NonProfit News Pod: BDOG Trends and Trust Based Philanthropy

Jeff Holden: [00:00:00] Welcome to this nonprofit podcast NewsPod. This is a dedicated news pod, the fourth in a series of five specifically addressing our Sacramento Region Community Foundation's Big Day of Giving. Or as we are continuing to say, Be Dog. I'm joined with Kelly Siefkin, Chief Philanthropy Officer with the Community Foundation.

Kelly, welcome. 

Kelly Siefkin: Hi, good to see you. 

Jeff Holden: Likewise. And today, what I'm really excited about, we're talking about something in trends. You know, what are we seeing in philanthropy? What's happening? What's going on in what people are demonstrating through giving? Get us started. 

Kelly Siefkin: There are a lot of trends in philanthropy right now.

It's exciting because I think things ebb and flow, and there's some really interesting ones that we're paying attention to. [00:01:00] One is a rise in trust-based philanthropy, and that's much more of a, you know, buzzword. It's a belief that the nonprofit that you choose to support meets the requirement of doing the work.

So I think you have to think about it as trusting them to do them and releasing control or expectations. I like to do an analogy of flying when I get on the plane. I let the pilot do his or her job. When I go shopping, I buy the clothing that's available on the rack, not go into the back and ask them to make me something special.

So really believing that the nonprofit knows what the challenges are and how to address those and trusting them with your philanthropic dollar. I think another one is younger, younger donors are looking for engagement. And I think there's the different types of engagement that are so of interesting.

You know, I think volunteerism combined with crowdfunding. I think gone are the days of people just mailing [00:02:00] in a check and being done with it. I mean, don't get me wrong. Jeff, writing checks is still really, really critical at a, at a important part for nonprofit organization remaining high. 

Jeff Holden: Still works just fine.

Kelly Siefkin: Yeah, but more people wanna give in more than one way. So that's kind of something interesting that we have been noticing. Another one is the great wealth transfer. I know that people have been talking about this for some time now, but we're seeing this huge number of baby boomers. They're really expected to leave trillions of dollars when they pass, and much of it will go to their children, but not all of it.

Much of this wealth is gonna go to nonprofit organizations. There's huge tax advantages, you know, for anyone who is thinking about leaving dollars to their children. If they don't want, if they want to avoid some inheritance taxes, there's some great opportunities by working with nonprofits. I think women in philanthropy

Now, we know that women on average live longer than men and incre- increasingly are [00:03:00] increasing their earning potential. So these disposable dollars are really pos- a potential source of philanthropy. And for decades, women have usually shaped philanthropic decision making for the household, but now the amount is going up thanks to, like, sort of longevity and higher income that we're seeing.

A big one is DAF. Those are the donor advised funds. Donor advised fund is a charitable fund. It's either expendable, which means liquid or it's endowed in perpetuity, or only a portion of that can be spent. And whoever holds the fund like a local community foundation will invest and grow those dollars for the donor.

Then the donor advises or selects organizations where they'd like to send funds, the community foundation, then sends those dollars out stats. But I wanted to share some statistics from the National Philanthropic Trust, contributions from DAFs, $85.53 billion. [00:04:00] That's an all- time high and a 9% increase from two years prior.

DAFS are the fastest growing charitable giving vehicle in the United States because it's one of the easiest and most tax advantageous ways to give. So donor advised funds are everywhere. Another one that I thought I would share is unlike the, uh, very common phrase, cash may no longer be king. When it comes to philanthropy, we're seeing a, a rise in non-cash assets.

Looking at sort of the IRS, non-cash asset donations from, really has increased over the last few years. I think stocks, homes, securities, property, vehicles, commercial building, land, all of the things that are not stored in your bank account are things that more donors are making contributions with to support nonprofit organizations.

Workplace giving is also changing. I think a lot of combined campaigns that used to exist now are very much replaced by individual matching from a [00:05:00] company or incentivizing or other maybe socially responsible initiatives. So I think that has to do a lot post- COVID with people gathering less at their work between me learn about opportunities.

And that really, I think, dovetails into crowdfunding as well. Crowdfunding has slowed slightly since its boom in COVID. It hasn't gone away, but like all things, philanthropy has these trends, and crowdfunding is a little bit less hot right now, but we'll see what comes out of that shortly. Another one I wanted to mention was board membership.

Hmm. Mm-hmm. It looks a little bit different in terms of recruitment than it may have done in days past. A lot of boards used to be invite only, and some still are, but more than ever before, I think organizations are grateful when a caring and committed individual comes and volunteers to serve on their board.

So I think a lot of nonprofit organizations like when a CEO of a company can serve, but you don't actually have to be the number one for a board [00:06:00] opportunity anymore. I think it's really important to engage younger and, and growing leaders within companies, and board membership is a great place to do that with nonprofits.

I'd like to end with QCDs, if I may. I know more acronyms, more acronyms, but often- Please do 

Jeff Holden: tell. 

Kelly Siefkin: A QCD is a qualified charitable distribution. Um, and anyone who's taking a required minimum distribution out of their IRA after age 70 and a half is able to take a portion of that and give it directly to a nonprofit organization to avoid having that count as taxable income.

So a lot of people are paying attention to that. If they're already philanthropic and are gonna grant money to those organizations, they're skipping the step of it, coming to them, landing as income, then writing a check, paying tax on that, and sending it out. All, anyone who has, is doing a required minimum distribution has these opportunities to do a [00:07:00] QCD, and it's fantastic.

We're seeing QCDs everywhere fueling the great work in our community. 

Jeff Holden: And these are all the positive forward trends- mm-hmm. ... whether they're aggressively trending like a hockey stick or even just trending upward. 

Kelly Siefkin: Yeah. 

Jeff Holden: The value to many nonprofits in these cases too is that these are unrestricted funds, so they can use them in any way, shape or form that they see the best use of, as you mentioned in trust-based philanthropy, but many of these are and can be unrestricted, which is so challenging for many nonprofits when they get these criteria like a grant might have, you know, the, the borders on what it can do and, and the confinements of what they can do, they still need to operate the organization.

Kelly Siefkin: And I think it's really important when we talk about trust-based philanthropy, more companies that are giving grants or groups that are making grants that we're hopefully seeing a reduction in [00:08:00] the, in the challenges that it takes to apply for those things and leaning into trust-based philanthropy, because at the end of the day, philanthropy gives you the power as an individual donor to create change.

That's what you get to do with your philanthropy. How it's done is up to the nonprofit organization doing the work. So meeting in the middle, what, however you're gonna give those dollars, letting the nonprofit really achieve that as necessary is truly the best of both worlds. 

Jeff Holden: And I loved your analogy about the plane.

You, you're not gonna go to the pilot and say, I'm gonna tell you how to fly this thing and here's- No, of course. ... here's what I'm gonna do with money. It'd be like saying, "Hey, I, I wanna just get my money to the tires." 

Kelly Siefkin: Exactly. 

Jeff Holden: Well, but the tires aren't gonna get you from point A to point B You wanna

Ultimately, you want the plane to get you from point A to point B. How you do that, I don't care. Just- 

Kelly Siefkin: Exactly. ... 

Jeff Holden: make it happen. 

Kelly Siefkin: You got it. 

Jeff Holden: So on the moving forward side, that's what we just discussed on the, on the trends. What are some of the barriers to philanthropy? What are we seeing today that are, are some [00:09:00] of the, the roadblocks where people are questioning what's happening there?

Kelly Siefkin: I think the very first one is perception. Yeah. And a lot of people think that philanthropy is for Daddy Warbucks or Oprah or the Rockefellers or that monopoly guy. People think I'm not a philanthropist. I don't even own a monocle or a top hat. And I think this is one that we need to help everybody get past.

We need to help change the perception because philanthropy is doing good and you can, everybody can do that in our community. So I think we have to make philanthropy accessible to everyone, which is what Big Day of Giving comes in and does with a $10 minimum gift each year, but also the belief that you can do it in any way that is meaningful for you.

So changing perception is the first start. 

Jeff Holden: Mm-hmm. 

Kelly Siefkin: Um, the second one is money. A lot of people feel that major gifts are out of their league. Maybe they're carrying around student loans or they have a new mortgage that they're paying or they don't earn enough to [00:10:00] care yet about tax breaks. But I, I want people to realize that the philanthropy is very personal, so I don't want the number of zeros on the gift to impede anyone.

I want everyone to just start giving. Another one that I hear time and time again is time. I'm busy, family or school or work or whatever. Maybe you already volunteer and your, and your schedule is busy, or you need a break from volunteering. I hear that one as well. Or maybe board service seems terrifying.

I understand that people's calendars are booked, but I always encourage people to flip the script and figure out how you can get more out of this. I think it's like life. What you're putting into is what you're getting out of it because I think a lot of barriers are things like, how do I work with my boss and time away will only create a problem, but how can you create good for your community that really fills you and, and makes you a greater [00:11:00] player?

So, you know, fold it into what you're already doing or considering what you could do without and make a little bit of an exchange. Mm-hmm. Another one is that it's complicated. So- 

Jeff Holden: Nonprofit. So much. I know. I have to do all this work to get there. I know. 

Kelly Siefkin: And, and nonprofits can make it hard to give. There are a lot of options and there are thousands of deserving nonprofits in our region.

And I think that there's a lot of unfamiliar lingo and acronyms, and I'll speak for industry and I'll say, "I'm sorry for that. We're working on it. " But maybe you've looked into setting up your own private foundation before, or, but then there's that idea of like, "Oh, I have to do one more set of taxes, and then I would need to have someone manage it, and then it feels overwhelming."

I really encourage you to reach out to the community foundation, a professional advisor, and find out how it doesn't have to be complicated. Mm-hmm. Find out how you can streamline it. We [00:12:00] talked a little bit earlier about donor advised funds. The reason they're so popular is they make giving easy. I think when people set up a donor advised fund, they're shocked that they basically have a charitable checking account that they can draw from.

They don't have to track down receipts. Someone else, the foundation, is making sure that everyone is in good standing, doing all the administration. It doesn't have to be complicated. One of them is the old WIFM, what's in it for me. And I think if you approach philanthropy with this is your only question, you actually might not get very far, but if it's a barrier to you, I encourage you to think about it from a perspective on how it might improve our community.

I think a lot of people, you know, want a very robust economy and maybe you wanna solve, solve a local challenge. So one idea is maybe you're gonna provide some lunches for communities with promise, and that really leads to greater school attendance, and potentially that leads to greater graduation rate, and that gets something [00:13:00] cooking where more and more individuals are coming back and contributing to the community in a really positive way.

And I think you have to understand that what's in it for me needs not to be dollar for dollar, but dollar for this community. The lack of impact insight. And I've been there. I, I support a lot of individual organizations. I really get this one. This is the belief that my money maybe won't make a difference for this huge problem, or I can't see the difference that my money is making.

It's one of those two things. And I can understand how people think that, but I wonder if it's actually true, and that comes from our hyper local example of Big Day of Giving. We raised $13.8 million on Big Day of Giving last year, and tens of thousands of donors turned out and gave a, a contribution to their favorite nonprofit organization.

More than half [00:14:00] were $50 or less. Well, let me think about that just for a minute. A lot of small gifts making a huge collective impact. And then finally, I think another barrier for folks, they don't want others to know. And that sounds more like a preference to me than a barrier, but I understand that everybody responds to FOMO.

My suggestion is that giving should feel good. And if you don't want anyone to know that you're kind, generous, thoughtful, community-minded person, that's fine. Anonymity is available and nonprofits want to keep you as donors so they're motivated to respect your wishes. 

Jeff Holden: Sure. Whatever it takes to make you feel good.

Kelly Siefkin: Exactly. 

Jeff Holden: Absolutely comply. Big day of giving. How does it address these issues? 

Kelly Siefkin: I think the big one is that unrestricted is the hallmark of Big Day of Giving. That's the core of trust-based philanthropy. 

Jeff Holden: Mm-hmm. 

Kelly Siefkin: All dollars raised, every single dollar raise for Big Day of Giving is unrestricted. So I think Big Day of Giving really, [00:15:00] really lifts up that to the start.

That $10 minimum gift really lowers the threshold and provides accessibility. So hopefully we're addressing the perception one and the money one. Big Day of Giving now accepts stocks through donor advice funds, through QCDs. So cash is actually no longer the only giving vehicle, which is really exciting.

People can think about their contributions for Big Day of Giving in a new way. We hope that we've removed the complication. While there are many, we have tools to help you sort by mission category or by zip code if you want to support organizations in your neighborhood. We can, we can minimize the number that you have to choose from, which is great.

You can also give anonymously, which is wonderful. Plus there's kind of an interesting opportunity that you can sign up and pledge volunteer hours for Big Day of Giving. So hopefully we're addressing some of those barriers and, and meeting those top trends in philanthropy. 

Jeff Holden: And there's, there's one last piece of this conversation that I, I do want you [00:16:00] to address.

For those who maybe really just don't have the ability to give, and I mean in money, in monetary contribution, there's still ways they can participate in Big Day of Giving, correct? 

Kelly Siefkin: Absolutely. And I think the very biggest one is to spread the word. Mm-hmm. We provide a variety of tools for anyone to share on their social media or with their friends.

There are so many ways that you can let the world know that Big Day of Giving is going on. And if you don't have the opportunity to give, you actually can create a page where you highlight your favorite nonprofit or nonprofits and spread the word and invite others to give, and you can actually track and see how much was raised due to your promotion.

So there's so many, so many ways if giving financially is not an option this year, work with Big Day of Giving to figure out there's ways that you can also spread the word. 

Jeff Holden: That's wonderful because I know there's a lot of people, maybe they're just apprehensive and maybe they just want to get their feet wet this year- Yeah.

as they look forward to what next year [00:17:00] could be for them. And then there's so many issues and reason why people may not be able to, given circumstances that we don't know at this point in time, but it does give them the ability to participate, to say, yes, they were a part of it. And they saw this community philanthropically step up to raise all this money and they still were involved.

So that's really encouraging. And again, I would imagine that that's the same website you wanna give that one more time before we wrap. 

Kelly Siefkin: Bigandgiving.org. And I, I challenge everyone if they're capable of making that $10 gift to consider it on Big Day of Giving, because thanks to Western, Western Health Advantage and a few other companies, we have prizes to boost your gift, and that carries a lot of weight.

You can make a $10 gift and your nonprofit might be able to win additional $500. 

Jeff Holden: In some cases, that's just one drink at your favorite coffee shop. 

Kelly Siefkin: Exactly. 

Jeff Holden: Well, Kelly, thank you so much. I really appreciate the information. The trending is really helpful to understand where things are going [00:18:00] for some of those who are a little bit more sophisticated in their giving, as well as for those who are first time givers coming into Big Day of Giving.

So thank you for all that information, and we will put all the, uh, details in terms of links in the show notes as well. 

Kelly Siefkin: See you big day of giving. 

Jeff Holden: Thanks for listening. If you like our program, please subscribe, give us a positive review, and, and share with somebody you know. This nonprofit podcast Newspod is a production of Hear Me Now Studio.