Giving with Impact:

[Michael Gordon Voss] Welcome to Giving With Impact, an original podcast series from Stanford Social Innovation Review, developed with the support of Schwab Charitable. I'm your host, Michael Gordon Voss, publisher of SSIR.

In this series, we hope to create a collaborative space for leading voices from across the philanthropic ecosystem to engage in both aspirational and practical conversations around relevant topics at the heart of achieving more effective philanthropy.

So you're an intelligent, successful, impassioned individual who's looking to create real impact around a social issue that matters to you. Okay, now what? This is the place many donors, whether they are new to philanthropy or have been making direct donations for years, often find themselves when first exploring how to deploy their philanthropic resources in a thoughtful and proactive manner in order to improve the impact they have on the causes they support. There are a range of organizations and solutions out there to help donors navigate this process, including community foundations and national donor advised funds. These organizations can not only provide direction into ways to maximize charitable impact, but thanks to their resources and expertise, often have unique perspective on the future of giving.

We're very fortunate to be joined today by two particularly insightful leaders of two such organizations, Nicole Taylor, President and CEO of the Silicon Valley Community Foundation, considered to be the largest community foundation in the US, if not the world; and Kim Laughton, President of Schwab Charitable, an innovator in charitable giving solutions, which is celebrating its 20th anniversary this year.

Nicole, Kim, thank you, both, for joining me today to discuss the present and future of philanthropic impact solutions, no small effort. Let's get started.I'd like to kick things off with a relatively simple question for both of you. What does philanthropic impact mean to your organization? Kim, let's start with you.

[Kim Laughton] Well, thank you, Michael, for having us. At Schwab Charitable, we're focused on increasing the amount of money that people can give across the United States. So consistent with Schwab's strategy of helping clients to save and invest to achieve their financial goals, our goal is to ensure that their philanthropic goals are also a priority. Ninety percent of individuals give to charity, including high net worth individuals, so most have charitable goals as an important component of their life plan. The majority of our impact comes from, first, integrating the charitable planning and giving process into our clients' everyday financial and wealth management process, thereby raising the visibility of philanthropy and making it simpler and easier to give; and, secondly, and importantly, enabling our clients to unlock the value of their investment assets that have appreciated a lot over the past decade.

[MGV] Thank you, Kim. Nicole, what about SVCF?

[Nicole Taylor] So for the Community Foundation, we see impact in two ways. One is what is really happening on the ground in the community; and, two, how do we help donors be effective with their philanthropy; and then how do we make both happen simultaneously, parallel, intersecting? So for the first, we really want to understand what the issues are in our communities here in Silicon Valley, but all community foundations. What are the issues that our communities are really facing? What are the solutions that are really going to work to create the impact on the people's lives in our communities? And then we look at the donors and those are individuals, families and companies who care about the communities in which they live, in which they work, in which they've created their wealth or they're raising their children or grandchildren, and how do we help them get their resources to have the most impact and to meet their goals. And, ideally, how do we marry the two? How do we get them to think about their own backyard, as well as, you know, meeting their philanthropic goals at the same time?

[MGV] Nicole, you mentioned the work not just of the Silicon Valley Community Foundation, but community foundations, in general, a moment ago.

What do you see as the role of the modern community foundation? And is there anything unique about leading a community foundation here in the Bay Area versus what may be common to community foundations anywhere?

[NT] Yes, the modern community foundation, I think, has to be built on the history of community foundations, which is understanding your community. And, today, I think philanthropy is demanding. I think people are demanding. I think the issues are demanding that we work in concert with public sector, private sector, other philanthropic institutions in order to get more resources to where they're needed. I think it's shining a light on what's happening. I think it's acting quickly when there's unfortunate disasters as we've been seeing recently. Community foundations play a critical role to making sure that those resources get to where they are needed, absolutely.

Being a community foundation in the Bay Area, I think, presents unique challenges and opportunities. I think this region has the largest wealth gap and income inequality than anywhere else that we're seeing in the country. To me, that begs responsibility for those of us who are working in philanthropy to figure out, ‘Okay, how do we solve that problem?' But, also, how do we help people with resources spend their philanthropic dollars wisely and effectively? Also, we have the abundance of some incredibly generous people in the Bay Area. We see it in all of the counties. I know Kim sees it at Schwab Charitable with the donors that they have who are based here. So as a community foundation, and there's four of us in this region—we work together, we work together on regional issues, we convene, we convene the public sector, we convene other foundations, we convene private individuals who are giving and families who are giving and companies who want to give in terms of really let's look at what's happening as a region and then also what that means in our local communities.

[MGV] Kim, both you and Nicole mentioned making philanthropic giving more effective and more wide. How do national donor-advised funds like Schwab Charitable help maximize the impact of philanthropy?

[KL] Well, Nicole mentioned the enormous wealth gap here in Silicon Valley, but that wealth gap exists nationwide. Over the past 10 years, the stock markets have tripled in value. In the past five years, they're up 71%. So while giving has increased during this time, we see a huge opportunity to help clients to unlock the charitable value of some of their investible assets and give even more than they have been giving. Donor-advised funds like Schwab Charitable and those associated with financial institutions are uniquely positioned to do this because they can make it really simple and easy to take those non-cash assets, publicly-traded securities, privately-held interest, and they can help educate clients, help educate their investment advisors about the advantage of contributing those to charity. We're able to help investment advisors with their discussions with clients about charitable planning, helping them to realize that it's helpful and tax efficient to give more, particularly when they have windfall years. And, ultimately, and this was born out in our numbers, we see that people do give more when they have that education and when you bring the charitable planning and giving discussions forward and make it part of the whole wealth management and financial management process.

[MGV] That education, both for donors and financial advisors, is a main reason why we started this podcast series, so thank you for touching upon that.

Nicole, you mentioned earlier that there are several groups here in the Bay Area with whom SVCF works closely. How does SVCF help not only donors but other groups, even other community foundations, in their efforts to create greater impact?

[NT] So we are fortunate to have policy experts, field experts, content experts in a variety of issues that we literally deploy them around the region with donors, with corporate clients that we have, with other funders who are interested in specific issues, whether it's immigration, census, education, common core, housing, you know, homelessness. So we pride ourselves on being able to have that content expertise and to use it with our partners. So if we have a private foundation who's interested in a particular issue, they don't necessarily need to staff up in that content area, they can come to us and work with us and partner with us and leverage where dollars may already be going into a particular issue area. And I mentioned earlier that, you know, there are four community foundations here, and we share information all the time around the region, particularly on issues like housing and transportation that affect every single county that's in the Bay Area. And we relish that kind of partnership because there's no one entity can attack these problems alone.

[MGV] Well, obviously, at SSIR we're big believers in collective impact, so I would agree with you wholeheartedly.

Kim, let me ask you, what would you say is the biggest opportunity you see to increase the impact of philanthropy through your work?

[KL] I think the biggest opportunity is to get people to give more money, and that's where we add value to the ecosystem. Community foundations add value by helping people to understand the problems and where they can give, but we uniquely add value by being closest to their money and their financial process, and helping them to give more than they otherwise would. We survey our clients every year just to make sure that we are adding value. And, consistently, over 60% say that they give more than they otherwise would because they have a Schwab Charitable account. We think this is because, number one, we raise the visibility of philanthropy and make it part of their everyday life. When you login to your Schwab accounts and your bank accounts and your investment accounts, you see your charitable account, and it brings philanthropy forward.

We also make it easier for them to, really, simply, with a couple of clicks, donate their appreciated investments. Over 66% of our donations last year, contributions into the accounts, were in the form of appreciated stock. We know that research from Texas Tech has shown that charities who are good at accepting appreciated stock have better fundraising, are growing more quickly. And so we're trying to help that ecosystem so that people can unlock that value. And, you know, providing online tools to help them to think about their giving, but I would stress that the majority of clients who really want help with their giving, we do refer them to community foundations because that's really where the expertise is.

[MGV] Well, and that's a great point. You used the word ‘ecosystem,' and we talk about the ecosystem for philanthropic giving. You know, some people would look at organizations like SVCF and Schwab Charitable, and potentially see you guys as competitors since you both have funds, but I am not one of those people.

I see you both as part of the larger philanthropic ecosystem, and like any entities in an ecosystem, your organizations play unique roles. But how do you see... Kim, you touched upon this a little bit already, so, Nicole, let me ask you, how do you see your organizations working in tandem to increase impact in charitable giving?

[NT] You know, we're at an inflection point in philanthropy. I think we are seeing it where people are questioning the value of donor-advised funds, people are questioning the value of private foundations, tax deductions. It's coming from all sides. And it's at this point in time that I'm really glad to be sitting down with my colleague, Kim, here, because we have got to be working together in this ecosystem. If there's information we have that can help the donors who use Schwab Charitable get their resources to where they're needed, that's the role we should be playing. And we can do this all over the country, there's community foundations all over the country who could be having those kinds of relationships and those conversations.

And we've got to figure out what that looks like, but that's where we need to be thinking. We have got to help our donors, whether they're at a community foundation or Schwab Charitable or any other entity that has a donor-advised fund vehicle, get more money to the ground, get more money out. Our people are literally living on the streets. There are issues that you cannot escape anymore. And it's happening not just here in the Bay Area, it's happening all over our country. People are in need. Schools are in need. We have got to help our donors get those dollars to the ground. And, to me, that means doing it in partnership and in concert to make sure that those resources do, in fact, get to where they're needed. And I believe people give, and open donor-advised funds and open other charitable vehicles, yes, they get a tax deduction, but I believe that they really want to do good. So that's what we've got to be about, helping them do good and be effective with their giving.

[MGV] Kim, what would you like to add to that?

[KL] Yeah, I think we both would agree that we are best when we're working together and contributing to the ecosystem what we do uniquely best. So for national donor advised funds like Schwab Charitable, we have systems set up because our sponsors, you know, donate these systems, allow us to access that help to accept the assets, do it at a low cost, do it in a more automated way. So really unlocking the value of this wealth that's been created, that is where national donor-advised funds can uniquely add value to the ecosystem in a way that community foundations, particularly the smaller ones, have a hard time, right? They don't have those systems and things are not as automated, and errors can occur, and the client experience isn't as good.

But once we've done that effectively, I think it's really up to us to be helping our clients to get to community foundations and to resources that can help them give that money away as effectively as possible. That's why that partnership is important. A place like Schwab Charitable is never going to be expert at the problems of communities, and the pros and cons of various charities, and I don't think we should ever pretend to be expert. We need to be aggressively referring people to community foundations and having them be able to utilize those resources to be able to give more effectively.

[MGV] Okay, so we've spoken a bit about the present of charitable investing. So now I'd like to ask you both to envision the future. This is the fun part of the conversation, potentially. If you look ahead three to five years, what's the most significant change you would like to see in philanthropy and how is your organization playing a role to meet that change? Kim, let's start with you.

[KL] So consistent with the thought of making sure that charitable planning and giving is a component of regular financial and wealth management discussions, I'd like to see that be ubiquitous. What that's going to take though is to add charitable planning to a lot of the curriculum for financial planners and wealth managers. We're working closely with Stanford on some training to begin to make that happen. And that will, I think, over time make it a part of the conversation. We've got the Millennials asking for this from their advisors, they want this expertise. So I'm very hopeful within the next five years or so that you'll find advisors being educated on charitable planning and giving and discussing that aspect of people's lives at the same time that they're discussing their other goals, be it retirement, college saving, and other things.

[MGV] Nicole?

[NT] Yeah, I'd love to just add to what Kim said. The conversation about philanthropy is ubiquitous and that they come to a place like Silicon Valley Community Foundation because they know we can point them to solutions or we can bring them together with other donors who have similar interests in and want to solve similar problems. They know that they can come to a community foundation to think about actual philanthropic planning, and goal-setting, and how to help next generation wealth, you know, and how do you transfer values and not just the money? And those are the kinds of things that if you have something that you really want to have an impact on, you're going to come to the community foundation because you know they'll have the answer or it will be a phone call or an email away for them to get the answer to you.

And, really, kind of back to where we started this conversation, that the ecosystem is working much more seamlessly together, you know, that we have those relationships between the community foundations and the national donor-advised fund providers, that, you know, when... it wasn't always friendly and collaborative, but I see in five years it's going to have to be. If we want to unlock the potential for philanthropy, unlock the potential for the resources to get to where they need to go, we're going to have to work much more collaboratively. And in five years, I think we can do it.

[MGV] Well, at SSIR we're certainly big believers in collaboration and the fact that everyone across the ecosystem has an important role to play in making the work of social innovation more effective and more efficient.

So, with that, I would love to keep going with this conversation, but I believe we're running short on time. So, let me, once again, thank you both for your time today. Kim, Nicole, it's been an absolute pleasure talking with both of you.

[KL] Thanks for having us.

[NT] Yeah, thank you.

[MGV] Thank you for listening. We hope you've enjoyed this episode. Please consider leaving us a review on Apple podcast or your favorite listening app as it helps others discover the show. We encourage you to listen to other episodes in this series, as well as other podcasts from SSIR, Schwab Charitable, and Charles Schwab. This podcast series is made possible with the support of Schwab Charitable, who played an important role in the selection of topics and speakers. For important disclosures and a transcript of this episode, visit schwabcharitable.org/impactpodcast.

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