Welcome everyone, and, uh, to today's webinar. I'm David Shaw, the publishing director for Family Business Magazine, and I'll be your host. I hope that you and your families are all doing well. Many family businesses make charitable, giving a core element of their values and their community engagement. A solid philanthropic strategy can benefit the business, the family legacy, and the bond between generations. But philanthropic strategy can be tested during times of economic uncertainty, which we are certainly in now, and those uncertain times also bring with them a lot of community needs. So we're gonna talk about how to balance, you know, being aware of what's going on on economically with maintaining your philanthropic, uh, strategy. Uh, and we'll discuss how family businesses can establish and navigate and maintain the, the, the giving that they want to during times like these. So the goal today is to be as interactive as possible within the limitations of webinar technology. You may enter questions or comments, uh, as they occur to you using the question box, which is, uh, it's a ask a question box, which is underneath the video screen. We'll go for no more than 60 minutes today, maybe less, and we'll get to as many of your questions or comments as we can. And of course, the slides you see here will be emailed to you following the webinar. We'll also have a replay of this available. So, leading us in our discussion today are my colleagues from Vanguard Charitable Colleen Cashman, and Julian Franklin. Colleen serves as Vanguard Charitable Senior Manager of Premier Services and Strategy, and oversees a team of relationship managers who provide service to ultra high net worth philanthropists, families and corporations. She's a graduate of the Mason Grove School of the Arts at Rutgers and holds a Cha Chartered advisor in philanthropy designation from the American College of Financial Services. Julian Franklin, who's been with us before, is a Phil philanthropic development consultant and focuses on supporting Vanguard Charitables most generous individuals and families through personalized consultation and service. Prior to joining Vanguard Charitable, he worked in corporate responsibility, corporate social responsibility at Aberdeen Asset Management. Uh, so welcome, Colleen, Julian. Colleen, I'm turning this over to you to get us started. Thanks, David. Good afternoon. I'm honored to be joining Family Business Magazine today, and I'll share that over the past eight years, I've had the privilege of working with hundreds of families at Vanguard Charitable. And so today I look forward to sharing with you some insights and stories and best practices. Julian and I have worked together for several years now, and I couldn't have asked for a better partner in today's discussion. Thanks so much, Colleen. I think we bring, um, some interesting perspectives, um, to the discussion today. And, uh, David, it's great to be back in front of your audience. Um, I think this will be the third year that we at Vanguard Charitable have had the opportunity to speak, um, to your readers. And I think that this, there is definitely a reason for this. Um, you know, more and more individuals, families, corporate entities, uh, are understanding the value of long-term strategic philanthropic plans. Um, so we certainly look forward to expanding on that concept. Uh, and hopefully we give the audience some new tools, um, and some new considerations when it comes to putting together a philanthropic strategy. Yeah, we have a lot to cover today. This is a really broad concept, but I want to acknowledge and recognize that, that there's a lot uncertain at the moment. We're in an unprecedented economic climate. Inflation has at a 40 year high, and volatility remains incredibly high in the financial markets. Every day. We're learning of different disasters globally, whether they're natural or manmade. And as a result, the need in the charitable sector is absolutely greater than ever. But I will say that despite these challenges, we've remain optimistic. Julian and I have the privilege every day to facilitate donations on behalf of our donors. At Vancor Charitable, for instance, we've seen our donors leverage their fast and responsive accounts to grant nearly 60 million to the Ukraine humanitarian crisis this year. And for many donors that was on top of their already established giving strategy, Right? I think change is constant, right? Our world, the businesses that we run are family dynamics. They're always evolving and sometimes that they can change suddenly. Um, but really I think it's about, um, keeping our core values the same. Um, and that's the foundation strategy really. Um, so we wanted to touch on a few key points today. Um, first we'd like to talk about how you established, um, giving plan and a philanthropic plan. We don't have one already. We'd definitely like to talk about, um, how you might adjust the plan if you have a, a philanthropic strategy already. How do you get creative with that? Um, then certainly I think very apt to this audience is how do you empower the next generation? How do you think about utilizing philanthropy to engage with the next generation of business leaders? Um, and in times of uncertainty, it's de definitely natural to the question if your plans are sustainable. Um, and it's also a time where many people decide to really put pen to paper and really get to developing. That's right, Julian. So, um, I'll ask us to take, to go to the next slide so that before we can jump into the planning process, we just wanna make sure that for those of you that aren't familiar with Vanguard Charitable, that we, um, take a moment to set the table and, and share with you our impact to date and the role that we play in the nonprofit sector. So, as, as David mentioned, Vanguard Charitable is a public charity. We were founded in 1997 by the Vanguard Group. And our mission is, is pure and simple. It's to maximize our impact over time and to increase philanthropy. And we do that by sponsoring donor advice funds. I'm really proud to say that we've granted nearly 15 billion since inception, and this December we'll be celebrating our 25th year anniversary. Yeah, 15 billion is pretty amazing. And I think you said it, we're really proud of how we've been able to help our donors achieve that kind of impact. Um, I think our plan is to certainly continue doing that, um, for the next 25 years. Um, if we move to the next slide, we can talk a little bit about what a donor-advised fund is. Um, you know, our organization has seen incredible growth year over year, and so has giving by corporations, giving by individuals, um, the giving u s a annual report, which indicated that giving by corporations rose significantly in 2021, actually increasing by almost 24%. Um, and many family businesses are engaging philanthropically and choosing to use a vehicle like a donor-advised fund as one of their core giving tools of choice. Um, again, either for that corporate philanthropy or even on the personal philanthropic side. So at Vanguard Charitable, we administer these donor-advised funds or DAF for short, and for those that are unfamiliar with that concept, a donor-advised fund is a flexible, um, it's cost effective and a tax efficient charitable vehicle that allows donors to gift to nonprofit organizations and really leverage their impact over time. And donors can contribute a variety of asset types into a donor-advised fund and claim an immediate charitable tax deduction in the year that the gift into the DAF is made. And from there, dollars can, uh, excuse me, donors can sort of allocate those dollars, um, into an array of investment options in which to be in, invested in the charitable vehicle. And those proceeds can grow tax free. And all of that account growth is earmarked for charitable giving. And, uh, with our program at Vanguard Charitable, our donors can send grants to qualified 5 0 1 c three public charities. Um, and we at Vanguard Charitable handle all of the Grants administration, which allows donors to manage their charitable giving from one convenient online account. Um, and the DAFs are often utilized as long-term charitable vehicles, um, as I think you'll see. Um, and donors often have the ability to pass on the account, seeing it as a legacy vehicle, um, and, uh, gifting, um, the opportunity to give philanthropically to other family members or loved ones. So I think the next here is, uh, uh, a bit of a survey, um, that we'd like to, to put up. And David, Julian, before we jump to the survey, can I ask you to kind of just briefly talk about some of the differences between a donor advised fund and a, like a private foundation and what, what some of the pros and cons are? Yeah, definitely. So, you know, the first thing I would say is there are different types of philanthropic vehicles that are great for different things. We work with donors who utilize different types of philanthropic vehicles at the same time. Um, donor-advised funds and private foundations are similar. Um, I'd say donor-advised funds are a bit more simplified than private foundations. Um, the administrative capability of donor-advised funds really streamlines gifting, um, gifting to, you know, public charities, the ability to invest, you know, at Vanguard Charitable, in particular in a, in a particular suite of investments. Um, private foundations have been around for a long time and are very well known vehicles, but I'd say donor-advised funds are growing in popularity. Um, the cost, um, of donor-advised funds been less than a private foundation. Um, but private foundations can sometimes be more flexible in the types of grants that they're sending out and the types of investments that are sort of held within the private foundation. Um, so I think there are, you know, two different vehicles that can be used for, for two different, you know, uh, philanthropic strategies, uh, in particular. Terrific. Thank you. Okay. Well, now we, let's get to the question. Um, I'm going to start this survey. We're gonna ask you, uh, everybody in the audience please when you receive it, just tell us a little bit about, uh, whether the current economic environment is having an impact on your decisions and ability to give. And we will come back to this question, uh, in a few minutes with, with the answers. So I'll, uh, come back, uh, when you're ready, Julian and Colleen. Thanks, David. I'm so curious to see how, how your audience is going to answer this question because year end's rapidly approaching, and we're talking to many donors right now about their year end plans because they're traditionally aligned with tax benefits. However, tax effective philanthropy is not solely a December 31st decision, particularly if you're involving a business. So we see many times that individuals are coming to us to maximize their philanthropy at all different times of the year, but it's certainly most popular as we approach year end. And although we're not in a position to give tax advice here at Vanguard Charitable, we do work with many advisors, both tax investment and legal counsel to help families develop a plan that's best for them. I think that's a, that's a great point, Colleen. You know, you said we're not tax advisors, but we definitely consider ourselves as partners in your charitable planning. And I think something that we've really worked hard to do is create some tools that donors can use to help, you know, make the best decisions for them when it comes to their philanthropic giving. Um, one that we'll point out is, um, our tax calculator, um, which we definitely encourage folks on the call today to, to check out on our public website. We've also got some other tools, um, that we'll mention today in the, in the webcast, but just wanted to add that to your point. Yeah, that's a great point. Julie, and I think about some other resources that are on the site, um, are also, um, there's a page that actually compares giving vehicles like David asked us. So it gives you an overview of donor advised funds, private foundation, different trust, um, in a really clear way to digest the pros and cons of each vehicle. So certainly encourage people to check that out as well. Okay. Let's get into the planning. So, um, we're gonna spend a little bit of time talking about if you're just beginning your philanthropic journey and establishing a philanthropic strategy. And I always suggest to our new donors to take a moment and ask yourself a few questions. Um, why am I giving, what values have guided my business and how might they guide my philanthropic giving as well? I find that most family businesses I've worked with are fueled by purpose and optimism, but it can be a really deeply personal question. Determining your core values is really important in understanding your motivations for giving today and in the future. So I think some of the most common things that I've heard from different families is, um, that there is a real desire to give back after they've, um, been the benefit of philanthropy. Um, whether it's a scholarship that they've received that really helped them on the right path, or perhaps they're a grateful patient, um, many people receive health diagnosis and after, um, having their, their life turned around, they feel compelled to continue to give back to the hospital or institution that has really helped them, um, rebound in their life. And then I think one of the other most common things is related to legacy. Time and time again, individuals come to us and share that they've witnessed their parents and or their grandparents dedicate their lives to a cause and as a result, it's ingrained in their way of life. So one of the tips that, that I would suggest is when you're engaging in this self-reflection, think about how to bring other people into the conversation. If you can identify overlapping areas that you want to make a commitment to, it will better focus your philanthropic plan. And so I know that we'll be talking about engaging the next generation a little bit later, but it is really important to think about different voices, different perspectives that can lead to a greater impact over time. Yeah, and I'm, I'm really glad that you mentioned impact, Colleen, because identifying the impact you wanna make is a key part of the process. And depending on the tool and the asset that you might be thinking about gifting, you know, families, corporate entities have the potential to really amplify your impact in a number of ways. So part of creating a philanthropic strategy involves identifying if there are any mechanisms for particular vehicles. David, you know, you mentioned private foundations, donor advised funds, um, there's other, other vehicles out there that might give you the best chance to achieve your unique goals. Um, and really, you know, I think direct cash gifts have been an interesting, uh, and popular way to support favorite causes. But you might think about other vehicles as well, um, that might give philanthropists greater flexibility, increased impact over time, um, and the ability to take advantage of tax efficiency, certainly. Um, and not only should donors consider how they might execute on that giving strategy, what mechanisms they might use, um, but also think about the asset type. So as mentioned, donors have the ability to gift cash, um, to charity, certainly to donor-advised funds like Vanguard Charitable, um, appreciated assets such as publicly, uh, publicly traded stocks, mutual funds, ETFs, um, and as well as more non-traditional assets like closely held business interest, real estate, real assets. Um, you know, considering all of these asset types at your disposal is so important in planning to maximize impact. So once the tool and the assets are identified, you can then start developing your plan. And, you know, you might wanna determine the cadence and amount of giving that works for you and your situations and your specific goals. And this is always important, but even more so in light of the current economic environment. And, you know, we know that many people are unsure about how to establish or maintain a giving strategy when there is so much uncertainty. Um, and we find it helpful to consider how much charities are in need, you know, evaluate what you can reasonably commit in the near term, um, and what you'd ultimately want to be able to give in the long term. Um, and, you know, you mentioned some resources, Colleen, our charitable planning guides and our resource center and our Giving Matters guide, um, I think in particular may, uh, help you all better understand your motivations for giving, um, and ensure that you make the, take the strategic approach, um, of making the most impact, you know, for you. Yeah, Julian, I would say that it's just really important to keep in mind that your plan is about progress. It's not about perfection, and it likely will change over time. I think we all wanna feel like we're gonna hit our goals year over year, especially if you're applying your business practices to your philanthropic strategy. But know that just like you have to balance your budget every year and you have to shift priorities, you're likely going to do the same with your philanthropy. And taking an agile approach is certainly welcomed. David, I'm curious, do you have survey results for us? I do indeed. Um, we, uh, let's see. I'm gonna send these results to the audience, but I'll have to read them, uh, to you too. Um, yes, I'm giving more 28.7%. Yes. I'm giving less 13.3%. No, I'm giving the same 48.7% and the, I'm not sure, category is 13.3%. So, um, those are our results. For those of you who are seeing the results on your screen, you just press the X in the upper right corner and you can remove that from your screen. How did, how does this, how does this compare with what you find with your current clients? Well, David, I, I'll comment first, but I, I think that because we are a donor-advised fund, our, our donors have the ability to give more. Um, we will show you, um, some statistics related to that. Um, but year over year we have seen donors increase their giving, um, as a whole. But, you know, in my role working directly with families, I am hearing quite a bit that donors are, are staying the course. Um, but what might look different is the purpose of their granting. Hmm. So perhaps they used to, um, be really specific with the causes, um, that they wanted to support. So whether it was the business school at a college, or it was a particular program for an arts organization, they're making the decision to go unrestricted. They know that the need is really great and they wanna trust the leaders of those organizations to make the decision that's best for the funding that year. So I think that when giving the same, it's incredible that donors can maintain their giving strategy and priorities, but thinking about how to maximize the impact for the grantees and giving unrestricted is a really great way to do that. Definitely. And, and I'll just add, I think that these survey results are really encouraging, you know, just to see how much folks are looking to main maintain their giving during these uncertain times and those folks that are looking to increase their giving. Um, and for those in the audience who are still trying to figure it out, who aren't sure, um, I think that that's okay as well. You know, you wanna be deliberate in, um, executing on your philanthropic strategy. Um, and I think, you know, you can take a variety of approaches there. Um, but I think overall these survey results are, are amazing to see and really encouraging. Well, let's dig in just a bit into that idea of Colleen, of adjusting the giving plan or adjusting the, you know, going perhaps to unrestricted. How do those adjustments work within a, a DAF a a, you know, donor-advised fund environment? How involved is the donor, uh, how, how involved is their advisement? Great question. So our donors are able to recommend grants, um, as one-time grants as we call them. So with each particular request that they're making, they have the ability to either restrict or unrestrict the grant. Um, so in real time, our donors can make a decision to pivot in their strategy and, and send those recommendations our way. Now, if it's an, uh, recurring gift that they have established with the organization, um, with our partnership, then we'll work to basically amend any agreement that might exist to say we, you know, we were previously committing funding for this particular area of let's say cancer research, but instead we're going to remove restrictions so that you can utilize these funding, this funding at your discretion. So it just depends if there is, um, uh, an agreement in place that might need to be altered. But that's the beauty of a donor-advised fund, is that traditionally the majority of our grants are going out as one time in the moment recommendations, and the donors are in the driver's seat to say, here's, here's how I'd like this grant to go out. And, um, we do see unrestricted support as really something that is top of mind over the past few years. That's a really good point. And then I'll, I'll just add to that, David. Um, I think this idea of trust-based philanthropy where our donors are saying, Hey, we trust in the nonprofits, they know how to best utilize the capital that's granted to them, um, is something that I think we certainly encourage. But you know, as I said, our donors are doing more often. So this idea of unrestricted gifting is really, you know, know, having our donors show those known pro nonprofits that they trust what they're doing. Those nonprofits are the experts and they're the ones that know how to really make impact, you know, in their given cause area and, uh, the work that they're doing on the ground. Fair enough. Good. Okay, well, I will come off screen for a little while here, and I guess we'll go on to the next slide. Yeah. Great. Um, so we've certainly given some guidance on how you might go about starting to formulate a philanthropic strategy. Um, but we recognize that for those of you with an existing giving strategy, you might be reevaluating, you know, how and when and what you're giving in, in light of these, uh, this current economic environment. And we like to start by reminding those of you with a donor-advised fund or with another charitable vehicle that you've already earmarked funds for charitable giving. Um, and this is one of the powerful benefits of utilizing a giving vehicle, um, allowing you to be both long-term with your strategy, while at the same time having the flexibility to respond to changing an unforeseen, um, charitable needs or, you know, evolving priorities as well. Yeah, Julian. So as we said, you know, there's likely going to be a time where you need to evolve your strategy. And while we think that inflation will likely peak in the near future, um, I think we're gonna be living in inflationary times for a number of years to come. So in order to maintain your commitment to giving, you might need to think creatively. Um, we did talk about unrestricting your gift, which certainly is a way, um, to meet charities where they're at in their time of need. But you might also think about how you communicate that to the organizations that typically count on your support. When I was a fundraiser, I found it incredibly valuable when a donor would actually pick up the phone or email me and let me know that their plans were shifting, whether they were giving more or giving less. It showed that they really cared about our work and that we could continue the conversation with them. Um, and I think it was also inspiring for the donor that was calling me because I was able to give them real time updates on how we were being great stewards of their funds and the things that we were prioritizing in times of, um, multiple shifting priorities. And I'll, I'll share an example with you because I recently had a conversation with one of our donors who inherited a donor advice fund from their parents a few years ago, and used their words, they were humbled by the opportunity to give back and continue their parents' legacy. They had witnessed them, um, from the time they were young, give their time and their money to organizations. So when the transfer of wealth occurred, they decided to stay the course. They knew what was important to their parents, and they wanted to continue to, um, make them proud and continue in the tradition of giving. But recently, their community was affected by a hurricane, and that was when they fully realized the benefits of having a charitable account, in this case, a donor advised fund. They decided to have a family discussion, and their strategy, the way they decided to pivot, was to front load several years worth of donations to the charities that they typically support. 'cause they knew they had an incredible need now, and they were uniquely positioned to do that. They felt confident, um, that their parents would have likely taken a similar approach if they were still here. And I just thought that was really powerful because, um, many people don't recognize the ability to get creative in the position that they're in to make such an impact when the charitable sector has great need. And then I'll, I'll share one more example of a way that Vancor Charitable has decided to, um, think about amplifying our own impact for our donors. And that's where the tool that is really gaining popularity with people that are interested in, um, impact investing. So it's, uh, it's a tool called a recoverable grant. And I'm gonna get a little bit technical, um, to give you the explanation of it. So, um, bear with me. But a recoverable grant is, um, an opportunity to provide grantees with immediate and flexible funding, um, that they wouldn't be able to launch a program without. And the key thing about the recoverable nature is that, um, there is an opportunity that the grantee might be able to return, recover, recycle the grant dollars to be used for future philanthropic activities. So I'll, I'll give you an actual example of, of a recoverable grant, because I think it'll be helpful to put it in context. But this was with unicef, and I know UNICEF is likely a, a household name. Um, I think we can all remember, um, fundraising for UNICEF in schools when we were little, but UNICEF found themselves in the position where they had the ability to pre-finance covid vaccines, and they had the networks and pipeline to distribute them quickly in the pandemic. But one of the challenges with fundraising is that many times you'll receive pledges for a particular program, but there is a time lag from when you're actually receiving those pledges. And for unicef, they had to act quick in order to purchase the vaccines. So they went out to their donor base, which included Vanguard Charitable with the concept of a recoverable grant to their bridge fund. And so we were able to deploy quick capital that gave them the financing they needed to purchase. And as they collect pledges over time, there is the potential that they would recycle those dollars back to their donors so that they could make additional grants, either to UNICEF or to the charities of their choice. So I think the bottom line is, is that there's a lot of opportunity to think creatively in times of uncertainty, whether you're exploring a new tool like a recoverable grant, or you're just reaching out to partners and experts in the sector to say, how can I make my dollars go further? Where's the immediate need and, and how can I respond to that? And we're seeing our donors do that in such a tremendous way. Yeah, I, I think you're right, Colleen. It's, uh, definitely an opportune time to be creative with the different giving tools you've got available to you. You know, you mentioned recoverable grants. Um, you know, we, we've been working on some tools and resources such as our nonprofit aid visualizer or navi, which, um, our donors and anyone can actually use to sort of find organizations that are working within covid relief, find demographics that are most in, in need at that time. We have a new iteration of that focused on hunger and homelessness. Um, so our donors are getting creative and, uh, we're helping them, uh, do that in a variety of ways. Um, so during uncertain economic times, you know, you might wanna consider the wide range of assets that you might hold as well and determine which might make the most sense to gift from a tax efficiency standpoint. Um, and we encourage our donors to not only be creative in how they're gifting, but also in considering what they gift. Right. Um, and as mentioned, cash gifts are popular, um, with supporting charities, you can certainly claim a deduction with cash gifts. Um, there's some added benefits with appreciated assets. You know, like we mentioned before, this idea of publicly traded stocks, mutual fund shares, you know, donors have the ability to claim the fair market value of an appreciated asset for tax purposes, while also foregoing capital gains taxes on a transfer to charity. Um, so we always recommend that, uh, folks consult with a tax professional, but considering these tax implications for non-cash gifts can often benefit the donor, um, and leverage more impact over time, which I think is really going to benefit those charities in the long run. Um, and what might be of particular interest for this audience is the viability of donating what we call complex assets, um, or alternative assets directly to charity or directly to a vehicle like a donor-advised fund. And more and more of our donors, especially business owners, are asking about the benefits and potential for gifting these kinds of assets. Um, these complex assets are, are not publicly traded, you know, shares of privately held business, for example, you know, could be tax efficient in a viable asset to gift. Um, often these kinds of assets have experienced substantial appreciation over time and may make sense to gift from a charitable production standpoint. Um, and most of all could certainly allow donors to enhance the funds that are available for gifting. Um, so again, we always recommend consulting with an advisor or a tax professional to help you understand and consider the viability of different asset types. Um, but we think it's important to at least be aware of these kinds of assets and other potential for impact. Um, so with that, Couple of questions on this. The, you know, this, the, what other kinds of complex assets are there that could be, that could be, um, donated? Um, in this particular case, you mentioned shares of a privately held company, but are there other types? Yeah, so I'd say shares of privately held businesses are, um, a, a, a pretty popular option when it comes to complex asset gifts. Um, you know, I mentioned real estate, real assets. Um, restricted stock is also sometimes an asset that can be gifted to charity. Um, I think there's a wide variety of complex asset types that are out there, and you'd be surprised at what you can gift to charity. Um, you know, we take a number of different asset types in-house. Um, there are a number of different providers that are out there that specialize in accepting and taking in and tax substantiating donors for these complex assets. You know, I'll say over the last couple of years we've also, um, gotten interest from donors in contributing assets like cryptocurrency. Bitcoin, um, I know has been a volatile asset, uh, of recent, uh, recently. But, um, you know, cryptocurrency is also something that we've heard, um, of folks gifting. And there is the ability to gift that, gift that tax efficiently as well. Um, so again, I would say keep an open mind. There's a lot of different assets out there. We've named just a few. Um, but always consulting with the tax professional is gonna be the best, uh, you know, best decision. Um, initially, uh, that's a good question. What, what's interesting is, you know, obviously we have the Patagonia, uh, uh, example that just seems to be coming up about the idea of, so Patagonia's owner basically is transferring the entire business over to charity, so not just shares in that, um, which is a very interesting approach. It'll remain a a B corp, a benefit corp, but will now benefit charities, um, designated. How, how common are asset share asset donations now? Are they increasing in commonality? Are, have you seen them grow? Yeah, you know, I'd say we at Vanguard Charitable see interest more and more every year. And I think that it's a knowledge gap. You know, I think that a lot of folks may have these kinds of assets, but we're not aware that they could gift them to charity. Um, they weren't aware of the tax benefits for gifting these kinds of assets. Um, I'd say, you know, our donors are certainly giving cash. Our donors are probably giving appreciated publicly traded assets the most. But, um, in terms of these complex assets, we, we see more and more every year. So I would expect, you know, more donors to be coming to us with this interest, um, us accepting these kinds of assets more and more. So I only see it growing over time. Yeah. I would assume as Patagonia executes on this, it, it will increase interest because of just simply this sheer size of that. So definitely, Yeah. Do you, do you see a time, this may be beyond your ability to answer, but where you could take the, share the 100% of the shares of an operating business and keep it operating and just have the, just like Patagonia's doing and have the fund the proceeds go to a donor-advised fund? Yeah, that's a, that's a really interesting model, and it's definitely a novel model. I haven't seen many businesses doing that. Um, you know, it's, I'd say we at Vanguard Charitable, um, you know, are probably equipped to dealing with more straightforward, complex assets and closely held business interests. But, you know, I would say with that sort of longer term hold, um, there are providers that, that, um, are out there that can do that and mm-hmm. I think Patagonia is probably setting, um, you know, an example for many of the businesses out there. So there are a lot of creative ways to think about leveraging assets, um, for impact over time. And who knows, we, we might get somebody asking us about that. Um, but undoubtedly there will be more creative ways to, to leverage, you know, value, um, and high value assets for charitable impact over time. So, we'll see. I'm sure it'll be coming up more and more often. Yeah, it's fantastic. Uh, and I I, I'll be interested to hear as more people approach you with that, you know, what the, uh, what the results might be. Colleen, you talked about recoverable grants, and this question came in. How does this work if you're not, if you're not dealing with unicef, can any grantee do a recoverable? What, what are the mechanics of it? Great question. Um, so it really depends on, um, the infrastructure of a nonprofit. Certainly, I, I don't think that this is going to be a tool that, um, smaller localized, you know, volunteer based organizations would implement. Um, so I think that it will be something that is really driven by our, our large, um, nonprofits in the sector. Mm-hmm. But, um, but we can go to them with the concept. So if a donor comes to us with, with an opportunity that they like to pursue, um, we always take a consultative approach, um, to find out if this is something that, that would be a burden to the organization. 'cause that's the opposite impact that we're looking for, right? We want them, the nonprofits to be able to deploy their capital and have it go to the communities that need it. So if they're having to build a, you know, a, an accounting system to, to track a, a recoverable grant, um, that likely wouldn't be, um, in the best intentions for anyone. But I do think that it is a concept many organizations are beginning to explore. Uh, we do have some details on our website where you can actually see some of the other organizations. Um, one of them that comes to mind is, uh, habitat for Humanity. Hmm. So they help first time home buyers secure low interest rate loans, um, below market rate loans. And so one of their recoverable grants is focused there, which is, um, really appealing to people right now with interest rates where they are. So, um, you can explore some different organizations on our website, but certainly, um, there's an organization that we partner with that is an expert in the field, so people can connect with us and we can get them some more details. That's great, thank you. Okay, well, we'll take you to the, uh, the next slide then, and I'll get out of the way for a bit. Perfect. Thanks, David. Um, so I think this graphic here is a really good example of how Vanguard charitables donors have stepped in during these times of uncertainty. And Vanguard Charitable and the Harris Poll recently conducted some research around giving trends in the US but giving trends specific to disaster relief. And the research found that nearly 65% of donors gave to a charity that they'd never donated to before, with nearly half of those donors doing so in reaction to a recent local, national, um, or global disaster. Um, and we continue to see what feels like a never ending cycle of natural disasters, right? Military conflict, social unrest so much is afflicting communities across the world and having the ability to respond in real time and often in the face of this uncertainty. Um, you know, donors are really employing, uh, a philanthropic vehicle like a donor-advised fund, um, to, to act, to send grants and folks that are using these vehicles can do some, um, really amazing things. Um, in terms of the chart here, um, this really illustrates some of our giving trends over the last few years. Uh, and I think it really shows that how, despite unforeseen crises, our donors have been able to respond to the short-term needs of these nonprofits and hard hit communities and still maintaining a long-term vision for their philanthropy. Um, and the last four years have felt pretty unprecedented in terms of the number and magnitude of crises of variant various forms. Um, you know, you can see that in 2019, our donors deployed more than 140,000 grants totaling $1.3 billion in 2020. Our donors sent an incredible amount of support for covid relief, many of those donors utilizing that nonprofit aid visualizer, um, that we mentioned earlier. In 2020, our donors were sending grants for social issues in, in full totaling $1.7 billion. In 2021, they deployed more than 200,000 grants for nearly $2 billion to over 50,000 unique organizations. And then through September of this year, um, the giving from our accounts, um, has really grown, uh, substantially. Um, and we've gifted nearly as much as we did in 2019 already this year. So not only has the giving from our accounts grown, but I think this graphic illustrates how grants have been deployed in real time. And you can see the increased grant activity that corresponds with specific disasters, you know, each of the last several years. Um, and so far this year, I think, Colleen, you mentioned our donors have issued, you know, more than $60 million for U Ukraine relief. And you can see here on this timeline that spike in gifting towards the beginning of 22, 20 22, specifically much of that for U Ukraine relief. And, um, more recently, obviously we've all heard of the devastating impact of Ian Hurricane Ian. You know, that impact is still being felt and assessed, but you know, I'm sure our donors will jump into action and adjust their giving budgets to direct grants to release there, um, as well. Thanks, Julian. This slide is just so powerful to me. It really speaks to how our donors can lean on the power and flexibility and convenience of a giving tool. Um, and it's incredible to see the response increase significantly year over year. So one of the, the things that you mentioned that I just wanna give another, um, highlight to the survey that we ran, um, which I found so interesting, was that, um, the poll found that millennials are giving five times more money than baby boomers when it comes to disaster relief. And that 42% of millennials that gave to charity in the past 12 months were really interested in understanding how their dollars were making an impact. This shows that the younger generation, um, is eager to be philanthropists, but they're also eager for, for data. Um, this is the, the world that we live in, that people wanna understand the how their dollars are really making a difference and whether or not they need to think differently or pivot in their strategy strategy. So let's go to the next slide, which we'll focus on how to empower and engage the next generation. I think that what we've learned in, in our seat at Banker Charitable is that when you look at philanthropy through a long-term holistic lens, it really becomes easier to engage the younger generation in your mission. It's a way to reaffirm and reflect on your family's values and share your passions that will encourage others to develop and pursue their own charitable passions actions. One of the best things that I, um, piece of advice that I give to many of the families that I work with is to volunteer together. So engaging in a philanthropic activity is incredibly effective, and passing down your values through actions and not just words. And I think that this is a wonderful tool for ba uh, businesses and corporations to employ as well. If you're gathering your employees together for a day of volunteering, it not only helps to deepen relationships and trust with your employees, but it can foster a culture of giving back. Um, so we've seen that not only giving your, your, your funds to your capital to charity makes a difference, but thinking about how you contribute your time and contribute your resources and bring other generations, again, whether it's family members or emerging leaders in your business, it fosters the culture of giving back in a really organic way. And I think, um, David recently, family Business magazine published an article, I think it was this week, three weeks ago, um, that's highlighting the power of community engagement and its importance to the business entity and the business's key stakeholders. Mm-hmm. And I think what was really interesting about that article was the incorporation of this idea of, of values, right? Founders, um, who often came from modest means, they're looking to instill values that made them and, uh, their business successful, right? Looking to instill, instill those values within younger generations. Um, and the importance of giving back and instilling that value, um, you know, really has, um, you know, when, when younger generations perhaps have been raised in a different socioeconomic environment, given the success of the family business and wealth accumulation over time, keeping those values consistent is a key goal for family businesses and founders and, and leaders of those businesses. So engaging with these generations early and often, um, as I think you said, Colleen, you know, in this idea of philanthropic giving can help carry on, uh, both a family and business legacy that lasts. And, you know, uh, a recent example, um, that I can give is working with a family business, um, that was looking to step up their philanthropy. And I was working with the third gen of that family in setting up a donor-advised fund and kind of thinking through how that, uh, how that business might execute on its philanthropy. So I've seen, um, sort of businesses look to the younger generation in many regards to sort of that millennial cohort, um, to lead the philanthropic giving, um, for the business itself. Um, and utilizing something like a donor-advised fund and a philanthropic vehicle, um, is a great way to do that. So I certainly wanted to give, you know, give that example. Hey, Jolene, I'll, I'll, Oh, please. Thanks David. I'll add just one, one other tip that I have. Um, when you talk about the, the value of giving, ironically, that is the name of our podcast that we created, um, about two years ago. And I'm not sure if we have anyone in the audience that is a podcast enthusiast, but I've been really, um, you know, getting my parents into listening to podcasts and, um, I've heard other families tell me that they've utilized the podcast to almost replicate a book club. Um, so they're sharing the podcast with their family members or their, their colleagues and thought partners, um, to have a conversation about what, what they're hearing, whether it's an organization that we've brought on as a special guest for the podcast, or we're talking about, you know, our recoverable grants offer or our investment offer, and how that maximizes your philanthropy. It's a way to, um, engage an expert and, um, really just cultivate a conversation with, um, those that you're looking to leave your legacy with. Mm-hmm. Well, you, you may have pointed some answers to this question, but, um, as you're engaging and empowering the next generation, what, what happens if the two generations don't really see eye to eye on values and causes? What, what are some ways in which families can kind of navigate that? Uh, do you find that to be something that you're seeing a lot or, you know, where what the parents want is different from what the children want? Family dynamics certainly, um, can have their highs and lows at times. So I, I, I don't think it's uncommon to, um, at times not agree on, on your focus and your core values, but I think that comes to the, the early steps that we outlined of self-reflection, what has impacted you in your life. Mm-hmm. And many times when you're talking to the different generations, they will comment on some early, um, early insights that have really left a mark on their life and their values, whether it was, um, you know, going together to, to sponsor a family around the holidays and, and talking about others that are less fortunate, um, whether it was, um, you know, so many families tell us that they sit around the table at Thanksgiving, and that's really the, the catalyst for coming together and talking about the ways that their family might give back, again, whether it's with their time or their money. So trying to really get back to those fundamentals. Um, you know, grandparents have huge influence on, um, both generations to say, you know, what, what would grandmom do? What would grandpop do if, if he were still here leading this conversation? And they tend to find common ground when they can really take it back to the basics. Um, but when in doubt, pull in a partner, pull in an expert, get a third party to join the conversation and help to facilitate some dialogue, because outside perspective can make a difference. And then I'll just, I'll just add to that, Colleen. That's a great point. I think another thing that we often encourage, and we've mentioned a giving guide several times in our today, is this idea of not just thinking about what your values are and where you might find common ground, but actually write it down. You know, actually having a document that you can refer back to where folks can speak openly and get their ideas down. Um, you know, oftentimes I think that solidifies, uh, a plan in many regards. Um, but like you said, Colleen, I think you often find common ground when you really get your ideas down and can reflect back on them over time. Um, so that's something that we would also encourage. Colleen, uh, there was a question that came in, so let, let's give another chance to pitch that podcast. What's the name of the podcast and where is it available? It is available wherever you get your podcast, so I know that I typically just listen right from my iPhone, but I think it's on Spotify and, and a few other platforms. But it's called The Value of Giving, the Value of, and go to our website, vanguard charitable.org, and you can find it under the resource section as well. Excellent. Okay. I'll get out of your hair. We have eight minutes to go. Um, I know we've got a couple more things to talk about. Yep. Just a, a couple more things. And, um, if you could go ahead and, and move to the next slide, David, um, sort of continuing on with this idea of impact, um, and I think this slide here, and this visual really illustrates the power of a philanthropic vehicle, like a donor-advised fund. Um, you know, uh, in terms of thinking about a donor-advised fund as a long-term vehicle, you want to consider how might you leverage investing? How might you amplify impact over time? Right? And keep in mind, you wanna be thinking about how you execute, um, on your personal philanthropy or your corporate philanthropy, both now and in the future, and even consider what your plan might be beyond your lifetime. Right? Um, so what kind of charitable impact a single $500,000 donation into a DAF make over 20 years? So this example here assumes that 500,000 has been invested with an investment allocation of 80% stocks and 20% bonds. This particular account is granting 5% of these assets every year to various charities, and it assumes a return of 8% growth. The darker green portion of this graph represents the, the changing account balance over that 20 year period. The lighter green portion of the graph represents the additional grant dollars that the investments have generated over time. Um, and in this particular example, the single, single $500,000 contribution yielded over $5 million in charitable impact over the longer term. So each philanthropic strategy, uh, may incorporate different granting plans, different investment allocations, but consider the long-term potential of this example. How might, you know, your long-term plan affect the incorporation of other, of younger generations into a business or a family's long-term? So what does your family or businesses giving look like 20 years from now? What might leave for future generations when it comes to philanthropic capital, or how you involve them now in order to respons to allocate those shared assets down the line? I think on our, um, next slide, we have a list of resources, um, that we'd, uh, certainly encourage folks to, folks to look at. Yes, I know that we are running up against time, but I will, I will leave you with, um, just one final suggestion of, you know, whether you're starting your philanthropic strategy or you're looking to maintain it and get creative with the resources that you have, it's really important to, to think of your strategy like you would with any business plan, be purposeful set goals, think of your time horizon, and make sure that you're challenging yourself to drive forward results and whatever that means to you personally, to you, your family. Um, do what aligns with your core values. So we have a ton of resources on our website as you see here. Many of them we've, we've discussed already. But, um, I encourage you to think, as Julian said, you know, sometimes just writing it down, putting pen to paper really allows you to be more reflective and thoughtful in the approach that you wanna take for short-term and long-term giving. Excellent. Excellent. Well, that, that actually ties in wonderfully to, uh, to the question that, that I've been holding onto here because you were talking about writing the plan down, but how important do you find it for families to create giving mission statements or having, having, and you said write it down, but really the full strategic plan and, and what kind of examples of missions have you seen or strategic plans in short? Yeah, I, I can, um, add my perspective there. So I, I think that having a mission statement, um, is a great exercise. Um, if you're choosing a private foundation, you likely, you know, that will be, um, a requirement, um, when you think about your funding areas. But with a donor advice fund, you have the flexibility to create a plan, create a mission statement, and, and allow it to be flexible and evolve over time. But particularly tying it back to the question you asked before around what if the generations aren't aligned mm-hmm. This challenges you to really find common ground, and it can be broad. So perhaps the, um, focus of, uh, a family's mission is that they want to impact their, the Philadelphia area to foster arts and culture, um, in the area, it can be extremely broad. You know, maybe one person is, is a modern art enthusiast, and the other one is, you know, wants to support the orchestra. Well, you, you can do both. Um, and they're both really crucial to the, the arts world of, of any city. And, and, um, but you can be more specific. I, I think we find that if organizations, um, have incredible wealth and they're receiving a lot of inquiries from nonprofits, it can be overwhelming for people. So developing specific interest, interest areas and really diving into those details help them to just be more strategic with their time and their requests and the relationships that they're building with nonprofits. So it's a personal decision, but it is an exercise that can be really valuable in how you, you know, maximize your time and resources. Mm-hmm. Julian, any thoughts on that? No, I think that, I think that's exactly right. You know, the idea of getting it down, understanding what your, um, you know, strategy is gonna be allows you to be more focused, right? Folks get a lot of solicitations from nonprofits too. Having a mission statement and understanding where your giving is intended to go also sometimes allows you to say no, you know, allows you to say, I have this earmarked for a particular gift, or even allows you to budget so you know how much you might wanna gift to un, you know, unsolicited requests and so forth. So, um, that's what I'd add there. Fantastic. Well, it's been a real pleasure, uh, uh, having both of you, uh, on today's webinar. It's been very, very informative and I thank you very much for the time and effort that you put into this. I'd also like to, uh, thank our audience, uh, for being with us today. Uh, it's always great to have you join us for a webinar, and as I noted, a copy of this presentation will be emailed to you soon. We'll have a replay of the webinar available so that you can share this with family members. And, uh, just as a a note, uh, we will be exploring more issues related to legacy and family dynamics at our upcoming Transitions Fall conference out in Marina Delrey, California. It's next month, November two through four, and I hope you'll join us if you have the chance. We're, we're really pleased to be back in person again. If you have any questions about this topic or any other topics, please feel free to reach out to me at Family Business Magazine. And with that, I wish everyone a wonderful day. We'll see you at the next webinar.
Ways for Family Businesses to Maintain Giving During Times of Economic Uncertainty
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