1. Endowment Strategies: Essential Infrastructure and Conversations with Donors Create a Jewish Legacy of Western Massachusetts

2. Why Are We Here?  Building a culture of Legacy and endowment can be challenging.  Now, time to engage in endowment building at your agency or synagogue.  This is an ongoing process – it takes preparation, and activity.  Today will focus on key elements of the process you are undertaking.

3. Essential Elements for Endowment Success

4. An Overview  Building endowment is a proactive – not reactive process.  To be successful, you must create a strong infrastructure, understand the donor’s perspective, and engage in conversations.

5. The Paradigm Shift  Ten years ago – endowments were an embarrassment of riches  Now, fiduciary duty  However, the urgency of current programs must be balanced with preparing for the future

6. Why So Much Talk About Creating a Jewish Legacy?  The economy is tough and taking a toll on donors Since 2000 Now, uncertainty in markets, interest rates, jobs, inflation, oil Affects all wealth/age groups

7. Why So Much Talk About Creating a Jewish Legacy?  Government grants are disappearing – greater needs with less available funds National Association of State budget Officer – “Fiscal Survey of States” June 2008 - $48 billion shortfall in 2009 Cuts will occur in public health, elderly and disabled, education, work force Federal government deficit at high

8. Why So Much Talk About Creating a Jewish Legacy?  Private foundation grants are shrinking  The number of charities reaching out to your donors is increasing 819,000 in 2000 1,128,367 in 2007  Board have a fiduciary duty to address mission

9. Understanding the Role of Endowed Gifts in Development  Planned gifts, legacy gifts, and endowment are closely tied  Annual gifts – from income  “Lasting” gifts – from assets  Continuation of the relationship with the donor

10. The Fundraising Pyramid ANNUAL GIVING MAJOR GIVING PLANNED GIVING Donor Commitment Nonprofit Contact

11. Building Relationship with Donors  The most exciting – and strengthening – element of this process is building closer relationships with donors – sharing their visions and goals  Conversations let you get to know a donor  It takes more than one conversation  And it requires a strong infrastructure

12. Balancing Solicitations  One of the greatest concerns expressed by staff and boards is: How do you balance needs and solicitations?  You have limited staff and budget.  And you cannot afford to lose current revenue.  You may feel you have to wait until the time is “right” – but that day will never come.

13. An Exercise As a group, tell me your greatest concerns about the impact of endowment on your ongoing fundraising.

14. The Infrastructure Required to Build Endowment

15. A Strategic Assessment  Your Strengths You have local and national resources. You have a strong, committed Jewish community. You have a group of charities going to the community at the same time – this will help in education and marketing

16. A Strategic Assessment  Your weaknesses: Most of your organizations are new to the process. Most of your organizations have limited staff. Staff is not trained in complex gift options. It may not be easy to build infrastructure, assemble, and manage the volunteer team – and expand the marketing.

17. A Strategic Assessment  Your Opportunities: You’re creating a long-term resource. An endowment provides funds to capitalize on opportunities or expand strategically. You’ll have resources to respond quickly to critical and urgent needs. You’ll have resources to take on new ventures not covered by annual revenue.

18. A Strategic Assessment  Your Opportunities You’ll have the opportunity to build stronger relationships with your donors – sets the stage for ongoing communications. You can do it right – you’re starting at the beginning. You can build strength in the Jewish community for Jewish causes. There is an enormous transfer of wealth underway - $41 to $136 trillion

19. A Strategic Assessment  Your challenges: Articulating the case for Legacy/endowment, and building it into conversations with donors. Finding the time to prioritize the work. Changing the culture of your organization to build donor relationships Positioning endowment to encourage donors to make annual, capital, and endowed gifts.

20. An Exercise Divide into teams and identify your organization’s greatest strengths and weaknesses in building endowment. You may select up to 3 of each.

21. The Case Statement  The internal case for support: Start by building the case among staff and board Why do you need endowment? Take the board through the exercise of answering these questions:  Do you have a long-term purpose?  Do cyclical economic variances impact annual fund?  Do you have new programs you want to pursue – but no dollars?

22. The Case Statement  The questions, continued: Do you anticipate future needs not currently funded? Is there more competition for annual gifts? Are you dependent on grants? Are you losing donors through mortality, or a move from the community?

23. The Six Greatest Concerns  How can we hold money for the future, when there are so many needs today?  We will appear rich.  We don’t want restrictions on gifts.  Won’t endowment giving hurt annual giving?  These gifts seem complicated.  This process costs money.

24. The Case Statement  The external case – why donors should give Should inspire vision Should inspire passion Should be urgent Should involve the donor See page 15 – Ray Lynn Wilbur statement

25. An Exercise Make a list of the top five elements of your case for support.

26. Gift Acceptance Policies  Primary benefit is to maintain discipline, while opening doors to additional assets  Often come late in a development program as charities move beyond cash and marketable securities  There is organizational and board liability for mistakes.

27. Gift Acceptance Policies – Why? 1. Decisions on a case by case scenario are inconsistent. 2. The glittering appeal of the gift obfuscates good judgment. 3. Without policies, you may send mixed signals to donors. 4. Good policies will keep donors from making mistakes.

28. Endowment Policies  Location and form of endowment  Spending policy  Minimum fund sizes  Broad areas of endowment  How decisions are made  Publication and stewardship  Investment management  Other issues

29. Effective Data Management  Data is gold – the key to prospecting  Data is key in building relationships  It’s about more than membership or annual giving – it’s about who they are and how they relate to your organization  Others can not sort, remember, or analyze what’s in your brain – unless you reduce it to data.

30. Key Data  Name, address, contact  Electronic as well  If family, key decision makers  Method of solicitation, contact  Personal interests  Family structure and interests  Volunteer history  Giving history  Use of services

31. Sound Fiscal Management  The scandals of a few have created concerns about all  No longer get “the benefit of the doubt” – and you shouldn’t - you should have sound policies.  Dual controls and active board review  Standards for donor response  Transparency to public

32. Building the Legacy Team  You need staff and volunteers – but will need to work with the resources you have  Rely on outside help for technical advice and guidance  Rely on staff and board to ensure key infrastructure is in place  Rely on volunteers to have conversations with donors.

33. Building the Legacy Team  Be patient – endowments and legacies take time  Remember you’re working with your best donors  Build a well-informed, motivated, inspired team  Each individual should understand the role they play in success

34. The Role of the Board  Engage in planning  Participate in endowment design  Ask questions!  Ensure accountability  Review regular report on progress  Support process in budget  Provide support in outreach  Adopt policies, including ethics  Consider a gift!

35. The CEO’s Duties  Drive strategic planning  Oversee case statement  Ensure board is on board  Make regular reports to board and staff  Recruit planned giving committee  Define endowment form  Draft resolution to commit gifts to endowment  Assign oversight of endowment  Set goals  Establish way to distribute  Support calls

36. The CFO’s/Treasurer’s Duties  Work with development staff to create endowment agreement  Review administrative requirements  Make checklist for endowment support  Work with investment committee  Prepare quarterly and annual investment reports  Follow through on receipt of gifts

37. The Development Officer  Work with CEO/ED on case statement  Identify budget needs  Prepare marketing materials  Make calls on donors  Prepare gift proposals  Close and report gifts  Follow through with CFO/Treasurer  Contact donor after fund operational – send update

38. The Volunteers  Embrace learning curve!  Learn to articulate the case.  Consider a personal Legacy  Give thought to the impact of your gift.  Make the calls!  Get help when you need it.

39. Setting Goals and Objectives  Shaping expectations on goals – two common mistakes The expectation the endowment will address short-term funding issues Expecting planned giving to generate instant returns

40. Begin with Conceptual Goals  Building the financial base of your charity  Identifying new donors – and cultivating connected donors  Creating a marketing program to create greater visibility  Creating visibility for endowment and gift planning  Improving infrastructure  Engaging board and volunteers

41. Next, Set Specific Goals  Year One Strengthen data management Building donor information Create prospecting process Adopt key policies Create marketing plan Update current marketing platforms to include key messages Develop method of tracking calls

42. Next, Set Specific Goals  Year One (continued) Create recognition society Make calls on top 50 prospects Obtain endowment gifts from 50% of the board Obtain endowment gifts from 20% of former board Train staff/board on endowment/planned giving

43. Next, Set Specific goals  Year Two Raise board participation to 75% Obtain 10 additional endowment commitments from former board Make calls on top 75 prospects Celebrate success at 1-year mark Send letters to 500 endowment prospects Create professional advisory council Expand staff to support activities

44. Next, Set Specific Goals  Year Five 150 members of the recognition society $2 million in endowment assets $10 million in endowment commitments 150 ongoing solicitations per year Active committee/task force Active advisory council

45. Track Indirect and Direct Revenue Producing Activities  Indirect: Number of prospects qualified Number of records reviewed Number of training sessions/volunteers trained Number of telephone contacts, written contacts, personal contacts Number of seminars, events

46. Track Indirect and Direct Revenue Producing Activities  Direct Gift commitments – irrevocable and revocable Cash revenue

47. Drafting the Implementation Plan  Start with your goals  Incorporate infrastructure needs (from assessment)  See page 28 Task People responsible Staff/volunteer resources $$ resources Timeline

48. Tracking and Reporting  Update progress on quarterly basis  Report internally - one page report for consistency  Report externally – thank donors and report impact

49. Basic Marketing Strategies

50. Opportunities for Donors  Creating a Legacy is a joy – not a burden.  Donor can select the charity and purpose for Legacy  The gift can involve or honor family  The gift should fit within context of other planning  Opportunity to give back  Opportunity to change the world

51. Challenges to Donors  It is uncomfortable to talk about bequests or death – “I’ll take care of it later.”  How do I balance family with charity?  Where do I start?  Why do you need the money?  I’m not wealthy.  This is complicated.  My family doesn’t live here.

52. The Many Facets of Donor Motivation  Commitment to role of organization in Jewish community  Deep religious faith  Commitment to “give back”  Services provided  Contribution to quality of life  Personal gratitude for success

53. The Many Facets of Donor Motivation  Memorial  Facilitating change  Desire to influence or control activities  Guilt  Tax incentives

54. Donor Motivation: High Net Worth Philanthropy Study  2006 Study  Focused on philanthropic profile, motivations and goals of high net worth individuals (income >$200,000, assets >$1 million)  3.1% of all U. S. households  98% of group made gift to charity in 2005

55. Type of Gift Vehicles Used Type of Gift% Who Have Created Capital campaign64.6% Bequest41.2% Stocks/mutual funds31.8% Created foundation19.5% Created donor advised fund15.9%

56. Important Motivations for Giving Motivation% of Respondents Citing Meet critical needs86.3% Giving back to society82.6% Reciprocity81.5% Bring about a desired impact68.5% Nonprofits should do what government cannot do 64.4%

57. Factors That Would Prompt Additional Gifts Factor% of Respondents Citing Spent less money on administration 74.8% Donor can determine impact of gift 58.3% Donor felt more financial secure 52.0% Donor received better return on investments 46.6% Donor not already financially committed 40.2%

58. Center on Philanthropy at IU Bequest Study  Report in March 2007  Combined high net worth with surveys in Indiana, St. Louis, Memphis  Goal to identify potential bequest donors, and donor motivation  48.4% had a will FindLaw 44.4% (2002) NCPG 42% (2000)

59. Age Demographics for Those With Bequest in Place AgeBequest StudyHNW Philanthropy Study 30-408.9%1.4% 40-5028.1%9.4% 50-6-21.9%19.3% 60-7020.6%27.5% 70-8011.0%25.1% 80+8.9%17.3%

60. Age Demographics for Those Willing to Consider a Bequest AgeBequest Study% of Sample 30-4018%18.2% 40-5028%28.8% 50-6024%18.3% 60-705%10.9% 70-803%7.8% 80+1%3.7%

61. Bequest Intention Potential >$25,0 00 $25,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,00 0+ Bequest currently in place 6.6%7%7.6%6.5%10% Would consider putting a bequest in place 28.4%34.6%28.8%25.99%35.63%

62. Giving Interests – Generational Differences Younger donors are less likely to contribute to religious causes.

63. Generational Differences  After controls were factored, age had little impact on amount.  Motivations varied by generation – but not as varied as you would imagine.

64. Motivations for Giving – Generational Interests Millen.Gen XBoomerSilentGreatOverall Basic needs poor 39.4%39.6%44.9%46.7%52.3%43% Better com- munity 34.3%39.4%35.9%34.5%36.7% Self help 28.5%34.3%38.6%41.3%43.9%36.7% Better world 44.5%37.3%33.8%31.9%26.5%35.4% Help – those w/ less 28.7%27.8% 28.5%21.7%27.9%

65. Generational Difference  Educational level affected donor motivation College degree more likely to cite “responsibility to help those with less” and less like to “meet the basic needs of the poor.”

66. Identifying the Best Prospects  Internal: Multi-year donors Members Major gift donors Long-term leadership Long-term volunteers Current board Corporate leadership Staff

67. Finding the Best Prospects  External Community investors Always start internally

68. Educating Prospects (Marketing)  Integrating the Legacy Message in Current Platforms Annual report Website Annual fund solicitations Substantiation and “thank you” letters Stationery Newsletter Board meetings Annual appreciation luncheon

69. An Exercise As a group, let’s brainstorm to identify current marketing platforms that may be available to you.

70. Create an Endowment/Legacy Brochure  A word from the Board Chair, Legacy Chair, President  The case for Legacy/endowment  The endowment structure, options in giving  Basic giving options  Two donor stories  Reply form

71. An Exercise: The Most Effective Marketing Materials What is the single most effective piece of endowment marketing material you’ve seen? Why?

72. Conversations with Donors

73. Making Calls on Potential Donors  The personal call is the most powerful, effective marketing tool you have.  Cannot be reduced to a formula.  The good news is, it’s driven by the donors interests – so easy to do.  Planning is critical: Information Calling strategy

74. The Secret for Success: It’s All About the Donor  Here’s where you start: Information about the donor’s relationship with your charity Info from public sources Anecdotal information from staff

75. What You Must Know Before the Conversation  The strategy – why you’re there  Why you picked this donor  Basic gift options Outright gifts Gifts that pay income Deferred gifts  Endowment options  What happens to the money

76. Assembling and Training the Calling Team  The importance of volunteers Willing to be training and make calls Know the charity well Have made personal commitment Have participated in training  Training the team Role of endowment Purpose of Create a Jewish Legacy Strategy behind prospect selection Role of volunteer Basic gift options

77. The Top Fifty Prospects  Use identifiers discussed earlier  Share list with volunteers  Allow the volunteer to select 2 to 3 names they are most comfortable calling on

78. Setting Up the Call  Step One – review the info.  Step Two – send the letter.  Step Three – follow up.  Step Four – set a time to meet.  Step Five – follow the phone call with a letter confirming the meeting time and place.

79. An Exercise: What Are Your Greatest Fears? As a group, share the donor question or response you most fear as a part of this endowment conversation.

80. The Course of the Call  Establish a relationship with the donor How long have you been a donor to our charity? When did you make your first gift – and why? What are your concerns as you look out 10 to 20 years? What do you believe are our greatest opportunities and challenges?

81. More Questions  What are the charitable interests you are most passionate about in the Jewish community?  How have you supported those interests?  Do you realize you could create a fund with our charity – either today or through your estate – that would address those priorities?  Would you like to talk more?

82. And Still More:  What is the most significant charitable gift you have ever made?  Why?  What are your goals for you children, grandchildren in philanthropy?  Do you have an estate planner you work with you can recommend to others?

83. Listen Carefully – Financial Needs  My CD income has been cut in half!  The dividends and interest from my investments has dropped dramatically.  I wish I could sell my stocks – but I don’t want to pay capital gains.  I’m worried about taking care of my parents – and my children!  I have a child with disabilities – they are my first priority.

84. Listen Carefully – Financial Transactions  My brother and I are going to sell land we inherited from our parents – tired of taxes, management, and conflict.  I’ve decided not to pass the family business to my children – I think I’ll sell it now to maximize its value.  I’m worried about having enough income in retirement – I think I’ll sell my stocks and buy tax-exempts

85. The Course of the Call  Share information about your charity.  Qualify the donor.  Move the prospect to the next step.  Ask for the gift. Know the gift goals. Donor must be qualified. Determine amount and type to suggest. Set time to make the ask. Who should be there? Thank the donor.

86. The Follow Up  The follow up is key to your success – endowments are built overnight, and deferred gift decisions are not made on the first visit.  Make notes about the call, the information developed, and steps required for follow up.  Assess the value of the call.  Make a list of follow up items.  Send a thank you note for the call.

87. Seven Secrets for Success

88. #1 Find the Right Donors  It’s all about the donors Commitment better indicator than wealth Ownership is key Find a way for each to participate

89. #2 Communicate Clearly and Consistently with Those Donors  Communication must express expectations.  Communication must be ongoing.  Potential donors should be able to identify themselves as the target and get key information on how to move forward.

90. #3 Stewardship is King  Stewardship is king Can’t begin with campaign – must begin earlier Hard to find time when in planning – make time Set stewardship as campaign value

91. #4 Spread the Endowment Building Responsibilities  CEO/ED duties  CFO/Treasurer duties  Development staff duties  Board and volunteer duties

92. #5 Report, Report, Report  Boards love facts, figures and success.  They prioritize those activities heavily reported.  They must engage and take ownership of the results.  Treat every report like a donor call – provide stories, incentives, results, impact

93. #6 Never, Never Quit Building  The best campaigns reach goal and keep going.  Think about Harvard, Yale, etc……..they fundraise for endowment daily.  Also remember, many of these gifts will be revocable – don’t send the message you don’t need the gift any more.

94. Final Thoughts  Success requires a plan  Focus on best prospects  Make those calls  Keep endowment visible  Know the answers  Stay with it! – building endowment is an ongoing process