ProSpeak: It's Time for a Two-way Street

1. When an advisor contacts your charity offering help, inquire how the advisor is personally involved in philanthropy, both in terms of time and donating money.  
2. Ask about the advisor’s specialty.
3. Ask how many other charities the advisor is currently helping.
4. Ask about results and references.
5. Ask why they are contacting your charity specifically.

Action tips for advisors

1. Before you solicit the charity, volunteer so you truly understand the cause.
2. Interview the board members and top professionals to discover specific areas in which they need help.
3. Analyze how they can benefit from your services and share a few success stories.
4. Do not ask for a donor list or ask for a contract
5. Be prepared to train its professional staff.

These tips can help charities and advisors establish relationships built on understanding and trust — the entrance ramps to our two-way-street way of thinking.

Once charity and advisor are on the same page, they can present donors with comprehensive strategies that work for everyone. When there are clear benefits for both donor and charity, the cause benefits. Moreover, the right advisor provides the charity with financial credibility.

Case in point: Recently a religious fundraiser working on an endowment campaign without an advisor asked two affluent donors for seven-figure cash gifts, spread out over a five-year period. These donors both said they would like to help but neither had any confidence in the financial management of the nonprofit. They believed they could manage the money better and, consequently, passed on the opportunity. The fundraiser left empty-handed.

This could have turned out differently. The fundraiser could have offered to set up a trust. The donors could serve as trustees responsible for investing the money, and the nonprofit would be the owner/beneficiary. This way the donors could manage the assets and the religious institution still would receive the benefit of the gift. But the fundraiser was unaware of the scenario and he didn’t have an advisor to explain it.

One of the most important things an advisor can bring to the table is the ability to explain complex financial concepts in simple English.

For example, here’s one way of explaining alternatives to a donor:

Let’s say you have Elsie the cow in your backyard, and you’re interested in helping others by giving a gift to your favorite charity. While there may be combinations, you basically have three options:

• You can donate both the cow and the milk.
• You can donate just the milk (and keep the cow).
• You can donate the cow (and keep the milk).

Of course, if the individual isn’t currently considering making a donation, we can point out a fourth option:

• You can keep the cow and the milk and wait for the IRS to come along, butcher half of the cow, haul off the meat, and maybe leave you with a glass of milk.

We had a client recently who was looking at that last option. The family had an estate-tax exposure of $8 million. Rather than give $4 million to the IRS, we found a way to re-direct it to their favorite charity in a way that lets the family get all $8 million at the end of a set term. In other words, they got their cow back.
 
Marc Sheridan is president of Sheridan Wealth Advisors, and Don Tolep is senior vice president at the firm, which works with major nonprofits across the United States. For more information, visit www.sheridanadvisors.com.

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