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Stewardship 101
Old 06-14-2007, 09:07 PM   #1
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Stewardship 101

Indulge me while I snivel.

Spouse and I have been trying to get a clue formulate a policy for our charitable donations. We think we have everything else covered-- our ER portfolio, the kid's college fund, our long-term care, even some set aside for the parents' long-term care. We can see that our earnings are occasionally exceeding our expenses and that some years we might want to push our spending up against the top of the 4% envelope.

I'm a recovering nuclear engineer so I'm familiar with the challenges in disposing of toxic waste streams from holding tanks. So far this has essentially been like yardwork-- you rake up all the green waste, compost & mulch some of it for your own use, and give the rest away. Some days you barely have enough for your own piles, other days the opala guys have to send an extra truck to accomodate your largesse. Or maybe it's like sewage-- insert your own analogy here.

The mechanics are fairly straightforward. There are at least a half-dozen websites that help find charities for your keywords and also rank their efficiency/effectiveness. Examples of where I'd give money today include: Hawaii's Institute for Human Services (homeless shelter), the Hawaii Food Bank, the Honolulu Habitat for Humanity, and Rabbit Kekai's surf foundation. There are plenty of other candidates like microcredit loans, Doctors Without Borders, shelters for domestic violence, and literacy organizations. No problem there.

We've established a donor-advised fund, dumped some green waste highly appreciated Tweedy, Browne shares into it, and spread it around a bit. We can take a charitable tax deduction this year for the money we put into the DAF and dispose of the rest of it more or less at our leisure. We may leave the residue in the holding tank to compound for a few years (in Fidelity's International index) or we may grant the rest to a worthy charity tomorrow-- no more pressure to get it done before the end of the tax year. Another nice feature of Fidelity's DAF is that we can dump anonymously. It all works great.

Spouse, however, raises the very good point that stewardship is not supposed to feel like yardwork or toxic-waste disposal or septic pumping. (Gosh, how Bill Gates & Warren Buffett must be suffering.) She wants to find something that fills her with the passion of a life's mission-- maybe even spreading it around like Dolly Levi. She wants to feel like Melinda Gates was on the Charlie Rose show-- full of motivational stories, spouting facts & figures, and excited about the project. Spouse, however, does not want to have to travel to Kenya to develop this feeling.

I've expressed these sentiments in e-mails to a local estate-planning law firm and an elder mentor. I've asked for suggestions on where we'd find a resource to help us get enthused about stewardship. The response so far could best be summarized as "stunned silence". That may be all the response we get from them.

Anyone else have any inspiring ideas on how to stop feeling like I'm wielding a shovel?
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Old 06-14-2007, 09:18 PM   #2
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It sounds like she/you both might want to roll up the shirt sleeves and volunteer some time and then get into an advisory capacity? It can be much more real and satisfying when personally engaged in a charity you have a passion for.
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Old 06-14-2007, 10:54 PM   #3
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Hey Nords, we have pondered the same dilemma, Our highest potential outcome could reach $30 million or more. And we have no desire to dump this into the United Way. Our thinking is a Family Trust but with clear investment guidelines involving our two boys as trustees. We do not think it is fair to dump this responsibility on them. Bear in mind that in 30 years, $30 mil is not that big a deal. Think about a new car for $300k! And food for 10x what it is today.

But I watch Gates and I hope we will live long enough to see whether they will make a difference. After all, Buffett bought in so there is definitely some momentum!

Meanwhile I need to gain some personal experience beyond the annual contributions. I do the investment thing like a Vencap. So far it seems to be working. If that continues, we could achieve 10x what the above forecast says. And with all due respect to CFB, this does not involve leveraging my principal residence anymore (although it did for 35 years).

I have no answers but I am open to ideas.
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Philanthropy
Old 06-14-2007, 11:07 PM   #4
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Philanthropy

Nords - great topic!

Philanthropy is defined as "the love of humankind."

You have to find your "giving style". Some people like to make fewer gifts that are larger. Others like to give many smaller gifts. One is as honorable as the other.

It's your money, so it's your style to discover and develop. This style may or may not change over time. Also, some organizations that you support will find ways to capture your imagination (and certainly volunteering is a way to connect in an additional manner). Over time, you may increase your support of some charities, and decrease or eliminate support of others.

But keep exploring until you find the kind of gratification - even fun - that keeps your interest.

One of our most "fun" projects has been establishing a scholarship fund at our alma mater. It took a long time (many gifts over many years) before it was big enough to give away a small scholarship, but the students really seem to appreciate it. The scholarship is awarded to a student with "star" qualities who has the potential to impact his/her community for good. It is not awarded on the basis of financial need (though that would have been fine if we'd chosen to specify that). Rather, we were attempting to affirm creativity and leadership. It's been a real charge to see the scholarship awardees. In an interesting twist, one awardee turned out to be the son of a former college dorm roommate!

To another charity (one that must work hard just to cover annual expenses) I've given a couple of gifts restricted to endowment, because I want them to start thinking longer term.

If you're wanting reading material, there are a couple of books by Douglas Lawson: "Give to Live" and "More Give to Live" are the titles, I think. Another book by Jerold Panas is called "Mega Gifts" and it explores the thinking of philanthropists.

Our local hospital, established 100 years ago, will soon be raising money to build a complete replacement hospital, so if anyone reading this would like to name a wing, I can hook you up heh-heh.

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Old 06-15-2007, 01:05 AM   #5
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There sure are some amazing conservation projects and critical needs in Hawaii. Have you talked to your local Nature Conservancy?

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Old 06-15-2007, 09:41 AM   #6
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Our charitable giving program is fairly simple. We have about 10 charities on our list and typically decide at the beginning of the year how much we will give to each. Occasionally, the roster will change slightly, but it is relatively constant. Then, through the year, I write the necessary checks. I have not found the process to be particularly burdensome.

However, I understand the need for a more personal connection. While I am happy to support the causes we do, limiting my involvement to picking an organization and writing a check gives only limited satisfaction. For example, I get more enjoyment out of serving on the board of trustees of my church than I do in paying my weekly pledge. Similarly, we have long supported our local historical society. However, they recently invited me to set up a display of my collection of historical US flags and give a few talks about the history of our flag. Doing that brought greater satisfaction than all the monetary contributions over the years. Since I am still w*rking, I currently have more money than time, so I expect I will continue to be limited to primarily monetary support for the next few years, but eventually I can see expanding my volunteer efforts.

My only suggestion would be to seek more personal involvement in causes that interest you. You may not find a good fit right out of the box and you may have to try a few, but eventually, you and your wife will find something that truly inspires. If that occurs, you will probably want to direct your monetary contributions there as well. For example, I have noticed with respect to the local opera that the board of directors, who are all deeply involved in the process of running the opera, are also the largest financial contributors.
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Old 06-15-2007, 12:15 PM   #7
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Jossey-Bass::Inspired Philanthropy: Your Step-by-Step Guide to Creating a Giving Plan, 2nd Edition

You might try reading this or similar books.
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Old 06-15-2007, 12:56 PM   #8
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I think Melinda has an entire staff to do the raking for her, which might explain her demeanor.
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Old 06-15-2007, 01:44 PM   #9
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Thanks for the book suggestions and the other charity ideas. I'll keep reading.

Quote:
Originally Posted by Martha View Post
Thanks very much for suggesting that one, Martha! It popped up while I was working through my Amazon.com list, and I'm glad to see it's as good as it appeared to be.

I've been Treasurer of a non-profit for three years plus an encore (my relief didn't work out) so I have no desire to ever serve on a board again-- even if the President is Mother Theresa. I don't have much interest right now in getting my hands dirty again or of feeding my ego-- we like the "anonymous donor" cloak very much. And when it comes to choosing who to help, I think I prefer people to animals or environments. (IMO the latter are generally much less in need of help.) Habitat for Humanity is on my "To Do" list but after five years I still have more to do than time to do it.

In the meantime we'll keep pitchforking the dough donations. No problem doing that and we're not suffering, but I guess this has been a bit of an "Is that all there is?" reaction.

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I think Melinda has an entire staff to do the raking for her, which might explain her demeanor.
Originally I thought that Bill married her just to kill any possibility of Microsoft having to develop "Son of Bob". (It certainly wasn't because he was having trouble finding attractive women willing to spend time with him.) But now I think that both Bill & Warren are out of their depth with her, and that she's the real power behind the thrones...
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Old 06-16-2007, 03:10 PM   #10
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Nords, the donor advised fund is a great idea, but it seems to me that the donors need a clear vision to guide disposition of the funds!

I have recently set up a DAF, but I put off the decision till I had come up with a vision statement and a series of goals and expectations. As a result my fund will focus on the causes I am passionate about. As soon as the DAF has sufficient money in it, funds will be dispensed through grant applications whcih must meet predetermined criteria. When I die, the residue of my estate, after designated gifts, will go to the DAF. It's set up to be self sustaining, though I still have the option of spending every last penny before I kick the bucket! I have also selected (with their consent) an advisory group of experts who can properly evaluate applications and whom I expect to outlive me.
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Old 06-16-2007, 04:58 PM   #11
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Nords, the donor advised fund is a great idea, but it seems to me that the donors need a clear vision to guide disposition of the funds!
I have recently set up a DAF, but I put off the decision till I had come up with a vision statement and a series of goals and expectations. As a result my fund will focus on the causes I am passionate about. As soon as the DAF has sufficient money in it, funds will be dispensed through grant applications whcih must meet predetermined criteria.
Yeah boy, one of the things I always enjoyed as Treasurer was getting a check with a bunch of strings tied to it.

"Yo, Prez, your decision-- see if we want to cash this or not..."

I don't know how much business a fund would get if charities had to send in grant applications. Seems kinda unfair to make a non-profit figure out how to file a grant (or, more likely, to pay someone to do it for them) when it might be easier to make a grant to a charity whose mission is already aligned with the donors.

Fidelity's DAF grant-making website allows donors to put restrictions on the grant. For example we specified that our donation to the Family Literacy Foundation should go to their military program instead of to their convict-outreach program. Whether or not that actually happens would have to be the subject of an audit, but short of that it's as much reassurance as any donor can expect to get.

Frankly I'd rather choose a charity that spends our donation in a manner I'd support than a charity that just follows my instructions.

And I'm still looking for that cause I'm passionate about...
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Old 06-20-2007, 12:46 AM   #12
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And I'm still looking for that cause I'm passionate about.
Me too, I have no passion. I think I might enjoy delivering meals on wheels or even setting up a shelter for select homeless people. I don't like most homeless people so it would have to be only those I felt weren't at fault for their own problems and would get past the rough spot. I will be moving to the country so if I found someone who had their spouse run off leaving them with children and no income I would be moved to help. I don't know how much of that really happens where they don't have family or friends to help them.
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Old 06-20-2007, 01:09 AM   #13
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Well, I found a cause I can get passionate about, but of course it's not that easy.

I'm one of the biggest (tallest/heaviest) tae kwon do students on Oahu. In most tournaments I'd be in the category that we politely refer to as "Unlimited". But one other local black belt is my height and within a few pounds of me, and he's taught me a lot. I enjoy sparring with him even though I walk head-first into most of his traps. His spinning jump-hook kick is unbelievable-- almost impossible to break down without an instant replay. He made third dan as a 17-year-old and has been winning medals in national competitions for six years. Not your typical teen slacker, but he's too tall/heavy to be national/olympic caliber. I doubt he'd be earning a stipend at the Colorado Springs training facility, and in another five years the injuries are gonna catch up.

Now he's about 20-21 years old and this week he was helping out at our dojang. I asked him how things were going and commented that he must've finished his third year of college by now. He laughed and said "No, just one semester." I asked him what was next and he said "Trying to get back into college." We're not talking Amherst or Stanford-- just the business curriculum at UH. But his family doesn't live on the island, can't (or won't) support his college expenses, and it's hard to live on your own in Hawaii while saving enough for the tuition. I don't think he's brilliant enough to merit an academic scholarship but I haven't had a chance to follow up with him. He appears to be more the kind of guy who will work hard to improve his writing/analysis skills and get a 3.0 GPA while learning how to run a business. I worked with about a thousand of those guys in the Navy and I know what they can do, but he's not interested in joining the military either.

Spouse and I are at a point in our lives where we could subsidize a UH semester's tuition and perhaps even more. Of course there are scholarships for these situations and there's always the risk of inflicting affluenza. But in this case I think the cost of the tuition is venture capital, not a handout. If he was an IPO then I'd be buying shares.

I'd never ruin a good friendship, or his dignity, by letting him accept money from us. But I'd write a check to UH tomorrow if I could figure out a way to do it anonymously. This problem must have been solved before-- how does a college offer an anonymous "angel investor" scholarship to a specific student?

I'm going to have to talk about this some more with my instructor and with UH...
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Old 06-20-2007, 09:01 AM   #14
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A creative co-conspirator at the university could probably work out the anonymous scholarship part.

But, while being very admirable, and very "philanthropy-minded", since you would be "specifying" the dollars for his tuition, I don't think it will qualify to be tax-deductible, ie., from your donor-advised fund (sorry).

Of course, check with your tax-advisor.
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Old 06-24-2007, 04:58 PM   #15
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A creative co-conspirator at the university could probably work out the anonymous scholarship part.

But, while being very admirable, and very "philanthropy-minded", since you would be "specifying" the dollars for his tuition, I don't think it will qualify to be tax-deductible, ie., from your donor-advised fund (sorry).

Of course, check with your tax-advisor.
When I was a youth in Civil Air Patrol people wanted to donate so their kid could get air time but if you donated you weren't allowed to donate for a person. It is that way with all donations or everyone would give to charities on condition it help only people they wanted to help.
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