Charitable Giving Videos

MICHAEL VOSS: Nonprofits and Donor-advised Funds: Perceptions, Progress, and Potential Impact. I'm Michael Voss, publisher of Stanford Social Innovation Review, and the host and moderator of today's webinar.

The Indiana University Lilly Family School of Philanthropy and Schwab Charitable recently collaborated to field a research study focused on the interaction between nonprofits and donor-advised funds, or DAFs. The resulting report, Nonprofits and Donor-advised Funds: Perceptions and Potential Impacts, examines DAFs from the perspective of nonprofit organization [...unintelligible...] of nonprofits experiences over the past three years, and an in-depth nonprofit case study review. The report also features a spotlight on nonprofits' experience during the COVID-19 crisis and how DAF donors responded during these times. Amir Pasic, the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy says, and I quote, 'This new study expands understanding of a rapidly growing form of charitable giving and provides valuable suggestions for both nonprofits and DAF-sponsoring organizations based on the latest research.' What did this research uncover? Today's speakers will unpack the findings from this study and further share their perspectives on successful partnerships between nonprofits and DAFs.

Joining us today is Una Osili, a noted Ph.D. and the associate Dean for research and international programs at Indiana University's Lilly Family School of Philanthropy. An internationally recognized expert on economic development and philanthropy, Professor Osili speaks across the globe on issues related to research and policy in the fields of philanthropy, household behavior, and economic policy. Joining us as well is Fred Kaynor, the Vice President of Business Development and Marketing at Schwab Charitable. Fred brings over 20 years of financial services experience. He was formerly with MasterCard Worldwide, where he held senior level positions in customer marketing, global sponsorships, and account management.

Before I hand it off to our speakers, I want to mention that this webinar is part of the Giving with Impact series produced by SSIR and supported by Schwab Charitable, who helped with the selection of speakers and topics in the series. The series is designed to stimulate a discussion among the philanthropic sector around ways to maximize philanthropic impact. Through webinars like today's and a series of original podcasts, we hope to create a collaborative space for leading voices from the philanthropic ecosystem to engage in both aspirational and practical conversations on ways to achieve more effective philanthropy. You can find out more about the series by visiting SSIR.org/GivingWithImpact. Next slide, please.

With this, let me turn things over to Una and Fred to take us through their findings, and hand it over to Fred.

FRED KAYNOR: Next slide, please. Thank you, Michael, and thank you, Una, for this really exciting opportunity to share the finding of such an important and relevant research study that will help all of us to achieve maximum impact with our philanthropic plan, and, ultimately, support nonprofits in the most effective way possible.

So Schwab Charitable is committed to, and by its very mission and by its design, committed to helping to increase charitable giving in the United States. The results of our 2020 Donor Survey suggest that 65% of Schwab Charitable clients said that they've increased their philanthropic giving as a direct result of access to such an efficient platform for their charitable giving strategy. We've done a lot of research and there's been a lot of research fielded in the industry and sector around nonprofits and donor-advised funds, but largely those efforts have been focused on donor perceptions. And this is really, we believe, the first research study of its kind that really focuses on the perceptions by nonprofits of donor-advised funds, and is an in-depth effort to try to determine how and where donor-advised funds can truly be additive to nonprofits in terms of their efforts around development and fundraising. So the opportunity here is to engage more deeply with nonprofits in a manner that will truly be of maximum impact to them as they face an unprecedented time of challenges associated with their fundraising and their development efforts.

So, with that, if I may, turn it over to Una, please.

UNA OSILI: Thank you, Fred, and thank you, Michael, and thank you to all of you who have joined us today. We know that these are unprecedented times for nonprofits, and for the sector and our world as a whole. Before we begin, I'd like to start by acknowledging all the researchers and partners that participated and contributed to this project. Specifically, my colleagues from the Lilly Family School, Sasha Zarins and Jon Bergdoll, who played lead roles on this project.

Before we begin also, I think I'd like to just share a few words about the Lilly Family School. Many of you in the audience today already are familiar with the school. It is the world's first school dedicated solely to the study and teaching of philanthropy, and I feel honored to have been part of the school's growth over the last few decades. Indiana University has been at the vanguard of philanthropy education, establishing the first degree programs in philanthropic studies, the nation's first Bachelor's degree, Master's and Ph.D. degrees in the field. Today, the school plays a leading role in moving philanthropy forward across the country and around the world. Especially in this moment of crisis around the world, the school has been at the forefront of collecting data and sharing knowledge. And it's with that background that we are pleased to collaborate with Schwab Charitable on this project. Next slide, please.

To get started, I'd like to just share with you why we conducted this study and what we hoped to find. To provide a bit of context, grants from donor-advised funds reached an all-time record in 2018 of $23.42 billion, the highest level ever recorded. And between 2014 and 2018, grants made from DAFs increased 90%, over four times as quickly as growth in giving by individuals and total giving during the same timeframe. In fact, when we look back at the last few years, donor-advised funds have been not just increasing, but have gained attention from donors, nonprofits, scholars, the media and policymakers. Our team has actually calibrated questions that we've received over time, and donor-advised funds typically rank in the top three in terms of just volume of questions that we receive on an ongoing basis. In addition to the ongoing set of questions emerging in the field, there is also a gap that we have uncovered. Although many are very curious and very interested in learning more about donor-advised funds, there has not been as much research on their growth, and especially research that focuses on the nonprofit sector and is centered on the experiences of nonprofits during this period of record growth. So to bridge this gap, our research team conducted a two phase research study. Our goal was to better understand how nonprofit organizations interact with and perceive donor-advised funds. And to summarize our research focused on three big questions. The first one, how do nonprofit organizations perceive DAFs? The second, what is the process? How do nonprofit organizations actually receive donations and what challenges do they encounter along the way? And, finally, understanding that this requires both donor-advised funds sponsoring organizations and nonprofits to work together, what are some areas where both sides of this donation process can work more effectively to improve the DAF process, and, ultimately, to achieve more impact and effectiveness in the sector? So, that is a big picture overview.

Now, with that, I'd like to turn to the next slide and here, I'm going to take you behind the scenes to learn a little bit more about the design of the study, the data underlying the study, and the methodology that we used. Keep in mind, our team has had to really expand our work during the pandemic and especially in light of all the changes that the sector has experienced. And so when we started this project, we really did want to design it to be a national sample of nonprofits, and we're very pleased to say that the sample that we're sharing with you does embody and reflect the nonprofit sector.

We also recognize that it's important to understand the nonprofit perspective of DAFs. Perceptions not only affect how and when donor-advised funds are used, but they also affect policy-makers' decisions about the rules and regulations, and, ultimately, the long-term efficacy of DAFs as a philanthropic vehicle. So we also wanted to make sure, in addition to representing different types of organizations by revenue and asset size, you can see that the bulk of our sample is actually made up of small organizations that are under $1 million in revenue, and that's typically what we see in the nonprofit sector as a whole. When we look by sub-sector, our sample largely mirrors the nonprofit sector, with a representation among arts organizations, education nonprofits, environmental groups, human services organizations, and even spanning into some areas such as international.

And our goal was to provide as comprehensive a view of the nonprofit sector, and to our knowledge, this is one of the first studies that provides an in-depth view of donor-advised funds on the landscape with a centering on nonprofit organizations. It's also important to realize that we conducted a quantitative survey, but also interviews with nonprofits. The survey was conducted over a two-month period in early 2020, included a range of questions that touched on nonprofit perceptions, experiences, and the processes used to accept donor-advised fund gifts.

Now, on the next slide, here, I think it's worth noting that in addition to collecting the data, which is critical, we also went further and conducted interviews with six nonprofit organizations around the country who had received gifts from donor-advised funds in the past three years. These interviews were used to gain a more in-depth and nuanced understanding of how nonprofits interact with donor-advised funds. The value of this qualitative approach is actually worth emphasizing because these questions allowed us to go deeper into the why and the how nonprofits engage in the donor-advised fund process, and the potential to actually uncover the areas that are challenging or need improvement as we move forward were critical as we designed and conducted the interviews. So I do feel that in doing so, this study actually was comprehensive, but also moved us forward in our understanding of donor-advised funds and nonprofits.

On the next slide, I'd like to highlight some of the key themes of this project. Taking a step back, for those you who want to go deeper, the full report provides, first, an overview of the field of donor-advised funds. It also provides an overview of the policy issues and policy questions, and summarizes some of the research on the donor lens, as well. What we do in this project, though, is unpack nonprofit experiences with donor-advised funds and put this in a larger context. The full report is available on our school's website, and we don't have time, unfortunately, to cover all of the details that are included in the report. What I'd like to do in this webinar is touch on some of the key themes and foreshadow some of the findings. So to organize the findings, there are three key concepts.

The first is around perceptions. Perceptions are important because, as we know, donor-advised funds are relatively a new vehicle in the field of philanthropy, at least compared with some of the other ways of giving. What we found, importantly, is that experience with donor-advised funds tends to decrease concerns for many recipient organizations. So experience matters. The second key finding onto the theme of perceptions is that the donor relationship is very important, understandably, for many nonprofit organizations, and the concerns that we see reflected in the data and in the interviews reflects concerns about disruptions and the relationship between donors and nonprofits. It's also important to note that many nonprofits that we surveyed, a majority, are encouraged by the opportunities provided by DAFs to connect with high-net worth donors. So that's the first key theme.

The second key theme is a more, you could say practical theme, which focuses on the processes that nonprofits use to accept, manage, and track and solicit gifts, and to also acknowledge those gifts. The vast majority of surveyed nonprofits tend to receive gifts from DAFs, solicit gifts from DAFs and are prepared to receive the gifts. However, many recipient organizations are very interested in how they can communicate with their DAF donors more effectively. They also highlighted issues around acknowledging, and recognizing, and thanking their donors. And we did identify areas of confusion, specifically how to solicit gifts and manage the administrative burden associated with DAFs.

The final theme is one that we spent quite a bit of time on, and that was asking nonprofits, themselves, for specific recommendations to allow their organizations to work more effectively with donors and with sponsoring organizations.

FRED: Next slide please. And so what we found... thank you, Una. Thank you very much for sort of laying the foundation of the research study and its structure.

What we found with Una and her team's help and insights in conducting these multiple interviews and coming up with key findings that are actionable, is that, really, there's a twofold opportunity here from a donor-advised funds perspective. We have an opportunity to build upon best practices that many nonprofits already employ to leverage donor-advised funds as effectively as possible in a manner that's additive to their development and fundraising efforts, and we have an opportunity to increase awareness among nonprofits that may have a comparatively lower awareness of donor-advised funds, and how they can be additive to fundraising and development efforts. And we are going to use the findings of the study to address both opportunities in a manner that is going to be comprehensively supportive of nonprofits so that we can make sure that our solution is as efficient from the nonprofit perspective as it is from the donors. So next slide, please.

Una, if I may turn it back to you to share some of the key findings here. This is a great statistic.

UNA: Thank you, Fred, and thanks, also, for your partnership throughout this process.

One question that our team really set out to answer is how prevalent is the receipt of donor-advised funds among nonprofit organizations? And so with that, the finding that I'd like to start with is this data point that I think really did get my attention and the attention of our team. Within our survey, a majority of organizations, 70% of nonprofits surveyed, had received at least one gift from a donor-advised fund over the past three years. Why is this important to note? Keep in mind that although donor-advised funds are relatively new, they have been part of the nonprofit landscape for quite some time, but in the beginning, in the 1930s, they were mostly held at community foundations. And over time, we've had a growth in donor-advised funds sponsoring organizations and a growth in accounts. To give you a sense of the numbers here, based on the National Philanthropic Trust's annual report, the most recent data suggests that there are more than 593,000 donor-advised fund accounts, with over $72.4 billion in charitable assets. So being able to have that counter statistic on the nonprofit side to see that a majority of organizations are, in fact, receiving donor-advised funds is worth noting.

It's also important, and I think the takeaway is that the receipt of donor-advised funds does vary by revenue size. In particular, about 45% of smaller nonprofits with revenues below $100,000 had received a DAF in the past three years. In contrast, 100% of larger organizations had received DAF gifts. So this is certainly a place where we see differences by size, but overall, the finding here is that DAFs have become much more widespread in the nonprofit sector, and this is a statistic that I think we can continue to monitor going forward. The data here really do aluminate some of the questions that we have been asking, and I think many others in the sector.

Turning to the next slide, in addition to the prevalence question, another aspect of the research is to actually go a bit deeper to understand what challenges and opportunities nonprofits themselves perceive with regards to donor-advised funds.

So let's start with the moments that we're in, where there is increasing interest in many nonprofit organizations in thinking about sustainability over this period where there's a great deal of economic and other types of uncertainty. So, here, what we did find is that many nonprofit organizations were encouraged by the ability to reach wealthy donors, high-net worth donors, to cultivate and achieve larger gift sizes, and, ultimately, to receive unsolicited gifts. And we asked organizations to rate how effective or concerning certain aspects of donor-advised funds were. In general, gift size emerged as one of the key encouraging factors related to donor-advised funds. Forty-five percent, nearly half of our sample, expressed a positive benefit of donor-advised funds associated with gift size. And many of the positive perceptions were driven by organizations that had actually received gifts from donor-advised funds compared to organizations that had not received donor-advised fund gifts.

So, with that, I'd like to turn it over to Fred to see if these findings resonate with his own experience, especially in this period where, as we noted, there is quite a bit of uncertainty facing nonprofits and the economy as a whole.

FRED: Thanks Una. And the findings do, indeed, resonate very much with us at Schwab Charitable, and I think, more broadly, among DAFs. We really see that there's an opportunity here for us to engage with nonprofits in a manner that helps them understand exactly how to leverage our solution in a way that achieves some of the key opportunities that were articulated by Una earlier.

What we found is over the first half of this calendar year, over 60% of contributions made by our donors to their donor-advised fund account were in the form of appreciated non-cash assets. We also hear a consistent theme that, as I said before earlier, people are able to and inclined to give more as a result of the efficiency that's offered them with and through a donor-advised fund platform. So let me explain a little bit here.

Our platform is, as I said, highly efficient in its ability to help facilitate the process of donors receiving a variety… or contributing a variety of different kinds of assets, including cash, but, you know, more importantly, non-cash assets, like publicly-traded stock, restricted stock, private business interests, commercial and residential real estate, fine art and collectibles, and so forth. So what we do is in that process and in that efficiency, we accept those contributions, we liquidate them on behalf of the donors, they receive a fair market value tax deduction, and potentially avoid the capital gains that they would incur if they were to liquidate them themselves and then donate the proceeds, and in so doing, that means that much more that's, ultimately, available for them to give to the charities and causes they wish to support. And then, of course, we have a very efficient granting process, whereby it's a matter of clicking a couple of buttons, identifying the charity they wish to support, how they wish to be recognized, and then it's processed.

To Una's earlier point, I also want to emphasize that the beauty of our solution is also in the fact that we are... when they have made a contribution to a donor-advised fund, it is already an irrevocable gift to a charity, meaning it's already there and it's, by design, meant… that all of the assets in the account are meant to be used for charitable purposes only. So what that does is in the spirit of that efficiency of the solution, it empowers donors to be able to give not only on a sustained basis to support the charities and causes that are most important to them, but it also allows them access to resources for them to support episodic, tragic developments and disasters, such as what we faced with the pandemic, and a variety of natural disasters that are occurring right now, for example, with Delta.

So it is… the efficiency is not only in the ability to contribute a variety of different kinds of assets, but in that it is a resource that donors can turn to for both episodic and sustainable support of nonprofits and causes that are most meaningful to them.

So if I may, Una, with that, turn it back over to you, and we can go to the next slide.

UNA: Thank you, Fred. And in addition to uncovering some of the potential opportunities associated with donor-advised funds, we also uncovered some of the challenges or constraints that nonprofits face. At the core of the survey findings, we noticed the importance of the donor-nonprofit relationship. The survey respondents and interviewees, as you will note on this slide, noted some concerns about their ability to engage with donors. In fact, lack of contact with donors was perceived to be the biggest issue with DAF gifts among survey recipients. To give you the data point here, 60% of respondents indicated some level of concern with their ability to engage donors, or broadly, donor contact. As we dug deeper into the open-ended responses in the survey, nonprofits noted that they could only communicate with donors through the sponsoring organization. And this appeared to create missed opportunities to share proposals or engage donors in their projects.

Other respondents shared that it was generally difficult to get in contact with donors who give, and they often also shared in open-ended responses that they would like to be able to communicate with donors and around these issues. So at the top of the list was the ability to thank donors and acknowledge their gifts, communicate with donors about impact, donors care about this, and to track donors and solicit future gifts.

So this is a place where we did see some challenges. And I wanted to ask Fred to just chime in and perhaps touch on this topic of the ability to engage donors and anonymity as one of the challenges that some organizations are facing.

FRED: Sure thing, Una, and thank you, again, for this. And this is really an important theme to understand and figure out really how to address. I believe that the findings reflect the feeling of nonprofits who have comparatively limited experience with donor-advised funds, or haven't necessarily seen a significant spike in grants that are coming from donors through donor-advised funds. I would suggest that this is really important to understand and uncover so that we can make sure that we are as collaborative and transparent as possible in communicating exactly how donors can engage with their donor... excuse me, how nonprofits can engage with their donors through their donor-advised fund platform.

As it relates to your question on anonymity, we find, Una, that a very, very small portion of grants that are coming from our donor-advised fund platform are completely anonymous. In fact, it's… I believe three and a quarter percent was the latest statistics of all the grants that are made through a donor-advised fund… through our donor-advised fund, were done in an anonymous manner. I would also suggest that over 79% of grants that were received by nonprofits through a donor-advised fund contained contact information that enabled them to be in communication with those donors. So the vast majority of grants that are processed through a donor-advised fund contain information at the direction and guidance of the donor that allows these nonprofits to engage in a thoughtful communication and steward that relationship going forward. And if I could ask that you flip to the next slide, please.

This is just, again, more information. Three-quarters of nonprofits that received donor-advised fund gifts had been in contact with those donors. So the suggestion here is that while we acknowledge the findings of the research and are absolutely committed to doing whatever we can to elevate that awareness, the statistics suggest that the vast majority of nonprofits that received gifts from and through donor-advised funds receive… are in contact with the donors that made those grants. And we just... the obvious opportunity here is how do we increase awareness of that statistic and address the concerns that some nonprofits feel that donor-advised funds disintermediate them from the direct relationships with those donors? And if I may flip it again to Una, please, to the next slide.

UNA: Thank you, Fred. And I'm so glad that you touched on this notion of what are the gaps? I think within this research project, I'm also really encouraged to say that there is a call to action embedded in the research, and that is around information and lack of knowledge. We identified in the survey that many nonprofit organizations lack an understanding of donor-advised funds. And this is particularly true of smaller organizations, those with revenue sizes below 100,000. Many of those organizations shared a number of questions that they had about DAFs, even in their open-ended questions and their written responses. It does appear from the data that having experience with DAFs eases concerns for nonprofits. Organizations that had received at least one gift from a DAF in the past three years we're less concerned about issues related to DAFs. This is important because perceptions, as we've noted, affect how and when donor-advised funds are used, and impact policymakers' decision rules and regulations. Smaller organizations, especially those who have received no gifts or a few gifts from donor-advised funds indicated a lack of knowledge around the entire process of soliciting and receiving donor-advised fund gifts.

We did actually note that a small but noticeable portion of the survey did not actually know, had not heard of donor-advised funds, and didn't know how to reach donor-advised fund donors. So this specific information and communication gap is worth noting.

In terms of the data, 87% of the organizations that we surveyed had solicited DAF gifts, and actually received a DAF gift in the past three years. Forty-two percent of organizations that did not solicit gifts received a DAF gift. So this also speaks to the prevalence of DAF gifts in the nonprofit sector, and that many nonprofits are just beginning to adapt their fundraising methods and techniques. In particular, nonprofits that had explicitly solicited gifts by talking to donors, communicating with donors, in some cases, communicating directly with DAF sponsoring organizations, and including information about giving through a DAF in their fundraising communication, were able to achieve higher rates of success in receiving donor-advised fund gifts. In contrast, organizations that didn't solicit DAF gifts, and specifically didn't have information on… within their own organization, also noted that they may need to be better prepared to accept and process gifts in the future. We did ask organizations, specifically, how concerned or encouraged they were about the solicitation process, and, in general, what we did notice that many organizations noted that they did have difficulty in soliciting organizations, and over half of the respondents indicated they were concerned about how to actually solicit DAF gifts.

Now, just for… because I know that many in the audience are interested in this very question, solicitation of gifts, we do have some examples of how organizations are meeting with, or communicating directly with DAF donors. And I'll just cite that the top ways of soliciting gifts are meeting and communicating directly with donors who have DAFs, and communicating with sponsoring organizations, 25.7% of respondents.

I'm going to turn it over to Fred to actually share his own take on this gap in information, and, ultimately, the solicitation process. What can nonprofits do to bridge this gap?

FRED: Thanks, Una. If you could flip, please… I think, Una, you covered this already, so we'll just flip right to the next slide, please.

So to Una's point, exactly, there are exciting opportunities for us to engage with non-profits in a manner that is truly additive to your development and fundraising efforts. We view it as our responsibility in the spirit of our mission to help to increase charitable giving on an ongoing basis in the United States to do so.

So a couple of them just to touch on them briefly is number one, cultivate and steward the relationships. Identify donors with donor-advised funds, and then track and review their grant history to inform your outreach, and your communication, the appropriate timing, and the types of requests for support and so forth.

The next is personalize the ask. Reach out to donors at any time during the year, and particularly when the need is greatest. The dollars in donor-advised funds, again, as I mentioned before, are already earmarked for charitable giving, so decisions about when to give are not necessarily affected by changes in disposable income, or any potential adverse economic conditions.

Third, make it easy for donors to support you. We would encourage you to do whatever you can to ensure that they are aware that you accept gifts from donor-advised funds and there's an ability to do so, in fact, you encourage them to do so. There's a device and a widget that you can load onto your fundraising website, and it's called the DAF Direct Widget. It is effectively an application whereby you can… a donor can click on that application, be routed directly to their donor-advised fund, and, ultimately, process a gift from your website. So that is just one way in which, from a technology perspective, you could increase the ability for donors to make their gifts to you through their donor-advised fund accounts.

Help to provide an understanding of IRS code restrictions placed on gifts from donor-advised funds related to, for example, supporting events, memberships, fulfillment of legally binding pledges, and so forth. What is or isn't permissible with and through a donor-advised fund?

And then, lastly, engage around giving strategies, collaboration, and education. Educating donors on the appropriate timing and tax strategies to consider when they make their gifts are an even greater way to elevate awareness, and, ultimately, boost engagement around donors that leveraged donor-advised funds for their charitable giving. Talk about different topics that are relevant to donors with these types of endowment-giving vehicles such as giving non-cash assets, appreciated assets, such as stock, publicly-traded stock, restricted stock, and so forth. As I mentioned, additional tax strategies, bunching strategies, to be able to receive a tax deduction in a given year, if you itemize. Flexibility of giving through a donor-advised fund. That increased flexibility in terms of timing, giving on a sustained basis to ensure the health and wellbeing ongoing of your nonprofit. And episodic giving to support efforts to help people that are victims of, or impacted by natural disasters, pandemics, a variety of different kinds of things. That flexibility is something that is one of the key benefits for donors to leveraging giving vehicles such as donor-advised funds, and it's certainly worth discussing, and promoting to them in the context of your communication with them.

The next slide, please. This is an example that I wanted to share that we found was so compelling by one of the nonprofit organizations that really embraces messaging around donor-advised funds. St. Jude's is, obviously, a recognized national organization for the tremendous work that it does for pediatric cancer research and treatment. And they came out with a very successful campaign not long ago that promoted to both existing and prospective donors that they accept gifts through donor-advised funds. And they actually encourage people to consider giving gifts through donor-advised funds in a manner that would be additive to their fundraising and development, and, ultimately, demonstrate more accessibility and engagement with donors that potentially have larger potential gifts to make or can be… are prospects, but haven't otherwise given, and didn't realize that they could do so through a donor-advised fund. So this was a very deliberate effort to try and elevate awareness of the fact that they accepted, gladly, gifts through donor-advised funds. And it's my understanding that this effort was extremely successful for St Jude's.

So with that, Una, if I may, turn it over… if you could flip to the next slide, please… if I may turn it over back to you.

UNA: Thank you, Fred. And one of the important components of this research is the time in which it was being conducted. So it's critical that we emphasize what the lessons learned and the key findings are because, as we all know, 2020 is an unprecedented year, and many nonprofits are facing funding gaps. So, with that, we actually have some recommendations from the nonprofits that we surveyed, and interviews for a sponsoring organization. And a lot of these recommendations focus on bridging the communication and information gap. Specifically, many of the survey respondents and interviewees asked that sponsoring organizations increase communication with nonprofits and provide educational opportunities, such as webinars for nonprofit organizations and proactively communicate with organizations with little or no experience with DAFs. One example that was offered by a national human service organization is around education, educating non-profits so that they better understand what donors want, and they can actively solicit them through the DAF sponsoring organization.

On the next slide, we also have specific tips that apply to donors, and to others in the sector. And I'll just go through some of these tips, but also keep in mind that the report has a range of additional ideas. So for the nonprofit organizations, we learned that many of them have achieved success by talking to donors about DAFs, including information about giving from adapt in communication with donors. That could include information on the website, mailings, email newsletters, and in these virtual worlds that we now live in, through virtual means. It's also important to make sure that staff across the organization are familiar with the benefits and limitations of gifts from DAFs. For example, DAFs may not be used to purchase memberships, or buy tickets to galas, in some cases, or pay for future events. The IRS has some clarification around some of these pledges, so it's very important that staff within non-profits know these regulations, and can articulate them to donors.

It's also important as we go through a lot of the recommendations that the recognition and credit is provided. Many organizations have a solid process in place to accept and code gifts from DAFS and if they are organizations that haven't developed this, this may be a good opportunity to learn how best to do this. And that may include thanking the original donor having a template for thank you letters for donors that are giving through their DAFs, whether they are giving anonymously or not. And also expand attempts to solicit gifts from DAFs. One very prominent example that I think Fred already mentioned is adding a widget to your website that allows your organization to accept gifts from DAFs, and include that option for giving through DAFs, in both print and online communication.

Let's go to the next slide, please. As we summarize the findings from this research, I think we need to take a step back and look at the big picture. We are very aware of the times that we live in, and that many organizations are looking to identify opportunities to engage with donors, and also to expand their fundraising potential. What we learned from this study, and the full report has a lot more detail than we've been able to share in this webinar, is that perceptions of DAFs were primarily neutral, but there was both a positive perception of donor-advised funds, especially in this period as a way of bringing in high net worth donors and larger gift sizes. So that is something that I think is very encouraging, especially in the times we live in. We note that a majority of organizations have actually received a DAF gift and have a process in place to manage DAF gifts, but many are concerned about how to steward relationships with donors, how to continue to develop relationships and solicit future gifts from organizations. A key data point is that I already noted that 55% are concerned about solicitations, but that number goes up even higher to 70% for organizations that haven't received donor-advised fund gifts.

In general, though, a key takeaway is that more experience with DAFs was associated with a more positive perception. We also identified that there is an information communication gap, and that both sponsoring organizations and nonprofits have an opportunity in this moment to educate each other, in order to improve the overall experience, and, ultimately, achieve greater impact. We also wanted to note that at the heart of the nonprofit sector is the work of many organizations, but also their relationships with donors. Nonprofits want to be able to thank and cultivate their donors and have found this to be somewhat of a challenge, as they navigate the DAF world. What we have uncovered in this study is that there's an opportunity, also, for sponsoring organizations to develop a DAF process that allows nonprofits to build deeper relationships with sponsoring organizations and with donors.

With that, I think we also have a lot of encouragement in these results. Taken together, we've learned that in this time period, there has been an increased interest in donor-advised funds from donors and nonprofit organizations, many organizations, both through the surveys and the interviews, are having a positive impact on their fundraising revenue through DAFs. And there's also a real, I think, moment here where we can start to bridge the information and communication gaps that we identified, in order to achieve larger impact. So, with that, I'll turn it back over to Fred.

FRED: Thanks, Una. And thank you for that great summary. Again, when we approached Una, and the Lilly School on this opportunity, it was really with the focus and desire to ensure that we conducted an in-depth study to understand exactly where the opportunities were, where concerns lie, and, ultimately, find a way to address them in a manner that would be truly additive to nonprofits as they face some of the most difficult and uncertain times ever.

If you could flip to the next slide, please. To Una's point, we already offer a host of different resources that are designed to provide nonprofits with the tools, and the content, and the information that will help them increase awareness among their existing donor base and potentially among prospects to ensure that they know that you accept gifts through donor-advised funds. We provide helpful best practices and guidelines, be it related to granting guidelines or tips on engaging more deeply with donors, articulating sort of the benefits to nonprofits of donor-advised funds, and messaging on how you can communicate those benefits to your donors and so forth. Also, Una reiterated the information on the widget, making it easier for people to give with and through a donor-advised fund.

So we are absolutely committed to doing whatever we can to ensure that we are a resource as much to nonprofits that are supported through donors with their donor-advised buzz as we are to the donors, themselves. So thank you very much, Una.

And, with that, if I may turn it over to Michael.

MICHAEL: Well, Fred, Una, thank you for your presentation. It went a little longer than we had originally planned, but I think it was a lot of important information to share out.

But now is the point when we're going to spend the next 10 minutes or so addressing some of the questions that have come in from the audience. I know we received quite a few even before the webinar and the registration process, and quite a few came in during the course of the webinar. We won't have time to field everyone's question, but we'll try to get to as many as we can.

So with that, let's jump in. And, Una, a question that I'd like to direct to you to start us off is, 'What should future… what should future research examine related to donor-advised funds and the relationship with nonprofit organizations?' So I guess, what were you unable to get at with this current research and either based on the findings or based on discussions that you've been having since you started this work, what are some of the other areas that you think need to be probed-out a little bit more?

UNA: Thank you, Michael, and I do think that there's a lot more to cover. This is just the first study. Given the time that we're in, it would be very important to also look at to what extent nonprofits are benefiting from donor-advised funds right now, and what areas, specifically, are benefiting? Is it healthcare, human services, the environment? Knowing more about that sub-sector impact, I think, is very important. And also with our nation's reckoning on race and social justice, being able to see the impact that donor-advised funds are having, specifically, on issues of racial justice and social justice.

MICHAEL: That's an excellent point, especially with all of the questions about racial justice that we've been wrestling with for decades, but even more acutely in recent months.

Fred, in response to COVID-19, have DAFs increased grant contributions because of the pandemic and the need to support organizations, not only with relief, but, you know, they're just suffering as a result of the economic downturn?

FRED: Thanks, Michael. The answer is a resounding yes. We have seen an extraordinary outpouring of generosity among donors for… specifically for activities related to the COVID-19 pandemic. That includes, you know, recovery and relief efforts, it includes viral treatment research, and it, ultimately, also, includes vaccine acceleration efforts. What we saw in the first six months was really nothing short of historic in terms of the engagement among our donors to support not only specifically earmarked activities around COVID, but also in their efforts to ensure that their nonprofit organizations and causes of choice have sustained support in the face of this uncertainty to ensure that they are operating with maximum efficiency, as well.

So some statistics are we saw over $1.7 billion in grants and 330,000 grants in the first half of the calendar year, which is almost a 50% increase during the same period, relative to the same period year ago. That is, if you consider already the pretty amazing generosity of our donors, consider then the generosity and the increase in that generosity in the face of such extraordinary times, and that it's a demonstration of their commitment to supporting really people in need in such an important and meaningful way.

So, yes, in answer to your question, we've seen a significant spike in support during this period.

MICHAEL: Una, let me turn back to you, and apologies for sort of jumping around here, but I'm trying to cover a range of questions. 'Many of the issues related…' someone asks, 'Many of the issues related to DAFs touched on in the survey were rated as neutral by a majority of the organizations who responded. What do you think this indicates on both a scholarly level and on a practical level?'

UNA: Thank you, Michael, for that question. I think it speaks to the fact that many organizations lack experience with DAFs, so that may also be part of it. I think there's also the perception as we've noted that there are some concerns that they have. And so for many organizations, I think that neutral, from a practical perspective means they would like to see some more information, they have some concerns, but they're also very conscious of this as an area of opportunity. So when you put all that together, that's neutral.

From a scholarly perspective, I think that is why we conducted the interviews, because we were aware of the complexity of the issues surrounding DAFs, both the benefits and the constraints that organizations were facing. And I think importantly, the regulatory questions that we didn't have time to address here in this webinar, but are also part of the wrestling that many nonprofits are akin to. And I think in this environment, many nonprofits are very interested in how they can increase their ability to raise funds, but also wanting to ensure that they comply with any of the regulatory requirements.

MICHAEL: Thank you for that. Fred, how can DAFs help donors be more strategic in making their giving decisions? And sort of related to that, you mentioned the tools of the widget that St. Jude used, are there any other specific tools that make it easier for nonprofits to be able to engage with DAF sponsors and how do people get those?

FRED: Sure. So I'll give you the first question as relates to how we help donors to be more strategic in their giving. So the solution, in and of itself, by its design, is meant to make giving as efficient and tax-smart as possible for these donors, so that they can give as much as possible and potentially give more than they otherwise would by virtue of that efficiency. In addition to the efficiency of the platform, itself, to your point, we offer a variety of different tools that are donor-facing or that touch really all elements of the charitable giving ecosystem to be as informed and thoughtful in the way they give, how they give, and when they give, as possible. We have thought leadership content as it relates to consideration on tax strategies and how to give with maximum impact under the current tax law, and with the changes to the new CAREs Act, why this is a particularly good year to give from a tax perspective, from, you know, giving the type of assets that are going to result in their maximum impact and so forth.

And with respect to the second part of your question on the tools that we offer to the nonprofits, again, we offer a variety of things. If you look on our website at SchwabCharitable.org/Charities, that website and those resources are by design meant to provide the nonprofits that receive support from donors through their donor-advised fund with best practices, with tips on how to engage in a more thoughtful conversation with their donors, by leveraging donor-advised funds and promoting them as a vehicle through which they accept gifts.

So lots of… for the donor, it's the efficiency, and the efficacy, and the benefit to the structure of the solution, itself. And for nonprofits, it's really best practices on how to engage and create awareness and make sure that their donors know that they accept gifts through donor-advised funds.

MICHAEL: And Fred, I guess a follow-up question for this is… there were a lot of specific questions coming from the audience. So one was… and I thought this was interesting. 'Who makes donation decisions for the DAF once the first generation of donors are no longer around to direct their gifts?'

FRED: That's a great question, and it really is… there's a variety of options for our donors to consider when they're considering what to do with their donor-advised funds beyond their lifetime. We have something… at the time that they open their account, they can identify additional account holders. They can identify successors on their account. They can identify beneficiaries, that is, charitable organizations to which they choose to direct their donor-advised fund gifts when they are no longer able to process those transactions themselves. And then we have something called the Legacy Program. The Legacy Program by its design is meant to provide a platform to donors that would fulfill their charitable wishes and their charitable intent with their donor-advised fund upon their passing for a sustained period, based on a number of criteria and information that they would provide.

So there's no one answer, but, again, it's the beauty of the flexibility and the options that we provide to donors that make it something that would really efficiently and effectively address what they want to do with their account beyond their lifetime.

MICHAEL: There were a whole bunch of other questions that actually started diving into the research, which I wish we had time for, including questions about did you notice any differences between, let's say, national DAFs, like a Schwab Charitable, or community foundation DAFs, or what have you. Unfortunately, we're not going to have time to get to that right now, but I am going to direct everyone. We have put links in the Q&A to access the report from the Lilly School and the data. And, of course, we'll also be sharing all of the presentation decks and the recording of this after the fact, since, unfortunately we're out of questions.

If you want to dive deeper into this subject, I encourage you in the audience to consult the list of resources that our speakers have helped us compile. That slide, along with all the other slides, are available for download, so no need to write anything down. You can just download that.

Next slide, please. I hope you'll all agree that this has been a very interesting session. I want to, once again, thank Una and Fred for leading this discussion around the interaction between nonprofits and donor-advised funds. As I mentioned at our start, this webinar is part of the Giving With Impact series. To learn more about the series, please visit SSIR.org/GivingWithImpact, which is produced by SSIR with the support of Schwab Charitable.

A few quick reminders. You can access this webinar as many times as you want over the next 12 months. If you want a .pdf of the slide presentation, you can use the link… an email will be sent out to you shortly with a link that you can use to download that slide presentation and to access the recording. Also, in that email, there's a link to take a brief survey. Your feedback is valuable and it helps us to improve our webinars.

Out next webinar will be How to Interview Your Data and Elevate Your Nonprofit's Mission, and that's scheduled for Tuesday, October 27^th. In this program, a professor from Stanford University will discuss powerful data visualization and data-driven communications techniques. If you're interested in registering for that or learning more about our other programs, please visit SSIR.org/Webinar.

And with that, I'd just like to thank you all again for participating.

FRED: Thank you very much, Michael.

UNA: Thank you, Michael. Thank you, all.

This is a transcript of unscripted speech, rather than written prose, and therefore should not be relied on for grammatical accuracy. This is not a verbatim transcript. Parts have been slightly modified to improve readability.

Thank you for joining Stanford Social Innovation Reviews webinar, Giving With the Heart and the Mind, Achieving Impact Through an Intentional, Empathetic Strategy. I'm Michael Voss, publisher of Stanford Social Innovation Review, and the host and moderator of today's webinar.

Many popular approaches to philanthropy prioritize measurement and maximizing charitable impact when making decisions about where monies should be invested. But should all charitable decision-making be driven solely by data and analytics? Is there still room for the heart in modern philanthropy? And how can we satisfy both motivations, the desire to support an issue about which we are passionate while still encouraging more effective strategic philanthropy? And what options are available to help us do so? Today's speakers will help answer these questions and others, and share their perspectives on intentional giving and some of their personal perspectives, as well.

Our first speaker is Tricia Raikes, co-founder of the Raikes Foundation. The Raikes Foundation focuses on youth-serving systems, seeking to make them work better on behalf of the most marginalized young people in our society. In 2009, Tricia was recognized as a White House Champion of Change for her work on youth homelessness, and in 2017, was awarded the Ginger Ackerley Community Service Award by the WMBA Seattle Storm. Tricia currently serves on the Stanford University Graduate School of Education Advisory Council, the Brotman Baty Institute of Personalized Medicine at the University of Washington, and other academic and philanthropic boards.

Our second speaker is Kim Laughton, President of Schwab Charitable, a non-profit, donor-advised fund provider established with the support of Charles Schwab and Company to make charitable giving simpler and more tax efficient for clients. Prior to joining Schwab, Kim was a Vice President for Citibank Asia Pacific and a consultant for Bain & Company. She has served on the board of the Educational Foundation of Orinda, and has been recognized by the San Francisco Business Times as one of the most influential women in Bay Area business.

Before I hand it off to our speakers, I want to mention that this webinar is part of the Giving With Impact series produced by SSIR and sponsored by Schwab Charitable, who helped with the selection of speakers and topics in this series. The series is designed to stimulate a discussion among the philanthropic sector around ways to maximize philanthropic impact. Through webinars like today's and a series of original podcasts that will begin this fall, we hope to create a collaborative space for leading voices from the philanthropic ecosystem to engage in both aspirational and practical conversation on ways to achieve more effective philanthropy. With that, let me turn things over to Tricia to kick things off.

Well, hello, everyone. Michael, thank you very much for having me, and thank you for that very kind introduction. I'm delighted to be here virtually with Kim because we both really deeply care about supporting donors to give in ways that can really make a difference to address the challenging issues of our time and improving our communities.

So I'm going to talk today about three high-level topics. The first is how donors can take the pull on the heartstrings that draw us to an issue and then translate that into the change we want to see in the world. Then I will switch over to talk a little bit about best practices on how to get the most impact from our giving. And then, finally, I will cover the importance of collaboration with others to be successful givers. So I'm going to start off with how we can shift from the pull on our hearts to impact on the ground.

So one of the questions that many people wrestle with in philanthropy is how to find a focus for our giving. You know, it's really important for our hearts to be engaged, and it really does make a difference when we have a personal passion and a genuine interest in the work that we're supporting. But real sustainable impact is more likely to happen if we can focus at the intersection of our personal interest and passion, and where there is the most need in the world. And that's when we use our heads, our intellectual curiosity and our persistence to learn and understand the context around the problem we're trying to solve. You know, the pull on the heartstrings, it's an important first step for all of us, but it is just the beginning.

So, for me, I want to just share a quick personal story. I remember vividly, early in my career as a philanthropist, when my heart strings were pulled. I think it was back in 2009. I was driving to a meeting in downtown Seattle where I lived, and I was stopped in traffic on a freeway off ramp where there was a view underneath an overpass where people experiencing homelessness often gathered. And on that particular day, I happened to see a teenage girl, and she looked just like my youngest daughter. She was being led back to a dark corner near an encampment by two older men, and I have to tell you, it really shook me up. I can still remember the extreme fear I felt for her, and the anger and helplessness that I felt in that moment because she did not fit the face of homelessness that I had in my mind. I still think about her, and I can really point to that moment as the true start of my personal journey as a philanthropist because I didn't just want to help that girl, I wanted to stop the issue of homelessness from ever happening to all of our young people.

So doing something right takes time, and we discovered it also takes a big dose of humility. So we dug in and we started to learn, and what we found was that for young people experiencing homelessness on their own, so unaccompanied by parents and family, there just wasn't a system in place. There was good work happening here in Seattle on addressing chronic adult homelessness and also in family homelessness, but these young kids were falling through the cracks. Our youth homeless… our youth experiencing homelessness are really invisible. Our young people understand how dangerous life can be for them on the streets, so they tend to stay hidden. There weren't a lot of resources behind this problem and very little data, but that ended up being a motivating factor for Jeff and I to really step in and to address that gap. So, for us, what started with the heart shifted to the head.

Now, on a more practical level, if you aren't planning to start a foundation of your own, and especially if you have a full-time job, you know, the amount of work that Jeff and I did to understand and then intervene in the homelessness system in our community, it's just not going to be realistic. But you don't need to do what we did to be effective. You can partner with other philanthropists, foundations, and non-profit organizations who have done the work, so that you know that your contributions are additive to a comprehensive approach that will really help move the needle on systemic issues.

Now, if you don't have a lot of time to commit to deep learning but you want to have impact, another pathway is to give through an intermediary. There are a wide range of organizations that focus on specific issues and they can re-grant your dollars in very effective ways. The Global Fund for Women is a great example. They have been investing for over 30 years in multiple aspects of women's empowerment. And there are other organizations, like Global Green Grants Fund which supports grassroots environmental advocates, and yet another, like the Center for Disaster Philanthropy which creates pooled funds to support communities in disaster recovery and resilience, or you can also ask your local community foundation for guidance and look at where they are giving. Now, we've been collecting and curating information on these intermarry… intermediaries on a donor website called GivingCompass.org, so that will be a good place to check opportunities out.

So switching over to best practices for donors who are leaning into impact. You know, there are many approaches to giving. Some donors will want to scale up strong organizations, others may be drawn to advocacy and policy work to move systems, and others may prefer to fund basic research or to provide risk capital for innovation. But no matter how deeply engaged you want to be in the work of a particular issue, it's really important to do your homework, you know, build in time upfront to really understand the scope of the problem you're trying to solve and where the inequities are. That's how you will figure out where you can be most effective. You know, on any issue confronting our society, whether it's homelessness or education, the environment, transportation, understand which population is being least served well by the current system and that's where you will want to focus your energies.

Now, that process can start with reading credible quality coverages of the issue that you care about to really understand the scope of the problem, who is most effective, where the gaps are, and what's already been learned so far about promising solutions. But be aware of the silver bullet. You know, it often takes multiple approaches tailored to specific communities to move systems in a better direction. And then find others, other funders, in the issue area who can be aligned with you. You know, the website, GivingCompass.org is a free site for donors that we started a few years ago, and it's a great place for any new donors looking for good information to get started. You will find that we've aggregated wonderful high quality content from partners like SSIR, the Chronicle Philanthropy, and many other sources. So donors don't need and shouldn't expect to become an expert in the field they want to fund in. There are experts already. We just want to have enough information to be able to guide our giving towards impact.

So, you know, philanthropy can really feel lonely in the beginning. I mean, I certainly remember how overwhelmed I felt as a first gen philanthropist when we first got started. I wasn't aware of all the resources that are available, but building relationships in the field, finding people you can trust who will help deepen your understanding is really essential to success. You can join with others in a donor network or a giving circle. There are organizations like the Women's Donors Network or Social Venture Partners. Those are great examples of places to connect with others who will likely share your interests.

Now, we partnered with Stanford PACS to put these great resources where donors can most easily find them. Those resources are live both on Stanford's site and in the resource guide on GivingCompass.org.

So that brings me to our final topic of when to involve others. Now, our point of view is that philanthropy should never be a solitary enterprise. You know, as I mentioned earlier, you don't need to become a renowned expert in education to effectively support progress in the field because there are plenty of people that we can and should learn from. But I do think the most important thing a donor can do at the beginning of the journey is to start where I call… is to start with what I call a beginner's mind. And that is being open, being curious, and being willing to listen.

It's also important to do a bit of self-reflection. Now, we all bring particular sets of lenses to how we see the world based on our own lives… our own lived experience. I'm a White woman, grew up in middle-class, a close-knit family in Seattle, I graduated from college, I worked as a young executive at Microsoft with my husband, and we became wealthy when Microsoft went public. But I also happen to be a mom who raised three kids. Those are some of the lenses that I bring to the work. And for the most part, the systems in our country worked pretty well for me. But, as a result, I fully recognize that I am not the person best poised to diagnose what we need to do to improve the lives of young people who are experiencing homelessness. You know, the young people themselves and the advocates they work with are the true experts, so that's why they must be involved in shaping the strategies that affect them and why we, as philanthropists, should not substitute our judgment for theirs.

Now, I'll give you another example from our education strategy. We put together a network of school support organizations to work together to address disparities in education outcome. School support organizations are essentially the non-profits that public schools contract with to offer services that they don't have the internal capacity to provide. And those school support organizations play a critical role in developing the culture and practices of public schools around the country. Now, we call this group of non-profits the Building Equitable Learning Environments, or the BELE Network. They're partners to schools, students, and to parents. And these organizations, they're really in a far better position than we are to co-construct solutions to problems that they've identified together. We told the perspective members that we wanted them to come to the table and tell us and each other which students in their schools were being served least well, and then, together, we'd all dig in, we'd look at research, and we'd figure out why. We really tried to create an atmosphere of trust where grantees could be open and honest about their struggles or they could lean on each other for ideas and solutions. And as a result, three years later, they are now advancing the field's knowledge and reliably producing more equitable outcomes, as well as building the leadership capacity and institutional ability to see and understand all students, and leveraging what the science of learning and development tells us to design learning environments and systems that work for all of our students.

So at the end of the day, being a donor is really about being a strong partner, but we also need to acknowledge that there is a power imbalance right out of the gate. Donors are giving money and the grant-seekers need it. It can be a bit of an awkward dynamic. So right up front, when talking with leaders we want to support, we talk about the importance of having honest and authentic dialogue. This is a partnership, and your grantees must be able to trust that you are invested in their success. You can also demonstrate that trust by not putting too many strings on your dollars and by committing to multi-year support.

As philanthropists, we also have to calibrate our expectations to the size of the grants that we are giving. If it's a significant enough partnership, the organization should be able to tell us what success will look like. But, and this is important, success may not look like what we thought at the beginning of the work together. We both need to be flexible enough to course correct when things aren't working because the best philanthropic strategies are not set in stone. They are designed to be adaptive, to incorporate new information, and sometimes they're going to fail, but that's okay because we can all learn from failure. Jeff and I have also found that proximity to the issues that we are trying to solve is essential. When we have had the opportunity to spend time with young people and hear their stories, it has significantly influenced the work that we do.

So just a few reflections on my own learning journey. You know, there are so many ways that our thinking and our work has evolved from where we started. You know, when I reflect back on where I started and how I think today, the biggest example of how I've changed really goes back to the story I told in the beginning of our discussion, when I saw the girl who looked like my daughter. I told that story before, but over the past few years, I've come to realize through our commitment to learning about equity, that it took seeing a White, blonde girl for me to really see that there was an issue of our young people in our community experiencing homelessness. You know, it was an uncomfortable realization, but embracing and working through that discomfort has really helped us become more effective in our giving.

So gaining a deeper understanding of who is most affected by a problem and how our systems are not working for some people has been really eye-opening. For example, a disproportionately high number of young people of color, Native American youth, and LGBTQ youth experience homelessness. You know, as a society, we do tend to see these issues as the fault of the population that's suffering. You know, they made wrong choices, they came from bad families. But when you actually meet and talk to young people who have experienced homelessness, you start to see the myriad ways that systems have failed them and failed their families. You know, these young people, they want the same things that my kids want and that your kids want. They want love and support and an equal shot at success.

So we've come to better understand how systemic racism and implicit bias feeds into disproportionately negative outcomes for these youth across all kinds of systems, whether it's the juvenile justice system, our school system, the foster care system, you name it. And that has changed the way that Jeff and I approach our work. It's not that we weren't aware of this before, but now that we've taken the time to dig in further and gain a deeper understanding of the inequity in our country, we can more directly focus our philanthropy to target those who have been least served well by our system as we're trying to change them.

So to do that work, it doesn't mean that others will lose out, rather that we are trying to help different groups of people with resources that are targeted proportionately to their needs. And we owe a great deal of this learning to a wonderful colleague of ours named Professor John Fal… John Powell at the Haas Institute at Berkeley, who has really helped us understand that when you design the systems for those who are furthest from opportunity, positive outcomes can occur across population.

Now, there's a great article on the subject in the Stanford Social Innovation Review from a few years ago called 'The Cross Cut Effect,' by my friend Angela Glover Blackwell. It tells the story of disability advocates in Berkeley, California, in 1972, who were pushing for creating cuts in the curb for disabled people to be able to access the sidewalks better when they're crossing the streets. When the cuts in the curbs were implemented, the city officials immediately saw that the benefit spread to multiple groups of people that they hadn't even thought about, much less designed for. So elders who were less surefooted, or parents pushing baby carriages, or bicyclists, or delivery drivers, you know, the list went on.

So as we learn, we adapt and we shift our approach because that's the thing about philanthropy. It is a constant learning journey. We all start certainly motivated by our heart, because we want to help others. And it's not always easy to do, but we all get to decide how we show up for this journey. It takes heart and it certainly takes fortitude for all the pivots and challenges that will happen. But, ultimately, as Jeff and I have experienced, the joy of giving, when you can see change happening and you know you've been a small part of it, it's unparalleled. And that's what motivates us to stay the course. So if you're not getting joy, we'd love to talk to you and we'd love to help you.

So here's just a really quick recap of the principles and practices that we recommend for an effective giver. Number one, start with a beginner's mind to be, you know, open, be curious, to be humble. Number two, do your homework. Systemic change is complicated and it takes time. You know, understanding the landscape is really going to be essential for effectiveness. And, three, work with others. You know, we all have lenses that we bring to problem-solving, and we need to collaborate with those who bring a different set of experiences to fully understand the problems that we're trying to work on. And, also find other funding partners that are like-minded. And, finally, continuous learning. You know, philanthropy is not a static process. It will evolve as our understanding of the landscape deepens.

So thank you for listening. With that, I would like to hand the presentation over to Kim.

Great. Well, thank you so much, Tricia. That was very personal and very inspiring. And before I get started, also, just as an aside… as an aside, Jeff and Tricia's work is so really nicely profiled in the Chronicle of Philanthropy this month. There's an article called 'The Brain Trust.' And I think she's given you a few highlights of the work, but if you want some more detail I'd highly recommend you read it. It's very inspiring.

So I'm Kim Laughton, President of Schwab Charitable, and our goal here is to help donors maximize the impact of their giving by taking a thoughtful and proactive approach to philanthropy. Tricia focused on many of the non-financial aspects of creating a strategic charitable plan. Here, we have been really blessed to be able to have the opportunity to work with thousands of donors to implement their plans, and we work with them on the non-financial aspects, but really focus primarily on the financial aspects, given our expertise. So during my time, over the next 20 or so minutes, I will discuss some of the best practices we've seen donors use to maximize the impact of their giving, with an emphasis on these financial aspects that can enable them to give more.

So four strategies that we found to be most effective with our clients in helping them to maximize charitable impact are highlighted here. First, be thoughtful and proactive in your approach, similar to what Tricia talked about. Second, give your best assets to charity. Third, choose the best giving vehicles. And, fourth, consider tax reform implications from the recent tax reform 18 months ago. I'll walk through each of these individually in the next few slides.

So the first thing we encourage donors to do to maximize their impact is to take a more strategic approach to their philanthropy, and they can do this in three ways: by creating a giving strategy or a charitable plan and monitoring their actual giving versus this plan on an ongoing basis, by aligning philanthropic and investment dollars, and they can also time gifts to help reduce taxes and help to maximize funds available to give. So I'm going to walk through a little more detail on each of these ideas right now.

So just as many clients and their advisors have agreed to asset allocation for their investment accounts, a best practice for Schwab Charitable donors is to take that same portfolio approach with their charitable accounts. They can do this by just developing a simple plan, by making a list of the causes they want to support, allocating their funds across these causes. And then as they make gifts from their Schwab Charitable account, we make it really easy for them to monitor their progress by putting these types of pie charts on their personal dashboard that they see every time they login. It helps to keep them honest and to just sort of see how their actions are comparing with what their hopes and dreams were and what they had planned. This is very simple, but it forms a foundation of philanthropic budget, and it allows donors to diversify and align their giving motivations. And it also allows for them to create a component of giving that's a little bit more reactive, but it becomes part of their plan and enables them to give to needs that maybe they hadn't anticipated or just to support others in their philanthropic journey in a planful way.

So as donors get more defined about the causes that they're supporting, we also can see many of our best donors aligning their investment practices with their philanthropic goals. This combination allows them to achieve both social and financial returns. It's not a new idea, but it's certainly catching on in a broader manner in the industry. So in this example, you can see how a donor has taken a cause such as equity for women and girls, and not only allocated her charitable dollars to it, but also looked at ways to allocate her investment dollars. And these organizations are focused on women and girls. There are many others out there, but this is just one example.

And a third way that donors can take a more strategic approach to giving is to be mindful of the importance of timing gifts, so that they reduce their taxes and can therefore give more with maximum impact. So there are certain points in people's lives where they're earning a higher income and there will be more value in making charitable contributions at that time to offset that income, and they're also in a higher tax bracket typically. During liquidity events, like selling a business, being involved with a company that's going public, high income-earning years... maybe it's a large bonus or a payout of vesting or exercising of restricted shares. As donors near retirement when income could decline along with the associated tax benefits of giving, they may want to consider pre-funding a charitable account to use in their retirement years to support causes and perhaps a retirement career focused on charity. And then, finally, any time donors are thinking about estate planning, be it early in life or later in life, they should absolutely be incorporating charitable planning and giving to help remove assets from their taxable estate.

A second strategy we found to be effective with our clients in helping them to maximize charitable impact is to utilize their best assets for giving so that they can reduce taxes and allow for the most funds to go to the causes that they care about. What do we mean by give your best assets? While cash is king in many elements of life and no charity will refuse your check or your credit card payment, it's usually not going to make the most tax-advantaged gift. Why is this? Because appreciated investments or assets that have been held for a year or more if given to charity are typically not subject to capital gains taxes when they're sold by the charity. So by giving appreciated non-cash assets like this, donors can get both the current year tax deduction that you get for all gifts, that's at a fair market value of the gift… they also can avoid the payment of capital gains taxes that they would have by selling that asset, and it can allow them to increase the amount they give to charity, often by as much as 20%. Now, according to the recent IRS data, nearly 70% of portfolio assets fall into this non-cash category, and yet if you look at the itemized giving by individuals on tax returns, only 34% of donations are comprised of these types of non-cash assets.

So in addition to publicly-traded securities, which are represented here on the far left, which I think we're all familiar with and are very simple to give directly to charity or through a donor-advised fund to charity, there's also a growing trend to contribute more complex assets, privately-held shares, pass-through interest, real estate, alternative investments, other property. A lot of these have very different tax implications, so it's important to consult with an advisor, but it's good to know that any appreciated investment is worth talking about with your advisors because they could make good gifts.

This is a bit of an eye chart, but it illustrates the math. And we won't spend too much time on it, but just to know that this kind of eye chart can be produced for any type of asset you're thinking about. It's a great illustration of the advantages of donating non-cash assets. In this case, it's a publicly traded stock.

So option one on the left illustrates how it would work if you sell the stock and then donate 25% of the proceeds to charity. You sell the stock for a million dollars. Cost basis is $500,000, so your taxable gain would be $500,000, which requires you to pay $119,000 in capital gains tax. $881,000 is the total gift left after taxes are paid, and if a donor gives 25% to charity, that amount would be $220,250. So the tax savings from the charitable deduction of 37%, in this case, is $81,493.

Option two illustrates a different approach in which you give 25% of the stock to charity before you sell it, and that's a very important distinction... you can either give it directly or to a donor-advised fund, which is also a public charity, which then… allows you then to distribute to multiple charities afterwards. In this case, the donor does not have to pay any capital gains tax on the stock going to charity and is able to give an additional $29,750 more than they otherwise would have in scenario one. In addition, the donor is able to take advantage of an additional $11,008 in tax savings from the charitable deduction.

So while this chart is complicated at first glance, the bottom line is that it's often better for the donor to give an asset directly to charity rather than to sell the asset first and then donate the proceeds.

The third area where donors look for guidance in how they can achieve the most impact from their philanthropy is to identify the most appropriate charitable giving vehicles, or, in some cases, combinations of vehicles to meet their needs. And the first step in doing this is for donors to make sure they understand their giving horizon. Do they want to give immediately, now? Do they want to give over time? Or do they need to earn income for a period of time and also want to give to charity at the end of that period? So depending on the answer to these questions, certain charitable vehicles can make sense. So to give now, giving cash, by credit card, or stock directly is fairly straightforward. Although it can be cumbersome for some smaller charities to receive stock directly, so that's when you want to think about potentially using things like donor-advised funds to make that process easier.

The other thing to realize in giving now, and this is for the audience that's maybe over 70-1/2 and is taking the required minimum distribution from their IRA, is that a permanent part of the law is that you can donate, if you don't need that income and don't want to be taxed on it, up to $100,000 a year of your required minimum distribution, which is called a qualified charitable deduction, directly to a charity. And that's a great thing to do each year, if you're not needing either all or part of your required minimum distribution. There are a number of vehicles that enable donors to give over time, and that allows them to separate the tax decision from the charitable decision. And in a minute we'll review some of these vehicles in more detail. And then there are a few vehicles that allow donors who want to earn money and then provide the remainder benefit to charity. These can also be good estate planning tools that are fairly focused for specific needs and those are charitable remainder trusts and charitable annuities.

So let's focus a bit on the various vehicles that enable donors to give over time, which is probably the largest use case for this particular audience on this webinar. So over the years, we've had the opportunity to assist many donors with the planning and execution of their philanthropy and help them to think about which charitable vehicles, in some cases it's more than one, are most appropriate for them. We found that these nine factors tend to be the most important in the decision-making process. The relative importance of each may differ by individual, so it's important for donors to engage experts who can help them think through these issues. Their tax professionals, their estate planning attorney, and people like us can help, just to think through what the objectives are and how these various factors may factor into the decision.

So another bit of an eye chart, and we don't have time to go through this in detail today. I actually spent an hour alone just on this slide yesterday at the Stanford Philanthropy Innovation Summit. But this can provide a good start for discussions that donors might want to have to assess various vehicles. On the left we have sort of direct giving, directly giving stock gifts. You could also discuss cash gives, but stock if we just appreciate... as just discussed, is a more advantaged gift than just cash. In the middle, this section are the four largest ways of giving over time—donor-advised funds, private foundations, supporting organizations, and a somewhat new entrant for some of the very large donors is the LLC structure. It's been used by the Omidyar Network, the Emerson Collective, and, more recently, the Chan Zuckerberg initiative. And then on the right is the charitable trust. So, again, we don't have time to go through this in detail, but each of these vehicles has pros and cons. Nothing is all green and nothing is all red. And so it's important just as you think about the objectives that you have, to really be thoughtful in choosing. Once you put money into charitable vehicles, with the exception of the LLC, which is not a 501(c)(3) or a charitable structure, you can't get it back out. So it's important to really think through it up front, so that you make the right decision.

And the final strategy that we've found to be important in helping our clients to maximize charitable impact is to consider the implications of the recent tax reform. So the first important implication to highlight is that according to Giving USA figures recently released earlier in the summer, giving by individuals actually declined by a little over 1% in current dollars and a little over 3% if you adjust for inflation. What we know from our donors is that they become more connected to their causes in the non-profit sector. As they do that, they want to do everything they can to support them. So in light of the new tax law, we know that our donors are wanting to correct this trend. We don't know if it was caused by the tax law potentially because there was a surge in giving the year before in anticipation of the new law. We want to help them to correct that and to try to make the biggest impact and to ensure that the giving pie expands.

So there are three strategies that we've identified, summarized here that people should consider in light of this new tax law just to maximize the amount that they're giving.

The first is all donors should continue to donate appreciated assets held for more than a year to charity to avoid paying capital gains taxes on the sale of the assets and potentially result in a larger donation. This tax benefit did not change. A lot changed in the new tax bill. They preserved this benefit and donors should take full advantage of it.

Secondly, for donors who itemize and will likely continue to do so in the future, one of the features of the new tax bill is they doubled the standard deduction. So there are a big chunk of donors who may not be itemizing in the future, but for those who do and will continue to, they may want to increase the amount they give to charity to offset the loss of some of the other deductions that were either capped or eliminated under the new tax law. So, for example, many donors who live in states that have state local taxes, or have property taxes, or mortgage interest deductions, all of those things were capped. And one thing that wasn't capped was the charitable deduction, so they could consider increasing their giving to help reduce their taxable income. In that sense, the charitable deduction becomes a relatively more powerful deduction in their toolkit. Again, those donors who are itemizing and are in their higher income-earning years, may be facing a tax liability, or maybe retiring in the next few years, they could consider using a charitable vehicle to concentrate their giving and get their tax benefits now, and then be granting out over time later. So while you're in a high tax bracket or having high income, it's a good time to tuck money away for charity that you might then use in future years and certainly through your retirement years.

And then the third, for those who are on the cusp of itemizing, and those would be people who if they're single or sort of less than $12,000 in deductions a year and if they're filing jointly or less than 24,000 in deductions… we're going to talk about an example in a few minutes… they can do what we call concentrating their giving, or bunching their giving, so that they can switch between itemizing one year and taking the standard deduction the next year to maximize the tax benefits and ensure they're getting the full tax benefits of their giving.

So here's my last eye chart. And this shows the example for those who are on the cusp of itemizing the benefit of concentrating or bunching contributions. So, let's say, there's a married couple filing jointly. They traditionally had 23,000 of itemized deductions each year. Because their itemized deductions are less than the new 24,000 standard deduction for those who are filing jointly, they would be best off taking the standard deduction going forward and getting no incremental benefit from their charitable deductions. But, let's say, $13,000 of their deductions are related to state taxes and mortgage interest, and 10,000 is related to charitable. In that case, the couple may want to consider concentrating or bunching multiple years of contributions into a single year. That way in one year they could double their charitable giving and itemized $20,000 worth of donations plus 13,000 of their other normal itemized deductions, which gives them 33,000, which is above the 24 limit… or the 24,000 and makes it… makes them… makes it make sense to itemize. And then the next year they would skip donating and take the 24,000 standard deduction. So net result, net-net, is that they have a lower tax bill over that two-year period, $9,000 of additional tax deductions over two years, just by timing things and using a donor-advised fund. You can still give to charity on a consistent basis by using a charitable vehicle to space out your granting. So you're just contributing to a donor-advised fund and then granting as you would normally to the charity on a time schedule.

So last, but not least, I wanted to take a few minutes to address the role of donor-advised funds in the philanthropic landscape. I recognize that there are non-profits on the call today and many of you who are on boards of non-profits and so it's important to point out that as a donor-advised fund, one of our objectives is to ensure that the non-profit sector understands how we support your goals and can help lead the sector to grow and encourage greater levels of giving with reduced associated costs.

So we strive to do all the things that are here. The first is that we are very proud of the way that we integrate charitable planning with financial and wealth planning. When you login to our donor-advised fund or in any account you have at Schwab, you see your Schwab Charitable account, which reminds you of giving and makes it easy for you to move your investment dollars into your charitable account. We make it simple to accept non-cash assets. Donors can give non-cash assets directly to charity, but for smaller charities that can be a cumbersome process. So giving to a donor-advised fund and then granting out to charity is a service that we encourage non-profits and donors to take advantage of, so that the charities then receive a cash and check, and that's something that they are very easily able to handle and issue the tax receipt for. We help to facilitate longer-term strategic gifts, people who are giving have a windfall event and want to give over time. And they can use donor-advised funds to set that money aside during that windfall event. That's a great benefit of giving vehicles. We, as I showed in the previous example, help support people who want to concentrate or bunch, and make sure that they're giving most tax-effectively. In cases of disasters or recessions, donor-advised funds provide a ready pool of assets for additional needs, and most of our donors do allocate portions of their funds to make sure that they can give to those needs and maintain giving if times get tough. And donor-advised funds are a low-cost vehicle compared to the other endowed vehicles that allow people to give over time. Donor-advised fund providers typically are much lower cost.

So we survey our donors every year, and consistently over 60% say they give more than they otherwise would because of these vehicles. And that's a number we take seriously and we'll continue to monitor to make sure that we're growing that pie and getting more money to charity where it's needed.

So before we transition to Q&A, let's quickly review the takeaways from both what Tricia and I have shared today. First, funders can focus by looking on for the intersection point between personal passion, resources, and areas where there is need. Tricia talked about doing your homework to understand the scope of the problem, who needs the money, and the gaps that philanthropy can help fill. Don't do it alone, it's not a solitary exercise. Develop other partners and work with others to accomplish your objective. Be thoughtful in your approach, explore strategies both non-financial and financial that are designed to be adaptive. And then, as I've just discussed, consider an array of assets and vehicles, all the tax implications, to make sure that you're maximizing your philanthropic impact.

So, with that, let's turn it over to Michael and do some Q&A.

Great. thank you Kim. Kim, I want to thank you for sharing with us the financial aspects for maximizing impact in donor giving. And, Tricia, I'd also like to thank you for sharing not only your philanthropic approach and the foundation's philanthropic approach, but your learning journey, as well. So thank you to both of you.

So, with that, I'm going to kick us off with a question, Tricia, for you. Tricia, for donors with many passions or multiple priority causes, how do you balance the desire to give to all and desire to achieve meaningful results?

Well, thank you, Michael. It's a great question, and it is really a challenge for all of us because there's not a shortage of societal challenges, as well as opportunities out there that we can all support. But we think of our giving kind of in in two buckets. One, where we want to be an active giver, and then the other collection of supports as a passive giver. So, as I mentioned to my presentation, you know, there is a lot of advantage to focus, but that does require, you know, time, and of course we want to lend our voice, as well as substantial funds to those issues that we deeply care about, like youth systems. So we would put that in the active…sort of the active category of issues that we will really spend a fair… you know, the lion share of our time on and our efforts.

But, you know, taking this sort of portfolio approach, we also have a fair number of items that we will put into sort of our passive giver bucket. And things we certainly care about like the environment or mental health, but that we won't dedicate a lot of resources on our own team to that, we'll look to others that we trust to invest properly there.

So those are kind of the ways we sort of think about our giving, so that we can… you know, we can touch a fair number of issues, but we will definitely prioritize going deep and having meaningful impact on a few.

So, Tricia, thank you for that. And in the last thing you said, you mentioned having meaningful impact. So we've gotten several questions about some of the ways that the foundation, the Raikes Foundation measures impact.

Oh, great. Important question, and love to jump into that one. You know, we certainly have goals for each of our grants, that, you know, we agree with our grantee on what we're going to aspire to accomplish with the grant, but given that we tend to work on systems change and we're working with a range of partners and stakeholders, we are looking to, you know, measure at a collective impact level, so, for example, ending youth homelessness. And what we found is, obviously, quality data really matters. And so very early on we invested alongside others in significantly improving the systems that collect the data, and we had to, of course, understand what data we want to gather, how do we need to collect that. And that has ended up becoming a community dashboard, so that we can monitor the progress that we're doing and others alongside us are doing on this work, so that we understand within reasonable accuracy sort of inflow, so the number of young people that are coming into our systems.

And we also can monitor what the system capacity is. So how many beds, what are the resources to be able to serve the population? And then we can also monitor outflow, how many young people are we helping to connect with permanent housing? And another key measurement is recidivism, you know, are any of those kids coming back into our system? Which would give us indications that our system is not designed well for some or that we need to do adjustments. And so that is a community dashboard that exists for all of us to use as sort of our benchmark to understand the impact and the progress that we're making. And so that's certainly one way that we have established for us to be able to sort of measure in our strategy work if we're making the progress and having the impact that we hope to have.

So that dashboard sounds like a fantastic resource, especially, as you point out, when you're trying to address a systems level problem like youth homelessness.

Kim, let me turn to you for a moment. We've got this same question in our last webinar, so, obviously, people in the audience want to know. With a significant portion of our attendees coming from non-profit organizations themselves, what are the best ways for these organizations to engage with DAFs and the companies that manage them?

It's a great question, so thanks for giving me a chance to answer it. So I guess there are a number of ways that I think non-profits can make sure they're engaged with DAFs.

First, before you engage, and every non-profits is located at different areas may have different DAF in mind—you've got your community foundation donor-advised fund, you've got some that are nationally based, and some focused on certain missions. Just understand what the DAF's motives are. Almost all of us are out to increase giving, as I mentioned in my last slide. Make it simple, easier, and have our clients give more. And all of us are able, from a regulatory perspective, to give to 501(c)(3)s. Some have short lists, but one misconception is that DAFs have short lists, but most do not. Most, and including ours, will give to any eligible 501(c)(3). So know the ground rules in the DAF you're wanting to reach.

If you're wanting to get donations from DAFs or if you already do, just make sure that your information is current. And I know, for us, we have a For Charity section on our website, so that the money's going to the right place, the right address, and to the attention of the right person. You, also, if you're getting gifts from DAF holders, 97% of our grants go out with attribution. That means that the clients are giving their name, sometime not their address, and that's only because they don't want junk mail. But you know who these donors are, and it's really best practice, and we see many charities going that extra mile to engage their donor-advised fund donors to encourage them to be giving those appreciated investments that we just talked about, to encourage them to set up scheduled or recurring grants, which is a feature that many DAFs like us have, to encourage them to be naming them as successors on their donor-advised fund accounts in their estate plan. So really engage your donor-advised fund donors and know that they have a ready pool of assets to give.

And then I think the last tip would be, you know, we especially rely on third-party resources to help to put the best non-profits doing great work on in front of our donors. And Giving Compass, as Tricia recommended, is one of those resources, GuideStar, Charity Navigator, the Center for Disaster Philanthropy, Charity Watch, Give Well, Give.org—all of those are highlighted on our website. And so to the extent that you can engage with those third-party resources and ensure that your charity is well-represented as our clients are looking for places to give that they will see your charity. And some smaller donor-advised funds, more local ones, have opportunities for events, and you would want to make sure to meet the leaders of those funds, so that you can get it on those events if they're talking about a specific topic area that your non-profit may be able to participate in.

That's terrific, Kim. And it really sounds like you guys are working as a partner to the non-profits with whom the DAF works.

I think you'll agree that this has been a terrific session. I, again, want to thank one last time Kim and Tricia for leading this discussion around intentional giving.

This is a transcript of unscripted speech, rather than written prose, and therefore should not be relied on for grammatical accuracy. This is not a verbatim transcript. Parts have been slightly modified to improve readability.

Thank you for joining Stanford Social Innovation Reviews webinar, Giving With the Heart and the Mind, Achieving Impact Through an Intentional, Empathetic Strategy. I'm Michael Voss, publisher of Stanford Social Innovation Review, and the host and moderator of today's webinar.

Many popular approaches to philanthropy prioritize measurement and maximizing charitable impact when making decisions about where monies should be invested. But should all charitable decision-making be driven solely by data and analytics? Is there still room for the heart in modern philanthropy? And how can we satisfy both motivations, the desire to support an issue about which we are passionate while still encouraging more effective strategic philanthropy? And what options are available to help us do so? Today's speakers will help answer these questions and others, and share their perspectives on intentional giving and some of their personal perspectives, as well.

Our first speaker is Tricia Raikes, co-founder of the Raikes Foundation. The Raikes Foundation focuses on youth-serving systems, seeking to make them work better on behalf of the most marginalized young people in our society. In 2009, Tricia was recognized as a White House Champion of Change for her work on youth homelessness, and in 2017, was awarded the Ginger Ackerley Community Service Award by the WMBA Seattle Storm. Tricia currently serves on the Stanford University Graduate School of Education Advisory Council, the Brotman Baty Institute of Personalized Medicine at the University of Washington, and other academic and philanthropic boards.

Our second speaker is Kim Laughton, President of Schwab Charitable, a non-profit, donor-advised fund provider established with the support of Charles Schwab and Company to make charitable giving simpler and more tax efficient for clients. Prior to joining Schwab, Kim was a Vice President for Citibank Asia Pacific and a consultant for Bain & Company. She has served on the board of the Educational Foundation of Orinda, and has been recognized by the San Francisco Business Times as one of the most influential women in Bay Area business.

Before I hand it off to our speakers, I want to mention that this webinar is part of the Giving With Impact series produced by SSIR and sponsored by Schwab Charitable, who helped with the selection of speakers and topics in this series. The series is designed to stimulate a discussion among the philanthropic sector around ways to maximize philanthropic impact. Through webinars like today's and a series of original podcasts that will begin this fall, we hope to create a collaborative space for leading voices from the philanthropic ecosystem to engage in both aspirational and practical conversation on ways to achieve more effective philanthropy. With that, let me turn things over to Tricia to kick things off.

Well, hello, everyone. Michael, thank you very much for having me, and thank you for that very kind introduction. I'm delighted to be here virtually with Kim because we both really deeply care about supporting donors to give in ways that can really make a difference to address the challenging issues of our time and improving our communities.

So I'm going to talk today about three high-level topics. The first is how donors can take the pull on the heartstrings that draw us to an issue and then translate that into the change we want to see in the world. Then I will switch over to talk a little bit about best practices on how to get the most impact from our giving. And then, finally, I will cover the importance of collaboration with others to be successful givers. So I'm going to start off with how we can shift from the pull on our hearts to impact on the ground.

So one of the questions that many people wrestle with in philanthropy is how to find a focus for our giving. You know, it's really important for our hearts to be engaged, and it really does make a difference when we have a personal passion and a genuine interest in the work that we're supporting. But real sustainable impact is more likely to happen if we can focus at the intersection of our personal interest and passion, and where there is the most need in the world. And that's when we use our heads, our intellectual curiosity and our persistence to learn and understand the context around the problem we're trying to solve. You know, the pull on the heartstrings, it's an important first step for all of us, but it is just the beginning.

So, for me, I want to just share a quick personal story. I remember vividly, early in my career as a philanthropist, when my heart strings were pulled. I think it was back in 2009. I was driving to a meeting in downtown Seattle where I lived, and I was stopped in traffic on a freeway off ramp where there was a view underneath an overpass where people experiencing homelessness often gathered. And on that particular day, I happened to see a teenage girl, and she looked just like my youngest daughter. She was being led back to a dark corner near an encampment by two older men, and I have to tell you, it really shook me up. I can still remember the extreme fear I felt for her, and the anger and helplessness that I felt in that moment because she did not fit the face of homelessness that I had in my mind. I still think about her, and I can really point to that moment as the true start of my personal journey as a philanthropist because I didn't just want to help that girl, I wanted to stop the issue of homelessness from ever happening to all of our young people.

So doing something right takes time, and we discovered it also takes a big dose of humility. So we dug in and we started to learn, and what we found was that for young people experiencing homelessness on their own, so unaccompanied by parents and family, there just wasn't a system in place. There was good work happening here in Seattle on addressing chronic adult homelessness and also in family homelessness, but these young kids were falling through the cracks. Our youth homeless… our youth experiencing homelessness are really invisible. Our young people understand how dangerous life can be for them on the streets, so they tend to stay hidden. There weren't a lot of resources behind this problem and very little data, but that ended up being a motivating factor for Jeff and I to really step in and to address that gap. So, for us, what started with the heart shifted to the head.

Now, on a more practical level, if you aren't planning to start a foundation of your own, and especially if you have a full-time job, you know, the amount of work that Jeff and I did to understand and then intervene in the homelessness system in our community, it's just not going to be realistic. But you don't need to do what we did to be effective. You can partner with other philanthropists, foundations, and non-profit organizations who have done the work, so that you know that your contributions are additive to a comprehensive approach that will really help move the needle on systemic issues.

Now, if you don't have a lot of time to commit to deep learning but you want to have impact, another pathway is to give through an intermediary. There are a wide range of organizations that focus on specific issues and they can re-grant your dollars in very effective ways. The Global Fund for Women is a great example. They have been investing for over 30 years in multiple aspects of women's empowerment. And there are other organizations, like Global Green Grants Fund which supports grassroots environmental advocates, and yet another, like the Center for Disaster Philanthropy which creates pooled funds to support communities in disaster recovery and resilience, or you can also ask your local community foundation for guidance and look at where they are giving. Now, we've been collecting and curating information on these intermarry… intermediaries on a donor website called GivingCompass.org, so that will be a good place to check opportunities out.

So switching over to best practices for donors who are leaning into impact. You know, there are many approaches to giving. Some donors will want to scale up strong organizations, others may be drawn to advocacy and policy work to move systems, and others may prefer to fund basic research or to provide risk capital for innovation. But no matter how deeply engaged you want to be in the work of a particular issue, it's really important to do your homework, you know, build in time upfront to really understand the scope of the problem you're trying to solve and where the inequities are. That's how you will figure out where you can be most effective. You know, on any issue confronting our society, whether it's homelessness or education, the environment, transportation, understand which population is being least served well by the current system and that's where you will want to focus your energies.

Now, that process can start with reading credible quality coverages of the issue that you care about to really understand the scope of the problem, who is most effective, where the gaps are, and what's already been learned so far about promising solutions. But be aware of the silver bullet. You know, it often takes multiple approaches tailored to specific communities to move systems in a better direction. And then find others, other funders, in the issue area who can be aligned with you. You know, the website, GivingCompass.org is a free site for donors that we started a few years ago, and it's a great place for any new donors looking for good information to get started. You will find that we've aggregated wonderful high quality content from partners like SSIR, the Chronicle Philanthropy, and many other sources. So donors don't need and shouldn't expect to become an expert in the field they want to fund in. There are experts already. We just want to have enough information to be able to guide our giving towards impact.

So, you know, philanthropy can really feel lonely in the beginning. I mean, I certainly remember how overwhelmed I felt as a first gen philanthropist when we first got started. I wasn't aware of all the resources that are available, but building relationships in the field, finding people you can trust who will help deepen your understanding is really essential to success. You can join with others in a donor network or a giving circle. There are organizations like the Women's Donors Network or Social Venture Partners. Those are great examples of places to connect with others who will likely share your interests.

Now, we partnered with Stanford PACS to put these great resources where donors can most easily find them. Those resources are live both on Stanford's site and in the resource guide on GivingCompass.org.

So that brings me to our final topic of when to involve others. Now, our point of view is that philanthropy should never be a solitary enterprise. You know, as I mentioned earlier, you don't need to become a renowned expert in education to effectively support progress in the field because there are plenty of people that we can and should learn from. But I do think the most important thing a donor can do at the beginning of the journey is to start where I call… is to start with what I call a beginner's mind. And that is being open, being curious, and being willing to listen.

It's also important to do a bit of self-reflection. Now, we all bring particular sets of lenses to how we see the world based on our own lives… our own lived experience. I'm a White woman, grew up in middle-class, a close-knit family in Seattle, I graduated from college, I worked as a young executive at Microsoft with my husband, and we became wealthy when Microsoft went public. But I also happen to be a mom who raised three kids. Those are some of the lenses that I bring to the work. And for the most part, the systems in our country worked pretty well for me. But, as a result, I fully recognize that I am not the person best poised to diagnose what we need to do to improve the lives of young people who are experiencing homelessness. You know, the young people themselves and the advocates they work with are the true experts, so that's why they must be involved in shaping the strategies that affect them and why we, as philanthropists, should not substitute our judgment for theirs.

Now, I'll give you another example from our education strategy. We put together a network of school support organizations to work together to address disparities in education outcome. School support organizations are essentially the non-profits that public schools contract with to offer services that they don't have the internal capacity to provide. And those school support organizations play a critical role in developing the culture and practices of public schools around the country. Now, we call this group of non-profits the Building Equitable Learning Environments, or the BELE Network. They're partners to schools, students, and to parents. And these organizations, they're really in a far better position than we are to co-construct solutions to problems that they've identified together. We told the perspective members that we wanted them to come to the table and tell us and each other which students in their schools were being served least well, and then, together, we'd all dig in, we'd look at research, and we'd figure out why. We really tried to create an atmosphere of trust where grantees could be open and honest about their struggles or they could lean on each other for ideas and solutions. And as a result, three years later, they are now advancing the field's knowledge and reliably producing more equitable outcomes, as well as building the leadership capacity and institutional ability to see and understand all students, and leveraging what the science of learning and development tells us to design learning environments and systems that work for all of our students.

So at the end of the day, being a donor is really about being a strong partner, but we also need to acknowledge that there is a power imbalance right out of the gate. Donors are giving money and the grant-seekers need it. It can be a bit of an awkward dynamic. So right up front, when talking with leaders we want to support, we talk about the importance of having honest and authentic dialogue. This is a partnership, and your grantees must be able to trust that you are invested in their success. You can also demonstrate that trust by not putting too many strings on your dollars and by committing to multi-year support.

As philanthropists, we also have to calibrate our expectations to the size of the grants that we are giving. If it's a significant enough partnership, the organization should be able to tell us what success will look like. But, and this is important, success may not look like what we thought at the beginning of the work together. We both need to be flexible enough to course correct when things aren't working because the best philanthropic strategies are not set in stone. They are designed to be adaptive, to incorporate new information, and sometimes they're going to fail, but that's okay because we can all learn from failure. Jeff and I have also found that proximity to the issues that we are trying to solve is essential. When we have had the opportunity to spend time with young people and hear their stories, it has significantly influenced the work that we do.

So just a few reflections on my own learning journey. You know, there are so many ways that our thinking and our work has evolved from where we started. You know, when I reflect back on where I started and how I think today, the biggest example of how I've changed really goes back to the story I told in the beginning of our discussion, when I saw the girl who looked like my daughter. I told that story before, but over the past few years, I've come to realize through our commitment to learning about equity, that it took seeing a White, blonde girl for me to really see that there was an issue of our young people in our community experiencing homelessness. You know, it was an uncomfortable realization, but embracing and working through that discomfort has really helped us become more effective in our giving.

So gaining a deeper understanding of who is most affected by a problem and how our systems are not working for some people has been really eye-opening. For example, a disproportionately high number of young people of color, Native American youth, and LGBTQ youth experience homelessness. You know, as a society, we do tend to see these issues as the fault of the population that's suffering. You know, they made wrong choices, they came from bad families. But when you actually meet and talk to young people who have experienced homelessness, you start to see the myriad ways that systems have failed them and failed their families. You know, these young people, they want the same things that my kids want and that your kids want. They want love and support and an equal shot at success.

So we've come to better understand how systemic racism and implicit bias feeds into disproportionately negative outcomes for these youth across all kinds of systems, whether it's the juvenile justice system, our school system, the foster care system, you name it. And that has changed the way that Jeff and I approach our work. It's not that we weren't aware of this before, but now that we've taken the time to dig in further and gain a deeper understanding of the inequity in our country, we can more directly focus our philanthropy to target those who have been least served well by our system as we're trying to change them.

So to do that work, it doesn't mean that others will lose out, rather that we are trying to help different groups of people with resources that are targeted proportionately to their needs. And we owe a great deal of this learning to a wonderful colleague of ours named Professor John Fal… John Powell at the Haas Institute at Berkeley, who has really helped us understand that when you design the systems for those who are furthest from opportunity, positive outcomes can occur across population.

Now, there's a great article on the subject in the Stanford Social Innovation Review from a few years ago called 'The Cross Cut Effect,' by my friend Angela Glover Blackwell. It tells the story of disability advocates in Berkeley, California, in 1972, who were pushing for creating cuts in the curb for disabled people to be able to access the sidewalks better when they're crossing the streets. When the cuts in the curbs were implemented, the city officials immediately saw that the benefit spread to multiple groups of people that they hadn't even thought about, much less designed for. So elders who were less surefooted, or parents pushing baby carriages, or bicyclists, or delivery drivers, you know, the list went on.

So as we learn, we adapt and we shift our approach because that's the thing about philanthropy. It is a constant learning journey. We all start certainly motivated by our heart, because we want to help others. And it's not always easy to do, but we all get to decide how we show up for this journey. It takes heart and it certainly takes fortitude for all the pivots and challenges that will happen. But, ultimately, as Jeff and I have experienced, the joy of giving, when you can see change happening and you know you've been a small part of it, it's unparalleled. And that's what motivates us to stay the course. So if you're not getting joy, we'd love to talk to you and we'd love to help you.

So here's just a really quick recap of the principles and practices that we recommend for an effective giver. Number one, start with a beginner's mind to be, you know, open, be curious, to be humble. Number two, do your homework. Systemic change is complicated and it takes time. You know, understanding the landscape is really going to be essential for effectiveness. And, three, work with others. You know, we all have lenses that we bring to problem-solving, and we need to collaborate with those who bring a different set of experiences to fully understand the problems that we're trying to work on. And, also find other funding partners that are like-minded. And, finally, continuous learning. You know, philanthropy is not a static process. It will evolve as our understanding of the landscape deepens.

So thank you for listening. With that, I would like to hand the presentation over to Kim.

Great. Well, thank you so much, Tricia. That was very personal and very inspiring. And before I get started, also, just as an aside… as an aside, Jeff and Tricia's work is so really nicely profiled in the Chronicle of Philanthropy this month. There's an article called 'The Brain Trust.' And I think she's given you a few highlights of the work, but if you want some more detail I'd highly recommend you read it. It's very inspiring.

So I'm Kim Laughton, President of Schwab Charitable, and our goal here is to help donors maximize the impact of their giving by taking a thoughtful and proactive approach to philanthropy. Tricia focused on many of the non-financial aspects of creating a strategic charitable plan. Here, we have been really blessed to be able to have the opportunity to work with thousands of donors to implement their plans, and we work with them on the non-financial aspects, but really focus primarily on the financial aspects, given our expertise. So during my time, over the next 20 or so minutes, I will discuss some of the best practices we've seen donors use to maximize the impact of their giving, with an emphasis on these financial aspects that can enable them to give more.

So four strategies that we found to be most effective with our clients in helping them to maximize charitable impact are highlighted here. First, be thoughtful and proactive in your approach, similar to what Tricia talked about. Second, give your best assets to charity. Third, choose the best giving vehicles. And, fourth, consider tax reform implications from the recent tax reform 18 months ago. I'll walk through each of these individually in the next few slides.

So the first thing we encourage donors to do to maximize their impact is to take a more strategic approach to their philanthropy, and they can do this in three ways: by creating a giving strategy or a charitable plan and monitoring their actual giving versus this plan on an ongoing basis, by aligning philanthropic and investment dollars, and they can also time gifts to help reduce taxes and help to maximize funds available to give. So I'm going to walk through a little more detail on each of these ideas right now.

So just as many clients and their advisors have agreed to asset allocation for their investment accounts, a best practice for Schwab Charitable donors is to take that same portfolio approach with their charitable accounts. They can do this by just developing a simple plan, by making a list of the causes they want to support, allocating their funds across these causes. And then as they make gifts from their Schwab Charitable account, we make it really easy for them to monitor their progress by putting these types of pie charts on their personal dashboard that they see every time they login. It helps to keep them honest and to just sort of see how their actions are comparing with what their hopes and dreams were and what they had planned. This is very simple, but it forms a foundation of philanthropic budget, and it allows donors to diversify and align their giving motivations. And it also allows for them to create a component of giving that's a little bit more reactive, but it becomes part of their plan and enables them to give to needs that maybe they hadn't anticipated or just to support others in their philanthropic journey in a planful way.

So as donors get more defined about the causes that they're supporting, we also can see many of our best donors aligning their investment practices with their philanthropic goals. This combination allows them to achieve both social and financial returns. It's not a new idea, but it's certainly catching on in a broader manner in the industry. So in this example, you can see how a donor has taken a cause such as equity for women and girls, and not only allocated her charitable dollars to it, but also looked at ways to allocate her investment dollars. And these organizations are focused on women and girls. There are many others out there, but this is just one example.

And a third way that donors can take a more strategic approach to giving is to be mindful of the importance of timing gifts, so that they reduce their taxes and can therefore give more with maximum impact. So there are certain points in people's lives where they're earning a higher income and there will be more value in making charitable contributions at that time to offset that income, and they're also in a higher tax bracket typically. During liquidity events, like selling a business, being involved with a company that's going public, high income-earning years... maybe it's a large bonus or a payout of vesting or exercising of restricted shares. As donors near retirement when income could decline along with the associated tax benefits of giving, they may want to consider pre-funding a charitable account to use in their retirement years to support causes and perhaps a retirement career focused on charity. And then, finally, any time donors are thinking about estate planning, be it early in life or later in life, they should absolutely be incorporating charitable planning and giving to help remove assets from their taxable estate.

A second strategy we found to be effective with our clients in helping them to maximize charitable impact is to utilize their best assets for giving so that they can reduce taxes and allow for the most funds to go to the causes that they care about. What do we mean by give your best assets? While cash is king in many elements of life and no charity will refuse your check or your credit card payment, it's usually not going to make the most tax-advantaged gift. Why is this? Because appreciated investments or assets that have been held for a year or more if given to charity are typically not subject to capital gains taxes when they're sold by the charity. So by giving appreciated non-cash assets like this, donors can get both the current year tax deduction that you get for all gifts, that's at a fair market value of the gift… they also can avoid the payment of capital gains taxes that they would have by selling that asset, and it can allow them to increase the amount they give to charity, often by as much as 20%. Now, according to the recent IRS data, nearly 70% of portfolio assets fall into this non-cash category, and yet if you look at the itemized giving by individuals on tax returns, only 34% of donations are comprised of these types of non-cash assets.

So in addition to publicly-traded securities, which are represented here on the far left, which I think we're all familiar with and are very simple to give directly to charity or through a donor-advised fund to charity, there's also a growing trend to contribute more complex assets, privately-held shares, pass-through interest, real estate, alternative investments, other property. A lot of these have very different tax implications, so it's important to consult with an advisor, but it's good to know that any appreciated investment is worth talking about with your advisors because they could make good gifts.

This is a bit of an eye chart, but it illustrates the math. And we won't spend too much time on it, but just to know that this kind of eye chart can be produced for any type of asset you're thinking about. It's a great illustration of the advantages of donating non-cash assets. In this case, it's a publicly traded stock.

So option one on the left illustrates how it would work if you sell the stock and then donate 25% of the proceeds to charity. You sell the stock for a million dollars. Cost basis is $500,000, so your taxable gain would be $500,000, which requires you to pay $119,000 in capital gains tax. $881,000 is the total gift left after taxes are paid, and if a donor gives 25% to charity, that amount would be $220,250. So the tax savings from the charitable deduction of 37%, in this case, is $81,493.

Option two illustrates a different approach in which you give 25% of the stock to charity before you sell it, and that's a very important distinction... you can either give it directly or to a donor-advised fund, which is also a public charity, which then… allows you then to distribute to multiple charities afterwards. In this case, the donor does not have to pay any capital gains tax on the stock going to charity and is able to give an additional $29,750 more than they otherwise would have in scenario one. In addition, the donor is able to take advantage of an additional $11,008 in tax savings from the charitable deduction.

So while this chart is complicated at first glance, the bottom line is that it's often better for the donor to give an asset directly to charity rather than to sell the asset first and then donate the proceeds.

The third area where donors look for guidance in how they can achieve the most impact from their philanthropy is to identify the most appropriate charitable giving vehicles, or, in some cases, combinations of vehicles to meet their needs. And the first step in doing this is for donors to make sure they understand their giving horizon. Do they want to give immediately, now? Do they want to give over time? Or do they need to earn income for a period of time and also want to give to charity at the end of that period? So depending on the answer to these questions, certain charitable vehicles can make sense. So to give now, giving cash, by credit card, or stock directly is fairly straightforward. Although it can be cumbersome for some smaller charities to receive stock directly, so that's when you want to think about potentially using things like donor-advised funds to make that process easier.

The other thing to realize in giving now, and this is for the audience that's maybe over 70-1/2 and is taking the required minimum distribution from their IRA, is that a permanent part of the law is that you can donate, if you don't need that income and don't want to be taxed on it, up to $100,000 a year of your required minimum distribution, which is called a qualified charitable deduction, directly to a charity. And that's a great thing to do each year, if you're not needing either all or part of your required minimum distribution. There are a number of vehicles that enable donors to give over time, and that allows them to separate the tax decision from the charitable decision. And in a minute we'll review some of these vehicles in more detail. And then there are a few vehicles that allow donors who want to earn money and then provide the remainder benefit to charity. These can also be good estate planning tools that are fairly focused for specific needs and those are charitable remainder trusts and charitable annuities.

So let's focus a bit on the various vehicles that enable donors to give over time, which is probably the largest use case for this particular audience on this webinar. So over the years, we've had the opportunity to assist many donors with the planning and execution of their philanthropy and help them to think about which charitable vehicles, in some cases it's more than one, are most appropriate for them. We found that these nine factors tend to be the most important in the decision-making process. The relative importance of each may differ by individual, so it's important for donors to engage experts who can help them think through these issues. Their tax professionals, their estate planning attorney, and people like us can help, just to think through what the objectives are and how these various factors may factor into the decision.

So another bit of an eye chart, and we don't have time to go through this in detail today. I actually spent an hour alone just on this slide yesterday at the Stanford Philanthropy Innovation Summit. But this can provide a good start for discussions that donors might want to have to assess various vehicles. On the left we have sort of direct giving, directly giving stock gifts. You could also discuss cash gives, but stock if we just appreciate... as just discussed, is a more advantaged gift than just cash. In the middle, this section are the four largest ways of giving over time—donor-advised funds, private foundations, supporting organizations, and a somewhat new entrant for some of the very large donors is the LLC structure. It's been used by the Omidyar Network, the Emerson Collective, and, more recently, the Chan Zuckerberg initiative. And then on the right is the charitable trust. So, again, we don't have time to go through this in detail, but each of these vehicles has pros and cons. Nothing is all green and nothing is all red. And so it's important just as you think about the objectives that you have, to really be thoughtful in choosing. Once you put money into charitable vehicles, with the exception of the LLC, which is not a 501(c)(3) or a charitable structure, you can't get it back out. So it's important to really think through it up front, so that you make the right decision.

And the final strategy that we've found to be important in helping our clients to maximize charitable impact is to consider the implications of the recent tax reform. So the first important implication to highlight is that according to Giving USA figures recently released earlier in the summer, giving by individuals actually declined by a little over 1% in current dollars and a little over 3% if you adjust for inflation. What we know from our donors is that they become more connected to their causes in the non-profit sector. As they do that, they want to do everything they can to support them. So in light of the new tax law, we know that our donors are wanting to correct this trend. We don't know if it was caused by the tax law potentially because there was a surge in giving the year before in anticipation of the new law. We want to help them to correct that and to try to make the biggest impact and to ensure that the giving pie expands.

So there are three strategies that we've identified, summarized here that people should consider in light of this new tax law just to maximize the amount that they're giving.

The first is all donors should continue to donate appreciated assets held for more than a year to charity to avoid paying capital gains taxes on the sale of the assets and potentially result in a larger donation. This tax benefit did not change. A lot changed in the new tax bill. They preserved this benefit and donors should take full advantage of it.

Secondly, for donors who itemize and will likely continue to do so in the future, one of the features of the new tax bill is they doubled the standard deduction. So there are a big chunk of donors who may not be itemizing in the future, but for those who do and will continue to, they may want to increase the amount they give to charity to offset the loss of some of the other deductions that were either capped or eliminated under the new tax law. So, for example, many donors who live in states that have state local taxes, or have property taxes, or mortgage interest deductions, all of those things were capped. And one thing that wasn't capped was the charitable deduction, so they could consider increasing their giving to help reduce their taxable income. In that sense, the charitable deduction becomes a relatively more powerful deduction in their toolkit. Again, those donors who are itemizing and are in their higher income-earning years, may be facing a tax liability, or maybe retiring in the next few years, they could consider using a charitable vehicle to concentrate their giving and get their tax benefits now, and then be granting out over time later. So while you're in a high tax bracket or having high income, it's a good time to tuck money away for charity that you might then use in future years and certainly through your retirement years.

And then the third, for those who are on the cusp of itemizing, and those would be people who if they're single or sort of less than $12,000 in deductions a year and if they're filing jointly or less than 24,000 in deductions… we're going to talk about an example in a few minutes… they can do what we call concentrating their giving, or bunching their giving, so that they can switch between itemizing one year and taking the standard deduction the next year to maximize the tax benefits and ensure they're getting the full tax benefits of their giving.

So here's my last eye chart. And this shows the example for those who are on the cusp of itemizing the benefit of concentrating or bunching contributions. So, let's say, there's a married couple filing jointly. They traditionally had 23,000 of itemized deductions each year. Because their itemized deductions are less than the new 24,000 standard deduction for those who are filing jointly, they would be best off taking the standard deduction going forward and getting no incremental benefit from their charitable deductions. But, let's say, $13,000 of their deductions are related to state taxes and mortgage interest, and 10,000 is related to charitable. In that case, the couple may want to consider concentrating or bunching multiple years of contributions into a single year. That way in one year they could double their charitable giving and itemized $20,000 worth of donations plus 13,000 of their other normal itemized deductions, which gives them 33,000, which is above the 24 limit… or the 24,000 and makes it… makes them… makes it make sense to itemize. And then the next year they would skip donating and take the 24,000 standard deduction. So net result, net-net, is that they have a lower tax bill over that two-year period, $9,000 of additional tax deductions over two years, just by timing things and using a donor-advised fund. You can still give to charity on a consistent basis by using a charitable vehicle to space out your granting. So you're just contributing to a donor-advised fund and then granting as you would normally to the charity on a time schedule.

So last, but not least, I wanted to take a few minutes to address the role of donor-advised funds in the philanthropic landscape. I recognize that there are non-profits on the call today and many of you who are on boards of non-profits and so it's important to point out that as a donor-advised fund, one of our objectives is to ensure that the non-profit sector understands how we support your goals and can help lead the sector to grow and encourage greater levels of giving with reduced associated costs.

So we strive to do all the things that are here. The first is that we are very proud of the way that we integrate charitable planning with financial and wealth planning. When you login to our donor-advised fund or in any account you have at Schwab, you see your Schwab Charitable account, which reminds you of giving and makes it easy for you to move your investment dollars into your charitable account. We make it simple to accept non-cash assets. Donors can give non-cash assets directly to charity, but for smaller charities that can be a cumbersome process. So giving to a donor-advised fund and then granting out to charity is a service that we encourage non-profits and donors to take advantage of, so that the charities then receive a cash and check, and that's something that they are very easily able to handle and issue the tax receipt for. We help to facilitate longer-term strategic gifts, people who are giving have a windfall event and want to give over time. And they can use donor-advised funds to set that money aside during that windfall event. That's a great benefit of giving vehicles. We, as I showed in the previous example, help support people who want to concentrate or bunch, and make sure that they're giving most tax-effectively. In cases of disasters or recessions, donor-advised funds provide a ready pool of assets for additional needs, and most of our donors do allocate portions of their funds to make sure that they can give to those needs and maintain giving if times get tough. And donor-advised funds are a low-cost vehicle compared to the other endowed vehicles that allow people to give over time. Donor-advised fund providers typically are much lower cost.

So we survey our donors every year, and consistently over 60% say they give more than they otherwise would because of these vehicles. And that's a number we take seriously and we'll continue to monitor to make sure that we're growing that pie and getting more money to charity where it's needed.

So before we transition to Q&A, let's quickly review the takeaways from both what Tricia and I have shared today. First, funders can focus by looking on for the intersection point between personal passion, resources, and areas where there is need. Tricia talked about doing your homework to understand the scope of the problem, who needs the money, and the gaps that philanthropy can help fill. Don't do it alone, it's not a solitary exercise. Develop other partners and work with others to accomplish your objective. Be thoughtful in your approach, explore strategies both non-financial and financial that are designed to be adaptive. And then, as I've just discussed, consider an array of assets and vehicles, all the tax implications, to make sure that you're maximizing your philanthropic impact.

So, with that, let's turn it over to Michael and do some Q&A.

Great. thank you Kim. Kim, I want to thank you for sharing with us the financial aspects for maximizing impact in donor giving. And, Tricia, I'd also like to thank you for sharing not only your philanthropic approach and the foundation's philanthropic approach, but your learning journey, as well. So thank you to both of you.

So, with that, I'm going to kick us off with a question, Tricia, for you. Tricia, for donors with many passions or multiple priority causes, how do you balance the desire to give to all and desire to achieve meaningful results?

Well, thank you, Michael. It's a great question, and it is really a challenge for all of us because there's not a shortage of societal challenges, as well as opportunities out there that we can all support. But we think of our giving kind of in in two buckets. One, where we want to be an active giver, and then the other collection of supports as a passive giver. So, as I mentioned to my presentation, you know, there is a lot of advantage to focus, but that does require, you know, time, and of course we want to lend our voice, as well as substantial funds to those issues that we deeply care about, like youth systems. So we would put that in the active…sort of the active category of issues that we will really spend a fair… you know, the lion share of our time on and our efforts.

But, you know, taking this sort of portfolio approach, we also have a fair number of items that we will put into sort of our passive giver bucket. And things we certainly care about like the environment or mental health, but that we won't dedicate a lot of resources on our own team to that, we'll look to others that we trust to invest properly there.

So those are kind of the ways we sort of think about our giving, so that we can… you know, we can touch a fair number of issues, but we will definitely prioritize going deep and having meaningful impact on a few.

So, Tricia, thank you for that. And in the last thing you said, you mentioned having meaningful impact. So we've gotten several questions about some of the ways that the foundation, the Raikes Foundation measures impact.

Oh, great. Important question, and love to jump into that one. You know, we certainly have goals for each of our grants, that, you know, we agree with our grantee on what we're going to aspire to accomplish with the grant, but given that we tend to work on systems change and we're working with a range of partners and stakeholders, we are looking to, you know, measure at a collective impact level, so, for example, ending youth homelessness. And what we found is, obviously, quality data really matters. And so very early on we invested alongside others in significantly improving the systems that collect the data, and we had to, of course, understand what data we want to gather, how do we need to collect that. And that has ended up becoming a community dashboard, so that we can monitor the progress that we're doing and others alongside us are doing on this work, so that we understand within reasonable accuracy sort of inflow, so the number of young people that are coming into our systems.

And we also can monitor what the system capacity is. So how many beds, what are the resources to be able to serve the population? And then we can also monitor outflow, how many young people are we helping to connect with permanent housing? And another key measurement is recidivism, you know, are any of those kids coming back into our system? Which would give us indications that our system is not designed well for some or that we need to do adjustments. And so that is a community dashboard that exists for all of us to use as sort of our benchmark to understand the impact and the progress that we're making. And so that's certainly one way that we have established for us to be able to sort of measure in our strategy work if we're making the progress and having the impact that we hope to have.

So that dashboard sounds like a fantastic resource, especially, as you point out, when you're trying to address a systems level problem like youth homelessness.

Kim, let me turn to you for a moment. We've got this same question in our last webinar, so, obviously, people in the audience want to know. With a significant portion of our attendees coming from non-profit organizations themselves, what are the best ways for these organizations to engage with DAFs and the companies that manage them?

It's a great question, so thanks for giving me a chance to answer it. So I guess there are a number of ways that I think non-profits can make sure they're engaged with DAFs.

First, before you engage, and every non-profits is located at different areas may have different DAF in mind—you've got your community foundation donor-advised fund, you've got some that are nationally based, and some focused on certain missions. Just understand what the DAF's motives are. Almost all of us are out to increase giving, as I mentioned in my last slide. Make it simple, easier, and have our clients give more. And all of us are able, from a regulatory perspective, to give to 501(c)(3)s. Some have short lists, but one misconception is that DAFs have short lists, but most do not. Most, and including ours, will give to any eligible 501(c)(3). So know the ground rules in the DAF you're wanting to reach.

If you're wanting to get donations from DAFs or if you already do, just make sure that your information is current. And I know, for us, we have a For Charity section on our website, so that the money's going to the right place, the right address, and to the attention of the right person. You, also, if you're getting gifts from DAF holders, 97% of our grants go out with attribution. That means that the clients are giving their name, sometime not their address, and that's only because they don't want junk mail. But you know who these donors are, and it's really best practice, and we see many charities going that extra mile to engage their donor-advised fund donors to encourage them to be giving those appreciated investments that we just talked about, to encourage them to set up scheduled or recurring grants, which is a feature that many DAFs like us have, to encourage them to be naming them as successors on their donor-advised fund accounts in their estate plan. So really engage your donor-advised fund donors and know that they have a ready pool of assets to give.

And then I think the last tip would be, you know, we especially rely on third-party resources to help to put the best non-profits doing great work on in front of our donors. And Giving Compass, as Tricia recommended, is one of those resources, GuideStar, Charity Navigator, the Center for Disaster Philanthropy, Charity Watch, Give Well, Give.org—all of those are highlighted on our website. And so to the extent that you can engage with those third-party resources and ensure that your charity is well-represented as our clients are looking for places to give that they will see your charity. And some smaller donor-advised funds, more local ones, have opportunities for events, and you would want to make sure to meet the leaders of those funds, so that you can get it on those events if they're talking about a specific topic area that your non-profit may be able to participate in.

That's terrific, Kim. And it really sounds like you guys are working as a partner to the non-profits with whom the DAF works.

I think you'll agree that this has been a terrific session. I, again, want to thank one last time Kim and Tricia for leading this discussion around intentional giving.

This is a transcript of unscripted speech, rather than written prose, and therefore should not be relied on for grammatical accuracy. This is not a verbatim transcript. Parts have been slightly modified to improve readability.

MICHAEL VOSS: Thank you for joining Stanford Social Innovation Review's webinar, Giving Wisely, How to Apply a Proactive Approach to Finding and Evaluating Charities. I'm Michael Voss, publisher of Stanford Social Innovation Review and the host and moderator of today's webinar.

In order for non-profits to have impact on large and intractable global challenges, they need several things, including effective management systems, competitively paid staff, robust infrastructure, and, perhaps most importantly, the funding to support these efforts. Donors certainly want to help make this happen. At the same time, like all other partners in the philanthropic ecosystem, members are looking to increase the efficiency and effectiveness of their efforts in creating impact. How can donors best identify and evaluate non-profits with whom to work, not just from an issue alignment perspective, but from an impact perspective? What are the indicators of an effectively managed non-profit versus ones that maybe less so, and what resources are available to help make these judgments? And what methods are available to donors to monitor and evaluate the impact of the work they're supporting in order to better gauge this impact?

These are several of the questions we plan to explore in this webinar, and we're extremely fortunate to have with us two speakers who have a great deal of knowledge and experience in this area.

Our first speaker is Fred Kaynor, Vice President of Business Development and Marketing at Schwab Charitable. Fred brings over 20 years of financial services experience to today's discussion. In addition to his role at Schwab Charitable, he has formerly held senior-level positions with MasterCard Worldwide and Visa.

Our second speaker is Jacob Harold, Executive Vice President at Candid. As many of you are no doubt aware, Candid was formed earlier this year from the merger of the Foundation Center and Guidestar, where Jacob served as CEO since 2012. Earlier in his career, Jacob worked at the Hewlett Foundation, the Bridgespan Group, the Packard Foundation, the Rainforest Action Network, Greenpeace, and Green Corps. Over the years, Jacob has written extensively on philanthropic strategy.

But before I hand it off to our speakers, I want to mention that this webinar is part of the Giving with Impact series, produced by SSIR and sponsored by Schwab Charitable, who helped with the selection of speakers and topics in the series. The series is designed to stimulate a discussion among the philanthropic sector around ways to maximize philanthropic impact.

Now, with that, let me turn things over to Fred to kick things off.

FRED KAYNOR: Michael, thank you very much. I appreciate you setting the stage for today's discussion. And before we get started, we came up with a quote that I think really prepares us for what we're going to talk about today, which is "To give money, give away money is an easy matter and in any man's power, but to decide to whom we give it and how large and when, and for what purpose and how is neither in every man's power nor an easy matter." It's funny that came from Aristotle and it's very much consistent today, hence, the reason for our great dialogue.

So it's such a pleasure to be here with you, Michael and Jacob, to review such an important component of the charitable giving process. As a leading national donor-advised fund, Schwab Charitable sees a number of donors who already have a rather clear and defined idea of exactly how they want to deploy their charitable giving in terms of their charities, such as their alma maters or places of worship, and we also see a growing number of donors, particularly younger individuals and families, who have identified a cause that they wish to support and are looking for charities that can help them achieve the greatest impact on those causes that are most meaningful to them.

That's why we're so excited about today's discussion. As part of our commitment to providing our donors with tools and guidance that they need to achieve their charitable giving goals, we partner with industry leaders to provide additional guidance in various areas of philanthropy so that our donors can take a truly thoughtful and strategic approach to their overall charitable giving and philanthropy.

Jacob, Candid is a true leader and innovator in connecting people who want to change the world through the resources that they need to do so, through research, collaboration, and training. Tell us a little bit about Candid's philosophy on how to help donors achieve maximum impact on the causes that are most meaningful to them.

JACOB HAROLD: Of course, Fred. Great to be here, and thanks to Schwab Charitable and SSIR for pulling this conversation together.

And I think it's important to just start with what may seem obvious, but is too often forgotten, which is that social change is difficult work. I mean, whether we are talking about the history-making struggles for equal rights, or, you know, the get-your-hands-dirty practical work of a Habitat for Humanity build, the work that non-profits do is fundamentally challenging, and if it were easy to solve a problem like poverty or climate change or racism, someone would have done it already.

And so the non-profits that we're talking about today are facing problems that are built into the structure of our society and our economy, and they've shown an ability to often solve those problems. But it's incredibly important, we believe, at Candid, for donors to be compassionate and humble and patient when looking at non-profits, when thinking about the work that they are doing to try and address a problem or an opportunity that that society faces.

And that doesn't mean that donors shouldn't hold non-profits accountable, that we shouldn't have high standards. And, in fact, we really should. There's an immense variety within non-profits across many different axes, and one is how effective they are, and we'll talk about that some today. But as donors take a look at non-profits, it is important to keep in mind the challenging contexts in which non-profits work, and the way that donor behavior can have an impact on non-profits.

And let me offer an example of that, which is what's called the Non-profit Starvation Cycle, and this term was quoted in Stanford Social Innovation Review just a bit under a decade ago, and it was talking about this vicious cycle that many non-profits face in their interactions with donors. And it goes something like this, that donors want to give to the highest-performing non-profits, but they don't really know what questions to ask, they don't really know what metrics to look at. And so they fall back on one metric that has been mentioned often in the field, and, that is, easy to find, which is the overhead ratio, the percent of a non-profit's expenses that go to administrative costs. There are a number of different ways to calculate that, but the same dynamic plays out in all of them. And so what will happen then is that a donor will ask a non-profit about that. A non-profit will start to think, 'All right, that's how I'm going to be judged. I better spend a lot of time paying attention to my overhead ratio,' which means that that non-profit then doesn't invest in the accounting systems or the strategic planning or the staff training or other forms of overhead that they may need to in order to do their work better. And that then means that the non-profit doesn't have as much time to effectively communicate the real impact of their work and to pay attention to that, which often then leaves the donors frustrated that they're not getting the data that they feel they need to make a good decision, so they just double-down on the overhead ratio the next time around, and it continues. And this cycle has fundamentally starved many non-profits, leading them to not invest in the things they need to invest in, in order to not just do good work, but to be able to share that story with the field.

And so that's just one example, I would say, of how there's really a dynamic interaction between non-profits and donors. And donors are doing more than just choose. They are helping to set the terms for how non-profits operate, and that's an incredible position of power. And so I hope that, you know, over the course of today's conversation, we can raise some of the ways that donors can engage in the question of, 'How do I put my money to best use?' in a way that's fundamentally supportive of non-profits and that leads them to get better, and leads the field to get better, instead of creating an unhealthy cycle that keeps us all from achieving the goals that we all would like to achieve.

And then we'll be talking about this over the course of today, but I will just say that within all of that, it is Candid's belief that information is critical for good decision-making, and good decision-making quite obviously, is critical for creating an impact, and that we as a field have a lot of work to do in organizing information to help make sure everybody can make good decisions. Today, we're focused on decisions made by donors, but there are decisions made by non-profits, or government policymakers, or researchers that also have an impact. And, you know, in the modern information economy, we see how information is important in so many parts of our lives, and that's certainly true in philanthropy.

FRED: Thanks, Jacob. And great insights and perspective with respect to the Non-Profit Starvation Cycle, and, you know, the risks of being potentially too narrow in how we choose to measure impact. And you're also so right, that information is so key in terms of everybody that is… from the donors prospective that are considering the charities that are, you know, most worthy of receiving their charitable support.

We talked a little bit earlier from a donor's perspective that there are people, as I say, who really have a clear and defined idea of how and where they want to deploy their charitable giving, and then there are those that have those causes that are important and meaningful to them, but they don't necessarily know or have an idea of those specific charities that are best equipped to deliver maximum impact on those causes. So we're going to provide details in a moment on how to consider and create a short list of charities, but before we do, we think it's important for everybody to consider three questions at the outset of the process for researching non-profits.

The first would be how much time would you really have to dedicate to the purpose of researching these charities? There are those individuals that have the wherewithal to delve deeply into the research independently and they have the time and the bandwidth to do so. And for those individuals, we offer access to a variety of tools and resources that will help them to achieve their goals. We also have suggestions for those who don't necessarily have that same level of resources or bandwidth to conduct the same in-depth research, but still want to be thoughtful and purposeful in terms of selecting the charities to receive their support. And we're going to go through a variety of those tools and resources today.

Number two, is we ask ourselves what exactly do you want to give philanthropically-speaking? Is it going to be just financial support? Is it going to be active volunteer hours? Is it going to be board service? Is it going to be a combination thereof? Those answers and that conviction can really help to inform and focus those research efforts with respect to the charities that donors choose to support.

And then, lastly, where do you want to give? Consider the scope of your philanthropy. Do you want to support a need and a cause that's global in scale, or do you want to focus your efforts regionally, be that within a particular state in the United States or within a particular country abroad where you had lived and where you had worked or participated in some activities, or do you want to really narrow it specifically to the local community in which you reside, in which case that, too, would impact the potential charities to receive support? Again, those answers really play a significant role in conducting your research.

So, Jacob, let me, if I may turn it back over to you so you might be able to share some finer details on the process and methods that you employ at Candid to help create that shortlist of charities. And, perhaps, you can use a little more… tell us a little bit more about Candid's philosophy about narrowing down that shortlist of charities that most effectively deliver the service and the support for the causes that are most meaningful to donors.

JACOB: Definitely, and we do think that it's a fundamental step to navigate the sheer scale of the non-profit sector to narrow it down a bit. You know, when we think about the non-profit sector, it's very easy for many donors to think about just, you know, the homeless shelter on the corner or, you know, the art museum, you know, on the other side of town, and both of those are central parts of the non-profit community. But the non-profit sector in the US is huge, and we're looking at more than a million-and-a-half non-profits in the US, alone, employing 13 million people and responsible for a trillion dollars of GDP. It's an immensely complex part of the economy and our society. And so we quickly just run into a question of how in the world does a donor sort through that, how do they find that which is relevant to them? And I'm going to walk through an example of that in just a moment.

Let me start, though, by saying two things. First, is that, in this, we are assuming that a donor at least sometimes has taken a proactive stance, that they are not simply responding to requests, but that at least every once in a while they're saying, 'You know what? I really care about X issue, and I want to find a good organization.' And one of the most important pieces of advice that we offer is that that proactive stance is really important, and it can be incredibly fulfilling, too. It can allow donors to feel like they're taking control of their giving and not simply responding to a lot of requests.

The second thing I'll note is that, in this, we assume that people know what issue they care about. We have a saying, 'To pick an issue with your heart and pick an organization with your head,' that philanthropy is both a head and a heart act, and that, typically, people have causes that they are passionate about, and that comes from deep inside their sense of self and their life experience. And then we encourage people to embrace that, but then to be proactive and a little bit more analytical when picking the right organization.

Now, I will say there are folks out there who are also analytical about what issue they're going to give to, and that's a whole different topic than what we're focused on today, but there's some really interesting work. I'd direct people to the work of GiveWell, givewell.org, in taking a look actually at issues and saying, 'You know, which one of these is the most important?'

But, today, let's focus on organizations, and let's imagine, we'll do an example, that you're a donor, you live in California, and you care about mental health, and, in particular, you're focused on people who are recovering from trauma. And there might be that you have some basic parameters. You want an organization that is big enough to make a difference, but not so big where your donation is going to get lost. You want an organization that's transparent and willing to share basic information, and, of course, you want to make sure that your donation is tax deductible and fully legal in the eyes of the IRS. I think all of those… you know, in this example, I think all of those assumptions are ones that we can relate to, that basic sense of, 'Here's kind of what I have in mind.'

Now, if we look at all non-profits in the US, we're looking at more than a million-and-a-half, but if we use here Guidestar's tool… so Guidestar is one of the flagship products of Candid and a tool used by 10 million people a year to find out information about non-profits… we can quickly zero in that there are 29,488 mental health non-profits in the United States that are eligible for a tax deductible donations. We're in California. Remember, this donor, this imaginary donor is in California. We can zero into California, 3,609 that are in the state of California. If we then put some parameters on size, because, again, we don't want a really tiny organization that we might not be confident is positioned to have the scale and impact that we're looking for, but we also don't want a big one where our donation will get kind of lost, can zero it in to say organizations between a $100,000 a year in budget and, say, 5 million. That takes us down to 599. And then, if we focus on those that work, in particular, on PTSD, again, that was an interest of ours, and that have shared information through Guidestar to achieve at least what we call a bronze transparency seal, it takes us down to six. And think about the work it takes to wrap your mind around a million-and-a-half non-profits. It's not really possible, not for the smartest person, but six is something that you could sit around the kitchen table with your family and talk about, 'Which one of these six organizations is the one that we want to give to as a family?'

And so what it is, is there's almost mechanical step that we can take that's really quite straightforward to come up with that short list that we can then analyze more deeply, because no one is capable of deeply analyzing a million-and-a-half non-profits, but any thoughtful family or any thoughtful donor can take a look at five or six or seven and make a really smart choice if they're thoughtful about it. So then… so here we are, so that's the next step, which is… which is creating a short list.

Moving on from there, let's think about, 'Okay, how are we going to analyze these six organizations?' And I'd to propose a… what we're calling a non-profit results pyramid, which is, like any other activity, there are sort of basic components that must be in place in order to achieve social good. There are basic things that you as a donor want to check on to make sure that they're in place. And, you know, that first layer is just legal legitimacy and compliance. You want to make sure that the organization is legit and that a donation is tax deductible.

That is just table stakes to then move on to the next layer, which is the operational layer, the governance of the organization, its finances and its operational systems. You know, none of those are a guarantee of impact, but organizations that have high-performing board, that have well-structured finances, that have efficient operations are more likely to be effective because that just helps an organization run better. But all of that is only a means to the end of programs that try to create impact.

So then that next layer are the actual things that an organization does to create good in the world. It's logic, a logic that helps to create a set of activities that that organization believes will create results. And then, ultimately, what we really care about are the results that that non-profit leaves behind in the world as a whole.

The challenge, of course, is that measuring results is incredibly difficult, and it varies profoundly across different types of non-profit organizations. In some cases, we're able to have what some people might call a gold standard of a randomized controlled trial. So just like in pharmaceutical research, you can divide people into two groups, people who are receiving a treatment, an intervention offered by a non-profit, say, a job training program, and those who are a controlled group, you can randomize them and test that over time. So there are certain interventions that lend themselves to that kind of analysis that can give what social scientists might say is a high standard of evidence, and that's incredibly valuable.

But it's also very important to recognize that not all non-profit interventions lend themselves to a randomized controlled trial. If you are an advocacy group, you can't have an alternate universe where you don't do the advocacy, and you can't randomize yourself if you are trying to influence the behavior of, say, a government official. And there are times when it's simply unethical to randomize the those who are going to receive, say, a medicine and those who won't. So we can't expect from every non-profit that they're going to be able to provide a randomized control trial level of evidence that they created the results that we have here at the top of the pyramid. Sometimes that's possible, and in those cases, that offers a great kind of evidence for donors to look at. But, again, it's also important to recognize that that simply is not always going to be an option for a non-profit, depending on the time horizon they're working on, the nature of their intervention.

And so that then leads us on to what we call the proxies for effectiveness, that if it is not always possible to get that gold standard research, what are other ways that we can identify the quality of a non-profit's work and the likelihood that that organization is going to achieve lasting results? I will mention five here, five proxies for effectiveness, things that a donor can look for, which give a clue as to the ability of that organization to achieve lasting change.

So the first one is clarity. And if there were one word I would focus on, it would be clarity, because those organizations that are clear about their goal, clear about their strategy, clear about what they measure that they think is an appropriate metric or indicator of their progress, maybe not of final results, but still of progress towards those results. And so clarity is a great place to begin.

A second one is openness. A non-profit's willingness to share its thinking, to share its strategy, to share its failures and how it's learned from those failures, to me, is an indication of an organization that is not closed off from the field, but, instead, is in a constant cycle of learning and a willingness to engage with others who are trying to achieve the same goals, and not simply a black box. I will note that there are a few exceptions on openness. There are a few cases where non-profits are really quite justified in not being open. If you're working with undocumented immigrants, or you're working on gay rights in Uganda, there may be real safety concerns that have to be put… have to be considered when thinking about what information to share. So we need to respect those cases where non-profits are thoughtfully not transparent. But we still can ask for openness to be the default and look for organizations that are, as much as it's feasible and appropriate given their context, are open and engaged with the world around them.

The third proxy is people. This one is quite straightforward. You can ask any donor who sat down with a really compelling leader that that sort of charisma is an incredible motivator for donations. And it's not a guarantee of effectiveness. You can have a charismatic leader who is not an effective manager, but having a leader who clearly has a rich sense of the nature of the problem, compelling vision for a way to actually address that problem, and a mastery of the specific activities that can actually get to a solution, that is… that's relevant and that is a proxy for the potential of a given organization. And then you have versions of that throughout the organization, beyond the leader, to the operators and the frontline leaders who are actually executing the work of an organization. So people are a proxy for excellence. And if you go into an organization, and you're incredibly impressed by the people, that's a really good sign.

The fourth proxy I'll mention is stakeholder views. Now this plays out in a couple of ways. So one is just is the non-profit actually even asking their stakeholders for their input into their processes? If you have a homeless shelter that is not regularly asking the homeless people what they need, what's working and what isn't, then you have an institution that doesn't have a feedback loop with its primary constituency. That's a pretty concerning sign. What's even better is if you actually are able to hear what those views are, hear what the opinions of the homeless folks are about this organization or the volunteers at a volunteer-led organization talking about how their time is well used. Or there might be other stakeholders that are relevant. If it's an advocacy group that works on forest protection, it's pretty hard to ask the trees if that group is doing a good job. But you can hear from journalists, and policymakers, and researchers, who might have a good perspective, good line of sight to the effectiveness of that organization.

And then a final proxy that I will offer are the choices of other funders. It's no guarantee that an organization is high quality if other funders are funding it, but there is something to be said for the wisdom of the crowd. And I think this plays out in particular ways with institutional funders. If a large foundation that has a staff full of experts has supported an organization, you can at least trust that they have done standard due diligence on that organization. Now, there might be other reasons why they've made a poor decision, but there are institutional incentives for foundations to weed out the bad actors. And, you know, that is information that matters. If you have experts who are fulltime devoted to trying to give away money to the highest impact, that is a pretty powerful indicator that that organization has been through the ringer and has come out… it's come out clean.

So, again, none of these are… these five proxies are a perfect guarantee of lasting results. But in the complexity and nuance of social change, we're often never going to get that perfect metric. And so we have to be, as donors, willing to do the best we can, and I would argue that these sort of proxies get us a long way towards confidence that our money is really being put to really good use.

With that, let me hand it over to Fred. We've been talking about all the good things to look for, but we also want to take a bit of time to talk about some things that we need to watch out for. And so, with that, Fred, you want to talk a bit about red flags?

FRED: I do. Thank you, Jacob. And I want to thank you for those great insights. And, again, it just sort of reinforces what we talked about early on in the session, which was, you know, a broader, more flexible view into, you know, practices and all activities with respect to how these charities operate. Your insights were very interesting about, you know, it's easy for us to say that, 'Well, they're not transparent enough so that's a, big red flag.' But then when you cite those organizations that are intentionally and appropriately, perhaps, not as transparent as others, like those that support undocumented workers and so forth, that's a really important consideration. So it really is critically important in the process of researching these charities to do so with a much wider and broader perspective.

But, yes, much like the proxies that you just talked about, there are also red flags that we can and should look for in the process of researching the charities to receive philanthropic support. You mentioned many of them in the proxies.

Transparency. If for whatever reason basic fundamental information about that organization isn't publicly or readily available, that could potentially be a red flag under certain circumstances.

Likewise, legal status. An organization that is not legally registered, or their legal status, their 501c3 status, for example, has been suspended by virtue of an investigation or something, that, too, is a potential red flag.

Press and PR. We know that the press and PR we see out there can be factually accurate, and it can also be somewhat subjective. So it's important that when you're conducting the research on these charities that you do a thorough search for information that may or may not be accessible in the press to determine if there are things that are highlighted which would suggest that the organization doesn't necessarily operate in the most appropriate manner or there's potential impropriety of use of funds and so forth.

Strategy. It's very, very important just to reinforce what Jacob said, that non-profits have a very clear and specific strategy on how to operate and deliver, with maximum impact the services to the causes that they are supporting. And if there is an unclear or somewhat convoluted strategy with respect to how they operate and how they deploy the resources, that is a very big consideration when you're researching these organizations.

Financials. It's very, very important to have transparency into the financial well-being of these organizations. If the organizations have some instability or growing deficits with respect to their solvency and how they operate from a financial perspective, that would be a very important thing to consider in the course of this research.

Again, highlighted by Jacob in the proxies list, governance and management. It's also very important to see the health and stability of the leadership in each of these organizations. And if it's clear that there has been a series of changes at the senior level within those organizations, that might suggest a little bit of stability challenges, with respect to how they operate.

And then programs and services. Programs and services are should very much come from a very clear and defined strategy, and it should be very specific in terms of what the objectives are, what the approach is going to be, and, most importantly, how they're going to measure the success of each and every one of those services, be it qualitative or quantitative.

And, Jacob, maybe I could turn it over to you to give a little more perspective on how Candid sort of might have potentially identified programmatic red flags, if I may.

JACOB: Sure. You know, I'll mention a few that I certainly look out for.

So, you know, one, is an organization that has created its strategy in such a top down manner that they haven't done it in consultation and engagement with their stakeholders, and, most importantly, their end and beneficiaries. And I would argue this plays out both for individual non-profits, as well as foundations. That doesn't mean that an organization shouldn't take a bet and have a proactive strategy, but it's certainly concerning for me if that is developed in isolation.

You know, a second is those organizations that are clearly very fragmented across many different strategies. There's a concept called mission creep that most all of our audience will have heard of, and the truth is that there are profound incentives towards mission creep in the way that most non-profits are funded. Non-profits are desperately trying to pay the bills and looking for revenue wherever they can find it, even if that revenue requires them to do something that's outside of their core strategy. And so I think it's important for us to have a lot of compassion for non-profits that have been subjected to the pressures of mission creep. But at the same time, if an organization feels so fragmented that it is not focused on, you know, a clear approach to creating good, you know, or approaches, plural, but those approaches, plural, need to be clear, then that, to me, is something that I find, you know, certainly, quite worrisome. And, in part, just because one of the most valuable resources that all of us have in the modern information economy is our attention. And when non-profit leaders are able to focus their attention on one or a few strategies and programs, they're just much more likely to really give that the energy, and the thinking, and the passion that it needs to succeed.

And then, you know, a final red flag I will mention are those non-profits that only communicate in stories or only communicate in numbers. We have a saying around here that there are two laws of non-profit communications—one, is no numbers without stories; the other is no stories without numbers. That by the very nature of creating social good, we need to, both, be capturing the narrative, the actual experiences of end beneficiaries and how their lives are transformed by the work of non-profits, while also having some sense of scale and rigor that comes from having numbers. And so when I see an organization that's able to both show stories and numbers, I immediately have far more confidence in them, but if I only see one of those, I tend to get a little bit concerned.

And then I will add one more, and this is also on the sort of communication side, is if all of the communication that the non-profit is putting out is about the problem, as opposed to about the work that they are doing to address it, then, to me, that's an indication that, you know, someone is really passionate, but doesn't actually know what to do to address, you know, what may be a very, very real issue. So I look for non-profits that are communicating about both what's wrong, but, also, how they're making it right.

FRED: That's a great point, focusing on the problem versus focusing on how they're working to address it with their solutions. I think it's just spot on. Thank you.

So we've talked a lot today about, you know, an approach, resources, a process of thinking around, you know, how to do thorough, broad, and comprehensive research to identify… for donors to identify those charities that they feel are worthy of receiving their financial support. There are a wealth of resources available to donors. Obviously, thanks so much to you, Jacob, for providing us with guidance and the framework that Guidestar by Candid employs to really inform these donors and provide them with, you know, the necessary tools and structure and rigor to really conduct this research in an appropriate manner, and what to look for to really identify those charities and be informed in the process.

In addition to Guidestar, there are a variety of different types of resources available. I've listed some of them here. Obviously, Schwab Charitable, as a one-stop shop, a portal that provides, not only access to the donor-advised funds solution, but it also offers a variety of different kinds of resources, tools, content, and so forth, in partnership with other leaders in the philanthropic sector, to try and help these donors to be as informed and impactful as possible with their philanthropy.

Jacob, you mentioned GiveWell, as well. There are issue funds that's focused specifically on portfolios of non-profits that are curated by experts, and support particular issues or causes. Large foundations frequently publish… such as the Gates Foundation… frequently publish their grantee lists, and they share their approach to giving, and how and why they have selected those organizations to receive support. There are a curated lists, collective giving, like Giving Circles. And, of course, there are philanthropic advisors. These are organizations and individuals whose charge is entirely focused on helping philanthropically-minded donors to really achieve truly maximum impact with their philanthropy in every aspect.

So there really are a wealth of terrific and very, very informative resources out there that are at the disposal of donors to really take the most thorough and the most informed approach to maximizing the impact with which they give.

So if I can just, in closing, I think it's important for us to talk about key takeaways. So donors… if you're looking at a donor who is really embracing this process of researching the best charities to receive their support, once they identify the issue area that they want to work on, they then create the short list of charities working in that space. And, again, there are tools and third parties who are very well-equipped to be able to help to refine that list. Again, do the due diligence. Make sure that the organizations that you're considering, have the necessary foundations for programs to be as effective and powerful as possible, and potentially look for red flags in the areas that we just talked about that might potentially impact your decision. Jacob's point is extremely well taken. There really is no perfect metric for impact, but look to see if a charity is able to clearly articulate its goals and strategies, is open to proactively sharing data about its work, and if its people have the necessary quality, experience, knowledge, and every other type of resources to really just deliver maximum impact through their charitable mission.

And then, lastly, there are a wealth of organizations and resources, as I mentioned before, to help donors make the most informed decision about how and where to deploy their philanthropy. We named a few of them in the previous slide but there are many, many others that all have a particular focus and offer tremendous value in the process, researching those charities.

So, with that, I will turn it over to Michael, if I may.

MICHAEL: Well, Fred, Jacob, I want to thank you both for a very focused and engaging, and certainly highly informative presentation.

The next 15 to 20 minutes is for you, our audience, to ask questions of our presenters. And many of you have already been doing so as we've gone through the presentations. We have quite a bit to share. If you have a question, please submit it by keying the question into the box on the bottom-left corner of your screen. We won't have time to field everyone's questions, but we will get to as many as we can. And then we will try to answer some additional questions back on the comments box on the page in which you initially registered for this webinar.

So, with that, I'm going to address the questions to each of you individually, Fred and Jacob, but just because I addressed it to one of you, if the other one wants to jump in, please feel free to do so.

So let's kick off, Jacob, with a question for you. How can organizations, non-profit organizations, balance the need for experimentation and innovation, and, of course, the associated possibility of failure, with the desire to show responsible use of funding when working with donors?

JACOB: Yeah, it's a great question, and there's no simple answer. But what I can say is that it's going to depend on the problem that an organization is addressing. The problem or… I should say, or opportunity. Not all non-profits are addressing problems. Some are seeing an opportunity to simply add joy or beauty to the world. You know, think about a museum or the opera. But for some organizations there is an established intervention that we know works. There's evidence that researchers have found that, you know, for example, having nurses visit young mothers whose kids might otherwise be at risk of, you know, negative outcomes down the road helps to totally transform their lives if you come visit those young mothers before the kids are born. And there are interventions like that, you know, throughout the sector where we already know they work. And in cases like that, you still are going to want to experiment but the bulk of your attention should probably just be on reaching as many people as you can with the intervention that you know works.

There are other cases, where it's really not clear how to address a problem. And if it's not yet clear, then what we need is experimentation. And I think what the responsibility of the non-profit is to demonstrate to donors, not necessarily immediate impact, but a way to learn and share that gets us closer to understanding how we can effectively address that question. And I believe that you can explain that to donors and donors will get it. If we don't yet know how to solve the problem, then let's try and figure out how, but if we're going to do that, let's do that systematically, and as transparently as possible and as rigorously as possible. And so it becomes the non-profit's job more to tell the story of their process than to tell the story of their results, at least until you get to a point where you've figured out what really works.

MICHAEL: That's great. I like that. Let me give you another question, Jacob. We spoke a lot about funders doing their… donors doing their due diligence. Would you recommend that donors periodically refresh their due diligence? So other than monitoring for impact, should donors reexamine the fundamentals of the organizations to whom they're giving every few years or…?

JACOB: I mean, so the short answer is, you know, yes, if it's worth your time. And let's actually talk a bit about time, and this is something that Fred talked about. You know, if you are a donor and you're writing a $100 check, that might be a lot of money for you, and, you know, maybe for you, that's really worth a lot of investment. For some donors, it wouldn't be. I think, you know, if you are giving the bulk of your charitable budget… and I say charitable budget because everyone should have one. No matter how small it is, everyone should have a guess as to how much they want to contribute to non-profits each year, and actually know what that number is. But that if you're giving the bulk of your charitable budget to a given organization, then, you know, you're putting a lot of eggs in one basket, and that may be exactly the right choice but that would, I would argue, make it incumbent on you to check in on them a bit more often. Most likely, you would be.

But I think it's important that we're not expecting that every donor is doing this level of research for every single donation that they're making. Instead, that, you know, we, as donors, at whatever scale, at $10 or $10 million, can have a handful of places where we're really proactive, and we really pay attention, and we go deep. And then give ourselves permission that it's fine to make the donation to your cousin's cancer race, and not do any research and just do it because you trust your cousin. And so I think it's going to vary across, you know, an individual's giving portfolio. But let's all pick at least a couple where we really do pay a lot of attention.

FRED: And that also…

MICHAEL: And, Jacob… oh, sorry. Go ahead, Fred.

FRED: I just wanted to interject to your earlier point about the timing. I do think it's important that we be mindful of the timing of the gifts, as well. You touched upon it briefly. And, for example, what comes to my mind is that, you know, many of us, most of us, probably, embrace our charitable giving at the end of the year, at a time when it coincides with the holidays and people are philanthropically-minded and, you know, more inclined to give. But there are also other times during the year, I think, that as informed philanthropists it's important that people consider. For example, many, many non-profits operate on a fiscal year. We do ourselves, and that fiscal year ends in the summer, at the end of June, frequently. And in order to be helpful as a philanthropist and a supporter of these charities in delivering on their missions on an annual basis, frequently, it's important for them to give prior to the end of that fiscal year so that they're successful at doing so. And I just wanted to throw that out there. I think that is an important consideration.

MICHAEL: That's an excellent addition, Fred, to the question… or to answering the question. Actually, let me turn to you for a moment. So, Fred, you probably wouldn't be surprised that a significant portion of the attendees for today's webinar are coming from non-profit organizations, themselves. And we've received quite a few questions about the best ways for these organizations to engage with DAFs and the companies that manage them. Could you speak to that for us?

FRED: Absolutely. We are thoroughly committed to engaging with the non-profit community in a way that is additive and helpful and supportive to all of their efforts and help them operate with maximum efficiency. I think probably the best way to answer it… there's a sort of a two-fold answer I'd like to give.

From a fundraising perspective, in terms of what we can do to help them in their development efforts, we engage, as I say, with regularity to try and discuss and review meaningful, actionable ways that non-profits, service-providing non-profits, can promote donor-advised funds, like Schwab Charitable, as a way to augment their existing development efforts. And I could go into an entire session just about that, but there are many, many ways that non-profits have and can leverage our platform and promote it in a way that informs their donors that we accept gifts through donor-advised funds, and use it as a way ultimately to expand upon their development efforts beyond what they do today.

And then there's another perspective, which is more sort of from the administrative side, whereby, you know, we… in our structure, our very efficient structure, of accepting a variety of different kinds of contributions—cash, you know, publicly-traded stock, restricted stock, private business interests, real estate, and so forth—we handle that process with tremendous efficiency. And that is a process which can be potentially onerous to the non-profit community, depending upon their structure and the resources that they have to accept those types of gifts. So if you consider what we would do… so they don't have to worry about accepting these rather complex assets, liquidating them, and ultimately deploying the assets to their programmatic services, we would handle the process of accepting that asset. We, as a non-profit, we accept it, and then the donor receives potentially a same-year tax deduction once the gift is made. We liquidate those assets, if they're not cash assets, and the donor doesn't, which means that they potentially eliminate capital gains, which means that much more available to go to the charity. And then we grant it out. We've accepted the contribution. We then invest the assets for growth in the account and grant it out on behalf of the donor to whatever charity they choose to support. So, if you will, from an administrative perspective, and a second perspective, we streamline that process for many non-profits, which don't otherwise have the capacity or the resources to do it effectively themselves.

MICHAEL: That's terrific, Fred. Thank you for sharing that. I'm sure that a lot of those organizations are glad to hear how a DAF could be helpful to them.

Jacob, let me move back to you for a second. We've actually gotten quite a few questions about the international landscape. What are the vetting considerations when giving internationally?

JACOB: Yeah, so, you know, that is a question that I wish I had an easy answer to. It is very much an aspiration of Candid's that we be able to help serve donors, individual donors, foundations and others with a better understanding of the full landscape of non-profits around the world. Because let me tell you, it's not just that there are good non-profits happening, you know, doing work around the world, but we in the US have a ton to learn from them. But the mere concept of non-profit plays out differently in different countries. As a general rule, you can't get a tax deduction in the US when you give to a non-profit in another country without going through some additional hoops. Now, a number of those hoops are addressable but I would often recommend that donors work with some sort of intermediary that is better structured to handle some of those challenges, organizations like GlobalGiving, which I'd certainly highly recommend. Many donor-advised funds also have services to help donors identify, you know, promising opportunities around the world, and then help to actually make sure that that donation is actually legal. So there's not an easy answer.

Now, if donors are willing to give up on the tax deduction, which many are, it can become a whole lot easier. You can apply a lot of the same frameworks that we've been talking about today. You know, the information may not always be quite as trustworthy, depending on its source, but I will say there's often I think a myth of non-profits outside of the US being, you know, less effective than US-based non-profits, and I really don't think that that's fair at all. But I do think that we, in the field, have, you know, at least a decade's worth of work to begin gathering systematically the stories of non-profit organizations around the world and sharing that common story in a way that is actually accessible to donors, and that can allow them to easily, you know, make a gift that they feel really confident in.

So, in the meantime, I would direct people to entities like GlobalGiving.

MICHAEL: And just to follow up, would you think that GlobalGiving is also a good platform for foreign non-profits to get on the radar of US donors?

JACOB: Yes. I would say that, yes.

MICHAEL: Here's a question that came up and was very interesting. And, obviously, Jacob, it came from the fact that you referenced the article on the non-profit starvation cycle that we published in SSIR about 10 years ago. And the question is why are we still talking about the non-profit starvation cycle if this concept has been around for over 10 years? What information, what insights are we not giving funders to perhaps better understand the challenge inherent in funding for a non-profit and that leads to the non-profit starvation cycle? And I leave that open to either of you to answer.

JACOB: Yeah, I mean, you know, part of it is that behavior changes slowly until it doesn't, you know, until we hit some kind of a threshold, but we haven't hit that threshold yet. I will say, it seems clear to me that the conversation among sort of sophisticated observers of the non-profit sector has changed quite profoundly in the last 10 years. It has changed somewhat among individual donors and somewhat among non-profits. But, right now, I think the best hope for change actually rests with non-profits, themselves.

So if non-profits are prominently displaying their overhead ratio in their annual report, which many, many still are, they're continuing to keep this zombie myth alive. And if they aren't proactively sharing programmatic metrics that they think are appropriate to their organization, they aren't offering donors an alternative so donors can feel like they've done their due diligence.

This is not to absolve donors at all, and, you know, I think very often donors have been quite lazy in applying the overhead ratio. But I think the solution mostly rests with non-profits proactively telling donors, 'Look, I want to be held accountable but here is the way that you can hold me accountable that actually relates to my mission, that actually relates to the people or the ecosystems that we're trying to serve.' So that, you know, they're able to basically scratch that itch, which is what this webinar has all been about, is the itch that people have to put their money to use effectively. And if, in the absence of an alternative, donors are going to fall back on something like the overhead ratio, which does not inspect the complexity and dynamism and difficulty and potential of the non-profit sector.

MICHAEL: Fred, anything to add on that, or…?

FRED: Nothing to add on that one, although I did want to add, if I might, just go back earlier, to the question about international charities and international giving. Jacob mentioned, you know, that many donor-advised funds offer resources to help donors, you know, become educated with respect to, you know, supporting a global cause outside the US that may… that they would like to support and that they need help in identifying the service-providing charities for them. And we partner… as I mentioned before, we partner with a variety of different leaders in philanthropy for a variety of different reasons. And in this particular case, we have partnerships with key intermediaries, such as Give2Asia, and CAP America, and so forth, who really have a expertise and knowledge and perspective and the structure to be able to help those donors to identify needs on a global scale, identify organizations to best deliver the support for them, and then provide guidance and insights on how to do so. That was not directly related to that question but I did want to interject on the former question related to international giving.

MICHAEL: Great. Thank you, Fred. Well, Fred, let me direct another question to you. And you mentioned in your presentation non… non-monetary… excuse me… donor support. How do you advise a donor on ways to do more than just write a check, whether that's joining a board, volunteering their skills or what have you?

FRED: Right. It's a great question. Thank you. So, you know, as I mentioned, our solution provides a highly efficient platform for donors to maximize the impact of their financial giving, whether that be, you know, cash, appreciated stock, or other appreciated non-cash assets.

In terms of the advice, we don't so much give advice or advice per se beyond that solution, as much as we offer access to these additional resources, content, tools, and so forth, that that we provide to donors so that they can define for themselves their broader philanthropic goals beyond just the financial. So it can be content through an API with Giving Compass. It can be a tool to, you know, really calculate thoughtfully and deliberately how they want to deploy their philanthropy, both in terms of their financial support, as well as their volunteer. What we do is we provide them… beyond our solution, itself, we provide them with the tools and the resources like that to embrace a more thoughtful and broader approach to what they want to achieve philanthropically.

MICHAEL: Thank you for that, Fred. Well, I'm sure we could keep going on, and we certainly have plenty of questions to do so, for hours, but we've gotten to the top of the hour and this is all the time we have for questions.

I'd like to thank all of you, certainly, in the audience for joining us. I think… I hope you would all agree that this has been a really terrific session. I want to also, again, thank Fred and Jacob for leading this discussion around strategic giving.

This is a transcript of unscripted speech, rather than written prose, and therefore should not be relied on for grammatical accuracy. This is not a verbatim transcript. Parts have been slightly modified to improve readability.

Three ways to maximize impact—a discussion with Jeff Raikes

FRED: Welcome, and thank you for joining us today for a discussion about maximizing the impact of your philanthropy. I'm Fred Kaynor, Vice President of Marketing and Business Development for Schwab Charitable, and I'm joined by Jeff Raikes, Cofounder of the Raikes Foundation, and a philanthropist and a well-known leader in helping donors to truly maximize the impact of their philanthropic giving. Jeff, thanks very much for being here today.

JEFF: Fred, thank you. You know, one of the reasons we're so pleased to be here and joining you is that there's a tremendous opportunity to have people design their philanthropy, execute their philanthropy to have greater impact. But we also find that few people actually know how to do the research that really informs their philanthropy. And if people aren't designing their approach on philanthropy to give with impact what's going to end up happening is we'll all miss out on that opportunity to make a difference, and probably even more is that if we miss that opportunity people will be giving with less joy. And we think one of the great things about giving with impact is that it gives people great joy.

FRED: And we also like to try to do whatever we can through our solution to help donors really maximize the impact of the resources, themselves, that they're giving, and we think that as part of that journey, finding the best solution, the best giving vehicle for that purpose is really the best way to do so. Donor-advised funds, private foundations, community foundations, gift annuities, trusts—all of those have very, very valuable roles to play, and they contribute in a very different way individually and collectively to really providing the best platform for optimizing that giving.

JEFF: In fact, there are really three themes that stand out.

One is the philanthropist, the donor, should choose an area where they'll have a clear and sustained focus. Pick something that you're passionate about. Maybe it's the environment, or education, or homelessness. If you pick something that you're passionate about it's more likely that you're going to stick with it for the long term and have the ability to work with others to really make an impact.

The second thing that's very important is to have a research-informed strategy. There are a lot of these issues out there where other people have been working on them. What's worked? What hasn't worked? What should you know about the approaches that people have taken? Who should you be collaborating with? That can come through by really doing the landscape work to understand the opportunity for your giving to make a difference.

And then the third thing is the importance of continuous collaboration and learning. That's a very important theme. Because we often times come into an issue, we have a particular idea of what the strategy should be. But, like we learned in business, things happen. Things don't go the way you think. And so what you need to do is you need to continue to adjust and you need to continue to collaborate. If we're going to have great impact with our philanthropy, we're going to do it by working well with others, the people who are on the ground closest to the issues, other donors who are like-minded in their work. And that collaboration also can bring great joy, as well as the impact.

FRED: Indeed. And that's such great insight on how to sort of formulate the strategy to really achieve maximum impact. And what the donor-advised fund does is helps people to extend the impact of the resource that they actually give. We enable people to give a variety of different kinds of assets. They can give cash, of course, but they can also give appreciated stock, restricted stock, they can give real estate, private business interests, and they can do so in a manner that's highly tax-efficient. So that means that they make that donation through their Schwab Charitable donor-advised fund account. We liquidate those assets on their behalf. They avoid capital gains and they also get an immediate fair market value tax deduction. And, ultimately, that process is so efficient that it, in most cases, results in the maximum amount going to the ultimate causes and charities that they choose to support.

JEFF: You know, and the great thing about that is, if they can be thoughtful and efficient and give with impact, they will find great joy. And as Melinda Gates said to me one time, the most important thing that you need to do in your philanthropy is to find the joy. And this is an opportunity to do it.

FRED: Couldn't agree with you more. Jeff, thank you so much for your time today. It's such a pleasure to partner with the Raikes Foundation and to really work together in a very, very, very effective way to really maximize the impact that our donors have on the world today.

JEFF: Great.

FRED: So thank you for your time.

JEFF: Thank you, Fred.

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Addressing Youth Homelessness—a conversation with Jeff Raikes

FRED: Welcome, and thank you for joining us today for a discussion about maximizing the impact of your philanthropy. I'm Fred Kaynor, Vice President of Business Development and Marketing at Schwab Charitable. I'm joined today by Jeff Raikes, Cofounder of the Raikes Foundation and a highly respected leader in philanthropy, as well as a champion for helping donors to give with maximum impact.

JEFF: Thank you, Fred. It's a great opportunity to be here with you. You know, there are just so many pressing issues in society that we need to take on, and so my wife and I at the Raikes Foundation, we have a real passion for the impact that can come from philanthropy. And what we have found is that if you give with impact, you find great joy in giving.

FRED: And we also like to try to do whatever we can through our solution to help donors really maximize the impact of the resources, themselves, that they're giving, and we think that as part of that journey, finding the best solution, the best giving vehicle for that purpose is really the best way to do so. Donor-advised funds, private foundations, community foundations, gift annuities, trusts—all of those have very, very valuable roles to play, and they contribute in a very different way individually and collectively to really providing the best platform for optimizing that giving.

JEFF: Another thing that I think it's important to add is the recognition that philanthropy, giving with impact is a journey. Everybody should recognize that. And you want to remember that you want to give with the heart but also with the mind. So let me share a story with you.

My wife, Trisha, was driving on Interstate 5 near Seattle, pulling into Downtown Seattle. She saw an adolescent girl, she guessed maybe 14-, 15-years-old near a homeless encampment being walked by two kind of scary-looking men into that encampment, and it really caused Trisha to pause. You know, what's happening with that young woman, that girl? And that got Trisha very interested in the issues of homelessness in our community, and what we discovered is that there are actually different segments of homelessness. You have chronic homelessness, typically substance abuse; you have veterans homelessness, oftentimes PTSD; you have family homelessness, oftentimes economic dislocation.

But there was this segment, what we describe as youth homelessness—unaccompanied youth out on the streets by themselves, 12- to 25-years-old. And it doesn't get a lot of attention. And why doesn't it get a lot of attention? Well, because the survival strategy for those youth is to be invisible. If they're visible they're at risk of being drawn in to sex trafficking, or drug dealing, or gang, so on and so forth.

So we recognized that the Seattle community didn't have a focus on youth homelessness. That gave us an opportunity as philanthropists to identify where we could use our resources in an under-resourced area to really make a difference. And that's just another example of the journey that people can be on. It's quite gratifying when we see that we are able to make youth homelessness rare, brief, and one time. And that's an example of one of our stories.

What we hope, though, is that by working together we can create thousands, if not tens of thousands of stories for the clients at Schwab Charitable.

FRED: What a great story, and what an incredibly important point that it's a journey. Likewise, from the giving perspective, people, myself included, thought that for many years that really the only way to do philanthropic giving was with a check or with cash, or maybe a credit card. And I've since come to learn, as have many of our donors, that in order to support causes and areas of interest like just what you said, adolescent and youth homelessness, in the most efficient and impactful way possible is by doing so, to your point, in a very thoughtful, deliberate way where they can consider what they give and how they give it, and what vehicle they use to give it, which will ultimately achieve maximum impact and the maximum resources they could possibly bring to bear on those causes and needs that are so important to them. So it's just as much of a journey in terms of what to give as it is how to give.

JEFF: You know, and the great thing about that is if they can be thoughtful and efficient and give with impact, they will find great joy. And as Melinda Gates said to me one time, the most important thing that you need to do in your philanthropy is to find the joy.

FRED: Thanks for joining me today, Jeff. As more of us in the non-profit space work together to help donors give more and give with more impact, the more we can do to truly help donors make an even greater difference in the world. So thank you, again, very much for your time.

JEFF: Fred, thank you. It's a great honor for us to be partners with you and Schwab Charitable. We think that the connection between the two of us is going to help a lot of people in the world make a greater impact and find the joy in that impact.

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The slower pace of the summer months offers an opportunity to make a difference in the lives of others by volunteering for your favorite charities.  As you take time to consider how you'll carry out your charitable intentions during the remainder of the year, it might make sense to think about the timing of your financial support.

Many donations are made during the last few months of the year, but the needs of non-profits are year-round. For charitable organizations that plan around a fiscal year ending in June or September, the summer months are critical for fundraising. 

Ask your favorite charities about upcoming milestones. You may find just the right fit for your charitable resources and goals.

A well-timed gift over the next three or four months may be exactly what is needed to help a program or organization meet a critical goal.  If you traditionally donate to charitable causes in December, you may want to consider moving your annual donations to a date earlier in the year.

To maximize your charitable impact, consider donating appreciated non-cash assets that have been held for a year or more. Donating non-cash assets such as publicly-traded stock or private business interests can increase the tax benefits of your charitable giving, leaving you with potentially more money to support the causes that are most important to you.

Thoughtful timing of your charitable support, combined with tax-smart donations can help you make an even bigger difference in the world. 

From all of us as Schwab Charitable, thank you, and have a pleasant summer.

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When it comes to deciding which charitable vehicle is best suited to support the causes important to you, it is essential to understand both the differences and complementary features of charitable giving options.

You may want to considered a donor-advised fund, a private foundation, a charitable gift annuity, or a charitable trust.  To help you decide among these vehicles, you may want to ask yourself three questions.

One, are you concerned about cost, tax liability, or grant-making limitations?  Donor-advised funds can be an effective standalone solution or can complement other vehicles.

For example, a private foundation, combined with a donor-advised fund may help maximize tax deductions if itemizing, maintain privacy with charitable gifts, facilitate granting outside of the foundation's mission, and engage future generations.

Two, is guaranteed income important?  Donors can create a charitable gift annuity or a charitable remainder trust through an irrevocable transfer of cash or other property. 

Both of these can work in combination with a donor-advised fund account to add flexibility in granting and help establish a legacy.

And, three, is reducing gift or estate tax important?

For donors who want to support charitable causes during their lifetime while enjoying gift and estate tax savings, naming a donor-advised fund as the lead beneficiary for a charitable lead trust may be a good option.

And, remember, sometimes the best solution for you may be a combination of one or more of these vehicles.

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A growing trend for families with a private foundation is to combine a donor-advised fund to fulfill broader charitable objectives, including grant-making flexibility, tax-efficiency, and privacy.

From a tax planning perspective, donor-advised funds are public charities and provide higher deductibility limits for both cash and non-cash contributions.

In addition, for donors contributing privately-held business interest or real estate, donor-advised funds offer a fair market valuation, where private foundations generally use the cost basis.

For privacy, clients will add a donor-advised fund to give anonymously, while continuing to use their private foundation for more public programmatic giving.

In terms of grantmaking flexibility, donor-advised funds allow individuals and families to support causes beyond the mission of the private foundation.

Families may integrate a donor-advised fund to enable the next generation to give to their own set of causes without conflicting with the original principles of the private foundation.

Because donor-advised funds offer account administration and recordkeeping, they can serve as a low-cost training vehicle for younger donors' future involvement in the family foundation.

And, finally, some donor-advised funds offer investment flexibility similar to a private foundation, allowing for impact and legacy for many years to come.

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Why Charitable Giving Should be Part of Financial Planning

Americans are among the most generous people in the world. Our commitment to supporting charities and worthy causes with both financial resources and volunteerism is unsurpassed. This year, Americans are on track to potentially break records with their charitable giving.

By applying the same thoughtful approach to philanthropy as we do to investments and savings, we can truly maximize the impact on causes that are meaningful to us.

Much of America’s wealth is in non-cash assets, such as private business interests, publicly traded stock, or real estate. As a regular part of your financial planning process, you may consider selling a portion of your appreciated assets to help diversify your portfolio. You might also move some of these assets out of your taxable estate in an effort to reduce the financial impact to your heirs.

Selling non-cash assets that have appreciated in value will usually generate capital gains taxes. To help offset those taxes, consider donating a portion of them directly to charity by using a donor-advised fund, for example. By donating appreciated assets to a donor-advised fund versus selling them first and donating the proceeds, you can receive both a same-year income tax deduction and potentially eliminate capital gains tax, which can mean even more resources going to the charities you support.

Contributing non-cash assets to a donor-advised fund can also reduce the administrative burden to charities that may not necessarily have the same resources to accept them directly. Once the assets are liquidated and the fair market value proceeds are deposited into your account, you will have the flexibility to make charitable grants at any time.

Tax-smart, flexible giving through a donor-advised fund will enhance your financial planning and significantly increase the impact of your philanthropy.

On behalf of Schwab Charitable, thank you. Our donors are making an even bigger impact on the lives of others through their commitment to giving wisely.

This is a transcript of unscripted speech, rather than written prose, and therefore should not be relied on for grammatical accuracy. This is not a verbatim transcript. Parts have been slightly modified to improve readability.

Define your philanthropic mission in three simple ways.

Summer is a time for family, friends, a break from work, and a chance to step back and reflect on your priorities. It’s also a chance to think about how we can make a difference in the lives of others through activities like volunteerism and charitable giving.

Many of us embrace charitable giving as a way to make an impact on causes that are meaningful to us. To achieve the greatest results, it’s important to give wisely. That means defining exactly what you want to achieve with your philanthropy. It’s a big question, but following three simple steps can help you to find the answer.

First, consider your goals. Who do you want to help and how? Start with causes or communities that have a special connection to you and your family. And remember that volunteering can extend the impact beyond just financial support.

Second, write down a mission statement. Summarize your goals and your plan for achieving them. You may be surprised at how motivating this exercise can really be. And for families, it’s a perfect way to create a common mission and define a plan for achieving it together.

Finally, identify charities that align with your philanthropic goals. Many donors already know the organizations they wish to support, such as their alma mater or a house of worship. Others have a cause in mind but haven’t necessarily identified specific charities to support it. For those individuals, there is a wealth of resources, such as GuideStar, Give.org and CharityWatch, which provide detailed information on nonprofit organizations. But don’t stop there. Be sure to call or meet with your selected charities, and ask a lot of questions.

With these three principles in mind and a little help from Schwab Charitable, it’s easy to help maximize the impact of your giving and make an even bigger difference in the world.

From all of us at Schwab Charitable, thank you and have a pleasant, relaxing summer.

This is a transcript of unscripted speech, rather than written prose, and therefore should not be relied on for grammatical accuracy. This is not a verbatim transcript. Parts have been slightly modified to improve readability.

Three simple ways to increase the impact of your charitable giving.

Welcome to Schwab Charitable’s series on philanthropy.

This time, let’s talk about three simple ways to help increase the impact of your charitable giving.

First, figure out how much you already give or how much you’re comfortable giving. According to Giving USA, on average Americans donate about 2% of their income to charity. But many people generally think they give more than they actually do. Once people realize that they give less than they originally thought, it often compels them to give more.

If everyone who currently gives less than 2% would give just a half a percent more, it would generate an incremental $23 billion to support our schools, hospitals, food banks, and other worthy causes.

Second, you may want to consider donating non-cash assets as a way to maximize the impact of your philanthropy. As we discussed last time, donating non-cash assets can allow you to give up to 20% more to your favorite charities and pay less in taxes.

A third strategy is something everyone can do: Make sure to include philanthropic goals in your annual financial plan.

Charitable giving can connect families, build our communities, and change our world. But to have the most impact, it’s important to give wisely.

I’ll see you next time.