors are part of your constituents. [00:44:46.49] spk_2:
I love it, Paul. I’m thinking about a video on that exact subject around planned giving, which is what I do. Plan to giving consulting and, uh, using this as a time to do send exactly those kinds of messages with people you’re close enough to It could be a phone call. It could be a short hand written note. Um, you know, it doesn’t have to be. Ah, Doesn’t have to be an elaborate letter. Then that’d be a long letter. It never takes length. Month never trumps sincerity. And, uh, and genuine genuineness. [00:44:52.59] spk_6:
Your donorsnames. Right? I get letters. That’s a deer. A p [00:44:54.69] spk_2:
Okay. Yeah, Well, that’s that’s your database. Yeah, Yeah, yeah, that’s all. Another subject. [00:44:59.85] spk_6:
But no, don’t screw that up when you’re writing a good letter. [00:45:06.69] spk_2:
Yeah, that’s true. You’re right. Um, yes. Keeping in touch and heartfelt ways we’re thinking about you. We hope you’re well and safe. We we wish the same for your family. We just want you to know you’re important to [00:45:16.75] spk_6:
us. Yeah, really are about [00:45:19.62] spk_2:
sincerely. You know, that’s it. And that comes from Ah, gift officer doesn’t have to be a CEO board member letter and president. [00:45:27.47] spk_6:
Consign it. I mean, maybe maybe the dean signs. Um no clothes in a picture of the dean right there. So you know, you make it personal and you don’t act it. I mean, in this day and age is easy. Send an email I’m and write it well, and you know, [00:45:44.19] spk_3:
well, it can also it also come [00:46:08.38] spk_2:
from a gift officer. That’s right. If you know if there’s a relationship that’s right. Relationship there. That’s right. Gift officers. Good. All right, Paul, we’re gonna wrap it up. Um, so any any parting thought? I mean, we had lots of good advice, sir. I’m not We’re not looking, toe, uh, take off all the advice that you provided. But what [00:46:08.51] spk_3:
do you want? Do you [00:46:09.09] spk_0:
want to [00:46:09.28] spk_2:
leave people with Final [00:46:57.49] spk_6:
Five? Don’t do too much mission drift. Um, uh, if you were doing arts funding, um, you might want to stick with that at this time. You know, um, both as a donor and as a foundation. Um uh, mission drift can take place at this time because there’s always, well, politically correct or exigencies that seem to be so important. You can’t who ate them, And I will just say, um uh, take care of your workers and avoid mission drift. So take care of your donors. Take care of your beneficiaries. Take care of yourselves. You know, [00:47:03.62] spk_2:
and your employees as well. [00:47:04.93] spk_6:
Yeah, that’s what I meant. Yeah, that’s real [00:47:14.58] spk_2:
Pool service. Sh Professor emeritus at Boston College. Retired director there. Center on wealth and Philanthropy. You’ll find him at Paul Schervish s C h E R v I s H Paul. Thank you very much for sharing elder statesman. Thank you very much. [00:47:23.70] spk_6:
My pleasure. Good job.
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[00:00:16.14] spk_3:
Hello and welcome to tony-martignetti non profit radio big non profit ideas for the other 95%.
I’m your aptly named host. This is a special short episode of non profit radio Corona virus and non profit fundraising. Corona virus needs no introduction We’re recording on Monday, March 23rd on profits are scrambling and struggling, scrambling to adapt to workflow, and personal upheavals will subside. The struggle will get worse. The need among those you help has increased and will become greater expenses of all sorts from helping those in need to disinfecting offices to increased reliance on technology are rising. At the same time, there’s financial pressure on your donors in the face of firings, layoffs, work reductions as the individual donors is also financial pressure on your institutional funders. Is it wise for you to spend? Can you count on your donors when this is over, whether individual or institutional, can you fund raise in the midst of the crisis? My guest is Paul Schervish, retired director of the Center on Wealth and Philanthropy at Boston College, were sponsored by wegner-C.P.As. Guiding you beyond the numbers wegner-C.P.As dot com. My Cougar Mountain software Denali Fund is there Complete accounting solution made for nonprofits. Tony-dot-M.A.-slash-Pursuant Mountain for a free 60 day trial and by turned to communications, PR and content for nonprofits is their mission. Turn hyphen to DOT CEO. It’s a great pleasure to welcome back to the show. Paul Schervish. He’s professor emeritus at Boston College and retired director of their Center on Wealth and Philanthropy. He’s the author of seven books on Giving and wealth. He’s been studying philanthropy for over 35 years. He’s at Paul Schervish. Great pleasure to welcome you back, Paul. How are you, [00:02:32.87] spk_6:
tony? It’s a pleasure to be back. I’m just doing fine. Laying low, being an elder statesman, or at least another. [00:02:38.77] spk_2:
No, you’re You’re here to provide context. Historical context. Which eyes going to reassure all of us. So the elder statesman is appropriate on. Where are you? Ah, where you staying? In place. [00:03:04.57] spk_6:
We’re in Chapel Hill, North Carolina, where we moved from Boston. Ah, for 1/2 year. We live in Boston the other half of the year where our two boys live. But down here, um, is where our first grandchild arrived. And so we spend half the year down here. [00:03:12.10] spk_2:
All the reason to move only only half the year. I’m surprised your wife, your wife would like to stay longer. I’m wondering. [00:03:15.98] spk_6:
No, not at all. Because they’re two boys live in Boston. Grandchildren there, too. So, uh, there we go. [00:03:22.82] spk_3:
Okay. Well, I’m, uh I’m several hours east [00:03:36.84] spk_2:
of you. I’m on the coast in Emerald Isle, North Carolina, also also in place. And the governor today just ah, closed. Um, what [00:03:37.22] spk_3:
did you do [00:03:40.54] spk_0:
today? Today was just Ah, we already had. Oh, that was a local. Yeah, the governor today. Locally, they [00:03:59.24] spk_2:
had they had done some things. But the governor of North Carolina today, Governor Cooper just closed. Um, beauty salons, massage therapists, barbershops, movie theaters, Jim’s, um right Cooper, Governor. Right, Cooper. Um all right, [00:04:09.48] spk_3:
So what, uh, what’s your star general know? What’s your what’s your sense [00:04:10.18] spk_2:
of what non profits are facing and should look forward to? [00:07:06.64] spk_6:
Well, I hate to quote Rumsfeld, but what we’re facing is those I’ve known unknowns that he talked about, remember? He said they were known unknowns, and there were unknown unknowns, remember? And this is a biological event of an unprecedented nature. Not in the extent that we haven’t had major plagues in history, and we can certainly trace back to the 2018. Clue 2019 flu. I’m in 1919 1918. Um, but this is unprecedented in that this is taking place in an age of dramatic globalization and interaction, coupled with the dramatic situation of biological and scientific progress and and potential insight. So right now, what we do know is that this spreads quickly. It has a death rate that we’re starting to learn may not be as great as we had once feared. But what we don’t know is its termination date and how it will exhaust itself. And so anything we’re going to talk about for charity’s contributing to their, um ah, receiving money from their sponsors or charities contributing to those that they support Our, uh, philanthropy is contributing. We don’t have a time frame for this, like we might have had for recessions and so on. And even for 2011 29 11 when we, um, actually had, uh, on increase of giving within a year. So, uh, sound like Zach and, uh, the great recession of 2007 2008 29. Um, we had about a five year decline and terrible giving. It went up in some of those years, but the trajectory of charitable giving was down for about five years. If you looked at it as going up from a year 2000 2 2007 and if that had continued to grow, um, we would have had 350 billion more dollars given to charity from 2008 to 2013. So we lost a year. Charitable giving if, um, the, um, trajectory from 27 had continued unabated. So that was a longer hiatus and terrible giving. We lost about it. Ah, whole year’s worth. Over those five years, [00:07:13.64] spk_2:
the trajectory of charitable giving is always positive that the long term trajectory [00:07:18.80] spk_6:
that’s correct, [00:07:20.44] spk_2:
okay, that that in itself is grounding and and reassuring. We always it always does come back. [00:07:37.31] spk_6:
And I also think it’s important to note that something that Patrick Rooney and I Patrick from the Center on Philanthropy in Indiana and I have talked about is that even giving us A is a low ball estimate. We think there’s a lot more giving then what we can measure Ah, in a meaningful and in a sober manner. And this giving, of course, does not include all the informal giving that accelerates at this time that people don’t realize she could be recorded his formal giving or that people are giving and shouldn’t be recorded as formal giving. And it isn’t so. There’s a lot of intra family help at times like this that actually does make up for quote unquote the decline and formal giving. Oh, [00:08:24.54] spk_2:
interesting. Yeah. So you’re you’re yes. You’re bringing now family family support. It’s just private support. Me. Could be family. Could be friends. [00:08:33.22] spk_6:
That’s right. [00:08:33.89] spk_2:
That’s not recorded as a CZ. You and I talk about non profit fundraising. [00:08:39.43] spk_6:
That’s right. [00:08:40.30] spk_2:
Yeah. Yeah. All right, [00:08:42.54] spk_3:
All right. So then, you know, the non profit community [00:09:00.24] spk_2:
has greater expenses. Like I was saying in the intro, whether it’s technology or disinfecting offices or, you know, uh, you are, of course, greater need to, uh to the to those who were serving and [00:09:13.35] spk_3:
that just that doesn’t apply only to, uh, institutions, organizations that serve individuals. But, you know, culture is important. Yeah, Theater’s air closed now, but cultural institutions need to keep themselves going, whether It’s a museum or a theater group. Okay, These these air both closed now, um, but they’re gonna come back. And so the theater group theatre company needs to have ah ah. Pipeline of directors and shows planned. Um, the museum needs to think about, you know, curating for the future on being opened again. Will they will open again. So I’m not only [00:09:44.31] spk_2:
thinking of individuals and, you know, bring in arts groups and environment of course. Mean so [00:09:53.94] spk_3:
the work has to continue. And, um, in some cases, [00:10:05.77] spk_2:
there’s a special, special, greater need, but the upset cause is greater expenses, too. Like I said, possibly reliance on technology irrespective of what kind of mission. So [00:10:11.24] spk_3:
in the face of these greater needs, whatever form they take, um, are we safe to be spending [00:10:14.24] spk_2:
beyond what we anticipated? Beyond what we what we budgeted? [00:14:11.09] spk_6:
Well, the answer that I told my students over all the years that is the first answer of wisdom is that it depends. It depends on what kind of organization we’re talking about. Depends on whether a hospital depends on whether we’re receiving as a nonprofit organization or as a public organization. State funds to keep going. Let’s think of it as what we’re hearing from the federal government. What we’re hearing from state governments. There’s two arenas. One is the, um the people, the employees. And there’s a certain amount of expenditure that charities are going to need to support their employees. They way they want to support people in the community. It’s hard to treat your employees more harshly. Then you want a treat. You’re, um uh, the people in the community, Uh, these are your family members, so to speak. And so Charity’s first of all have an obligation, too. And we’ll find, I think, happy response among thunders for keeping employees uh, engaged and hired. Now we’re gonna have to work out the way there is the government non profit partnership here because of people are quote laid off that has some of their salary played paid for by unemployment benefits. And so maybe there’s unemployment benefits that the state the government will provide, and then the non profit makes up for that difference. To keep people from quitting or joining another, uh, employment opportunity. You see how this can get complex In a second area is the institution itself the survival of the institution. And just as the government is providing money for businesses to continue to exist so that there’s places for employees after the troubles are over, um, the nonprofit sector has to keep going in a way that there’s a place for the employees to be working and their jobs to be contributing to the community when the crisis is over, if there is a need for layoffs and we can talk about what donors may think about, but let’s just take one place to start. Let’s start with organizations that have no endowment versus for those with the small endowment versus for those with a grand endowment and what they can do. I think most universities they’re not laying people off, especially those with it was a great endowment. Um, they have the tuition for the year, even if their tuition driven. They have there the most of their revenue already in the coffers. They’re going to continue to grant credits, and they’re going to be able to keep their income stream alive at least until the beginning of the next semester. So that’s just one example. Often organization that may not need a dramatic infusion of charitable dollars at this point, and that takes us to the donor. The donor is goingto have to be picking and choosing maybe one that has contributed ah, large amount over years to uneducated l Institution might for the next six months shift that giving away from an organization that doesn’t need the money it much immediately to an organization that is proceed to be much more in need immediately [00:14:15.78] spk_3:
now. So, historically, have we seen a shift like that? Have we measured that? [00:14:56.45] spk_6:
Yes, wenn er the great recession took place 2008 2009 We found, as I said, a decrease in charitable giving overall. But giving too social service is was sustained much better. And after after 9 11 1 of the reasons why charitable giving didn’t go down. It was before we had this kind of crisis Fatigue, charity, fatigue. [00:14:59.44] spk_7:
Um uh, [00:15:27.84] spk_6:
9 11 produced a lot of charitable giving, and if it did it for the people that were, uh, immediate loss for their, um, family life and way of making a living, and it did it for communities and for businesses that were caught in that trap. And so the money shifted in 20 in the great recession. And it also shifted for crisis relief in on 9 11 [00:15:47.24] spk_2:
Okay, Yeah. 9 11 is a bit of a different case, because the funders, whether institutional or individual, we’re not enormously impacted the way we are are all now impacted. [00:16:02.64] spk_6:
One time shock. Yes, rather than an indefinite period of time that effects that the wealth of the donors, um, directly run in. And you’re very correct about that. [00:16:07.33] spk_2:
Yeah. Um, so that I don’t want to discount 9 11 lessons. I’m not. No, [00:16:12.26] spk_6:
no, no, you’re not. You’re not, But it’s a very good point [00:16:23.24] spk_2:
context. The great recession seems Maur. Ah, more of an apt analogy. Um, for that reason, if [00:17:18.68] spk_6:
you ever want to know what’s going to happen, the philanthropy look at the income and wealth. Gross or declines that fire outstrips any tax effects that are written about all the time in the nonprofit sector. Worries about all the time. Um, we had a natural experiment after the great recession. Um, there was no change in the tax laws that took place for those five or six years. No, except the tiny bit in the marginal tax rate for capital gains. But that was not that important. Okay, so without any tax change, we saw a dramatic decrease and terrible giving due to the decrease in wealth and an income. And the income effect and the wealth effect far outstrip any of these tax effects that the charity’s air always be moaning. Whenever they hear that there might be a decrease in taxes. They feel that the discount rate for donors is going down, and they’re going to give less. Well, in the past, that may have been the case. But today, wealth is growing normally so greatly that far outstrips any effect that the tax rates have. [00:17:45.94] spk_2:
All right, now, people don’t feel so wealthy right now. [00:17:49.09] spk_6:
That’s right. And that’s why that’s very important. [00:17:51.42] spk_2:
They don’t write and they don’t know for how long. They’re not gonna feel so wealthy. [00:17:58.24] spk_6:
Are these so wealthy? Yeah, [00:17:58.95] spk_2:
I was. Yeah, [00:18:03.40] spk_6:
I was returning. Dollars have been lost in the stock market, right over 1/3 [00:18:04.35] spk_2:
of value in the [00:18:05.30] spk_6:
market has been lost. [00:18:37.04] spk_2:
Yeah, you’re right. I’m I’m thinking of the perception you’re grounding in the reality, but e I mean, they’re both The reality creates the perception, your question of how long after the reality subs theat reality improves, Does the perception linger? But right now we’re in the midst of the reality, the reality of the perception of equal. Now we’ve lost a lot of wealth. Couple trillion dollars. Um, people are concerned about their jobs. Whether the jobs will continue or or just be reduced. Working hours be reduced. So incomes reduced so over people are not feeling wealthy. [00:19:29.04] spk_6:
Well, I’m gonna command Is that that for that insight about the sensibility of it did not in addition to the objective reality, because our own research has shown that over a period of time, very wealthy, um have an objective view of their financial security, but also a subject of one. And the lower the subjective you, no matter what their objective circumstances, the less they give to charity. And it is also true for people who are not wealthy, for whom income studies have been done. And when people feel that their incomes were going to rise over the next few years, um, they will give more to charity than those who feel that they’re not going to be rising. So it is even without the objective circumstance. Your note about the sensitivity is very important. And that does linger just as you suggested. [00:19:51.74] spk_2:
I’m talked to a lot of experts. I’m trainable. I’ve heard this a few times, so I Hi, I’m trainable. Um [00:19:54.36] spk_3:
all right. So what does that mean [00:19:59.74] spk_2:
for fundraising? Look, I don’t mean this week or this month, even still March, [00:20:08.64] spk_3:
but what does it mean for fundraising? Thio help counter [00:20:13.31] spk_2:
some of these increased expenses in Let’s say, you know, April, May June, do we [00:20:17.05] spk_3:
have to just wait and see? Ah, how people feel or or can we go out and test our our constituents for for fundraising messages? [00:24:48.84] spk_6:
I think that what we have to do is have a fundraising message that’s functional. Are we disappearing? And are my workers disappearing? Or are we going to be able to survive? Now there’s two sides of this when we talk about a arts organization, a museum or theater, they have funding from fundraise from by fundraising, but they also have revenue from attendance. And so those that are losing revenue by attendance from lack of attendance are going to be suffering more than those that are just able to keep their revenue alive. Um, for instance, hospitals will be able to keep their revenue alive over this period of time. While arts groups may not be able to, universities may be able to keep the revenue stream alive Attn least until the fall, until we find out more of what’s happening. While some social service organizations may not be able to a large community foundations with endowments, um, we’ll be able to do better than those without endowments. Um uh, organizations that have AH connection to people with donor advised funds will do better because donor advised funds are are terrible savings accounts that people will be able to contribute from even if they can’t add to them at this point. So there’s all these dimensions. But what I would advise charities to do is to be very honest about two things. Their employees and there beneficiaries are their beneficiaries being taken care of without them at this point, and they can cut back on those service is or are those service is remaining the same? Are they increasing their employees? Are their employees going to be able to because of the revenue stream, mainly continue to be employed. Supermarkets, food banks, perhaps, and so on because they’re being supported by the community, Um, or by government, um, places where school systems air, providing our continue to provide the breakfast and lunch programs. They’re different from communities that are dropping those programs and need private funding for them. You follow all of this and I hope our listeners are So what I would do if I were a donor, as I would look to a charity and how honest it is to be about its two major instrumental needs. Its beneficiaries And those programs on the one hand and the second instrumental need its employees, and I would see what needs to be done about that. And you know what’s happening out there? Is that some donors air actually contacting charities and saying, What do you need? I know one family that contributes to an inner city school in Detroit, and we were talking with them, and what they did is they found out that that inner city grade school is using the chromebooks that that family has contributed two grades five through eight, and they asked, Do you need more chromebooks for your youngsters? that the parents can use with the kids. The answer came back. Not yet, but we may. But that was something that the donor asked about a specific thing that was specifically needed for continuing education for the lowers, the lowest grades in school, the way they’re continuing education for the middle school. And uh huh. So those things are happening. [00:24:57.01] spk_2:
Yeah. So that’s right. That’s the individual that the donor reaching out to the charity. Maybe. Can we say, you know, I don’t know. Six. Well, [00:25:02.35] spk_3:
there’s value in keeping in touch [00:25:03.96] spk_2:
with your your major donors. You’re [00:25:21.78] spk_3:
even if this is not the time to be asking them to give, but explaining what the needs are. You know, like that that example. You know, we don’t need Chromebooks now, but maybe in the future, you know, we’re stable now, but six weeks from now, we the needs, maybe X y z [00:25:26.64] spk_6:
So, yes, that’s really [00:25:28.31] spk_3:
being not asking, but communicating the needs, sort of like you would do with a friend or a family member, you know? No, I’m okay right now, but six weeks from now, I might need some help, [00:26:06.14] spk_6:
you know, be in touch. Done kind of messages. Yeah, we call you. Yes, and I think that’s a great week. See, sometimes donors feel, um, neglected by not being asked. Isn’t that a strange thing? You know, you know, that’s one of the major things I call the new physics of philanthropy that instead of donors having to be approached and squeezed, donors are looking for a good opportunity to give. And especially if you’re already giving to an organization. You know, they value you and approach you just mentioned is a very good one to pursue. [00:26:20.04] spk_2:
Same same as the board members who we find unsatisfied because they’re not sufficiently asked to contribute their their time and time and talent to the accusation that not asked to do enough. It’s the It’s a paradox that I’m asked. I’m not asked to do enough, so I’m losing interest in being a board member on the charity side. They’re afraid to ask the board members to doom or because they feel they’re over taxing them. Same. But [00:26:50.19] spk_6:
I ran into a paradox one of the Kennedys at an event, and, uh, we’re [00:26:52.04] spk_2:
dropping names now. Look, a dropping names, Kennedy family. [00:27:25.44] spk_6:
Oh, no, no. There are in the Boston area, and it was one of the one of the younger kids and and we were he said, What do you do? And I’m going on He said, You know, one of things that happened the other day, I was really anxious to give to such and such, and they never asked me, and I was really kind of upset about that. You know, it’s just what we’re saying, and it’s a strange thing you may think, but you want to be valued for what you can do. And if you could do something, you want to be asked about it, [00:27:28.74] spk_2:
right? And if now is not the time to be asking, now is a good time to be [00:27:33.76] spk_3:
communicating about what’s happening at the organization, you know, telling your stories [00:27:57.84] spk_2:
about employee dislocation. Um, parent employees who are now have kids at home that used to be in school, um, and telling the needs of the stories of your beneficiaries the stories of your building that you can’t access, but you’re still to pay rent on, um, you know, [00:28:13.64] spk_3:
telling these stories the needs are just gonna be be evident and you’re not asking now, but you’re sort of laying the groundwork for asking when it’s, you know, six weeks of past or so 4 to 6 weeks of past. You’re starting to lay the groundwork. Not conniving Lee, but just being honest with laying, laying out the stories of what’s happening now, so that when the need is there, um, it’s not a surprise to your funders. [00:30:07.20] spk_6:
Well, take you picking up on exactly what you’re saying. If I were to make one recommendation to charities and I have received from charities and from newsletters and from financial advisors, I’m on all these lists because I like to read and I’m reluctant to miss anything. And and most of them are telling us about the covert virus and what’s gonna happen and wash your hands and and we don’t know exactly what’s gonna happen. But you know, it’s time for the charities to start sending letters to their donors about themselves and their beneficiaries, where we may not be in need right now, but here’s what’s happening to us. I would be interested to learn from some charities what’s happening to us. Um, if Boston College were to send out a, um ah, a letter saying financially, we do an annual report, and, uh, but this is what’s happening at Boston College these days could be partly financial. It could be party, uh, in Roman issues. It could be partly added expenses, and it may not be a request for donations at this time. But to hear about what’s happening to the groups and the beneficiaries for whom you care is, I think, a new kind of communication that can be part of this Corona virus communications network and content [00:30:26.09] spk_2:
and then in the in the medium to long term. Um, and we don’t know what that term is. Um, the history shows us that giving will recover. [00:31:15.48] spk_6:
That is correct. Let’s think of churches right now. Um, it is kind of a paradigm they’re not holding. Service is, um, now a lot of churches get their revenue by the collection basket each Sunday. Others get the major portion of theirs Bye pledges in November, December, and so on. Those that get their revenue by pledges and have regular communication and maybe are doing service is on the Web, or so one are gonna be more in connection with their donors and those that are supporting it. But church is an interesting thing. See churches, an organization that the donor uses, the donor and the recipient to a church [00:31:17.83] spk_9:
is the same person, the same [00:31:43.58] spk_6:
family. Yeah, and so there’s a close identification there. But there’s also the fact that if you’re not using the service is at the present time, does that distance you more then from the organizations whom you contribute to but you don’t use? The service is from so we’re gonna have to see right or will people say their church can continue? I don’t mind it if we have to cut back a little bit as long as our pastor is paid or our pastors air paid. [00:31:55.27] spk_7:
Um mmm. But [00:33:37.24] spk_6:
maybe other things are a priority, But we’ll see. And this is the uncertainty that’s plaguing the stock market. It’s played in charity. It’s plaguing donors. It’s plaguing charities. It’s plaguing foundations. Everywhere you look, it’s playing in the medical world, this uncertainty and it would just be maybe a miracle. Maybe a great lesson, maybe just the way things play out. Or maybe all of those that if this were to have a shorter six week duration in the United States or across the world. Um, it’s section of the world having a six week duration of this in which it peaks and then true tales. Or there’s some biological discovery or scientific breakthrough. Um, this could change this whole crisis. And I think behind everybody’s anxiousness is also this maybe even on reasonable hope. That is also at play. And so there is some of this. We’re in crisis now, but maybe there won’t be a crisis in two months or six weeks. I will begin to see this curtail. Um, the stock market does not seem to be saying this is short life or this is turning the corner. [00:33:51.34] spk_2:
Yeah, they didn’t seem to be. There’s not commentary suggesting that, but that’s that is reasonable. I know you’re you’re capturing it. You’re calling an unreasonable, unreasonable hope. It’s all the All the medical commentary is that we haven’t seen the worst. It’s gonna get much worse before it gets any better. [00:34:47.99] spk_6:
Yeah, and, ah, But if there is a biological breakthrough with some of the medications that they talk about low key at the present time, even today again, they say there’s close to more than 1/2 a dozen that they’re starting to experiment with and mixtures and so on. There just might be something there, but we’re not. We’re not a piece. By finding out the young people are perhaps more vulnerable than we thought. Our at least. Ah, the carriers more more being carriers and them congregating and not stopping to congregate could be a factor. That’s just gonna leave this to continue longer. We don’t know people after 14 days are still contagious the way they were previously. All these things you’re gonna make all the difference in the world. But I’m not a medal. [00:35:48.74] spk_2:
Right? So bring it, bring it back to nonprofits, you know? Yeah, there’s enormous uncertainty. Um, but we don’t want you to lose your head heads. And it’s not what individual one collective head. We don’t want you to lose your heads. We don’t want you to lose your humanity. Um, share the share. What’s happening with your funders, including institutional. Um, and, um, and, you know, be grounded in the confidence that your major donors will be there for you when they can, and that giving overall will recover in the in the mid to long term And I understand. You know, we don’t know what that what those terms are, but it will. So, you know, I think you go about your work in Ah, you know, in a in a thoughtful, uh, in a thoughtful way. Even even with, uh, you know, even with uncertainty [00:36:36.53] spk_6:
now, there’s, uh, four areas that, while hindered and lessened by the drops in the stock market, remain good potential. Um, sources of giving. Let’s start with donor advised funds. Most people in their donor advised funds have, ah, their investments invested in various kinds of stock funds, mutual funds. But that doesn’t mean that they’ve been emptied out and you can give from them a second source that charities ought to be asking and reminding people about is the required minimum distributions [00:36:48.47] spk_2:
All right, the IRA? [00:37:31.36] spk_6:
Yeah, that’s right. And that money has to be taken out this year. No matter what’s happening in the stock market, you’ve got to take out what they designated from last January 1st right is the amount. And if you are above a certain amount of wealth, that $100,000 that you can contribute that limit from your r. M. D is not much to you and can really be activated for large numbers of people that are pretty wealthy or higher, affluent. And the charities can educate about that. They can also put on their websites a buttons that are now being developed to contribute from RMDS and to contribute from donor advised funds [00:37:41.81] spk_2:
before we go 23 and four. Where can you name any place where you’re seeing these [00:37:52.43] spk_6:
buttons? I can’t. All I know is that I’ve seen in the past, um, discussions about them and advertisements for them. I don’t think it would be hard for any charity to say. Um how do I, [00:38:03.58] spk_7:
um uh, [00:38:05.52] spk_6:
website button for a donor advice fund for gifts from donor advice when they’re gonna be advertising to make sure you know about it so they won’t be hard to find. [00:38:15.72] spk_2:
Okay. Okay. What’s what’s number three? [00:38:41.72] spk_6:
Number number three would be foundations that despite a decrease in their assets right now, I still have large pools of money. They can, since they can average over a period of years, their quote 5% requirement of donation they can, without worrying about keeping us up forever, contribute 7% this year and give less next year. If the crisis doesn’t continue, Our that becomes a possibility because of the ability to average out over three years. That 5% column me on that. Okay. [00:39:24.22] spk_2:
Again? Yes. So keep in touch with your institutional funders again. This may not be that this is not the week or maybe even the month or the couple of several weeks to be asking, but keep in touch. You know, institutions are made of people. Institutional funders are made up of people, project officers, program officers. Um, let them hear from you. Okay, what’s your number? Four? [00:40:12.21] spk_6:
Number four is something that is really connected in a way to all the others. Um, and that’s your endowment spending from your endowment. What else is it for? I mean, it can be, ah, security blanket, but it’s time for people. Two makes some may be emotional sacrifice not just a financial one, but an emotional one that says that I don’t have to keep accumulating in my endowment. I can spend some of it for a crisis, and that’s what it’s for. In part, it’s not just to provide long term security, but don’t forget without spending from your endowment. Your long term security maybe undercut by this short term crisis. [00:40:41.41] spk_2:
That’s a very good point. Yeah, because I’m of course, that requires board action and thoughtful planning, but yeah, that’s a very good point. You’re You may undercut your long term by being, ah, to, um, too cautious in the immediate term. [00:40:45.01] spk_6:
That’s right. We may [00:40:55.01] spk_2:
not be the may not be a middle long term for you if you’re not cautious in the short term. And if you have the endowment wherewithal Ah, that maybe that’s that’s worth looking at through. [00:41:06.31] spk_6:
And And, of course, you know that’s not a bad message to your donors that you’re willing to put quote your money on the line as well. Yeah, [00:41:10.31] spk_2:
we’re not just asking for you, right, But we’re we’re dipping into our own long term savings [00:41:13.12] spk_6:
yet instead of grown on, have made us a good institution. And we’re going to come out of this a great institution, you know, [00:41:58.05] spk_2:
and, ah, A footnote for organizations that don’t have an endowment when we’re through this, uh, endowment growth or endowment creation is something for you to go to make a priority again. When we’re through this planned giving can be very good at that. However, you’re gonna do it if you don’t have that endowment. That forthe problem that you just mentioned. Paul, Um, it’s it’s something to make a priority for the next the next crisis. [00:41:59.27] spk_6:
And you will say that’s why we’re raising, you know, And then people will understand it at this point, [00:42:05.84] spk_2:
especially after this, right? All right, again, a footnote. I footnoted. I think that’s where it belongs. Uh, footnote not an end note. I prefer footnotes. Then I want to flip to the back of the book all the time. I don’t know. I have more footnotes over in there. [00:44:10.99] spk_6:
One more footnote would be something you hinted at earlier. So we’ll move in from the back of the book to the page. And that is, um, treating your donors in the way that you want to treat your beneficiaries. Um, I always say this to universities. When I give talks, you have the students in front of you yet Boston College and Holy Cross at Harvard wherever and Emerson College. I just think a few of University of Detroit where I will and you want to treat this student, not only to information you want to treat them to personal formation. And when they graduate, you sometimes forget that you still want to be part of their personal happiness in formation, and all you want is their money. And so this is a time to remember what you ought to be doing all the time. And you were suggesting being in contact with your donors, you’re being in contact with your donors and maybe asking him how you do it. You’re part of us. I’m not just asking you this because you’ve given us money and we hope that you will continue to honor us with your gifts in the future. We’re sincerely interested in you, and we know that those that donate tow us are as anxious and worried about their families as we are about our own. And we are about the people we serve. How about a letter like that that is sincere to the very bottom of your heart? Because these are your constituents to your donors are part of your constituents. [00:44:46.49] spk_2:
I love it, Paul. I’m thinking about a video on that exact subject around planned giving, which is what I do. Plan to giving consulting and, uh, using this as a time to do send exactly those kinds of messages with people you’re close enough to It could be a phone call. It could be a short hand written note. Um, you know, it doesn’t have to be. Ah, Doesn’t have to be an elaborate letter. Then that’d be a long letter. It never takes length. Month never trumps sincerity. And, uh, and genuine genuineness. [00:44:52.59] spk_6:
Your donorsnames. Right? I get letters. That’s a deer. A p [00:44:54.69] spk_2:
Okay. Yeah, Well, that’s that’s your database. Yeah, Yeah, yeah, that’s all. Another subject. [00:44:59.85] spk_6:
But no, don’t screw that up when you’re writing a good letter. [00:45:06.69] spk_2:
Yeah, that’s true. You’re right. Um, yes. Keeping in touch and heartfelt ways we’re thinking about you. We hope you’re well and safe. We we wish the same for your family. We just want you to know you’re important to [00:45:16.75] spk_6:
us. Yeah, really are about [00:45:19.62] spk_2:
sincerely. You know, that’s it. And that comes from Ah, gift officer doesn’t have to be a CEO board member letter and president. [00:45:27.47] spk_6:
Consign it. I mean, maybe maybe the dean signs. Um no clothes in a picture of the dean right there. So you know, you make it personal and you don’t act it. I mean, in this day and age is easy. Send an email I’m and write it well, and you know, [00:45:44.19] spk_3:
well, it can also it also come [00:46:08.38] spk_2:
from a gift officer. That’s right. If you know if there’s a relationship that’s right. Relationship there. That’s right. Gift officers. Good. All right, Paul, we’re gonna wrap it up. Um, so any any parting thought? I mean, we had lots of good advice, sir. I’m not We’re not looking, toe, uh, take off all the advice that you provided. But what [00:46:08.51] spk_3:
do you want? Do you [00:46:09.09] spk_0:
want to [00:46:09.28] spk_2:
leave people with Final [00:46:57.49] spk_6:
Five? Don’t do too much mission drift. Um, uh, if you were doing arts funding, um, you might want to stick with that at this time. You know, um, both as a donor and as a foundation. Um uh, mission drift can take place at this time because there’s always, well, politically correct or exigencies that seem to be so important. You can’t who ate them, And I will just say, um uh, take care of your workers and avoid mission drift. So take care of your donors. Take care of your beneficiaries. Take care of yourselves. You know, [00:47:03.62] spk_2:
and your employees as well. [00:47:04.93] spk_6:
Yeah, that’s what I meant. Yeah, that’s real [00:47:14.58] spk_2:
Pool service. Sh Professor emeritus at Boston College. Retired director there. Center on wealth and Philanthropy. You’ll find him at Paul Schervish s C h E R v I s H Paul. Thank you very much for sharing elder statesman. Thank you very much. [00:47:23.70] spk_6:
My pleasure. Good job.
