Episode Transcript
JOHN A: Welcome everyone to another episode of the Purposeful Planning Podcast. This is John A. Warnick, founder of the Purposeful Planning Institute, and today, this conversation is going to feature Rick (Richard) Peck and Vanessa Dennye. I'm excited to have Rick and Vanessa joining us to talk about how we can maximize variable impact. And they're going to really give you a quick primer, navigating through the world of Community Foundation and all the different donor choices that are out there. But Rick and Vanessa, we have a tradition in the Purposeful Planning Institute. We love to have the guests that come on this podcast or our webinars share what we call their Purposeful Odyssey. So those are the stories of how you’ve gotten to where you're serving today. You can start wherever you want the story but could you each take about 90 seconds and share your Purposeful Odyssey stories with us?
RICHARD: Sure. Thank you, John. I am happy to start and then, we'll hand it off to Vanessa. So my Purposeful Odyssey story, I guess, is when I started as a financial advisor. And I wanted to help people save money for retirement. I wanted to help people understand how to fulfill their lives and in the ways that they'd like to fulfill them and not have money as an obstacle. So that's why I went into financial planning. And I did that for seven years. But I've always had an interest in estate planning. So it has always had an interest in sort of how that worked. And then about seven years into my work as a financial advisor, I said, “I think I want to see what charitable giving is all about because I got an opportunity to start at Dartmouth College as a Gift Planning Officer and understand how people think about bequest intentions and estate plans.” And so that was my journey toward charitable giving. And then, it was very intellectually interesting. I found it to be very, very satisfying just to see how passionate people were about giving back. And then, I've just continued to lean into that I have been in academia. I've been in healthcare as relates to fundraising and also most recently in a community foundation. And I always feel very fortunate to keep building on that momentum and just to feel like I'm helping the world in a way to help people understand what's important to them and how they can make a difference in the world by giving back to specific organizations that can help those organizations. And also make them feel like they're making a difference. So that's my story.
JOHN A: Great, Vanessa?
VANESSA: Yes. Thank you so much for having me today. My story really is when I began working in city government in tourism and I was able to see the great impact of economic resources being infused into our community. And I really wanted to engage and connect further and understand the landscape of Omaha. I got into fundraising and after many years in government and continued to want to learn and challenge myself to understand the needs of the community. And that's really how I landed at the Omaha Community Foundation. My role focuses specifically on working with families and individual philanthropists that want to engage and see impact and get to know the community in a really deep way. So I get to walk alongside them and support their journeys while enhancing and learning my own. Enhancing my own expertise and really learning and engaging with the community in a new way every day. And that keeps me both really, really inspired and also very action oriented in terms of wanting to see change now and continue to facilitate important conversations to bring change and impact to our community now to meet the needs that we have.
JOHN A: I love that. And I'd like to start by having you both if you would share a little bit of the history of the Community Foundation. They're really relatively young institutions but having a very profound impact, but what's the history and how have we gotten from where it started in Cleveland (if I remember correctly)?
RICHARD: Yeah, that's right, Cleveland in 1914, by a gentleman named Frederick golf. And Cleveland has what's called the Cleveland Foundation. So that was the very first one. And then a few others followed by the California Community Foundation Chicago Community Trust, and then there was one that was established in Canada in 1921, called the Winnipeg Foundation. So today, there are over 700 Community Foundations in the United States and about 1700 community foundations in the world. And so just, briefly a summary of what they do: they make grants out into the community, they support specific projects, they are really set up to improve the quality of life in the community, they are named (as you might imagine) geographically by either the city, the state, region, and province, and they are supported by a broad range of private funding, as well as as public donors who seek philanthropic contributions from different parts of the community. So they are multi-sectors and they also all usually have an endowment that grows and helps to sustain what they're trying to do. So that's a brief history sort of writ large. And the New Hampshire Charitable Foundation, where I was most recently, started 1962. And it was from the remainder of an estate from a former governor, Spalding and sister. So after they distributed a lot of money, they still had money leftover and they said, “How about we establish a statewide Community Foundation.” So that's what they did. And that started very modestly, I think it was around $3 million and today, it's about $1 Billion. Sixty years later. So that I'll hand it over to Vanessa to explain Omaha.
JOHN A: Yeah and so I'm really excited to hear about the Omaha Community Foundation because I think it deserves special recognition. It's playing a very dynamic role in your community and doing amazing things. So tell us more.
VANESSA: Yes, thank you. Yeah, the Omaha Community Foundation has been in existence for just over 40 years. We were really inspired with starting this Community Foundation for Omaha by the Junior League and engaged community members that said, “We really need this resource in our community.” Since then, we've grown to 1.6 Billion in assets. We're one of the top 15 Community Foundations in the country. And to put that into scale, last year, we granted $224 million out into the community, representing more than 17,000 grants to 3,200 recipients. A lot of those are local. We can grant nationally but our expertise is local. And our mission is to maximize the power of philanthropy and to strengthen our community. And we feel that mission every day as we're issuing these grants and making these connections in the community with our philanthropists.
JOHN A: Thank you, Vanessa. So I'm wondering, Rick, could you maybe help us understand how the Community Foundation fits into the myriad choices donors have like private foundations and, as opposed to the community, the commercial donor advised funds which have grown dramatically as well. Give us kind of your take on how Community Foundations fit into all those different donor choices?
RICHARD: Sure, thank you. I do try to position it as four different choices at a really basic level so that people can kind of see these side by side. So first, I usually start with the idea of checkbook giving, which is what most people are used to. You get solicited in the mail by a friend or by a family member to give to a certain organization. So you write a check out of your checkbook and you fulfill that obligation or the idea that you're helping in some small way. Lots and lots of people give by checkbook. Cash is a very common way to give. And so I just like to start by just naming that. The second is a commercial donor advised fund. So the idea of going to Vanguard, Schwab, Fidelity, or another donor Advised Fund sponsor, and what you're doing is you're sort of pooling your money together and to this Donor Advised funding and you could be called a Philanthropic Checkbook — sometimes people call it that — you're pulling your money there, you're investing it, and then you're making grants from one source. So it's from this commercial donor advised fund. You could make 15 grant recommendations at the end of the year (for example) to all of your favorite nonprofits. You're doing it from a centralized place versus you writing 15 different checks. You just call those or write those grant recommendations in and usually the organization will take care of it. And it's very low fees. But most of the time, you're not getting any specific advice at those specific commercial donor advice because they're not designed that way, unless you have quite a lot of money with them. Third choice is the Charitable Foundation or Community Foundation where it's more knee-to-knee and face-to-face. You get more customized attention. It's really set up many times to say, “What are you interested in Mr. and Mrs. donor? And how can we help you deploy your assets in the most effective way based on your interests? Helping the homeless, helping with food scarcity, social justice, veterans, kids, and so on.” Just finding out what their various interest areas are. They tend to be a little bit more expensive than a commercial donor advised fund. But you're paying again for that additional service. And the fact that the Community Foundation really knows the ground and is well-networked amongst other community foundations, just like Vanessa and I are well-networked with each other and many other of our peers. And the fourth is a private foundation. So that's usually set up when people have maybe high six figures or seven figures. And what they're doing is maybe they want to employ their family. Maybe they have a very specific focus. Maybe it's really important for them to have a family foundation and brand themselves that way. But those tend to come with a lot of governance, fees, and a lot of structure, where a commercial donor advised fund or even a community foundation fund could also fulfill those obligations or do that in a much simpler way. Now, that all said, sometimes people do all four. They give out of their checkbook. They have a commercial donor advised fund. They work with the Community Foundation. And they have a private foundation. And they use each of those different vehicles and different entities in different ways.
JOHN A: If I look back 30 years to where things were, neither of you can do that. Because I know that kind of puts you in either early, early kindergarten or even earlier. But when I do that, this landscape has changed so dramatically because in terms of wealthy clients, the private foundation was kind of end-all-be-all. And the progress that we've made with the Community Foundations donor advised funds. I really think from my perspective today, some very, very wealthy clients have both a donor advised fund relationship. And sometimes they have multiple Daffs with multiple community foundations because their family geographically has presence and impact in more than one community. So I'm just very grateful that we're having this podcast today and talking about the dramatic growth and influence of the Community Foundation. I'd love to hear you talk a little bit more, Rick, about how procurement Community Foundation professionals — which really is one of the great advantages that Community Foundations offer to their donors is the expertise of their professional staff — collaborate with donors and with advisors to really try to enhance impact and strategize philanthropic giving?
RICHARD: Yeah, thank you. So, donors sometimes approach us and they say, "We have a certain problem we're trying to solve.” And then, what we'll do is we'll involve their professional advisors, and with their permission, of course, so professional advisors, for the most part that we work with our CPAs or accountants. We also work with Wealth Advisors. We work with family offices, and we work with people who are working in the trusts and estates attorney world. And so each one has its own niche, right? The CPAs are concerned about taxes. Wealth Advisors trying to grow their money or maybe aware of all kinds of assets that they have capital gains Family offices, obviously, you're dealing with very complex situations with their clientele. And then the trusts and estates attorneys are trying to devise wills and trusts, and so on. So we would touch base with all of these individuals through the donor. Now, if we approach or we start with the professional advisor, many times those professional advisors, they might touch on charitable giving at a high level. It might come up as part of their conversations with their clients. But they might not go deep into charitable giving. And that's where they'll pull in somebody like Vanessa or me or one of our peers to say, “You have a pretty broad viewpoint. You know about a lot of different charitable vehicles. Your Community Foundation knows the local community really well. There's other things besides donor advised funds that a community foundation can offer.” So let's have a conversation about outright giving as well as deferred giving or future giving, and what better place to start many times in a community foundation because they can really, really just sit down and say, “What is the donor trying to accomplish? And how can we integrate the professional advisors into the mix to make sure that we're serving the donors as well as possible, and being that quarterback sometimes between all of the different parties to make sure things are going smoothly?”
JOHN A: I think that's just an invitation for people to race in the both of you for the help that you can give them. I'm curious, Vanessa, could you and Ric (maybe you want to add to this) give us some profiles of who those typical clients might be that show up seeking the assistance of a community foundation?
VANESSA: Yes. So, I think one point that has been made to me by a business leader in the Omaha community that really resonated for me was hearing this leader say, “In my professional life, I would seek out experts and advisers before making big business decisions. Why wouldn't I do the same for my philanthropy?” And I think that speaks to the value of having experts in this space that do this every day. A lot of the folks that I work with philanthropy are not their full time job. It is something they do because of their family legacy and the importance of that for their family but they have day jobs. And so they really look to the Community Foundation to support their philanthropy and think about it day-to-day and help manage both the operational and administrative aspects of giving, as well as making those connections and helping facilitate important conversations around values, making those connections to organizations that are aligned with those family values in the community. We often see donors who are also going through some succession planning, the transfer of wealth. We're seeing that every day and I think every family that I'm working with is in some stage of planning for succession. Engaging the future leadership of their family philanthropy. Preparing them for those conversations with nonprofits and how to make decisions about their investments philanthropically as well as managing those aspects. And then providing that education to really further not only donor intent, but just being a leader in the community and networking with other foundation leadership that might be at the same stages. They are to continue to evolve and grow their foundation and their philanthropy to meet the needs of their family. So I think for us, being a resource in that space and an expert in that space, collaborating with those advisors that are seeing needs for the families, pulling us into those conversations, collaborating and then supporting the families then the ultimate goal is that impacting the community.
JOHN A: Rick, what can you say about the profile of a donor you physically work with?
RICHARD: Yeah. Just adding on to what Vanessa is saying, when I think of the central theme with a donor profile, they're coming to a community foundation because the Community Foundation can help them in all different types of ways with a variety of different topics and technical expertise as well. So it's a good hub. It's a good starting point. And fairly agnostic. We're really going to the individual and saying, “Well, again, what's important to you? We have ideas but let's start with what's important to you.” So and then, I'd say entry points. The donor profiles would be like a CPA might make a referral because the donor has a tax event coming up. And they felt like this is a good time to introduce them to the Community Foundation or if it's a trust in the state's attorney, classic is that they're trying to devise their will or they have a complicated estate plan. They're thinking about multiple charities that they want to give to and how can the Community Foundation help them decide not only what charities might be helpful to them and what nonprofits but also what different types of funds are appropriate in a legacy kind of way. And then I'd say with wealth advisory that they know a lot of different types of assets these individuals have. Maybe there's a wealth event. They've come into money, they've either inherited money, they have a stock that's going public, or there's something where they sold a business, and some of the things that Vanessa was mentioning. Those are the triggers to have them come. And so, sometimes there's something prompting them to make a decision. And that's the time where the donor sits down and says, “Finally. I'm at a point in time where I really want to give this a lot of sight and this particular event has forced me to sit down and do it.”
JOHN A: I think this is a natural segue. But as you talk about these differing distinctive profiles of donors, this goes back to that word you use at the beginning, Rick, check writers. There are so many other possibilities for what assets a donor might employ and draw to fund what they want to do philanthropically. Could you talk, Vanessa, a little bit about the different types of assets which you, as a community foundation, would be willing to accept and deploy on behalf of the donor?
VANESSA: Yeah, absolutely. We see requests for all different types of assets to be processed. And I will say broadly, that is expertise that lives within the community foundation so that we can be responsive to those types of requests. We often see appreciated stock is something that Community Foundations are able to process. And we often will get requests from nonprofits as well, that a donor may be approaching them with real estate or some other specific asset and they are not equipped. Do they have bandwidth or infrastructure really to accept that donation? So we can be a solution in those spaces when both a nonprofit and a donor are seeking an option to help process a gift. Just recently, and I think a lot of Community Foundation's are trying to understand the cryptocurrency landscape and what that looks like. Rick, you might have to help me here. I'm trying to think of other unique assets like farmland in Nebraska is something that comes up a lot as well.
RICHARD: Yeah. tangible personal property like artwork, jewelry, sports memorabilia, antiques, sometimes they say things that are under the bed, and they don't know what the value is that could be $500 or could be $500,000. And I'd say life insurance to life insurance, cash value, people are trying to figure out what to do with that 40 year old life insurance policy. If they should donate it or they should maintain it. They should donate it and have the nonprofit, the Community Foundation, cash it in or maintain it. Those are definitely discussions. And then I'll just mention one of the — I wouldn't call it necessarily a non-cash asset — IRAs and the fact that people are making required minimum distributions. And so if they're forced to do that, and they don't want the money and they don't want to be taxed on it, they can take what's called a qualified charitable distribution from the IRA and put it directly over to the nonprofit without it touching their taxable income. So that's technically, if you call it non-cash, but it's not your checkbook, so to speak, it's still a different way to give.
JOHN A: But that's a great way to leverage an asset that you want to deploy now rather than make charities wait until you die to get the benefit of that asset. These were wonderful examples. Rick and Vanessa, any parting words or wisdom. I will say, we we've recorded this in advance of Rendezvous. Both Vanessa and Rick are going to be at Rendezvous. There'll be laying roundtables at the Rendezvous. I'd love to have those listening. Seek them out. And but let me give you both, let's say 30 seconds feature so to say farewell and offer any parting wisdom here before we say goodbye today.
RICHARD: Well, I'll say that people probably don't know this, but half a trillion dollars a year is distributed to charity in the United States. And so it's in all of our best interest to make sure that we're bringing up the philanthropic conversation with people because they're already doing it with or without us. And to make sure that they have the tools they need and the guidance. They're seeking to make sure that they're making a really big impact or a very purposeful impact in the world and the way that they want to.
VANESSA: And I would just add that I think Community Foundations are a tremendous resource for the advisor network and the depth of expertise that's available at a local level and very available is tremendous. And so get to know your community foundation representative and explore how you might be able to partner with them in terms of bringing the right client forward. And I would also just add that you think about the competitive nature of, we're talking about different fund types and national providers and all these different spaces and resources that are out there in this space competing for the opportunity, I guess, to support philanthropy. At the end of the day, it's all about the impact in the community and the community foundation perspective. Those fees, all of that really is intended to stay local and help build that community expertise and knowledge and that resource for that space.
JOHN A: Vanessa and Rick, I think it's impossible to spell community finance foundation without using the word collaboration in the spelling of it. You guys are amazing collaborators. I love that point, Vanessa, about the willingness to collaborate with advisors. You collaborate with other charities. You collaborate with the community leadership itself. I just can't thank you enough for what each of you are doing. And more broadly, your peers within the community foundation system are doing so. Thank you for being our guest today. This has been a wonderful podcast.
RICHARD: Thank you, John. Thanks for having us.
