The Dark Underbelly of Wealth, and How to Save Your Kids from It

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The desire to bless our children, is God-given, but without careful thought can sometimes backfire. There’s a point where passing down wealth can cause irreparable damage to your children’s lives. When we speak about estate plans, there’s a lot at stake.

It’s not about money. It’s not prestige. It’s about our children — and our children’s children.

We all want the best for our children, and so we work hard to leave them an inheritance that will help them live the best life possible. It’s natural for a parent to give all they can to their children without a second thought. But there’s a hidden, dark side to wealth.

Most people don’t know how dangerous money is — or worse, they don’t want to think about it.

The truth is wealth has been a menace that has ruined many lives and destroyed many families.

“For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.” – 1 Timothy 6:10 (ESV)

The story of King David’s family offers us poignant examples of the potential destruction of vast amounts of unearned wealth.

David was a nobody, a mere shepherd boy walking his herds through the Judean hills. Through God’s grace and an immense amount of hard work and risk, he amassed great wealth as the king of Israel.

His son, Solomon, inherited the lion share of his father’s wealth. He grew that wealth to the point where silver was as common in Jerusalem as stones (1 Kings 10:27).

After Solomon, the Davidic inheritance fell to Rehoboam. Rehoboam not only lost the bulk of the wealth, but he also lost the kingdom.

Shirtsleeves to shirtsleeves in three generations, not to mention the great tragedy and violence that befell the kingdom.

The Burden of Unearned Wealth

A while back, I was sitting down in my office with a lovely, godly couple who had flown in to speak with me about their estate plan.

The husband came from a privileged and blessed family background. The wife had come from poverty.

They met as young adults, fell in love, and raised a beautiful family together. Now, they had begun the serious conversation about what to do about their sizable estate when they passed on. Our conversation that day revealed the enormous disparity between their views of wealth, well-being, and legacy.

Having been raised in the gilded halls of high society, the husband felt all of that privilege had, in reality, stunted his personal growth. He believed that his personal maturity had been hindered by the fact that he did not have to work his way up in life, as his more seasoned peers had to do. He was reluctant to place the same burden of unearned wealth upon his children.

Giving our children everything can be dangerous for them. Make a plan. #estateplan #plannedgiving Click To Tweet

To the wife, his reluctance signaled a lack of love and concern for their children. The emotions she carried about her lowly past went deep. She had been brought up in poverty — and she wanted her children to have no part of that upbringing! And so when the husband and I began discussing the idea of placing a cap of $3 million on each of their children’s inheritance, she wouldn’t have it.

You might think her silly. Or you might think her rightfully concerned for her children’s well being. But I’ve watched this scenario play itself out with families of all kinds of economic levels. It’s not the amount of money we’re talking about that makes any difference.

When we speak about stewarding our God-given resources, it’s how you view the role of money in your children’s lives that counts.

There is a point when inheriting greater amounts of wealth will do your children more harm than good. But as parents, it’s difficult to talk about. Our natural instinct to give all that we have to our children is strong (and noble). There are also times when we simply don’t know what questions to ask.

The Unasked Question

I once spoke with a couple who were selling their multi-million dollar business. We were talking through the sales process, and I brought up this simple, yet compelling question… How much is enough for your children?

What percent of your estate or what dollar amount is enough to launch your children into their ideal future?

If you can decide on that, you know how much is enough, and you’ll avoid harming your children with more wealth than they can handle.

How much is enough for your children? How much is too much? #estateplan #stewardship #plannedgiving Click To Tweet

The husband said, “No one’s ever asked us that question. But it’s so important!”

Eventually, they came up with a number that was a fraction of the amount they would have placed in their kids’ revocable living trust. They had decided what was truly enough to be helpful to their children’s future, and how much would have been potentially destructive.

Because they capped their children’s inheritances to a level that was truly beneficial, they were able to keep the inheritances within the tax-free range. They cut the capital gains tax on the sale of the business dramatically. But even better, they were able to give those tax savings to the different ministries they cared about.

As for the earlier couple, they’re still working this out. It’s an ongoing conversation, and I’m proud of them for praying, thinking, and talking about it!

Have you started this important conversation with your spouse? Do you know how much is enough to launch your children into their futures — and how much would be harmful to them?

A Helpful Guide

To get the answers to these profound and sometimes troubling questions, you may want a guide to help steer the conversation and bring clarity to the legal or financial details of the conversation.

Someone from the outside with no agenda, no commissions, and nothing to sell. Just a well-informed person helping you ask the right questions. That’s why The Giving Crowd is here.

We’re here to help you work through these critical yet complex conversations so that you can best steward the resources God has given you. The call is free, and there’s no obligation. Let’s talk!

Finding Hidden Treasure through Asset-Based Giving

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It happens in nonprofits and ministries of every stripe: Too many times, we underestimate the capacity and goodwill of our donors. To find the hidden treasure in and for our donors, we must change our perception of who are donors are and what they want to accomplish.

Recently, I made a call to a gentleman who’d asked for follow up after a seminar I gave at a small church. The voice on the other end had a drawl so thick, I could barely understand him.

Through an awkwardly comical series of my asking him to repeat himself, I made out that he was a farmer. A widower, no children. He was a sweet, gentle guy who clearly loved the Lord.

But I couldn’t understand why he wanted me to talk with him. A real communication failure. So I asked, “Do you have some specific questions based on the webinar a couple weeks ago?”

“No, I don’t think so. But my pastor thought I should talk to you. Because he thought I could sell the farm, and then keep farming, and give money.”

Confused, I still couldn’t make out exactly what he wanted to do or how to help him. I thought, he’s just a nice guy with about 30 acres of land resulting in about a $100,000 of total net worth and wants to give it to the church when he dies. I was about to end the call with a few quick words of advice.

Thankfully, we kept talking. Eventually, it came out that this farmer had 230 acres of land worth $20,000 an acre, and a developer is asking to buy 80 of the 230 acres from him.

That’s a $1.6 million deal.

I finally understood! The farmer had no idea what the capital gains taxes from the sale would be. He wanted to give the proceeds of the sale to the church when he dies, but he wanted to continue farming until he couldn’t do so anymore. He would then need regular income to sustain him.

To find the hidden treasure for our donors, we must change our perception of who are donors are and what they want to accomplish. Click To Tweet

We helped him set up a Charitable Remainder Trust which would provide him a steady income until his passing, at which time, the church would receive the large gift from the sale of the land. In this way, he was able to continue farming on the remaining 150 acres of land and avoid the massive capital gains tax from the sale.

For both the farmer and the small church, it was like finding hidden treasure.

Finding Hidden Treasure for Donors

This farmer with an unintelligible account from a small church in a rural county had an enormous capacity to give — but you wouldn’t know it by looking on the outside.

Despite his significant resources, this man probably lives on $30 to $50 thousand per year.
Humble. Simple. But wealthy.

There was so much latent potential within this humble man. Thankfully, that potential was able to be realized.

Too many times, we underestimate the capacity and goodwill of our donors. Click To Tweet

By tapping into the latent potential of this man’s giving through an asset-based gift, there were profound impacts on his retirement. But then, there was also a tremendous impact on the Kingdom of God through his gift to the church.

Unfortunately, for many donors, nonprofits, and churches, the latent potential for transformational giving within donor assets is often missed altogether.

Hidden Treasure in Retirement Accounts

There is somewhere north of $22 trillion sitting in IRA’s and 401k’s across America—latent potential for good. But there’s also latent potential to save donors thousands of dollars!

Nine out of 10 people that I talk to are unaware of the taxation on their IRA or 401K when they die. These donors have never heard of it, and yet for most of them, it’s going to be the largest tax bill of their life.

For example, the average American with an IRA of $200,000 can pay up to $30,000 or $40,000 in taxes when they die. For a middle-class couple with a combined income of $60,000 or $80,000 per year, that’s a ridiculous, astounding, unbelievable amount of tax.

On the other hand, being able to give a $200,000 gift to charity is equally unimaginable for many middle-class Americans.

It’s an “Aha! Moment” for most people to discover that they could give everything else—their house, life insurance, investments, everything—to their children tax-free by just giving their IRA to ministry.

This is hidden treasure uncovered for your donors through asset-based giving. And of course, it’s a hidden treasure uncovered for your organization.

Hidden Treasure in Business Sales

VIP Forum estimates that 82 percent of baby boomers that have a family business will sell that business as they approach retirement rather than pass it to the next generation.

When they sell the business they started in their garage and scaled it to a million, 10 million or 100 million dollar operation, they’re going to encounter an astoundingly high tax bill. The taxes on these sales are significant.

But what if they could cut those taxes and instead, direct the money to go to the charity they care about?

In our consultations with donors, we routinely show them how they can reduce those taxes by 50 to 80 percent. In fact, sometimes they can eliminate them all together in favor of the charities they care about, making the capital gains tax a voluntary tax.

Baby Boomers who are selling their businesses, and those with currently “untaxed” retirement accounts, can give that money to the government because they just weren’t paying attention or do so out of ignorance.

But if you show them how they can elect to (oftentimes) increase their retirement income, provide generously for their heirs, and disinherit the government in favor of their favorite charities, you will be helping them find hidden treasure for themselves and your organization.

If you would like to know more about finding hidden treasure for your donors by discussing asset-based giving options with them, let’s talk!

The Window Is Closing on Annual Giving

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The window is closing on annual giving as the main funding strategy for nonprofit organizations. And where one window closes, you need to find a door, like asset-based giving. It’s a lot easier to walk through.

As my colleagues, Greg Ring and Steve Caton have discussed, the window of opportunity is closing on annual giving. Sure, annual giving fundraising is not going away, nor should you shut down your annual fundraising program.

But as recent studies by the Indiana University Lilly Family School of Philanthropy show, annual giving trends are declining across the board.

There are certainly a lot of reasons for the decline in cash-based, annual gifts.

Therefore, nonprofit leaders like you must come up with long-term strategic answers to the problem instead of band-aid solutions that barely nudge the needle short-term.

White Noise

There are over a million nonprofits in the United States alone—and the number of nonprofits registered each year is only going up! They all have a cause. They all need donors.

They all have access to ever more powerful and cost-effective channels of communication, which means each one is communicating with the same donors you are.

For the donor, this all becomes “white noise.”

The constant barrage of nonprofit communications inundates people with news, solicitations, commercials, etc. to the point that few pay much attention to base-level (annual) fundraising campaigns.

Savvy Donors

Speaking of nonprofit commercials, ads, and solicitations—all of them come with a cost. The result is that nonprofits spend millions of dollars hoping to simply pay for the cost of their fundraising efforts.

Raise a dollar to spend a dollar.

This isn’t such a bad thing, except that donors are now aware of the price of these fundraising extravagances. Today’s donor realizes that his or her dollar isn’t going to help animals or children…it’s going to pay for the very communication used to acquire them.

Don’t get me wrong. I’m not against donor acquisition strategies, per se.

But the effectiveness of spending the entire campaign budget to acquire names in the hopes of future retention or renewal campaigns is growing thin.

And if the effect of traditional donor acquisition/retention strategies is waning, then we should direct our resources and time to other opportunities that provide much greater returns on investment, like asset-based giving.

The Tyranny of the Urgent

At the end of the day, it’s the tyranny of the urgent that keeps nonprofits from diving into cultivating transformational gifts and keeps them overly invested in base-level fundraising strategies.

The tyranny of the urgent keeps #nonprofits from diving into cultivating transformational gifts. Click To Tweet

To escape the coming dry spells in annual giving, you must begin shifting to a more long-term, permanent, asset-based funding mindset.

Concrete Steps

Moving from an over-emphasis on annual fundraising to an asset-based approach isn’t easy. But there are some concrete steps you can take to get there.

1. Change the leadership dialogue.

John Maxwell once said, “Everything rises and falls on leadership.” That means you MUST begin with your organizational leaders.

Change the mindset of your organizational leaders from short-term problem solving to long-term thinking. Click To Tweet

Begin by changing the internal dialogue of your organizational leaders from short-term problem solving to long-term thinking.

2. Articulate long-term vision.

While you must have a vision that goes beyond the walls of your organization, having an internal vision is not enough. You must articulate your long-term vision to your donors.

Over time, you’ve got to communicate both the right-now reasons to give and the long-term reasons to invest in your organization.

Images of orphans starving in the street is a short-term vision. A network of orphanages with a unique approach to mental health, education, and emotional care is long-term. Don’t forget the long-term vision.

3. Invite donors into the conversation.

This is the scary part. But it’s necessary to cultivate transformational gifts.

Your donors are probably used to short-term, annual fundraising tactics. So you’ll need to gradually invite your high-capacity givers to a conversation around asset-based giving.

4. Think of donors first.

Donor-centricity is much more than a good fundraising technique. It’s an institutional mindset that changes everything in your area of service.

Donor-centricity is more than a fundraising technique. It’s an institutional mindset that changes everything. Click To Tweet

Find ways to serve your donors’ needs, even if they’re not directly related to what you do. For example, Prestonwood Foundation in Plano, Texas has served their donors by offering Social Security benefit classes and retirement planning seminars. This, of course, is not why the foundation exists, but it is a way they can serve a felt need among their donors.

So how has that worked out for them? It helped them build such an affinity with their donors that opening up the conversation about asset-based giving was a natural next step.

Instead of getting their contact info to ask them for more gifts, tell your donors that you want to invest in them because your mission is worth their long-term investment. This level of donor care must become an organizational priority.

5. Get outside help.

Cultivating asset-based gifts is complicated, it takes time, and in most cases, it requires a confidential third-party service.

It’s an inherent conflict of interest. Donors simply won’t show you their balance sheet.

That’s why we do what we do at The Giving Crowd. We specialize in helping donors understand the ways they can use their God-given assets to further the causes they most care about.

By providing a complimentary, confidential consultation service like The Giving Crowd, you can build the trust between you and your donors.

Ready to see how we can help you cultivate transformational gifts for your organization? Let’s talk. The call is free, and there’s no obligation.

Tithing Is Down: Where to Go When the Brook Dries Up

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Churches all over America are seeing declines in giving, stopping them short of their God-given mission. But asset-based and legacy giving strategies offer hope for churches looking at a future funding crisis.

One of the grave ways in which our world is changing is that people don’t give to their local house of worship like they used to. Pastors across the country are feeling the pinch of trying to accomplish 100 percent of their vision with only 12 percent of their congregation tithing regularly.

Of course, this could be the result of a handful of churches that just don’t know how to motivate and instruct their members in Christian charity. However, a recent study suggests it’s more of a spiraling cultural trend than a local problem.

Only 34 percent of households gave to a house of worship or religious organization in 2014, down from 46 percent in 2004. – Indiana University Lilly Family School of Philanthropy

That’s 12 percentage points in just ten years! This is far more than a local church issue. This is a problem for the whole body of Christ.

Low tithe #giving is more than a local #church issue. It’s a problem for the whole body of Christ. Click To Tweet

Unfortunately, there’s no indication that this downward trend in religious giving is going to end. So what should pastors and church leaders do to stem the tide?

Ravens and Widows

Once after prophesying about a coming famine, Elijah found himself suffering as a result of the famine he foretold. But God provided for the faithful prophet, albeit in a strange way.

“Then the word of the Lord came to Elijah: ‘Leave here, turn eastward and hide in the Kerith Ravine, east of the Jordan. You will drink from the brook, and I have directed the ravens to supply you with food there.’ So he did what the Lord had told him. He went to the Kerith Ravine, east of the Jordan, and stayed there. The ravens brought him bread and meat in the morning and bread and meat in the evening, and he drank from the brook.” – 1 Kings 17:2–6 (NIV)

God didn’t give Elijah money, or send him a check from a friend of the ministry. He sent ravens with food. (Perhaps this could be considered the wildest gift ever received by a ministry, ever!)

It was indeed strange—and it wasn’t how all of the other ministers were supporting their ministries. But it provided all of Elijah’s needs.

But suddenly, the brook dried up.

“Sometime later the brook dried up because there had been no rain in the land. Then the word of the Lord came to him: ‘Go at once to Zarephath in the region of Sidon and stay there. I have directed a widow there to supply you with food.’” – 1 Kings 17:7–9 (NIV)

Many pastors feel that lower giving rates in tithes are the brook that’s drying up in their ministries.

It’s one thing to look at a national study and see a 12 percentage point difference—it’s quite another when you’re the leader trying to move your church forward on 12 percent less funding than you need to pay the bills!

Just like Elijah, God may have another way to provide that you may not have ever thought of before.

When the Brook Dries Up

God knew the brook was going to dry up on Elijah. The fact that the brook dried up was not a sign that God was not going to come through for the prophet. But that is probably how it looked to Elijah.

God had a plan from the beginning on how He was going to provide for the prophet’s needs. And He has a plan to provide for you.

God has a plan to provide for your ministry, even when the brook dries up. Click To Tweet

But you might have to do something a little different than you’re used to. You might even have to do something different than every other pastor in your denomination or location. I’m talking about asset-based giving and legacy giving.

Asset-based Giving

Asset-based giving happens when one of your members gives ownership of an entire asset or a portion of an asset like property, buildings, or businesses to the church. Legacy giving happens when a member makes a gift that is given from their estate upon their death.

Funding from tithes and offerings is instant, liquid cash for your church to use for the Kingdom. They’re usually small amounts compared to asset-based giving because 91 percent of the average American’s wealth is made up of assets, not cash.

Asset-based gifts are hard assets that may take time to liquidate, or they appreciate in value over time like an investment. They’re typically much larger in amount because they come from the much greater portion of the average person’s portfolio: their assets.

The reasons pastors should consider cultivating asset-based giving in their church are many:

  1. Asset-based gifts are transformational gifts that have the potential to change the face of your ministry and ease the stress you feel from the effect of lower tithe giving.
  2. Asset-based giving and legacy giving have been shown to increase regular giving among church members!
  3. Cultivating asset-based giving ensures that the church is as generous as its members.
  4. Asset-based giving helps you break through giving slumps so that your ministry can do things never before thought possible.
  5. Asset-based giving forces church leaders to focus on education and discipleship when it comes to giving, not manipulation.
  6. Asset-based giving motivates church leaders to expand their vision beyond the walls of their local church.
  7. Asset-based giving and legacy giving can bring mature believers from your congregation in to help you raise funds rather than you doing it all on your own.

The Provider

In the first book of the Bible, God reveals Himself to Abraham as Jehovah Jireh, the God who will provide. He always sees to it that His leaders have what they need to accomplish the mission He’s sent them on.

But it may not look like the provision that He gave to you yesterday.

So if you are finding yourself in the valley and the brook is drying up, I encourage you to consider how asset-based giving and legacy giving could move the Kingdom of God forward through your church, despite the national statistics.

And if you need some help with that, let’s talk! The call’s free, and there’s no obligation.

Finding the Perfect Donor

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All successful capital campaigns since the very first one recorded in Exodus are dependent on this kind of donor. Identifying them and knowing how they think can make all the difference for your next big initiative.Exodus 25 begins a story of the first recorded capital campaign in history. In later chapters, the writer tells us the results of the campaign and what they did with the funds raised.

It’s fascinating how this case study showcases all the elements of the successful capital campaigns we see today.

Each donor gave freely. This wasn’t a tax or government procurement. Moses clearly portrayed the vision to the people. The vision matched the desires of the donor base — and they responded!

Uniquely, the campaign focused on soliciting and receiving asset-based gifts. Moses saw tremendous success in building the Tabernacle by going deep with this commonly missing component of capital campaigns.

But there’s another ingredient of successful capital campaigns that I want to dive into today.

Donors make capital campaigns a success, not their gifts. It’s all about people. Click To Tweet

This final element of success is distinct because it’s a component of the donors that make capital campaigns a victory for your nonprofit, church, or ministry. To hit your campaign goals, you’ll need to identify, cultivate, and solicit campaign gifts from these special people.

Characteristics of the Perfect Donor

The kind of donor that makes capital campaigns successful are those who know that…

  1. Their wealth is a gift to them,
  2. They are responsible to steward it well, and
  3. They must use it to further their values rather than accumulate more valuables.

Take a look at the results of this ancient case study and see how these ingredients were present in the donors who gave to build the Tabernacle.

“Then Moses summoned Bezalel and Oholiab and every skilled person to whom the Lord had given ability and who was willing to come and do the work. They received from Moses all the offerings the Israelites had brought to carry out the work of constructing the sanctuary. And the people continued to bring freewill offerings morning after morning. So all the skilled workers who were doing all the work on the sanctuary left what they were doing and said to Moses, ‘The people are bringing more than enough for doing the work the Lord commanded to be done.’

Then Moses gave an order and they sent this word throughout the camp: ‘No man or woman is to make anything else as an offering for the sanctuary. And so the people were restrained from bringing more, because what they already had was more than enough to do all the work.” Exodus 36:2–7 [Emphasis mine]

The capital campaign goal was reached, and the donations kept coming in so much so that they had to restrain the people. (Imagine writing a letter/email/blog post telling your donors to stop giving because you have more than enough!)

Not one person gave a check. Nobody gave a CD. These people were giving assets.

Where did those assets come from?

They came from the “plunder” of Egypt. As the Jews left Egypt, God instructed them through Moses to go to their neighbors and ask for things. The Egyptian people, knowing that God was with the Israelites, gave the Israelites — former slaves — anything they asked for including silver and gold.

“The Israelites did as Moses instructed and asked the Egyptians for articles of silver and gold and for clothing. The Lord had made the Egyptians favorably disposed toward the people, and they gave them what they asked for; so they plundered the Egyptians.” – Exodus 12:35–36 (NIV)

There’s nothing in Scripture to indicate that the Israelites would have asked for these items on their own. God had given them the insight to go to their neighbors and request these precious assets. So they left Egypt with more than enough to build the Tabernacle a few years later.

Recognizing God’s Hand

Everything the Israelites had to give to the capital campaign came as a direct result of God’s favor and direction in their lives. In our modern society, isn’t the same?

Whether you have a multimillion dollar company or you have 50 dollars leftover in your pocket, what you have comes from the hand of God.

Unfortunately, it’s easy to think as hard-working Americans, “Look at what I’ve done. I’m a self-made person.” It’s easy to give credit to our free market system, our business-friendly government policies, or the massive amount of information available at our fingertips for our wealth.

But how foolish that would be! Sometimes we need to be reminded of the truth.

“You may say to yourself, ‘My power and the strength of my hands have produced this wealth for me.’ 18 But remember the Lord your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your ancestors, as it is today.” – Deuteronomy 8:17–18 (NIV)

Whatever we have comes because of God’s blessing. He enabled us to produce the assets that we have. He gave us the skills, the insight, the heritage, the education, the right piece of land — whatever it might be.

It all came from the hand of the Lord.

Becoming the Perfect Donor

So you and I do the same thing when we participate in capital campaigns. We’re taking the resources God has blessed us with and now using those as a part of our worship to the Lord. It’s part of our thanksgiving to him.

Knowing our wealth comes from God motivates us to give generously of our assets, not just our money. Click To Tweet

The difference today versus thousands of years ago is that most people sell their assets (such as a business or a piece of land or a warehouse), pay the taxes, and then give the cash to charity. But asset-based giving allows to give the asset itself rather than write a check — just like the Israelites did when they built the Tabernacle.

Knowing that all your wealth comes from God motivates you to give generously of your assets, not just your money.

And this comes with some significant benefits to you and your donors! By giving assets, you and your donors can avoid those taxes, get a handsome charitable deduction, and at the same time use the resources God blessed you with to further His Kingdom.

Want to know more about finding, motivating, and serving the perfect donor to do great things with their God-given resources? Let’s talk!

The 4 C’s of Successful Fundraising

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The days when money rolled in for nonprofits just because they were charitable organizations are long gone. But that doesn’t mean your nonprofit or ministry has to suffer a lack of funding! But you will need these four critical components firmly in place: “The Four C’s of Fundraising Success.”

1. A Clear, Compelling Vision

Back in the day, nonprofit organizations could rely confidently on gifts coming in simply because they were a not-for-profit trying to do some good in the world. But that world no longer exists.

In the last twenty years, there’s been an explosion of nonprofits registered in the United States resulting in an environment of intense competition where many charities are doing basically the same thing as your nonprofit.

The arrival of the Information Age has also changed the landscape drastically. Now anyone can find all the other nonprofits out there that do almost exactly what you do with a quick online search.

Competition in #fundraising is fierce. You must have a clear, compelling #vision that sets you apart. Click To Tweet

Competition for the charitable dollar has never been more fierce — which is why you must have a clear, compelling vision that sets you apart from the others. This is especially true when cultivating Gifts of Assets.

Vision and Asset-Based Giving

When you ask someone to give or liquidate one of their assets for your cause, you’re not asking them to give away their left-over cash. You’re asking them to take out a piece of their balance sheet, effectively a piece of their life and give it to you.

There must be a good reason — a compelling vision — for your donor to part with the wealth they’ve worked hard for.
How will the world be different? How will the community be different? What’s going to change if they give money or assets to you?

A Vision So Compelling

The pastor of a church in Detroit told me about how he took eight men from his church to Thailand in an effort to touch their hearts and raise support for a missionary there.

They did some ministry among the local churches there and even went out to tour the beauty of the city. Then they spent a day with the missionary unpacking for these men the horror of the daily life of a child trapped in sex trafficking.

The men heard the stories of twelve and fourteen-year-old girls and boys often introduced innocently into slavery by their parents and whose daily life existence was one sex predator after another.

This missionary wanted not only to rescue these children but to help them to heal. His vision was to build an orphanage and recovery center in the countryside where over time these kids could restore their dignity, learn a trade, and escape from the horror of their childhood.

The pastor shared with me what it was like to be there that day…

“Greg, when you get eight fathers sitting in a room hearing about this atrocity, it was like reaching right through their rib cage and yanking their heart out. They were pounding on the table with anger saying, ‘This isn’t right! We’ve got to do something.’”

The vision of this missionary was so moving that these eight men went back home in the depths of a deep recession in Detroit and put together the money for this orphanage in about 90 days.

I met with one of these guys who had a collection of rare 1920’s and ’30’s movie posters. Some of these posters were worth 10 or 15 thousand dollars. He didn’t have any money to give, so he went down to his basement and began taking down his posters to sell them and give the money to the orphanage.

That’s compelling vision when you’ve got people tearing things off their walls at home because they want to be involved. They want their lives to make a difference!

2. Consistent Communication

This “C” separates the big boys from the little guys. High-performance nonprofits and ministries are constantly reaching out to their constituencies through a variety of channels. They have receipt stuffers, magazines, seminars, appeal letters, audio downloads, etc.

Well-funded nonprofits communicate almost obsessively. They keep their blogs up-to-date. Newsletters go out on time and frequently. The website is updated with new pictures and stories.

Consistent communication is hard work, but the rewards are huge.

Donors give to the nonprofit that keeps up with them, not the “dabblers.” Consistency is a MUST. #fundraising Click To Tweet

When a donor is ready to give, they are more likely to give to the organization(s) that keeps up with them…not necessarily the one that needs the money the most. Conversely, donors don’t call the “dabbler” when they’re ready to give.

To be successful in today’s competitive environment, you must commit to getting better at reaching your donors consistently.

3. Competent Follow-up

Most nonprofit leaders understand the value of good follow-up. But the special nature of major gifts, asset-based gifts, and estate gifts require the finesse of a competent professional who not only knows the legal and financial nuances, but also knows the way higher net worth individuals think.

Too many times, nonprofit staff members assume the high net worth individuals they speak to have their estate plan locked down, or that donors understand how they could leverage their assets to create impact.

This unfamiliarity with the needs, desires, and realities of today’s high net worth individual results in missed opportunities to both serve the donor and the cause.

But the competent professional knows that only 1 out of 5 high net worth individuals have a robust estate plan that includes gifts of assets and methods to reduce taxes in favor of charity. They know how unusual it is for people to have this type of well-crafted estate plan.

They also don’t assume that donors have an A-level team of financial planners around them who share their values for philanthropy.

The Difference Competence Can Make

You’ll miss opportunities if you don’t have seasoned, competent staffers to follow up with “tire kickers.” An experienced planned giving officer will be able to listen to someone who’s got a living trust and show them how they’re still paying too much in taxes.

Of course, if you’re not a seasoned professional (yet!) or if you don’t have the budget to hire one, the team here at The Giving Crowd would be happy to help. We love helping donors understand how they can leverage their assets to further the causes they care about.

4. Champions

Finally, the secret sauce to cultivating and executing transformational gifts for your nonprofit organization is to recruit champions who can share the load of fundraising.

Many organizations aren’t large enough (especially churches) to have a ”Vice President of Giving.” But more than likely, you have laymen and women in your constituencies who have some kind of knowledge or experience in planned giving, financial planning, business, estate plans, etc.

Besides having the expertise to follow up with donors competently, these individuals can communicate on an entirely different level — and with much more credibility than you as a staff person — about creating a legacy through giving of their assets. Business owners who have themselves done some gifting of assets are ideal because they “have been there.”

These individuals are your champions!

They can help you get the word out about legacy and asset-based giving and they give you the credibility you need to cultivate these transformational gifts.

And here’s some more good news: Not every champion has to be good at following up with other donors.

Gather one-liner quotes or even long-form testimonials from other legacy givers to share with your prospective donors. Keep your website fresh with new quotes and stories from your current legacy givers and givers of assets to champion this way of giving through their testimony — even if the quotes seem simplistic to you.

For example, I once had the CEO of an international company give me this quote:

“If you’ll take the time, you’re gonna like this.”

That’s it! It was so simple, but his name and credibility along with those words of encouragement were enough to make this simple quote “gold” in terms of influence.

The 4 C’s of Fundraising Success

Clear, compelling vision. Consistent communication. Competent follow-up, Champions.

These are the four C’s of fundraising success that you’ll need to build into your fundraising program to cultivate transformational gifts for your organization…even in today’s intensely competitive environment.

Want to bring competent, affordable help alongside you to cultivate major gifts of assets and legacy gifts for your organization? Let’s talk.

Transformational Gifts: How Asset Giving Changes Nonprofit Organizations and the Giver

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We want you and your mission to be fully resourced — but not just so you have money in the coffers. Here’s how asset giving can radically change your organization as well as the giver.

At The Giving Crowd, we like to call asset gifts and planned gifts transformational gifts. At first blush, you might think we’re saying this to come up with a cooler way to say “asset-based gift.” But this is more than semantics.

Asset and planned gifts have real potential to transform both nonprofits and givers as well as transforming the beneficiary of the nonprofit’s mission.

Asset-based #giving and #plannedgiving transform both #charities and #donors. Click To Tweet

While this happens at every level of giving, the transformational effects of giving much are much more visible when an individual chooses to give of their assets or estate.

How Asset and Planned Giving Changes Donors

Empowered Stewardship

The first major change in donors is that they begin to understand the concept of biblical stewardship on a whole new level. Donors who give of their assets — whether it’s through the sale of a property, a gift of real estate, or stocks & bonds — have already begun to believe that everything they own should be considered in their giving.

Donors who give of their assets or estates have come to realize that they are stewards of much more than cash. They are stewards of their time, influence, and their assets.

Empowered Finances

When a donor begins to give of their assets or estate, they begin to see the possibilities of changing their tax liability. A surprising number of high net worth individuals do not know how they can lower the amount of taxes they have to pay if they gave to charity.

Understanding just how many options are available to them is empowering — it allows the donor to put their money where they really want it to go, instead of the big, black hole of government.

Empowered Individuals

Everyone’s got limitations on their cash flow. Even for high net worth individuals, there’s just only so much you can give in cash at any one time. We’ve said it before, but 91% of the average American’s wealth is made up of the assets they own, while only 9% is liquid.

91% of the average American’s wealth is in assets, not cash. #assetgiving #plannedgiving #charity #impact Click To Tweet

This puts an immediate cap on the amount of good that a donor can do through their giving — but when a donor gives of their assets, the cap is blown away and all the potential impact they can have through their assets is released.

It’s a transformational moment when a donor realizes that they can produce exponentially greater impact in the area(s) they care about simply by giving of the 91% they already have.

Empowered Time

Donors are changed when they realize that they can give their biggest gifts now rather than wait until they die or have more cash (which almost never happens). There is a release of joy when a person finds out that they can do something now about the cause or people they care about. Asset giving changes donors in how they see their time.

How Asset and Planned Giving Changes Organizations

At the transactional level, everyone understands what money can do for an organization. Appropriate resourcing provides materials, equipment, facilities, and staff to steward charitable funding well. Money is absolutely essential to keeping a nonprofit’s infrastructure humming along so that real impact can happen within the scope of the vision.

But giving does much more than purchase the things necessary to do the job. It also changes the nonprofit or ministry fundamentally in several key areas.

Donor Care

Organizations that implement strategies to cultivate asset and estate gifts automatically change how they care for donors. In fact, they ramp up donor care to all new levels as they begin to seek out how they can make their donors’ dreams of making a big impact come true.

When #nonprofits cultivate asset gifts & #plannedgiving, they view donor care as a core thing they do. Click To Tweet

When organizations begin to cultivate asset gifts and estate gifts, they view donor care as one of the main things they do as an organization rather than one more task to check off.

Long-Term Perspective

If you look at nonprofits (especially colleges and universities) who consistently cultivate asset and planned gifts, you’ll see that they have a long vision for their revenue. Nonprofits that do not cultivate asset gifts spend every moment thinking of today’s cash flow — they’re constantly in a state of crisis fundraising.

But when nonprofits start cultivating asset gifts, they begin to focus on future revenues. They know that tending to tomorrow will take care of today’s needs eventually.

Holistic View of Resources

Nonprofits that neglect asset and estate gifts tend to have a one-dimensional view of resources: cash. All they think they need (and therefore, all they ever ask for) is cash gifts. But as we see above, 91% of the average American’s wealth is NOT in liquid cash — there are so many more dimensions to explore when it comes to resources!

So when I or one of my colleagues here at The Giving Crowd begin to work with our clients and they begin their journey into cultivating asset gifts, we watch their view of the resources available to them expand as they realize all of the possibilities, not just the one possibility they always went for.

Becoming more Competitive

It’s an awkward truth, but the nonprofit sector has competition when it comes to fundraising. You might have noticed that for every one mission, there are at least four different nonprofits working on it — and all four of them are asking the same donors to give of their 9% of cash funds available.

Examples of Charities for Drinking Water

With at least 1.5 million nonprofits operating in the United States alone, the “competition“ for the 9% of available cash gifts is enormously high. But competition for the 91% of non-liquid assets that can be given is relatively low. Historically, it’s mostly universities and hospitals that are cultivating and receiving gifts of assets and estate gifts.

So you can imagine how deep the transformation is for a nonprofit that begins to cultivate asset and estate gifts. In a way of speaking, they’ve left the pond where a 100 people are fishing for an ocean with only 10 people fishing.

The change to asset and planned giving transforms the way a nonprofit operates because the consistent, perennial revenues that eventually begin coming in allow it to perform its mission with higher and higher levels of excellence without having to fight for every dollar to come in.

Ready for a Change?

Unfortunately, because so many nonprofit leaders are only focused on today’s revenue, and because donors are only given the option to give in cash right now, I’ve seen so many opportunities for transformation pass by untapped.

But when the heart and mind of both the organization and the giver have been transformed in how they view stewardship, vision, and resources than real transformation can take place.

Are you ready to begin cultivating transformational gifts that will change you and your donors? Then, let’s talk.

The call is free, and there’s no obligation to see how we could help you transform the way you raise funds and how you create impact for your donors.

It’s Both/And: How Cash & Asset-based Gifts Work Together

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For today’s tight-budgeted nonprofit organization, it is tempting to neglect cultivating larger, more complex Gifts of Assets or planned gifts that take time to come in and just go for the cash gift today. But there’s no need to sacrifice anything—you can have both!There’s an unfortunate myth among nonprofit leaders that transformational gifts such as gifts of assets or planned gifts, which take time to come in, discourage donors from giving cash-based gifts today.

The basis of this myth goes like this: because the gift amount for the Gift of Asset or planned gift is so large, church members will feel their obligations have been met and will neglect their tithes and offerings.

And because most nonprofits live hanging desperately on from one fundraising campaign to the next, this myth effectively stops most nonprofits and ministries from even trying to cultivate an asset-based gift.

When you are strapped for cash it’s hard to think of anything else but that next cash-based gift. And it’s especially hard to ignore the fear of losing a current gift for the sake of a transformational gift that would come in much later.

The Tragedy of Neglecting Asset-Based Gifts

This myth is dangerous because when you neglect cultivating transformational gifts, you doom yourself to an endless cycle of raising money just to keep the lights on. Current cash gifts are the lifeblood of any organization, but cash flow from current gifts varies randomly and uncontrollably.

Transformational gifts such as endowments, philanthropic trusts, and Gifts of Assets may take some time to cultivate and execute—but when they “turn on,” your organization or ministry will receive regular, consistent income that can help you weather the turbulence of cash-based giving.

The truth is you need both cash-based and asset-based gifts to propel your mission. This is not an either/or decision—and if you approach it that way, your mission will suffer for it.

And here’s the good news:

Asset-based gifts and planned gifts do NOT discourage current cash gifts. You need both. Click To Tweet

Asset-based gifts and planned gifts do NOT discourage current cash gifts.

In fact, the evidence shows it’s really the opposite: When donors engage in giving from their assets and estates, they are more likely to give current gifts and their average amount per gift goes up!

The Synergy of Asset-based Giving & Cash-based Giving

Texas Tech professor and planned giving expert Russell James conducted a recent study which discovered that donors who added a charity to their will increased their cash-based giving by “more than $3,000 dollars after making the planned gift.” Check out the breakdown of James’ research below from Pentera’s planned giving website:

Average Annual Giving Before and After Making a Planned Gift
Prior to Making Planned Gift
Average Annual		 After Making Planned Gift
Average Annual
$4,210 $7,381

This study reveals an encouraging synergy between asset-based giving and cash-based giving—when you cultivate asset giving, you automatically increase cash giving.

When you cultivate asset giving, you automatically increase cash giving. Click To Tweet

The results of this study should motivate us to cultivate as many asset-based gifts as we can—because it increases our annual, cash-based giving. And Professor James is not the only one to have found this to be true.

Another study, done by Indiana University Lilly Family School of Philanthropy in 2007, showed that donors who put a charity in their wills gave more than twice as much in annual gifts to that same charity as donors who did not have that charity in their wills. Here’s the breakdown of that stat from the Pentera website:

Average Annual Giving by Charitable Bequest Status
Charity in Will
Average Annual		 No Charity in Will
Average Annual
$4,490 $2,043

Raise Annual Income through Transformational Gifts

Despite coming out with slightly different numbers, both of these studies clearly show that by cultivating and raising funds through asset-based gifts and planned gifts, you can raise the yearly cash-based income for your organization or ministry!

It just makes sense.

The members who put your organization in their will and those who give from their assets are fully invested in your mission. In other words, they’re “all in” and are more than happy to give as their cash flow situation allows.

So when it comes to asset-based giving, your annual revenue doesn’t have to suffer. In fact, your annual income will be bolstered by educating about and encouraging asset-based giving.

For real answers and guidance when it comes to asset-based giving and planned gifts, our team of asset giving experts at The Giving Crowd can help.

The first call is free and there’s no obligation on your part. So if you’d like to see if we’re a good fit for you, let’s talk!

The 3 Reasons People Give Transformational Gifts that You Must Understand

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Transformational gifts may be large and complex, but the underlying reasons that donors give are not. Understanding the three primary motivators that donors give transformational gifts is critical for you to cultivate more of these gifts to drive your mission forward.Too often we find that giving is made up of smaller gifts that are given as a “tip” or an obligatory gift where the donor feels like they have to give. The donor feels like giving is just the right thing to do.

But the real transformational gifts that can change your organization are driven by three primary motivations.

These three reasons for giving will vary in a person throughout the different stages of their life. For example, an individual who’s approaching the twilight years of their life will have a different reason for giving then the 30-year-old tech mogul.

As the seasons of life change, so to the reasons for giving change.

But even though these reasons can change throughout a person’s lifetime, they almost always give based on one of three simple motivations. Get to know these motivations well and learn how to identify them in your potential donors so that you can better show them how your organization or ministry can serve their reason for giving.

Giving Motivator #1: Family

Top of the list is family. The main reason that people give transformational gifts is that they want to provide for the needs of their family as well as use their gift to promote the growth of their values within the lives of their family members.

Donors want their spouses and children to have the financial means they need to buy a home, go to college, or start a business. Providing for the physical needs of the family after death is an easy motivator to understand. But this is just the beginning of how a donor wishes to use their transformational gift to bless their family.

Donors are motivated to bless their family by using a transformational gift, like an asset-based gift, to instill their values in the lives of their children.

Especially with estate planning, donors have the unique chance to create financial and legal environments that help develop and grow noble or virtuous attributes in the lives of their heirs.

The astute donor will want their inheritance to launch their children, not endow them.

The astute donor will want their inheritance to launch their children, not endow them. Click To Tweet

Some want their holdings to inspire their children to be givers. Others wish to inspire their heirs to be involved in their communities and churches, to be good citizens.

Family Concerns

Conversely, many high net worth individuals are concerned that the inheritance they leave will turn their children into “trust babies” or destroy their kids.

Unfortunately, most financial services professionals are more concerned about transferring the wealth of the individual instead of the motivations of the wealth giver—and they miss out on the opportunity to pass on the values of the donor to their children through a transformational gift.

When communicating with donors, make sure you communicate how giving a transformational gift can help them instill their values in the generations of their family to come and avoid the destruction that can come through the weight of sudden wealth.

Giving Motivator #2: Taxes

Sometimes people are philanthropic simply because they don’t want to give more money to the government. They’ve given so much to local, state, and federal governments in their lifetime that the idea to give more through their estate simply disgusts them.

Tax avoidance is a common motivator for people on both sides of the political aisle. Both right and left-leaning people would like to see their hard-earned money go to the causes they care about the most.

Now, this isn’t the most altruistic reason out of the three, but tax avoidance is really a wonderful driver for transformational gifts. Here’s why:

The United States of America has the most charitable tax system in the world by design. It is designed to motivate people to generosity. This feature is unique to our governmental and economic structure. For all the things we wish they’d do better, Congress has purposefully rigged the system to promote generosity to charitable causes—and that’s a blessing that we should never take for granted.

Because of these charitable tax incentives, many of the taxes we face are, in effect, optional. This means you and your donors can opt out of these taxes—especially capital gains taxes and estate taxes—with an act of charity.

So I encourage you to leverage the perhaps selfish motivator to avoid taxes for its intended purpose—to promote transformational giving! Take full advantage of this tremendous blessing and give thanks that we live in a country that values philanthropy as much as you and I do.

Giving Motivator #3: Impact

Impact is a powerful motivator that you don’t want to miss communicating to your donors… like this Californian businessman.

One day in a conference room overlooking Monterey Bay, I was talking about these three common gift motivators with a man who owned a string of businesses on the West Coast from Washington to Southern California. When I got to “Impact,” the guy reached across the table suddenly and grabbed my arm.

“Greg, that’s what I want to talk about!”

He continued. “I don’t need any more money. What I want to know is… how can God use my life to make a difference in the world?”

The desire to make an impact with his God-given resources was his driver, his motivation.

He was blessed. He had a charmed life. And he was so grateful for his blessings that he wanted to leave the world better off when he left it than when he lived.

How can God use my life to make this world better?

This is a strong motivation lying deep in the hearts of your donors, whether you’re shepherding a small church or leading an international nonprofit organization.

There are all kinds of ways for people to make a significant impact through an asset-based gift or estate gift—and you can pivot off of this strong desire to do good to connect with what your donors are looking for through you.

Your donors want to leave a mark—and if you’re sensitive to detect this beautiful motivator inside them, you’ll be able to cultivate more transformational gifts for your ministry or organization.

Need some help identifying and pivoting on these motivations to inspire transformational giving in your organization? Let’s talk!

Irrevocable Charitable Remainder Trusts Aren’t so Irrevocable

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For years, the holy grail of estate giving has been the Charitable Remainder Trust. But this irrevocable trust may not be so irrevocable after all — and that’s not such a bad thing.

The Charitable Remainder Trust (CRT) has long been one of the most exalted tools of planned giving for charities. Quickly, here’s how it works…

  1. The donor puts in an appreciating asset in,
  2. The asset is sold tax free,
  3. The donors takes income out of it for the rest of their life, and
  4. When the donor dies, the money irrevocably goes to charity.

Who wouldn’t be happy with that? It’s a win-win scenario, right?

Well, not so much.

In the past, CRTs would irrevocably go to the charity with which they were set up in the first place. But in recent years, donors have been allowed to design these trusts so that although the asset is irrevocably going to charity, the donor can change their mind on who the charity is.

This means that the gift is irrevocably going to charity — but not necessarily to your charity.

The irrevocable trust you have secured for your organization may not be so irrevocable after all. Click To Tweet

But that’s not necessarily a bad thing.

In fundraising, we must always keep our hearts focused on serving the donor. We’re here to help him or her fulfill the stewardship responsibilities they feel in their heart.

It’s All About the Donor

Keeping this servant attitude in our hearts, we can see how the uncertain outcome of a “revocable” Charitable Remainder Trust is actually in the donor’s best interest.

For example, if you have a 65-year-old donor who knows she’ll probably live another 20 years, she may know that she wants to make a significant gift from her estate, but she doesn’t know for sure if your organization will be the same organization in 20 years.

You may change your vision. You may change your leadership. Unforeseen circumstances may cause you to change profoundly. Knowing this, if your donor does not have the ability to change her mind, she may not give the gift at all. The old school, unchangeable CRT backs your donor into a corner because she cannot change her mind if something major changes your organization, and the result can be that the donor simply chooses to not do an Irrevocable Gift at all.

Staying on Track

The uncertainty of modern CRTs can also help you stay on track as a nonprofit leader. As the CEO, revocable Charitable Remainder Trusts help keep you from getting derailed from your mission, because you know your donors can pull out their gifts if you go far from your original course.

Staying Relationship-Focused

The uncertainty of CRTs also helps to keep your staff focused on relationship building. It’s a huge mistake when charities receive an “irrevocable” gift, and chalk it up as if the money was already in the bank and forget the donor — who’s still got a lot of life yet to live!

Losing our personal care for people and focusing on their money is an absolute tragedy. Click To Tweet

But having an uncertain outcome for CRTs should keep us laser-focused on the desires and needs of donors instead of getting complacent thinking we’ve got the gift in the bag.

No More Missed Opportunities

This donor-centric approach keeps us from losing the heart of fundraising, which is serving donors, and it keeps us from missing out on great opportunities that can come our way.

There are times when a donor sets up their CRT thinking they have 20 years left to live, and 10 years into it, she realizes that she doesn’t need the income from the CRT anymore. If you’ve been keeping your relationship with her strong and vibrant, she can come to you and give the charitable trust asset today rather than waiting until she dies. But, if you haven’t maintained your relationship with her, chances are she will pull out her gift or change the beneficiary to the gift.

If you want to know more about Charitable Remainder Trusts and how The Giving Crowd can help you raise asset-based and planned giving funds, let’s talk.

The call is free, and you don’t have to buy anything to see if we’re the right fit for you.