Tag Archives: quasi-endowment

Nonprofit Radio for October 25, 2021: The Time For Endowment Building Is Now

My Guest:

Deborah Kaplan Polivy: The Time For Endowment Building Is Now

That’s Deborah Kaplan Polivy’s new book. She’s with me to explain why that title is a simple truth.




Listen to the podcast

Get Nonprofit Radio insider alerts!


Apple Podcast button




I love our sponsor!

Turn Two Communications: PR and content for nonprofits. Your story is our mission.


We’re the #1 Podcast for Nonprofits, With 13,000+ Weekly Listeners

Board relations. Fundraising. Volunteer management. Prospect research. Legal compliance. Accounting. Finance. Investments. Donor relations. Public relations. Marketing. Technology. Social media.

Every nonprofit struggles with these issues. Big nonprofits hire experts. The other 95% listen to Tony Martignetti Nonprofit Radio. Trusted experts and leading thinkers join me each week to tackle the tough issues. If you have big dreams but a small budget, you have a home at Tony Martignetti Nonprofit Radio.
View Full Transcript

Transcript for 564_tony_martignetti_nonprofit_radio_20211025.mp3

Processed on: 2021-10-22T18:31:35.862Z
S3 bucket containing transcription results: transcript.results
Link to bucket: s3.console.aws.amazon.com/s3/buckets/transcript.results
Path to JSON: 2021…10…564_tony_martignetti_nonprofit_radio_20211025.mp3.709407279.json
Path to text: transcripts/2021/10/564_tony_martignetti_nonprofit_radio_20211025.txt

[00:01:00.54] spk_1:
Hello and welcome to Tony-Martignetti non profit radio big non profit ideas for the other 95%. I’m your aptly named host of your favorite abdominal podcast and oh, I’m glad you’re with me, I’d suffer the effects of Takayasu says arthritis if you inflamed me with the idea that you missed this week’s show. The time for endowment building is now. That’s Deborah Kaplan policies new book, She’s with me to explain why that title is a simple truth. I’m Tony state too planned giving accelerator. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot C o. It’s my pleasure to welcome Deborah Kaplan Pahlavi and before I continue with her official bio, I should have asked you before we started recording, but you’re suffering a lackluster host. Am I pronouncing your last name correctly?

[00:01:14.10] spk_0:
I was just going to commend you, you were one of the few people that have pronounced it correctly. Good for you.

[00:01:56.24] spk_1:
Oh, good. Thank you very much. All right. Deborah Kaplan Pahlavi ph D consultant and author. Her third book published in 2021 is the time for endowment building is now Why and how to secure your organization’s future. She’s been a frontline endowment fund raiser researcher, university teacher. She’s trained numerous boards and development professionals to achieve fundraising success. Her consulting practice is at Deborah Pahlavi dot com. Welcome to the show, Debbie,

[00:01:57.74] spk_0:
thank you. My pleasure

[00:02:10.24] spk_1:
to have you on nonprofit radio Yeah. Endowment the title of the book end out the time for endowment building is now why is that So

[00:02:44.54] spk_0:
Well, we’ve all heard about the transfer of wealth uh, from baby boomers to whomever baby boomers choose to transfer their wealth to. And if we don’t capture that money now there is going to be, I don’t know, very little opportunity in the future. People are my age and younger, older are dying. We’ve made more money, particularly in the stock market and real estate than ever before. And if not for profits work hard. They can certainly do a good job in capturing this money for their own sustainability.

[00:02:56.24] spk_1:
This transfer was originally documented by two, two professors at Boston College Havens and Schervish. Right,

[00:03:00.57] spk_0:

[00:03:19.74] spk_1:
I’ve had paul schervish on the show. I don’t know, I don’t know Professor Havens um say a little about you know, just summarize you you, by the way I admire as a former tony I love all your footnotes and thank you for putting them at the end of a chapter and not end notes at the end of a book where I have to flip all the way back there. Thank you for deciding to put footnotes at the end of each chapter

[00:03:22.55] spk_0:
and author. An author makes no decisions. I have to, that’s what the publisher did not. Alright, well my graduate it,

[00:03:32.34] spk_1:
my gratitude to them, I appreciate either the bottom of the page or um or the end of a chapter. So you you cite havens and Shellfish just say a little about their, about their research, the magnitude of this wealth transfer and, and we’re, you know, the trillions of dollars that were anticipated to see and we are starting to see,

[00:04:54.14] spk_0:
right? Yeah. I’m not as familiar with their actual research. I’m quoting like other people quoted them when I began this book. It really wasn’t about the transfer of wealth. It was about trying to get people away from the language of planned giving toward endowment development. And then when I began to read and do my own research, I came across this study. I had heard about it years ago, but I was refreshed and doing or the research for this book and I realized that the timing was the factor. It wasn’t necessary, the language. It was, hey guys, and they say in their conclusions, nonprofits are going to get a lot of money from this transfer and then they say, if not for profits, work harder and are more aware and don’t do it in a serendipitous fashion, but do it in a very conclusive weigh in the decision making way that they’ll do a lot better than they ever imagined. And so that’s their conclusion. And I incorporated it in my book and in the book’s title.

[00:05:11.14] spk_1:
And wasn’t the magnitude of that, something like 50, $59 trillion dollars

[00:05:17.64] spk_0:
or nine trillion somewhere somewhere in that I have The numbers, but it’s 57, It doesn’t matter. It’s a lot of money, right?

[00:05:25.01] spk_1:
What’s $2 trillion between friends? All right. It’s not in the thirties? It was I thought so. There was 50 59 you know,

[00:05:31.54] spk_0:

[00:05:32.62] spk_1:
double high double digits of trillions of dollars.

[00:05:49.04] spk_0:
And that was before the huge increase in the stock market and the huge increase of what’s happened in terms of asset value because of Covid. So the money really as you’re you’re right, who knows what we’re talking about?

[00:06:42.44] spk_1:
Yeah. Yeah. Their research was like early 2000s was 1990s, early 2000. So it’s at least 20 years old. And yeah, the way the way asset values have increased since then I mean, I don’t know what you’re talking. A $100 trillion dollars from baby boomers to the next generation. I don’t know. But It’s huge. Even even if it was flat, it would still be 59 trillion, which is enormously big. So, uh, you know, as we as we sit here today, uh, Congress is debating whether to spend $1 trillion 20 times the order of magnitude, the larger end of that scale. So that spectrum, So a lot of money, let’s leave it at

[00:06:43.78] spk_0:
that. You’re with that observation when you compare it to the congressional numbers.

[00:06:59.54] spk_1:
Yeah. You know, the magnitude is enormous. Um All right. So let’s talk about, uh, types of endowment. Can we, can we make sure everybody’s got a baseline understanding of quasi versus permanent endowment. Can you take care of that for us please?

[00:08:34.94] spk_0:
Yes, a permanent endowment is that in which money is invested and there is a spending policy. In other words, a certain percentage is distributed every year. The donor, according to the law, the donor determine what goes into a permanent endowment. The donor decides, hey, I don’t want my money spent today. I wanted to go into the permanent endowment and I have set up my gift and the verbiage in my gift accordingly. Now, many donors either are unaware that they have that choice or they don’t choose to put their money into the permanent endowment. So they say, okay, not for profit, you do with my money, what you want. And many organizations will spend that money doesn’t go into any endowment or they’ll put it in what’s called a board directed endowment or a quasi endowment, which means the board can use that money as it sees fit. What happens for the most part when boards pay attention is that they say, okay, we’ll put that money into a quasi endowment or aboard directed endowment, but we need X, Y Z votes in order to take it out. In other words, the board itself makes it difficult to spend that money so that it’s done quite judiciously as opposed to just spent every day and regular expenditures.

[00:08:57.14] spk_1:
So we have different thresholds of spending capacity. So in one and we’re gonna flush this out, there’s a state law governing that you cannot spend principle of the endowment without going through enormous hurdles usually, or versus the board being able to approve spending of the principal or some folks, you know, you might call it the corpus. I don’t like to get too technical on nonprofit radio but the principle that, uh, so bored mechanism for spending

[00:09:36.24] spk_0:
that, your first example, the law says, if a donor determines, uh, indicates that he or she wants the money or they want the money to go into permanent dominant. This is what the law subscribes. It’s the second one that’s really kind of equivocal because sports have great discretion over what they do with particularly a state. Yes, that come in without any their owner direction.

[00:09:42.64] spk_1:
Yeah. All right. Let’s talk about that law a little bit, uh, to the uniform prudent management of institutional funds act. I wasn’t gonna ask you to the site of the acronym, but I like,

[00:09:53.55] spk_0:
I can’t even pronounce it. I call it now. But

[00:10:21.04] spk_1:
so it’s uniform prudent management of institutional funds acts. But it depends on whether your state has adopted. You have to, if you’re gonna embark on having a permanent endowment, you need to know what your state law says about that because this uniform law is not necessarily adopted in all the states. It was, it was a recommendation, uh, and, you

[00:10:22.94] spk_0:
know, I think at this point in time it’s adopted by all states. Yeah.

[00:10:28.45] spk_1:
On some states though,

[00:10:30.22] spk_0:

[00:10:31.23] spk_1:
Based legislature might modify it. So it may not be identical? It’s probably not identical in all 50 states.

[00:10:54.64] spk_0:
Right. But for more or less it is identical and it’s don’t correct it. And it was an attempt by state governments to, um, oversee the way in which non profits were using their requests in particular. But other future gifts,

[00:10:55.72] spk_1:
endowment money, right? Money is placed in these permanent endowments.

[00:10:59.62] spk_0:

[00:11:27.04] spk_1:
Uh, you know, the basic state laws basically saying keep your promise correct. You got to keep your promise to the donor. And here’s a law that enforces that exactly forces your promise. Okay, Okay. And then the quasi, the board has some flexibility as you described. And I guess if they want to be very restrictive, then they would say like it takes a three quarters vote or maybe 100%. Maybe every board member has to agree to take money from our principal of our endowment.

[00:11:35.74] spk_0:
But there’s a real difference in that in the former, the myth flower the uniform prudent management of institutional funds

[00:11:41.29] spk_1:

[00:12:37.74] spk_0:
That’s a law Board has great discretion in terms of the board endowment. And that’s where I really focus. My book is hey, board, have you really analyzed what you’re doing with these monies? And do you have policies and guidelines? Do you have a preference whether you want permanent endowment or quasi endowment? And, and the most important thing, I think is once you have really determined what you want, really thought about it, talked about it, have you communicated your preferences to the donor and communicated to the donor? Why you prefer one model versus the other. So I’m really asking for boards to address this issue and not just let it go by as they receive money.

[00:12:39.45] spk_1:
Right. Okay. We have an endowment. So we’ll just put it in a savings account. You know, there’s a lot more to it. All right. You said a lot there. We’re gonna unpack some of that first. Doesn’t, it doesn’t have to be one or the other. Couldn’t, couldn’t a nonprofit have both couldn’t have a permanent endowment and a quasi endowment

[00:12:59.44] spk_0:
and most do, yeah, it’s time for a break.

[00:14:24.54] spk_1:
Turn to communications. Crisis communications, you want to keep turn to in your back pocket so that when you have a crisis or if certainly I’m not hoping it on you, wishing it on you. Not at all. If you have a crisis, then you know, you need to be communicating consistently, but not identically with your employees. You’re bored, donors may be volunteers and possibly the public through the media. Now, all those messages are not the same. I’m sure your board doesn’t get the same message that the public gets. So you’ve got to be consistent, but different right turn to can help you. They do crisis communications. So if you need help in a bad situation, that’s why I’m suggesting you keep turn to in your back pocket, you’ve got something bad has gone down. You need help communicating with all your different constituencies turn to turn to right turn hyphen two dot c o. Now back to the time for endowment building is now. Now in terms of the policies, let’s talk about just how endowments generally both kinds are generally treated right the way the way we spend just a little and you know what, what, what, what do you see there? What are your recommendations around how much to spend each year?

[00:15:37.54] spk_0:
There are averages that most organizations use. They come out of national organizations and what have you? I’ve seen them as low as 3% as high as six per 77% particularly during covid times they really increase because people wanted to get more money out to the respective communities and clients patrons however you want to call the users of the monies. Um, but what mostly happens is there’s a rolling average and the rolling average it video rolling average and that allows you or the organization to think about ah ha. We don’t want to take the most one year. When are we have great proceeds asset management. We’ve got great returns in the next year. We have bad returns. So they don’t do it according to the return. They do it according to a percentage and it evens out the kind of money that is going into the budget as opposed to high, low, high, low, high, low this way with a rolling average, you’re much more aware and you can be futuristic in terms of your budget allocations and creation of budgets.

[00:17:16.54] spk_1:
So what we’re talking about is, you know, uh, let’s say a small mid sized organization has a $1 million. I like round numbers. They were, they’re easier for me to figure out as a $1 million endowment. And let’s say it’s a it’s a it’s a permanent endowment the way we’re describing. Yeah, it’s permanent endowment. And, and, and in in year one they spend they decided to spend 4%. So then $40,000 comes out of the endowment and that can be used for, You know, there may be restrictions on how it gets used if if people have like named programs that are part of their endowed that are they’re endowed funds, then part of that 40,000 has to go there to honor your promises to those donors. But then other other money may come out and be unrestricted. And so you’re you’re the presumption is that you’re spending less than what you earn Through investment management each year. So maybe you earned seven or 8% in the year, But you spent only 4% in year one so that the balance of what you learned goes back, in Does that sound right?

[00:17:53.14] spk_0:
Yes. And the balance of what you were. And so in your example, 3% goes back into the corpus and 4% of the new number because now we’ve grown By 3%. So the next year you get that much more and that’s why it’s a rolling average because the corpus let’s say you don’t make 7% you make 2% and you’re spending 4% then you have a minus number. So the purpose of all of this is to somehow get what you receive every year to be predictable and not go up and down and down and up.

[00:18:25.54] spk_1:
That’s a huge advantage to having an endowment. Exactly. You’ll know, you know, you’re trying to diversify your revenue streams and this is another revenue stream for you that you can count on. So when you do have a bad year and you lose money or only earn one or 2%, like you’re saying you still can count on The 4% or 5% whatever your board has determined for that year is going to come out and it will support you in the bad years and you’ll be profiting your end out. You’ll be growing your endowment in the good investment years.

[00:18:58.94] spk_0:
But that is also a board decision. The board has to also mhm address that spending policy. It can’t just be, well, let’s see the CFO says this year, we’re going to spend 4% and now gee it’s wrong, let’s spend 5% next year. And so what if it’s going down. So in order to keep that money coming, we’ll do 6% again. The board has to wrestle with this decision making and not just let it be haphazard

[00:19:22.44] spk_1:
and a lot of times they, the boards will board will get advice from the investment manager, what, what they predict will happen in the, in the next year or two. Uh, and how confident they are in that prediction, what we’ve learned over the past several years And what that tells us perhaps about the future, you know, so you can the board can get input often from an investment manager and you know, and this applies if you have $100,000 endowment and you’re looking at $4,000 or $5,000 coming out each year. You’re

[00:19:37.98] spk_0:
still, you know, it

[00:19:49.44] spk_1:
doesn’t matter the scale, the principles that you’re describing are all the same. The board needs to decide. It’s not just Let’s decide in December, what we’re going to take out on January 1st. There needs to be right. There needs to be a board evaluation of this and a policy around how your endowment is treated

[00:19:58.24] spk_0:
Exactly 100%.

[00:20:47.44] spk_1:
Okay, cool. Um let’s take a little higher level view. You you have, first of all, you have a chapter why we need an endowment or maybe we don’t. And I thought, well, I look back at the title of the book because the title of the book I thought was now is the Time for endowment building. So, alright, But it’s mostly a pro probably 90% of pro chapter. But let’s talk a little about some other advantages and then you you name a disadvantage and maybe maybe I missed other disadvantages in terms of equity across the years but acquainted. So aside from having a steady revenue stream, one of many, hopefully that we can count on through in the year. Why else might we want to have uh, an endowment either quasi or permanent

[00:21:54.54] spk_0:
first. Let me go back to that title of that chapter. Do we need an endowment or maybe we don’t or whatever. A favorite chapter in the whole book. And I’m so glad you picked that out because I think that’s a very important issue. Do we even need an endowment with the Sunflower, the uniform prudent investment act there. It says you have to have it at the donor directs it. But what about all this other stuff? Do you really need an endowment? And I always believe you do because you can have a really bad year in the market or you can have donors? You can have a donor who’s really supported you for ages, especially if you’re a small or middle size organization. And all of a sudden that donor either has a bad economic year or the donor can have said, you know, I don’t like you anymore. I don’t like your exact or your development director really insulted me and didn’t handle me well. So you know what you’re done, You’re out of my gift giving. And if you or look at the federal government, it changes its allocations on a regular basis. So if you don’t have an endowment

[00:22:14.84] spk_1:
and I just add one more foundation priorities, Foundation priorities change too. Or foundation may agree to fund you for three years and then that’s it. And that’s what they would extend another three years. And but they’re not, they’re keeping to what they said. So foundation can change as well.

[00:23:31.64] spk_0:
Any donor. Let’s just look at it as any supporter, whether government, whether private, whether stay, it doesn’t matter can change their minds. And if you don’t have a fallback because it’s going to take time to recuperate the kind of money that you’re losing, then you’re in big trouble. So the endowment provides you with maybe not the total replication of the gift, but certainly it keeps you from losing sleep at night because, you know, as the board and exact that you have a cushion to help you through bad times. The other reason I like endowments. And this was what I always used when I worked with potential donors is we in the not not for profit sphere, particularly for a smaller mid level organization. We have no money for research and demonstration that’s really icing on the cake. And yet it’s fundamental to the work we do. So I like an endowment to give us a little leeway in the kinds of programs that we want to experiment with, I call that money risk taking, it allows us to think about what we’re doing in alternative ways. And if we lose, we don’t succeed. Okay. At least we tried a different pathway or we took took some risks and we’re not always being so safe in the not for profit sector, we have to change the way in which we do things. And an endowment allows us the wherewithal to do so

[00:24:04.34] spk_1:
take a little risk. You know, we we we see a different way of doing something or something new that we can try uh $1000 behind a project project.

[00:24:31.74] spk_0:
And as you say, hire an investment manager, want to go into some strategic planning or hire a new officer employee to do something in a different way. Anything that we want to do that isn’t in accordance with the way in which we’ve done it over the past. And the domino allows us the leeway to try new things.

[00:24:38.14] spk_1:
How about the intergenerational Equity rationale, which cuts both ways. But let’s let’s deal with the pro the pro first you talk about it in the book.

[00:27:01.64] spk_0:
Well, intergenerational Equity is really brought up by um Tobin, who is, I forget his first name, who is a Nobel prize winner economist at Yale and what he says is an Endowment provides the same services to the generation today as for the generations in the future. So that’s what’s called intergenerational equity. Well if I go to the Y W. C. A. And I can use the pool or I can have daycare or I can have services because I’m homeless. That those same level of services will be available for the next generation of women because the endowment will be growing and the value of the money will be equal. So that’s the intergenerational equity. Others argue that this generation is going to be richer than the next generation. So why should this generation supply for the future or the opposite? No one really knows who’s going to be richer and who’s going to be poorer. There was some like Henry Hanson who is I think now an emeritus professor at the Yale Law School and it was his work that really got me started and thinking about the economics of endowment and his thinking says, hey look at Harvard Yale, these big universities, these big museums are holding on to so much money in their endowments. Wouldn’t it be better that they spend more today? And some people say, yeah, he’s right. And others say no we have to have intergenerational equity and make sure there is there for the future what’s available today. So you can argue it either way. Um and of course the favorite argument is the impact argument, do we want impact today? Do we want to spend all the money we get today and get the biggest impact today, are we pushing the can down the road and saying, okay, if we don’t spend the money today, we’re just continue waiting the problems down the road. And so what is the impact? So that’s why they’re question is, do we want an undamaged for intergenerational equity or no? Should we spend all the money today and try to solve all our problems today? And that’s a decision that organizations have to make.

[00:27:49.54] spk_1:
That was very interesting. I had never thought of it this way before. I read the book that that there are folks who say that uh, preserving endowment is actually, uh, antithetical to intergenerational equity because you folks now are doing what you just said, they’ll be pushing the can down the road, kicking it down the road. You’re you’re not investing enough and you’re you’re forcing the next generation to deal with the problem that you could solve if you would spend more so by spending less and preserving it for us, you’re actually hurting us because you’re levying a problem on us that you probably that, you know, the belief is you have a better chance of solving if you put more money toward it.

[00:28:29.04] spk_0:
Exactly. And there’s another issue in this, we keep talking tony about the organisational to organisational decision making, that’s also a donor decision. I dealt with many, many doctors who said I don’t want my money put away for the future? I want to see impact today. So that’s why a board has to discuss what they really want. And once they make that decision, they have to be able to communicate the wise and the wherefore to the donor. But ultimately, it’s a donor decision as to how the gift is made.

[00:32:11.84] spk_1:
Let’s talk a little about that donor. That’s, that’s, that’s excellent having these conversations with donors. You know, you said earlier, a lot of times, donors don’t even know that they have the choice to give a gift to endowment. A gift of, uh, yeah, that will last in perpetuity. And listeners, you’re just gonna have to get the book because Deborah talks about the phrase in perpetuity and what she learned about learned about it. But you know, we can’t, we can’t probe everything. Uh, you got, we scratched the surface, you gotta get the book. Um, but let’s say, but it is valuable to talk about, um, well, it’s all valuable to talk about, but we only have so much time. So, uh, your lackluster husted host is choosing to talk about the donor conversation, having, having a discussion with donors about an endowment gift. It’s time for Tony’s take to plant giving accelerator. So here we are talking about endowment building, right? Planned giving can be a great help in building your endowment. Lots of planned gifts come in unrestricted. I encourage you to put as much of that unrestricted money as possible into your endowment. The plan, gifts that come restricted. Those have to go into your endowment by law. So, uh, you could even take the show today. The time for endowment building is now, you could swap out endowment building with planned giving time for plan giving is now, which actually is ironic because something that, uh, Deborah and I are going to be talking about, you’ll hear the irony, just keep on listening. But for now, um, so you want to build endowment plan Giving an ideal for this Playing giving accelerator, I will help you get started in planned giving in 2022. The next class starts in January. I’ll teach you step by step, everything you need to get started. It’s a six month course, used to be a year now it’s down to six months learning exactly the same stuff exactly the same curriculum, but condensed and still only one hour per week, an hour a week. But I’ve taken out some of the free time and aside from learning from me, there’s this incredible peer support and peer learning. The existing class, the current classes existing sounds so jeez, existing sounds so I don’t know, So sterile the existing classes, the current classes, The members right now, you should hear the way they’re supporting each other, helping each other with questions about their board or individual board members. Um, donors, leadership questions. It’s a great supportive community and I have every reason to believe that the january class will be the same supportive. So there’s a lot of peer learning as well as learning from me. So you’ve got enormous support by no means are you on an island starting your planned giving? That’s, that’s antithetical to planned giving accelerator. So if you’d like to check it out, think about joining the january class, it’s all at planned giving accelerator dot com. I hope you will and I hope you’ll be with us if you want to get your plan giving program going next year. I hope youll be with me in planned giving accelerator. That is tony state too. We’ve got boo koo but loads more time for the time for endowment building. Planned giving is now

[00:32:21.04] spk_0:
froze. Yeah,

[00:32:43.54] spk_1:
we did freeze. Okay. Yeah. I made a little joke about lackluster host and I didn’t see, uh, you didn’t smile, was disappointed, but you’re frozen. So I’ll take that as a, as an, as an implied smile. So please, I’ll maybe I’ll edit this out or maybe not. It’s not really that bad. But talk about that donor conversation regarding an endowment gift. Mhm

[00:33:38.84] spk_0:
There are all kinds of donor conversations. The point and I and you read about it constantly in the chronicle of philanthropy is the necessity to have the conversation because oftentimes people make a state gifts and they don’t even talk to The people in the development office. That’s one. So they’re really two conversations. There is the personal one on one conversation with the organization to which the donor is giving the money, but there’s also the printed conversation or the website conversation. And that’s why I feel it’s so important that organizations make the preference and tell donors either verbally or through written material what they want and why. But back to your question on the verbal conversation. Uh huh. I think it’s very important to listen to the donor first. Everybody in this field, you have to listen to the donor and hear what the donor wants and you said something earlier in this interview where I did not interrupt you, but I did. Um,

[00:33:54.57] spk_1:
I’m like me. I just did right this second.

[00:35:43.24] spk_0:
I did get the chills when you said if the donor has directed where the money goes. I think the biggest and the most important conversation that a donor can have is how they want the money used and the most important usage is unrestricted and what we have to explain to donors is what they sail it. See as a usage today may not even be in the cards in 20-50 years. We may have conquered breast cancer. We may have conquered homelessness. That would be wonderful. But and asked me very, very clear to a donor that they, they have to think broadly in terms of how they want to direct their money if they want to direct their money at all or if they do want to direct their money that they have to have a second purpose, which could be unrestricted if the first purpose becomes obsolete. So I was always the endowment officer, the fundraising officer to try to get the most money to be unrestricted because then we would have the flexibility if we wanted to use it for experimentation or if we wanted to use it for a particular program. And I’m not sure that we talked to our donors in a generic fashion. We listen to what they want. And then we fashioned the gift accordingly as opposed to communicating what this money is really going to be used for over time. And that’s an important conversation

[00:35:50.24] spk_1:
about what our programs may look like in the future. Uh, but, but your point that we may not have some programs in the future.

[00:36:53.43] spk_0:
Yeah. And you can direct your program, your direct. I remember a woman came to me and said, you know, I wanted to defend. My father was a violinist. I wanted to have an endowment for musical concerts. And the last thing we needed was any more money for musical concerts. We needed money for Children that were challenged and needed some educational programs. And I was real clear to her that that was the need. And I brought in our educational professional and we talked about it and she completely understood and was willing to make the change and educational programming couldn’t go on forever because it changes over time. But it’s broad enough that the function is not restrictive or just broadly restrictive. and her father’s name still went on the named endowment, but it was for something that the community needed as opposed to a program that we didn’t really need it all nor want.

[00:37:01.43] spk_1:
And some of that unrestricted money could be put into endowment to,

[00:37:05.13] spk_0:
oh, this is the endowment get.

[00:37:39.03] spk_1:
Well, that was, yeah, that was, I’m going back to something you said earlier about, um, restricting restricted gifts, you know, being part of endowment, but, but unrestricted gifts, you know, you can put some of that into. I’m always advocating for clients put as much as possible, You know, I understand, you know, and it’s always a tension, of course, there are immediate needs. We got to keep the lights on, we got to pay the rent and the salaries. But you know, can we peel off anything? We peel off 15 2025% and put that into the endowment and, and spend 75% this month.

[00:39:02.92] spk_0:
That’s a different conversation. That’s a different conversation. There’s the convert endowment conversation, which is the permanent endowment conversation, which could be through an estate gift, a future gift or a current gift. This woman was making a current gift, which is another issue. We don’t think, I think, um, widely enough about talking to donors about a permanent current endowment gift. So that’s a um, let’s say you have a capital campaign. I always want to peel off a percentage of a capital campaign gift to go into the permanent endowment for maintaining that which we are building because otherwise what happens is you put all this money into the capital into the building. Now, all of your costs have gone up, but you have no wherewithal to maintain those costs and you put the organization at some kind of risk. So it’s a very wide that’s the beauty of endowment conversations. They can be very, very wide. They can be very, very creative. And the less you restrict your fundraisers imagination and your donors imagination, the more impact current and future that a gift might have.

[00:39:23.82] spk_1:
Let’s have a little fun with the phrase planned giving. I have a company called martignetti planned giving advisors. I run an online class called planned giving accelerator. But I mean, uh, there may be a common ground or maybe not, you know, that’s fine, but share your, your, the guests. So you go first. You share your thinking about the phrase planned giving.

[00:40:23.71] spk_0:
As I said in the book, I never allowed either my staff or hopefully my consultant clients or even a donor to use the word plan giving. We all plan are giving whether it’s our annual distributions or our future distributions. So planned giving as it is perceived or understood by the experts in the field are primarily future gifts. And I, my my my problem with the language is a we all plan our gifts. So it’s a, it’s the phrase is really only for the expert experts in the field. And it’s sometimes more often than not turns off boards and donors because they don’t know what you’re talking about and they think it is so convoluted and so expensive and you need fancy you should excuse me, consultants to help you go through this.

[00:40:39.24] spk_1:
You’re a consultant.

[00:43:39.50] spk_0:
Yeah. And but I don’t ever use the word plan Giving in my consultancy. I use endowment development. So that’s my first issue with the words Plan Giving. The second issue with it is plan giving is a tool. And what we don’t say is why do we want to use these grand gifts? What is the ultimate purpose of the planned gift? Do we want the planned gift to be used today? Okay, so I’m going to make a quote unquote. I’m going to set up a charitable gift annuity. It’s a future gift when you the organization received the principal after I pass away. What are you going to do with it? So my feeling is that we should concentrate on the use of the tool. What do we want the gift to be used for as opposed to the tool itself? So that’s two, three fancy dancy plan gifts, charitable lead trust, charitable remainder trust? Charitable. What have you trust? Those are going to come to most organizations through a professional advisor. They’re not going to go from the donor to the organization. So I concentrate on the book in the book with what kinds of gifts are easy for an organization to do to pursue where no attorney is needed. And then on the other hand, I think it’s very important to have outside counsel so that if you do receive as an organization, they’re kind of two ways to look at it. If the organization is the trustee of the gift that the professional advisor constructs, then the organization needs an outside counsel to make sure that the organization’s interests are protected through the document. But we don’t need all these fancy attorneys in house and what have you, especially small to medium sized organizations. There are lots of things that they can get current and future endowment gifts that have no relationship to these trust gifts. But again, my my my argument is a, the language is scary to the non professional and even fundraisers get scared by the language so they don’t discuss these kinds of gifts with their donors and ultimately, what is the purpose of the sophisticated, so called tools and what do we want to do with it in the organization? And that comes back to the board discussion.

[00:44:39.89] spk_1:
Okay. Yeah. I think we, I think we largely agree. You know, my, my use of the phrase planned giving is exclusive to those who are, I’m not even gonna say plan giving experts because I, I work with startup programs. So they’re not playing giving experts that they may never be, but they can have a, they can have a plan giving program. So I’m talking to folks who are inside nonprofits, but I understand your point to your right and I agree that it’s an off putting phrase for a lot of people. It’s just so well ingrained that my message constantly is don’t be intimidated by planned giving. Debunk the myths of planned giving. Planned giving is not a black box. You don’t, you know, I’ve got five myths, you don’t need an attorney. Like the things you ticked off debunked of top five minutes. You don’t the myth that you need an attorney, the myth that you have to offer complicated gift options, the myth that you have to spend a lot of money. I can’t remember the other two of my own debunked myths, but there’s a lot of mystique and mysteriousness and it does, it absolutely intimidates lots of non plan giving professionals and that those are the folks I’m talking to because I want to start up programs where its

[00:45:20.89] spk_0:
endowment building. See again, the plan keeping is the tool, right? It’s that is why that’s my primary Um, complaint is AIDS, the tool. We don’t talk about the purpose of the planned gift, how it’s spent when we actually receive the proceeds a and b. I love Doug whites comment to me, he calls the phrase planned giving calcified. He was using it what 30 years ago. It’s old. It’s time for us to change that.

[00:45:37.79] spk_1:
I’ve had, I’ve had dug on the show every time he publishes a new book, I have him on the show. Um, the fascinating one was the Robertson case at was at Yale. It was Yale.

[00:45:39.69] spk_0:
I don’t think it was texas, I’m not sure.

[00:45:43.17] spk_1:
All right. Maybe wasn’t really there, but it was, it was some time ago. He’s working on a new book now. So when he gets that one out, I’ll have him

[00:46:36.88] spk_0:
again. My biggest compliment. tony was when, um, two things happened. I did write him about some of the ideas that I was thinking about and never dreamt. He would reply and he replied in this long, long email and supported everything. And what was even more interesting and what he wrote to me is even with that act that we began this conversation with the uniform prudent management act, that’s in all of these states, there’s so many organizations that don’t even pay attention to it. Even when they get donor designated gifts where the donor says I wanted to go into the endowment, the organization is either unaware of the act or tends to ignore the act. And that’s where I think consultants like you and me have even a larger role is to help the boards come to grips with what they are doing with these monies and what they want to do with these monies.

[00:47:11.38] spk_1:
Yeah, It’s a, it’s an important conversation and, and the policies behind it that we talked about. Um, right. I’m, I agree, I agree. We uh, we, I guess what I’m, so you have a few things, you, you have a lot of footnotes to eat my emails with Doug White, you’re crediting Doug White and lots of cases email

[00:47:21.44] spk_0:
with White.

[00:47:24.48] spk_1:
Uh, he’s a gentleman,

[00:47:25.27] spk_0:
he’s a gentleman, he’s starling, he’s the guru. And it was very important to me that he agreed with my arguments because my arguments are not run of the mill. They are outside of what we actually for most organizations actually operate today. And that’s the reason for writing a book because you’re trying to affect change in the way in which the field operates.

[00:48:23.77] spk_1:
I would disagree with with you and Doug and playing giving. Being calcified, I would say it’s well known. It has been around for a long time. I had 60, 70 years or something like that back going to Robert Sharp senior, he was an early practitioner, uh, I don’t know who coined the phrase, I don’t know, he claims that, I mean he’s no longer with us, but um anyway, it’s a, it’s a timeworn phrase uh, calcified, Yeah, calcified, overstating, overstating. Its uh, its utility or lack of its lack of utility. I think it’s just a well well well known, well understood phrase,

[00:48:33.17] spk_0:
professionals in the field, but not the people that really matters, which is the donor and the board decision

[00:48:34.19] spk_1:
maker. That’s where we agree. Yeah, I absolutely agree with, not talking, not putting on your website planned giving options. You know, you

[00:48:41.87] spk_0:
suggest a bunch of your professional. I am the director of planned

[00:49:18.97] spk_1:
giving because that is an outward facing like that’s an outward facing title. You can know internally that the person works on planned gifts you want if you want to call them them internally, but outward facing. Yeah. Endowment development, long term, long term giving officer. You know, I tend to not like the silos anyway because I think the long term giving officers should be working a lot with the annual giving officer who’s working a lot with the peer to peer fundraiser of course, in some organizations, that’s all one person. Um All right. All right. Deborah, Why don’t you leave us with a little, um, endowment motivation? I think we’ve, you know, I feel like we’ve given a good justice. Uh, you know, but you wrap up with some final words on Endowment.

[00:50:14.86] spk_0:
You didn’t warn me about that one. Come on, think about this for a year. You wrote a book about this for for 25 years. You’re going to book, Right? And that’s why I’ve concentrated it on it. And those of my colleagues through the field say it’s about time. You wrote about it because you believe in it so strongly. I believe in endowment is like a retirement fund. If you don’t put away money for the future, you’re not going to have a future and it’s the board’s responsibility to think, yes, we have to worry about today, but we have a responsibility to future generations and future clientele to make sure that this organization is healthy today and tomorrow. And that’s why I think endowment is so important

[00:50:21.36] spk_1:
today and tomorrow. If you you see it on all the social networks and the nonprofit communities, sustainability, sustainability, well, if you if you want to live sustainability and

[00:50:34.36] spk_0:
and be healthy and be healthy, it’s really not only sustainability but to be healthy and your sustainability to be healthy in your retirement, that’s why we have our iras we want to live a qualitative life and we want to make sure that our organizations have a qualitative future.

[00:51:12.36] spk_1:
Mhm irish thought healthy was subsumed and sustainable. I just thought that meant, you know, not just not just starving, getting by, but you know, you’re you’re healthy, just sustainable. So if you want to walk the walk of sustainability, talk about, talk to your board about endowment development, Endowment growth. Do it correctly. And uh the book will help

[00:51:15.59] spk_0:
you time

[00:51:48.46] spk_1:
for endowment building is now there’s other chap, there’s a great, there’s a case study on a program called Life and Legacy of the Grinspoon Foundation. We didn’t get into that, but there’s a there’s a chapter on that could help you get started um you know, who are your best, your best prospects for for endowment type gifts and more about the titles. Uh and then the jargon. Just that’s the book. And the author of it is Deborah Kaplan Pahlavi, you’ll find her practice at Deborah Pahlavi dot com. And the book, the time for endowment building is now Debbie, thank you very much for sharing. Really

[00:51:53.09] spk_0:
enjoyed it. Thank you Tony. It was a fun conversation.

[00:51:56.18] spk_1:
I’m glad. My

[00:51:57.05] spk_0:
pleasure. Good luck to you And your plan.

[00:52:08.05] spk_1:
Giving consultancy. That’s very gracious of you. Thank you. See, and you didn’t say it to snarky either. Just a little bit, got a little bit of a pejorative tone, but I’m willing to overlook it Because it wasn’t, it wasn’t much, is only 10 or 15%.

[00:52:10.75] spk_0:
It wasn’t snarking on. I detected a

[00:52:14.40] spk_1:
little, we’re gonna play it back.

[00:52:15.64] spk_0:
There was a little snarkiness, but it was a small percent.

[00:52:44.15] spk_1:
No, no, look, okay, wait, I gotta finish up for our listeners because next week Jeanne Takagi returns with Risk Management Part two. And if you missed any part of this week’s show, I beseech you find it at tony-martignetti dot com. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o Our creative

[00:52:44.64] spk_0:
producer is planned. Meyerhoff shows social

[00:52:47.09] spk_2:
media is by Susan Chavez.

[00:52:48.83] spk_1:
Mark Silverman is our web guy

[00:53:00.95] spk_2:
and this music is by scott Stein, thank you for that information scotty be with me next week for nonprofit radio big non profit ideas for the other 95

[00:53:14.05] spk_1:
percent go out and be great, mm hmm.

Nonprofit Radio for Dec. 10, 2010: Death Won’t Stop Me & Endowment Emergency

Big Nonprofit Ideas for the Other 95%

Compliance. Board relations. Fundraising. Technology. Volunteer management. Accounting. Finance. Marketing. Social media. Investments.

Every nonprofit faces these issues and big nonprofits have experts in each. Small and medium size nonprofits have Tony Martignetti Nonprofit Radio. Trusted experts throughout the country join Tony to take on the tough issues facing your organization.

Episode 19 of Tony Martignetti Nonprofit Radio for December 10, 2010

Tony’s Guests:

Reynolds Cafferata, Esq. – Reynolds Cafferata, Esq. is an attorney with the law firm of Rodriguez, Horii, Choi & Cafferata in Los Angeles. His firm represents nonprofits and their donors.

Topic: Death Won’t Stop Me: Multigenerational Philanthropy:
Donors who don’t want to stop giving to you merely because they’ve died can use different legal structures to continue their philanthropy through generations. Reynolds Cafferata, Esq. joined me at the National Conference on Philanthropic Planning to explain.

Kathryn Miree – Kathryn W. Miree is the president and primary consultant for Kathryn W. Miree & Associates, Inc. Ms. Miree provides a full range of planned giving, endowment, and foundation management services designed to help charities build long-term financial stability through planned gifts and endowment.

Topic: Endowment Emergency:
Kathryn believes there’s a crisis swirling around how endowments are invested, allocated and spent. She joined me and Raymund Flandez of The Chronicle of Philanthropy at the National Conference on Philanthropic Planning to share solutions and best practices.

Here is the link to the podcast: 021: Death Won’t Stop Me and Endowment Emergency

When and where: Talking Alternative Radio, Friday, 1-2pm Eastern.

You can subscribe on iTunes and listen anytime, anyplace on the device of your choosing.

Sign-up for show alerts!

“Like” the show’s Facebook page.
View Full Transcript Transcript for 021_tony_martignetti_nonprofit_radio_12102010.mp3

Processed on: 2018-11-11T22:40:04.307Z
S3 bucket containing transcription results: transcript.results
Link to bucket: s3.console.aws.amazon.com/s3/buckets/transcript.results
Path to JSON: 2010…12…021_tony_martignetti_nonprofit_radio_12102010.mp3.421686930.json
Path to text: transcripts/2010/12/021_tony_martignetti_nonprofit_radio_12102010.txt

Kayman welcome to tony martignetti non-profit radio, big non-profit ideas for the other ninety five percent. Amiel aptly named host your aptly named host, tony martignetti last week. We had had a career kill your career in five easy steps. That was the second half of my robert sharpen to view from the national conference on philanthropic planning, and you’ll remember that i co interviewer was raymond flandez of the chronicle of philanthropy, and we also had interviews on interview, talking about tax policy and the future of philanthropic planning. My guests for that were emily lamb and perry wasserman, also recorded at that national conference, and this week, it’s the same thing. Mohr interviews from the national conference on philanthropic planning, which was from florida this past october, and we’re going to get right into those interviews after this break. E-giving didn’t think dick tooting getting ding, ding, ding ding, you’re listening to the talking alternate network e-giving duitz dahna cubine are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com way. Look forward to serving you. Do you want to enhance your company’s web presence with an eye catching and unique website design? Would you like to incorporate professional video marketing mobile marketing into your organization’s marketing campaign? Mission one on one media offers a unique marketing experience that will set you apart from your competitors, magnify your brand exposure and enhance your current marketing efforts. Their services include video production and editing, web design, graphic design photography, social media management and now introducing mobile marketing. Their motto is we do whatever it takes to make our clients happy contact them today. Admission one one media dot com hey, all you crazy listeners looking to boost your business, why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com welcome to tony martignetti non-profit radio and the chronicle of philanthropy coverage of the national conference on philanthropic planning. We are in lake buena vista, florida, outside orlando, very close to orlando, and our guest in this segment is reynolds cafferata reynolds seminar topic is creating effective legal structures for multi generational philanthropy. That’s a lot. We’re going to dive in and sort of parts that out just by way of introduction, reynolds cafferata and his last name is spelled c a f f e r a is a partner in the law firm of rodriguez, hori, choi and cafferata and they are based in los angeles, california. That firm is a tax firm working with both non-profits and individuals who are making charitable gifts. And, uh, we’re very pleased that reynolds work brings him to our podcast coverage of the conference. Reynolds welcome. Thank you. Thanks very much for taking time. So that’s a that’s a pretty heavy title. Creating effective legal structures for multi generational philanthropy. Let’s sort of parse it out a little bit. What? What do you mean? When you say multigenerational philanthropy that would refer to families who are trying to set up a private foundation or some other charitable organization that is supposed to stand up in span more than one generation of the family. So mom and dad and the kids maybe mom, dad, the kids, the grand kids, maybe even beyond. And why would a family want tohave? Ah, multigenerational structure there’s. A lot of several reasons why families find this attractive. One of the main reasons is if the founding members think that philanthropy is an important value. This is a a mechanism to pass that value down and provide a resource for future generations to act on that value. They feel that having the structure, they’re sort of instills the value itself. There’s also just sort of benefits to the family as a whole to control a philanthropic fun through multiple generations. So those are some of the reasons people find attractive. Is this something that really is restricted to people who are way need a definition of wealthy? I don’t know, but who have income or our assets at a certain of the family has income or assets at a certain level? Or is this open also to people of more modest means? My presentation today is probably focusing on the higher end issues that come up for people who were putting in a fairly large amounts of money, millions, tens of millions, but there are structures that air available for much more modest means, you know, a family multigenerational planning could just be parents putting ten thousand dollars hours into a donor advised fund for their children or grandchildren to advise, so some of it conspire. Hanna pretty wide range of economic means excellent, ok, but your conference topic is focusing more on the strategies for the wealthier. Now on tony martignetti non-profit radio we have george in jail and you’re an attorney. I’d hate to put you in jogging, joe, because that has big implications for your career just donorsearch advised fund, you just flush that out for us, tell tell the listeners, would of donor advised fundez sure don’t advice fund is a fund maintained either it’s, something called the community foundation or some of the financial services firms also have set thes fund’s up, and basically you make a contribution to the fund. When you make the contribution, you get your charitable deduction right then and then you’re allowed to give advice, which is pretty universally followed, assuming you’re advising to legitimate charitable organizations than you can advise the community foundation and the financial services firm what charity’s you’d like it to be distributed teo and that is something that’s available to people of modest means. I mean, you could put just a couple of thousand dollars into a donor advised funds? Yes, absolutely. I think several organizations have minimums of just a few thousand summits like ten. A few, maybe twenty five thousand. Ok, so you’re commuted from drug in jail. Your career is secure. You don’t have to report anything to the bar association. Let’s. So let’s, jump, then back tio. More more concerning your your topic. What are some of the let’s start with? What is the sort of simplest strategy for this multigenerational philanthropy? Well, the starting point is figuring out what’s important to the founder and the family. There’s often a attention between a desire to let future generations have their own imprint on the family’s. Philanthropy and the founders desire too, create something that remains true to the values in causes that are important to them. So you have to start out there and figure out which you know which direction and it’s not necessarily an either or theirs. Great ations in between. But what level of flexibility do you wanna have versus what kind of assurances does the founder want tohave that the causes that they created this thing for will be the cause is that it is supporting, you know, ten, fifteen hundred years. So now and let me just say so not unlike a non-profit talking to their donor about what? What structure a gift should take, whether it’s going to be a lifetime gift or ah, state or planned gift, and whether there’s a plan gift where there’s going to be income involved or not this you need to have your you’re having the same kinds of conversations with the clients. What are what are their interest what’s what’s really important to them and their family before? Before you can decide what’s the right structure. So they go see my simple minded question what’s the simple structure with these there is no there’s, no one solution. It really depends on what’s important to the family, right? And so kind of what i’m going through is, you know, talk to the donor about the values is their emphasis on, you know, maintaining these core principles, or is their emphasis on providing flexibility on? And then we go through? Well, you know, if the desire is to keep the organization really true to its mission and minimize the ability of future generations to change that, then you look at things like trust, which tend to be a little more rigid versus if ah, you know some donors take the position that hey, after i’m gone, i’m gone it’s somebody else’s decisions to make and they want to maximize flexibility and then, you know, the corporation is probably the place to see start there, and then there are other sort of things you can add on to increase or decrease the flexibility of either of those basic starting points and you mention the corporation. What? What sort of structures are we talking about? When it’s a corporation most each state will have, they call them different things, but usually each state has adopted some version of the non-profit corporation model non-profit corporation act and so it’s a essentially a state chartered corporation that’s expressly designed to be not-for-profits we’ll have some special provisions for governance that would come up and be africa ble to nonprofit organizations, delaware, they’re called non stock corporations in california. They’re called public benefit corporations. They could be called different things in different states and these air structures that individual on a family create is that right? In my understanding? Yeah, yeah, yeah. Okay. Yeah. Who do you anticipate your audience being for this seminar? Mostly planners are they are they planners. In in the non-profits or you think they’re mohr consultants and attorneys to individuals? I’m hoping because all those folks are here and i’m hoping to have something for all of them. Obviously, for the lawyers and some of the other allied professionals, they’re going to have clients, they’re going to come to them wanting to set up these types of entities in wanting advice on how to do it. So we’re giving us some direct information about the tools available to him and what to use potential in different contacts for the representatives of charities, they will often be working with donors who are setting up thes structures in well, they may not be the first line of advice for setting up the family foundation. They will often be consulted in a year you’re in the charitable worlds. You under chan charity. You understand what i’m trying to do? Give me your thoughts on this, and so it’ll give them some background tohave samen put and depending on what the donor is trying to do there, there are roles to be played for charitable organizations within these family structures, and so we’ll be talking about you know what? Those roles are and making sure that these people were aware of the opportunities that just because the money is initially going into the family foundation doesn’t mean that the university, the hospital, whatever organization they represent, is not part of the conversation. Okay, excellent. And i do want to pick up on that just very briefly little reminder that my guest is reynolds cafferata and we’re talking about his seminar creating effective legal structures for multi generational philanthropy. You’re listening to the chronicle of philanthropy and tony martignetti non-profit radio coverage of the national conference on philanthropic planning in florida. Let’s talk about the charitable role in this i wouldn’t have i thought that it’s ah, as meaningful as it sounds like you’re suggesting it can be with i’m seeing a family creating a structure what’s, the what’s, the what’s. Certainly we know the interest what’s the role of the charities there’s a couple places where the charitable organization can play the role one of them is an issue that people struggle with is, you know, the parents have one percent set of philanthropic interests and just like your children don’t listen to the same music you listen to, they don’t dress the same way you do, they don’t decorate their house the same way you d’oh, they also don’t have the same charitable interest that you d’oh, and if you’re you know, comfortable with just letting them do their own thing with the family money, then you know, fine, but i would not say that that’s an attitude that is reflected in all or even a majority of my clients, a lot of them, you know, they want to create a philanthropic legacy. They want to create the legacy that relates to the causes that are important to them not, you know, they may be willing to have something go to their children’s causes, but there are the things that are important to them, and they want to see their legacy address. So if that’s one of the concerns than by building into your governance structure our relationship with organizations that speak to the causes that you care about having, you know, the university of the hospital, maybe appoint one of the board members of the foundation or something like that? Well, then allow the family members to be involved, but at the same time ensure that the organization stays true to the causes and interests that were important to the foundation, another roll that can be played. One of the riel difficulties in setting these things up is succession of governance. Here durney setting this up, you’re expecting future generations of family members to be your directors, but a number of problems can arise there. There may be a lack of interest you could, you know, just through sort of the sequence of deaths and births of people. I have a period of time where there is a generation in which there’s, nobody who’s, has the legal capacity to be the director’s, because you either got people who are too young or you’ve got people who, you know our having capacity issues at the other end of life. So, putting aside the fact that the air’s may just not be interested in the work of the foundation, there may be actual legal structure, legal constraints around there being a family member involved in the foundation. You’re listening to the talking alternative network. Yeah. Are you feeling overwhelmed and the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics, politically expressed, i and montgomery taylor and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com i really need to take better care of myself. If only i had someone to help me with my lifestyle. I feel like giving up. Is this you mind over matter, health and fitness can help. If you’re expecting an epiphany, chances are it’s not happening. Mind over matter, health and fitness could help you get back on track or start a new life and fitness. Join Joshua margolis, fitness expert at 2 one two, eight sixty five nine to nine xero. Or visit w w w died mind over matter. N y c dot com is your marriage in trouble? Are you considering divorce? Hello, i’m lawrence bloom, a family law attorney in new york and new jersey. No one is happier than the day their divorce is final. My firm can help you. We take the nasty out of the divorce process and make people happy. Police call a set two one, two nine six, four, three, five zero two for a free consultation. That’s lawrence h bloom two, one two, nine, six, four, three five zero two. We make people happy. Durney talking alternative radio twenty four hours a day. So what do we do that so, thereby having again identifying some charitable organizations who are helping oversee the sanity? If you have one of these period and it may be temporary, it may be that, you know, you had a generation die out for some reason. There’s kind of a gap everybody’s under eighteen. But within a few years, they will have legal capacity. If you’ve got a charitable organization involved with you than they could at least temporarily oversee the administration of the entity. And then when you again have family members with capacity, they can come back in and start serving again. And i have a role. Ah, the other issue where the outside organizations can help out is that why is you well know, there’s there’s a lot to know there’s. A lot of expertise to develop in terms of effectively administering a charitable organization. And every generation sort of has to recycle and relearn that knowledge is they come on and again by having some outside organizations participating in the management of your organization, they could help make sure that that continual education and reeducation process takes place. Reynolds, is there a lot of ego? Wrapped up in this i mean, we’re talking about entities that could don’t necessarily need to be last in perpetuity. That could be have it their governing documents ah termination shin or fixed period, but the ones that one last they want the entity lasting in perpetuity. Our people just really tryingto extend their lives into a corporate structure. I think there’s, multiple motivations and certainly legacy and a sense of impact is one reason that people do these things. Another reason is they again want this mechanism sort of transmit the value of giving back and philanthropy to multiple generations so that’s why they like the entity to last that long. But you do raise a good point that we do discuss with our clients, and that is the issue of does perpetual existence really make sense from the structuring standpoint, as you make the entity exists for a longer period of time than many of the challenges in terms of governance, in terms of adapting to new circumstances? The longer it goes on, the more those challenges get magnified. The other thing to think about is, you know, yes, there’s, certainly something to be said and there presumably. Will always be a need for philanthropic entities to support whatever the issues are in society, and so creating something that basically will provide funding and perpetuity has some value. On the other hand, though, you may find that you could create mohr impact with something that you care about bye spending a lot more money over a shorter period of time and really, you know, sort of trying to address an issue once and for all. So that’s part of the conversation of working with these folks is do you want to try for the perpetual duration? Or you want to set a time limit and have some mechanism by which the entities spends down over, you know, ten, fifteen, twenty years, i’m goingto switch a little bit wanna talk about your role in representing individuals who are making charitable gift, but not necessarily through one of these more sophisticated structures. And what i’m curious about is we always in my business, we represent non-profits and i’m always interested in the other side. Dahna what is sort of overreaching when when you have ah, a client come to an individual client come to you and they want to make a gift to a particular charity of some type, and i’m thinking of a circumstance where maybe you kind of feel that charity has done a little more than they should have in advising the donor. Do you do see those circumstances much? I’m tryingto give charities the boundaries, in other words, of what they’re doing, a relationship where they don’t relationship should end, and so that’s sort of the way i’m trying to get at it. Well, i guess that the one area where i’ve been somewhat out spoken about practices by charities that i don’t think necessarily serve them or the donor’s well is the whole issue of enforceable charitable pledges and partly because of accounting rules, partly because of counting rules, organizations like to get donors to sign enforceable pledge agreements, partly because of fund-raising pressures, right, fundraisers have quarters on dh marks, right? And they only want account. What they see is an enforceable pledge, and the problem with that is it from the donor’s perspective, signing the enforceable pledge whether the, you know are concerned about paying it or not, it creates significant issues for them in terms of the flexibility of satisfying the pledges. They sign an enforceable pledge agreement in their own name, and then a year later, they create a donor advice funder private foundation. They can’t use either of those vehicles too satisfied that plans well against self dealing, right? Thank you, not as common an issue, but if they ever had somebody else who decided that they wanted to satisfy part of that pledge, and it does sometimes happen in families that you know, one family member makes a pledge, and then maybe somebody else decides to finish it out. Well, again, if that’s an enforceable, pledged theirs an irs revenue ruling on point that says that the person who is helping out is not making a gift to an organization, they’re making a gift to the original maker of the pledge. And then the person who made the pledge gets the income tax deduction. I mean, if you understand tax law it’s not a counter intuitive result, but if you’re just sort of a normal person who thinks logically it’s a very counterintuitive result. So from the donor’s respect of these pledges, khun b extremely problematic and even from the charity’s respect yeah, you mentioned doesn’t serve the charity. Well, why do you say that for a couple reasons number one, if they ever get into a situation where they need to do a workout with the donor and, you know, we certainly seen through two thousand eight that there were, you know, people who with, you know, complete honest belief that they were going to be able to make a syriza payments entered into these agreements, and then circumstances changed, and at a minimum, they needed to at least pay change the payment schedule. Well, if you’ve got an enforceable pledge, that’s an asset of the organization ah, and well, not always true, but a lot of times you have these pledges from people who are your director’s, your trustees or, you know, a former officer, former trusty, very close to the organization, right? Or maybe it may even be a fiduciary to the organization have a legal obligation if they’re on the board of trustees exactly. And that leads to another set of problems that if you’re a public charity, there’s thes rules called excess benefit transaction prohibitions. And basically what? Those days, if you’ve got somebody who’s khun wield influence over the organization like a trustee. And you enter into a transaction with them. And what they provide you in terms of economic value is less than what you provide them in terms of economic value. The difference there is an excess economic benefit, and if the irs identifies it, then the person who got that benefit has to repay it. They have to pay a twenty five percent excise tax on it. And the board members who are managers who approved that transaction are also potentially subject to an excise tax. Well, good. Who are enforceable pledge the person owes you. You know, it’s called one hundred thousand dollars on their enforceable pledge. And then something happens and they come to you and say, you know, g, you know, circumstances change, you know, i can’t pay i don’t want to pay whatever, and the organization is like, okay, we understand. Well, economically, you just handed them one hundred thousand dollars, and they handed you back nothing. Um, well, that you know, arguably is one hundred thousand dollars automatic access benefit. Now, we’ve had informal conversations with the irs about this, and really, you pick up the phone and the irs answers when you call. Yeah. They actually they actually d’oh the folks back, and they basically have different people assigned a different code sections, and, you know, if you call him up, if you’ve done your homework and so it’s, not something that you know they’re like, well, did you just read, you know, publication or whatever, but if you’ve done your homework and it’s, you know, an issue that’s not obvious than they’re definitely willing to have a conversation with you and, you know, try to be helpful and really give you their thoughts. And so we had this discussion and the person i was tell him i said, well, you know, we really we weren’t even thinking about this when we wrote these regulations, they were thinking, you know, excessive compensation, you know, selling property and sweetheart deals and stuff like that, he said, well, you know, technically, i understand, you know, i see your point that, you know, basically these rules would apply. I don’t see us coming after an organization, particularly if a disinterested group of directors were approving and they had a good business reason for doing it. But of course, you know, this is just you and me talking. And, you know, none of this can be relied on because it’s not written guidance in the agency and i haven’t heard of the irs going after anybody on this but it’s just an added layer of complexity that one has to think about all because you have the enforceable pledge and all the enforceable pledge gets the organization is basically the right to sue the donor if they don’t make the pledge payment. And when i talk about this issue and i’ve gone around the country and, you know, given the presentation the number of times and i always ask, you know, how many of you are from an organization that always sees their donors when they don’t pay, you know, out of thousands of people nobody’s ever raised their hand for them, how many of you are from an organization where, you know, if it were a really important pledge on dh, you know, the person really didn’t have any good defense to not paying it, and they had adequate assets? You’d at least think about it well, a few hands will go up, and i think, you know, every so often they’re certain key pledges where and sometimes charities do go after donors, but it’s, you know the exception, not the rule, and said, how many of you from organizations that, you know, basically almost never going to see their donors and that’s, where you see all the hands and that’s for a variety of good reasons where most charities come out. But it’s, you know, i asked, then. Well, if you don’t intend to sue the donor, if you don’t intend to use this feature of this document and it creates all these problems for you, and it creates all these problems. More importantly for the donor, why are you doing these things? Why bother? So going back to this was a very long answer to your question. You know, what do i tell donors when i’m on the donor side? In the first thing i usually tell the owners is, you know, if they sent you an enforceable pledge agreement, let’s, change it to a letter of intent and here’s why? We’ve actually tried with the enforceable pledges putting in language that warns the donor, if you sign this enforcement blood, you will not be ableto pay this with your donor advised fund with your private foundation, we thought this is great problem solved, at least going forward. We’ve warmed people we do that they signed him a week later, we get a check from their donor advised funds so it’s just sort of too much minutiae think for some of them to follow, and i think the advice sort of takeaway for for non-profits is you’re getting into on area that has a lot of legal implications that are maybe my new show, but could be significant when you’re getting into the legally enforceable pledge and sort of doing it really for no good reason, right? And now the you know, virtually all the community foundations when they send you your organization a check, they will be sending you a letter, and it will be asking you to confirm that it’s not satisfying and enforceable pledge and that it’s not, you know, tickets to the gala or anything that has any, you know, benefit going back to the donors, so you’ll end up in a bind. If you’ve written one of these things up, you know we have to leave it there. Reynolds. Thank you very much for joining us. Duvette my guest has been reynolds cafferata. His topic at the national conference on philanthropic planning is creating effective legal structures for multi generational philanthropy, and reynolds is a partner in the los angeles law firm rodriguez, hori, choi and cafferata. This is tony martignetti non-profit radio and the chronicle of philanthropy. Coverage of the. Non-profit s the national conference on philanthropic planning. We will have of future interviews and other recordings, and, again, thank you, thank you very much, reynolds for your time e-giving ending the ending, the ending din din din. You’re listening to the talking alternate network, get in. E-giving cubine are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics, politically expressed hi and montgomery taylor and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com talking alternative radio twenty four hours a day. Oh, this is tony martignetti aptly named host of tony martignetti non-profit radio big non-profit ideas for the other ninety five percent technology fund-raising compliance, social media, small and medium non-profits have needs in all these areas. My guests are expert in all these areas and mohr tony martignetti non-profit radio fridays, one to two eastern on talking alternative broadcasting you’re listening to talking on their network at www dot talking all calm now, broadcasting twenty four hours a day. Welcome to the chronicle of philanthropy and tony martignetti non-profit radio coverage of the national conference on philanthropic planning. Our guest right now is katherine miree she’s, a principal of katherine w miree and associates, and i’m joined by raymond flandez of the chronicle of philanthropy. The chronicle and my radio show are partnering to cover the conference, and i’m going to turn to raymond toe. Ask him to introduce our next guest, kathryn miree create thanks, tony, really appreciate and and plaid where we’re here to cover this. Today’s guest is a graduate of the university of alabama school of law, marie’s past share and treasurer of the national committee and plan e-giving now the partnership for philantech opic planning porter directors pass chair of leave, a legacy committee and various other boards. She spent eighteen years in banking management and she’s here to tell us a little bit about what she’s doing here at the conference. And katherine, your your conference it’s titled seminar title is endowment crisis. That sounds dramatic. What what is the well, that’s before we ask what the crisis and endowments is when we talk about what is endowment so we know everybody’s starting in the same place, i think that’s a good idea, there’s a lot of confusion about that. Endowments are permanent funds for charities that are set aside for their long term use, and there are two components of endowment that you normally see. One is what we call true endowment, where the donor’s restricted the use of principle and said that the funds to be made long term thie other is quasi endowment, which are so franklin. Most of the endowment balance is that i see where donors have left bequest or other large gifts to charity and the charity’s board, it has set him assad for their long term use and the role of endowment in non-profits i mean, you said long term use, but can we be a little more specific about what the value of endowment is too? Non-profits yes, and i have a very particular perspective on that. I believe that the most effective use of endowment is not to keep the light bulbs on in the door’s open, but to provide funds that really leverage the mission of that charity, allow himto act quickly on opportunities, allow them to expand programs and supporting where there is need. So i see him, and also, frankly, to get him through the economic crisis sees that come from time to time like the one we’ve been in recently and were in in the first decade of this century. And so i believe that endowments are critical components buy-in critical assets for every charity, whether they’re larger, small, whether their hospital, educational institution or a gospel rescue mission is it is it the case? Typically endowment is not spent, the principal is not spent, but the on ly the income or a portion of the income is spending. Isn’t that how these endowments last in perpetuity? Yes, but my endowments, their subject, true and down looks permanent endowments those restricted by donor’s air, subject to state law and under state law under the old upmifa the uniform management of institutional funds act and the uniforms prudent management of funds act, they can spend a percentage of the asset base it’s not limited anymore to accounting income. It can also include a portion of the appreciation. I see catherine tell us a little bit, but the state of what endowments are facing now, especially you mentioned about economic crisis and how maybe that’s affected some of the endowments. Well, the economic crisis has all of a sudden made the need for endowment very clear for all charities. So you hear a lot of talk about it, but in my work i go into a number of charities every year, and i’m looking at their programs. They’re playing, giving programs there sometimes their entire development programs, and i’m looking at endowment because endowment is the most important provides the context for deferred gifts and what i see are both internal threats to endowment and i can go into that a little more if you like as well as external threat to endowment. Yeah, why don’t we? Why don’t we talk a little bit? What? What what’s, the most serious external threat to endowment, external threats, congressional legislation you see congress looking at large and down months. The senate finance committee has been a lot of time studying large endowments, especially back in not two thousand eight, when we saw such large returns right before the crash on dh there looking at ways to require mandatory payouts, they’re looking for ways to tax endowment when you say mandatory payouts, almost like the foundations are now required to spend a certain up five percent of their assets exact that what you’re referring to exactly and there’s been legislation that floated around that for the larger foundations would require a five percent payout very much like private foundations, very much like type three supporting org’s now is this only towards a higher education, kind of in the end, they focused the senate finance committee focused on educational institution endowments. But, you know, just prior to that, they did that big focus on non-profit hospitals and my great concern is that they’re going down a path that some charities arm or charitable than others and more equal than others. If they come to the educational field, then it won’t be long before it spreads a little further, and you also see a lot of local governments looking for ways to tax endowments. Indeed, i’ve i’ve seen press about the greater new york city area, where property tax exemptions for non-profits are on the on the table. We haven’t seen them withdrawn yet, but it’s a subject that’s under discussion and you will see that throughout the northeast and in fact, in some cases charities heir stepping up and making a voluntary payment in lieu of that tax payment, and they’re negotiating payments that they make to the municipalities and the counties in the townships or whatever form that local government takes. What about external, sorry, internal threats to endowment? What does that mean? That’s, the more consistent problem internal threat are simply the malays and lack of attention that sometimes i see when you get this big pool of money that plays such an important part in the operating budget and it rolls out. The investment team is playing, paying a lot of attention to it. But what happens is the number of funds begins to proliferate. The ability to account to donors on an annual basis, drops. You see people creating really small funds. I walked into an institution one time with a fun, very large fund balance with over a thousand funds. They could not put their hands on the governing documents. For those more than a thousand funds, i would say they were distributing and allocating a lot of just by what i would say was folklore and tradition. Amane and they some of the fund balances were only fifty dollars o r five thousand, and i think that represented an intent to build larger funds that never materialized. So they’ve got all these funds on their books all the time required to allocate the earnings the, you know, negative investment values the fees that distribution for the fifty dollars as well as the fifty thousand exactly and then sell your administrative expenses began to climb. It’s those sort of threats that i think that best practices would fix. I see. Have there been any lawsuits are kind of awareness among donors about these kinds of you know, these problems that that endowments going to face, i would say absolutely on a larger scale, you’ve seen the princeton lawsuit that had to do with this supporting organ, which was an endowment, created a tte princeton and buy the roberts and family you’ve seen the lawsuit it to lane from the endowment that was created in the late eighteen hundreds by sophie newcomb to create new come college on the campus of two lane. And in two thousand six the college more or less dissolved that separate college absorb the endowment and created a women’s studies program. That’s it high level view of it you’ve got the barnes museum, which was thie endowment, created by dr barnes and philadelphia for his art collection. You’ve got the knot traditional endowment, but the art contributed to fisk university and the big lawsuit. So mohr and mohr often you’re seeing descendants, especially for these large endowments, whether they’re created a separate institutions apart of a larger pool, you’re seeing the descendants suit. What about states, attorneys general? Are you seeing much action at at that level? Especially curious about that causes the one the case. That you mentioned with the the organization that sort of had that embarrassment of riches, they couldn’t keep up with thousands of funds that they had. I mean, if a state attorney general caught wind of that, there would be pretty serious repercussions. Are you seeing any enforcement actions at the state attorney general level? Not too much. There are some of the most egregious after you have that big lawsuit in hawaii, where the attorney general got very involved with the king kamehameha school trust. I’ve seen some action out of new york, some in the northeast, but for the most part, you take a state like mine, alabama there’s probably one napor brand new attorney general working a portion of their time addressing these sort of issues in their tens of thousands of charities in the state, they’re simply overwhelmed, and i don’t see that they have the time to take on those issues now in new york state, though there’s a whole charities bureau within the attorney general’s office and i think that’s probably the reason that you mentioned them is one of the more activist, although i haven’t seen i’m not aware of yeah, enforcement actions. Of the type that you’re talking about from the a g’s office, not in new york state know not related to endowment. I’ve seen enforcement actions come out of the new york attorneys attorney, general’s office, on other issues, compensation issues, for example, for trustees of scene. But the truth is excessive compensation. Also for the ceo it’s, actually, those kinds of actions, exactly, exactly. And and but you can see it’s a lot of numbers. I mean, they’re what one point three million charities and their fifty states, and they’re all those non nani’s it comes rolling into the a g’s office. I think it’s pretty hard to pick out the issues. Now on my show, katherine, we have jargon, jail. And earlier you you mentioned you met fa and upmifa you did. You did say what they with the acronyms mean, i know, but and i gave you a reprieve from jargon jail because you were you were explaining something else but let’s ah, i’d like to get you get that sentence commuted from for jargon jail. So let’s, let’s, talk about what you missed. U m i n f a a and upmifa u p my f a r upmifa you met fa the uniform management of institutional funds act is the state body of law it’s a uniform law that was promulgated by the uniform commissioners, law commissioners and forty eight of the fifty states adopted it. I want to say it was first put out there by the uniforms, commissioners and maybe nineteen, seventy two or so. And the attempt was to create a universal investment standard because there were several depending on whether you were trusty, whether you’re fiduciary and it was very confusing, it also allowed some relief and gave addressed to some degree what you do with small funds or funds that no longer met. Their original purpose this has been replaced by the uniform, prudent management of institutional funds act, which was put out there in the summer of two thousand or fall of two thousand six. This truly provided one prudent investors standard across all old the you know, whether you were corporate, whether you were trustworthy, whatever form you were in, so it unified those standards, and it put frankly, it provided mohr discretion to trustees and board members in making their decisions that laid out the factors to consider and making investment decisions. And i always believe when you have discretion that you have a little bit higher duty because you’ve gotto do a good job of documenting why you made the decisions you did. It also went a little bit further and giving charity summerlee for these older funds that were too small to be reasonably administered or where the purposes were no longer appropriate or effective or cost effective. See you earlier. You mentioned about best practices that you knew endowments can implement right now to kind of deter or mitigate some of the influences by external or internal forces. Can you talk more about that? Sure, i have. I think of none best practices, and i’m sure i won’t be able to recall them all now without looking at him, but i start with a document you need a document that not only is going to be really clear about the charities, obligations to the family and to the donor, but also addresses flexibility long term provide some non jew judicial relief in the document. You need really good internal standards for management, a way to hold onto documents and have those available a white attract for restricted funds, and that is funds. I’m not referring there to funds restricted as endowment funds, but rather funds within your endowment restricted to a specific purpose, whether they are true and down. Mother, quasi endowment if you’re going to make a distribution for the library in the business school, you’ve gotta have a way not only to track that money going over there, but two on the backside to ensure it was used for those purposes. My, our guest is katherine miree a principle of katherine w miree and associates and you’re listening to the chronicle of philanthropy and tony martignetti non-profit radio coverage of the national conference on philanthropic. Planning. Dafs you’re listening to the talking alternative network. Oppcoll are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics, politically expressed, i and montgomery taylor and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com i really need to take better care of myself. If only i had someone to help me with my lifestyle. I feel like giving up. Is this you mind over matter, health and fitness can help. If you’re expecting an epiphany, chances are it’s not happening. Mind over matter, health and fitness could help you get back on track or start a new life in fitness. Join Joshua margolis, fitness expert at 2 one two eight sixty five nine to nine xero. Or visit w w w died mind over matter. N y c dot com is your marriage in trouble? Are you considering divorce? Hello, i’m lawrence bloom, a family law attorney in new york and new jersey. No one is happier than the day their divorce is final. My firm can help you. We take the nasty out of the divorce process and make people happy. Police call a set to one, two, nine six four three five zero two for a free consultation. That’s lawrence h bloom two, one two, nine, six, four, three five zero two. We make people happy. Cerini durney talking alternative radio twenty four hours a day. You’ve been listening to interviews i conducted from the national conference on philanthropic planning that’s when this show partnered with chronicle of philanthropy to interview speakers at the conference and bring those to you later to expand the reach of that conference. If you weren’t able to be there, i’m in bangladesh, sri lanka and thailand. I’ll be returning next week. As always, you can get our insider alerts and see my live appearances on our facebook page. Facebook, dot com, tony martignetti non-profit radio, the creative producer of tony martignetti non-profit radio is claire meyerhoff. Our line producer is sam liebowitz, and sam is also the owner of talking alternative broadcasting. Our social media is by regina walton of organic social media. I’m tony martignetti hope you’ll join me next friday when i’ll return from bangladesh, sir lanka in thailand and south asia at one p, m eastern time. Next friday, here, on talking alternative broadcasting at talking alternative dot com. Dahna durney wth e-giving thinking. Good ending. You’re listening to the talking alternate network, waiting to get a drink. Duitz nothing. You could. Is your marriage in trouble? Are you considering divorce? Hello, i’m lawrence bloom, a family law attorney in new york and new jersey. No one is happier than the day their divorce is final. My firm can help you. We take the nasty out of the divorce process and make people happy. Police call a set two one two nine six, four, three five zero two for a free consultation. That’s lawrence h bloom, too. One, two, nine, six, four, three, five zero two. We make people happy. This is tony martignetti, aptly named host of tony martignetti non-profit radio. Big non-profit ideas for the other ninety five percent. Technology fund-raising compliance, social media, small and medium non-profits have needs in all these areas. My guests are expert in all these areas, and mohr. Tony martignetti non-profit radio friday’s one to two eastern on talking alternative broadcasting. Hey, all you crazy listeners looking to boost your business, why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com. Are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com. We look forward to serving you. Are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics, politically expressed hi and montgomery taylor and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com talking.

The Chronicle of Philanthropy & Tony Martignetti Nonprofit Radio Interview of Kathryn Miree

I’m blogging from the National Conference on Philanthropic Planning. Raymund Flandez from The Chronicle of Philanthropy is here and we partnered to talk to Kathryn Miree about her upcoming seminar, Endowments In Crisis! Best Practices for Nonprofit Management to Avoid the Abyss.

Crisis and abyss. Sounds ominous.

She distinguished for us between true and quasi-endowment. The former is when a donor demands in writing that her gift be restricted to a particular purpose in perpetuity. Quasi-endowment refers to a bequest or other unrestricted transfer where the nonprofit board restricts the use of the gift. The organization’s board is free to lift the restriction down the road.

I subjected Kathryn to a short stint in Jargon Jail when she introduced UMIFA and UPMIFA: Uniform Management (and Uniform Prudent Management) of Institutional Funds Act. You’ll have to listen to our interview on The Chronicle of Philanthropy website or Tony Martignetti Nonprofit Radio to get the details of these laws and how they impact your nonprofit.

Kathryn Miree
A few endowment management best practices she recommends:

  • strong document retention practices (not merely a written policy) to preserve donors’ written instructions
  • accounting methods that closely track your restricted funds’ earnings, additions, expenses
  • standards for the board to set and release quasi-endowments
  • trustees should not act as investment managers; even if they’re unpaid, you risk proper oversight, which is conducted by fellow trustees

If you’re at the conference you can hear Kathryn in-person at 9AM Thursday. Thank you for sitting for an interview, Kathryn!

Raymund, a pleasure to work with you.

These interviews have me looking forward to my next remote podcast day, at NextGen:Charity in NYC on November 18 and 19. I’ll do podcast interviews on Thursday, 11/18. I’ll run over to Bernstein Global Wealth Management for a lunch program at their midtown office. Then on Friday the 19th, I deliver a workshop at NextGen from 11 to 1.

More live tweeting and blogging and podcast interviews tomorrow. (That sentence has 3 words that didn’t exist just 4 or 5 years ago. I feel so 2173.)