November 20, 2024 • 53 mins
Isn’t there a universal metric we can use in order to compare one charity to another? Not according to our guest today who says that we have to use the head AND the heart to determine what organizations we’re going to support. And when it comes to our motivation to give, I think it could be easy to dismiss our own efforts as just a tiny drop in the bucket. Maybe you’re giving when prompted at the checkout register, so it’s five bucks on occasion. Or maybe you are a little more disciplined or systematic about it and you give away a certain percentage of your income – but then you make recurring donations that you basically forget about. Out of sight, out of mind… but that’s not how we want you to give away your money. We want you to get the most bang for your buck! And here to help us to learn how to do that is Phil Buchanan, the president of the Center for Effective Philanthropy. He’s also the author of the book, Giving Done Right, where he emphasizes the importance of thoughtful and mission-driven giving. He has a podcast by the same name and he’s all about providing data-driven insights to help us maximize our personal impact. We talk about the limitations of effective altruism, focusing on local communities, the historical impact of philanthropy, and more!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Hod of Money. I'm Joel and I am Matt.
Speaker 2 (00:03):
And today we're talking about giving done Right with Phil Buchanan.
Speaker 3 (00:26):
Yeah.
Speaker 4 (00:26):
So when it comes to being charitable and giving away money, Joel,
I think it could be easy for us to dismiss
our own efforts as just a tiny drop in the bucket,
at least like on my part, uh huh, no foundations
in my name, I'm selling hardcore right now. Like I'm
thinking for a lot of folks out there, maybe you
know you're giving just when prompted at the checkout register, right,
so it's just like five bucks on occasion, or maybe
(00:48):
you actually are being a little more disciplined about it, right,
you give away a certain percentage of your income, you
cut a check every single month. Maybe that's the easy
part you give, but then you don't think about it
beyond that. But that is not how we approach things
here at How to Money, we want you to get
the most bang for your buck, and here to help
us to learn how to do that is Phil Buchanan.
(01:08):
He is the president of the Center for Effective Philanthropy.
He's also the author of the book Giving Done Right,
where he emphasizes the importance of thoughtful and mission driven giving.
He is all about providing data driven insights to help
us to maximize our impact out there in the world. So, Phil,
thank you so much for taking the time and to
talk with Joel and I today.
Speaker 3 (01:28):
Thanks Matt and Joel really happy to be here.
Speaker 1 (01:31):
We're glad to have you Phil.
Speaker 2 (01:32):
The first question we ask everyone that comes on the
show is what do you like to sporgehn Matt and
I we spend a lot on craft beer, but hey,
it's okay because we're doing the smart thing with our
money at the same time, saving and investing for our future.
Speaker 1 (01:42):
What's that spurge for you?
Speaker 3 (01:44):
I'm going to take two if that's okay.
Speaker 1 (01:46):
Oh yeah.
Speaker 3 (01:46):
One is concert tickets, live music. I love to see
shows and I sometimes spend too much on tickets. And
the other is I try to push myself to quote
unquote splurge fill only that is to give a little
bit more than might feel comfortable to organizations that I
really really care about. I don't know if that counts
(02:08):
as a splurge, but I know the first one does.
Speaker 4 (02:11):
Very on mission, I should say to educated. I'm curious too, Phil,
who have you seen recently? What was the best concert
in reason memory.
Speaker 3 (02:18):
So a lot of my musical tastes these days are
influenced by my nineteen year old and twenty three year
old daughters. So this summer I saw Noah Khan with
my nineteen year old, which was fantastic, nice, and just
recently my twenty three year old kind of dragged me,
(02:39):
and then I ended up having a great time to
see The Far Side, a maybe somewhat obscure nineties hip
hop act who were amazing actually, And then actually a
few nights after that, we went my wife and I
went also with my older daughter to see Dar william
(03:00):
who's folks.
Speaker 1 (03:02):
I loved Dar Williams.
Speaker 3 (03:03):
She's a great songwriter, brilliant. We went to college together,
although I didn't know her.
Speaker 1 (03:09):
Oh that's cool.
Speaker 3 (03:10):
We've been seeing her shows for you know, the last
twenty years. So lots of different types of music.
Speaker 1 (03:15):
Cool, Okay, yeah, that sounds very eclectic.
Speaker 4 (03:17):
Phil just like scored so many more points with the
younger listeners than.
Speaker 1 (03:23):
Oh, can I ask one quick question you Pheel?
Speaker 2 (03:24):
Yeah, I think we can talk about music for a
long time, But I want to know the title of
your book is giving done right? I'm curious I just
kind of want to start this episode off by asking
the inverse question, what's giving done wrong?
Speaker 3 (03:36):
Giving done wrong is thoughtless, arrogant, top down giving giving
that constrains organizations from being successful or effective. And there's
a whole lot of it. So I'll give you one example.
A lot of folks fixate, and I understand why on
(03:57):
overhead rates of nonprofits. So they'll say how much is
going to the cause or the program and how much
is going to quote unquote overhead, And that gets defined
in different ways, And I like to back people up
and say, what do you really mean? So if you're
talking about supporting the food pantry that's serving hungry people,
(04:19):
are you saying that you want your gift to go
to pay for the chicken and the broccoli and the
other food that's served, but not the rent of the
establishment in which the food is served, or the salaries
of the staff who coordinate the volunteers to serve the food.
(04:39):
Because that makes no sense. And if you restrict your
giving in that way, you will constrain the ability of
nonprofits to be effective. Similarly, if you think you have
all the answers to what are the most pressing problems
or the ways to solve them rather than going in
more from a place of humility, will make the kind
(05:00):
of mistakes that we sometimes see billionaire philanthropists make, and
so that would be philanthropy done wrong or giving done wrong.
Speaker 4 (05:09):
I could say that being an instance of being cheap
as opposed to more of a frugal approach and looking
at the overall impact phil Can you talk about like
America has an interesting philanthropy history. I think that differs
from the rest of the world. Can you explain why
that is?
Speaker 3 (05:24):
Sure? I mean, I think that the founding of the
country was rooted in a desire for religious freedom. And
you know, freedom of association obviously is built right into
our Bill of Rights. And in the you know, early days,
Totokeville discussed about discussed Americans tendency to form, you know,
(05:49):
associations and groups of all types and and so there's
this sense of the autonomy to kind of organize around
the issues that you care about, the freedom to do that,
the importance of doing that. And then in I believe
it was nineteen seventeen, the charitable tax deduction became a
(06:13):
part of the tax code. So there was then an
incentive to give philanthropically, just as we give incentives for people,
for example, to buy homes. The notion was we want
to encourage giving. And so the US has one of
the highest rates of giving globally. As a percent of
(06:35):
GDP giving in twenty twenty three was five hundred and
fifty billion dollars charitable giving, and the bulk of that
three hundred and seventy four billion was giving buy individuals.
And well, we think of the ultra wealthy, and there
are some concerning trends in terms of everyday givers giving
(06:59):
at lower rates than was true twenty years ago, and
we can talk about that. It is still also the
case that the bulk of giving to most nonprofits is
not accounted for or not rather done by the biggest givers.
It is everyday givers who are helping fuel local nonprofits
(07:20):
in every community, who are working on important issues and
often helping the most vulnerable among us. So it is
an integral part of what keeps our country going. And
there's lots to be worried about in terms of the
strength of the nonprofit sector, the sort of trends related
to philanthropy, but historically it has been a great strength
(07:44):
of this country the nonprofit sector supported by generous donors.
Speaker 2 (07:49):
Can you give us like an overview maybe or kind
of going into some US history a little bit here,
which is really cool, maybe of the actual good. What
are some of the things that nonprofits have had the
most impact on in this country in your opinion.
Speaker 3 (08:02):
There's so much all around us that we take for
granted that is the work of nonprofits supported by generous donors.
So in the wake of the pandemic, you know, we
all rediscovered the trails.
Speaker 1 (08:20):
In our very area.
Speaker 3 (08:21):
You know, all the land conservation, the beautiful places that
we get to enjoy that are all around us. That's
an example of something we don't necessarily think about how
that came to be, that we've got that great path
to run on. But there's a philanthropy story there. The
diseases that we don't have to worry about our kids
(08:42):
dying from, you know, the Rockefeller Foundation developing a vaccine
in the nineteen thirties for yellow fever. That's not something
you find most people worrying about anymore. You think about
medical education and medical schools and way in which philanthropy
(09:02):
played a role in their development and establishment. I mean,
there's a philanthropic, you know, story for almost everything we
think about basic you know, civil rights and some of
which are are under attack again, their right to vote,
and the role that nonprofits supported by foundations and other
(09:25):
donors played in helping to make that happen. You think
about the progress that's made been made in terms of
criminal justice reform and the rates of incarceration. I mean,
there's much more progress to be made, but the progress
that's been made and things like the disproportionate rates of
incarceration of black men in this country, the progress that
(09:46):
has been made has been a result of amazing nonprofits
like Equal Justice Initiative supported by generous donors, Clean air,
clean water. These are the result as of environmental advocacy
to try to get companies to curb their their pollutants
(10:07):
or to get government to regulate certain activities, and that
have been successful and that have led to again cleaner
air and cleaner water than we would have had. The
list just goes on and on. Museums, arts and.
Speaker 1 (10:22):
CULTURELD would be bleaker is what You're a.
Speaker 3 (10:24):
Solutely bleaker the art that we enjoy, you know, I'll stop.
Speaker 4 (10:30):
No, I mean, regardless of anyone listening could identify with
some of the different acts you mentioned. We can all
get behind clean water and clean air.
Speaker 1 (10:37):
Well.
Speaker 2 (10:37):
Yeah, and just to think that, I think you put
it in perspective really well there that there's a lot
of things that we enjoy that we have a hard
time pinpointing where they came from. And to see that
nonprofits had an active role in the society we live in,
it just, I don't know, brings a smile on my face.
Makes me happy that they exist and that there's nonprofits
doing great work out there, even if their nonprofits I
(10:58):
don't know about that's that's.
Speaker 4 (10:59):
True, but if you trace it back and dive into
the history, oftentimes you probably can tie that to charitable
organizations phil So you kind of hinted at the fact
that philanthropy, how it's been declining in recent years. Maybe
shed some light there, like why has that been a
trend that we've been seeing recently.
Speaker 3 (11:15):
Yeah, it's hard to know exactly why, and I think
that what I've learned over the years is maybe blindingly obvious.
But the answer to most questions, you know, when we're
looking for why is it's a combo platter of reasons.
But just to start with the problem two decades ago,
(11:38):
and this data comes from the Lily School at Indiana University,
about two thirds of American households we're giving to charity.
The most recent data it's just under half. So the
rates of giving have declined for a while that I
wasn't maybe seen as the crisis. It is because there
(12:00):
was so much wealth creation that the sort of mega
givers were able to fuel an increase in overall giving.
That in a way mass the problem of a decline
in the rate of participation. But now we're seeing that
flattening out to particularly when you adjust for the inflation
(12:22):
that has occurred in the last couple of years. So
we've actually seen year over year declines in giving, which
is not something that we're used to and which has
real consequences for vital nonprofits. So to your question why
there's so many possible contributors, one I think is just
to decline in trust and institutions broadly in our society,
(12:45):
more cynicism, you know, polarization rite a sense that a
sense of distrust in institutions. Essentially, I think that there's
also there's a lot of religion and religiously affiliated giving,
and because there's been a decline in religious participation that
(13:07):
has probably played a role. Folks point to some of
the impacts on the middle class of the Great Recession,
even as long ago as it was that that you know,
played a role fifteen years ago, I guess now in
some decline in rates of charitable giving. My own sense
(13:31):
is also that is a society we have not sufficiently
paid attention to the accomplishments of nonprofits. There's a tendency
to see nonprofits as lesser than to not think about them,
as we were just discussing, or when we do, to
imagine that they might be staffed by people who you know,
(13:51):
couldn't quite make it in the business world or something,
when in fact, my view is that it takes everything
to run a nonprofit that it takes to run an
equivalent side business, and a lot more. It's a harder job,
and nonprofit staff are often some of the most talented
in the country. But I don't know that that story
has been told, and that there's been a tendency instead
(14:12):
to focus on the isolated scandals or controversies which are
real and should be you know, should be addressed, but
people generalize them and assume that there are widespread problems
in management or leadership of nonprofits when when that's just
not the case. So I think it's it's so many
different things. And I would then turn around and point
(14:34):
the finger at myself and those of us in the
in the nonprofit sector who've made careers of this work
and say we have not figured out how to tell
the story well enough. And so I think part of
the part of the blame lies there as well.
Speaker 2 (14:47):
Well, it's interesting you're talking about people who work in nonprofits.
I think a lot of times you're right, they're just
as talented, and they often choose on purpose to get
paid less absolutely able to do work that they feel
makes more of a difference than going out there into
generalized corporate America. Not there's anything wrong with that, but
I think that they're like, yeah, those people are taking
(15:08):
a significant pay cut off them to do work that
they think needs to exist in this world. I'm curious
to what about taxes, how do those impact how people
give and how much people give? Because like the tax
cuts and Job Act, in many ways it had some
significantly positive impacts or other potentially negative impacts, But how
(15:29):
has that impacted giving and the higher standard deduction just
means that a lot fewer people gets a tax benefit
from their donations.
Speaker 3 (15:39):
Yeah, I think that's probably on the list of contributors
as well, although I mean that's some more recent development.
And I think as I'm not a policy person, I'm
certainly not a tax policy person, but I would say
that it doesn't make a lot of sense to me
that it is only the wealthiest, right the itemers, who
(16:01):
we would give an incentive to give. Right. So, so
I'd like to see universal uh deductibility of charitable gifts
in our in our tax policy, so that so that
folks who are you know, everyday people uh making you know,
regular wages also get also get that level of incentive
(16:26):
for for charitable giving. So I think it's an issue,
and and you know what, I honestly think it's one
of those issues that people should be able to come
together on across the partisan divide. I'm not sure that
I have a lot of hope right now about people
coming together across the partisan divide on much of anything,
(16:47):
but but this shure should be one area where you
can imagine some some agreement.
Speaker 1 (16:53):
Yeah.
Speaker 4 (16:53):
So we've we've talked about effective altruism on the show
before a lot of folks know about that. How would
you say that effect to valtruism is different from effective philanthropy.
Could you talk about maybe some of the differences, some
of the compare and contrast.
Speaker 3 (17:06):
To Sure, Yeah, I would sort of describe effective altruism.
And you guys tell me if you see it differently,
because I think it's shifted a little bit. What what
what what people? How people define it? But as this
notion that you should be sort of maximizing the impact
on human lives of your charitable giving and that that
(17:31):
that's a that's your moral obligation. And Peter Singer, the
philosopher at Princeton, I think, is sort of the godfather
of this concept. And I think it's a helpful challenge
to one's thinking to say, Okay, maybe I should give
some of my charitable donations to parts of the world
(17:53):
where the dollar is going to go further and where
I could say, prevent a death from malaria potentially for
not that much money, or you know, seriously affect the
trajectory of someone's life. And I think that's sort of
a useful intellectual challenge. I think as a practical matter,
(18:15):
though effective altruism doesn't really work as a defining sort
of framework for most people. And that's because if taken literally,
if applied literally, it would mean you wouldn't give to
the arts, for example. It would mean that you wouldn't
(18:39):
give locally in your own community if you live, for example,
in the United States. And so I am skeptical of
its utility as a practical framework to actually guide people,
because I think the reality is that philanthropy is rooted
(19:00):
in our values and our sense of connection to other
human beings, and so well we need to apply our
analytic minds to it, we also need to use our hearts,
and that the two go together. And so I think
of effective philanthropy as something that allows for more diversity
(19:27):
in choice of goals based on people's values and interests. Right, So,
I think, you know, the goals that you guys would
choose might not be the goals that I would choose.
And I don't think one set of choices is necessarily
objectively better than another. I think the sort of pluralism
(19:48):
of philanthropy, the choice that people have, is a strength. Then,
but I do think you should have clear goals. You
should try to know what you're doing and make sure
that you're giving is consistent with those goals. You should
try to then give in a way that supports effective
strategies to achieve those goals. If you want to work
(20:12):
on a particular issue, whatever it might be, there are
more and less effective paths to follow, often more and
less effective organizations to support. So I think that's important
to pay attention to. And then I think it's important
to have information that you're looking at to gauge your
(20:35):
sense of whether the folks you're supporting are are in
fact making the difference that they intend to make. Are
they as effective as as you thought they were when
you made those gifts. Those are important questions to ask,
But we got to keep the heart and values center
to this as well.
Speaker 4 (20:53):
I think I like how you mentioned hearts there and
you said objective truth. It's almost like the difference between
more of an object of approach to charity and a
subjective approach, right, It's like, are we talking about some
sort of absolute impact that these dollars are going to
have on individuals or maybe the relative impact relative to
who relative to you?
Speaker 1 (21:14):
And as you know, you can see in front of
your eyes, Yeah, and.
Speaker 4 (21:16):
As you know, like I mean, this is a personal
finance show, and so much of kind of the decisions
that we make do have to do with personal preference.
So I like how you distinguished the two there.
Speaker 2 (21:23):
I want to ask specifically about you talked about the
fixation on overhead, and that's something Matt and I've talked
about on the show before too, and maybe we should
probably think a little differently about that. This conversation is
making me want to think about what other things a
nonprofit might be doing, and not just thinking about how
efficient are they, but what are some of the best
resources for finding the most effective charities? And how do
(21:46):
you judge whether or not a charity is effective?
Speaker 3 (21:48):
Yeah, I mean those are really difficult questions because there's
not like a universal metric by which we can compare
the organization and working to improve graduation rates in Cleveland
against the organization working to reduce CO two emissions, you know,
in Brazil. The metrics are different, and so that's why
(22:14):
I think people gravitate toward overhead because it is something
you can compare different organizations using the same ratios. But
that doesn't mean that you should look I think it's
reasonable to say, well, what does this organization's budget look like,
how are they allocating it? You know, I think it's
reasonable if two organizations are doing essentially the same thing
(22:37):
to look at the budget relative to the amount of
that thing that they're doing. Although it's relatively rare, you're
going to find that apple to apple kind of comparison.
But honestly, what I would ask is what is the
organization trying to do? It comes back to what I
was saying before. What are their goals, what are their
strategies for achieving those goals? And what indicators are they
(23:01):
using to assess progress? Can they tell you a story
that makes sense that answers those basic questions. If they can,
then they're in the best position to decide how to
allocate your gift. And if they're investing in something that
some might categorize as overhead, like increasing staff salaries so
(23:22):
they can retain the best people because they're having trouble
retaining their frontline employees or making technological improvements that will
help them do their work more effectively, do we really
want to disincentivize them for doing that? And if we
don't trust the leaders of organizations enough to be able
(23:42):
to make those judgments about how to allocate resources within
their budgets to pursue the mission that they're dedicated to.
Then why are we funding them at all? And then
in terms of your question about well, where do you
go to figure this out? I'm not a huge fan
of some of the popular sort of charity rating websites
(24:07):
because they do tend to be too focused on these
financial ratios, which I think are not helpful out of context,
and which rightly varied based on the kind of work
that are being done, and then people apply them without
that context or nuance. So where do you go? I
think your local community foundation is a great place to start.
(24:29):
So almost every community in this country has a community
foundation that exists to match donors and nonprofits in that community.
I think there are this might be an outdated number now,
but at least eight hundred community foundations in this country,
and there's a community foundation finder online I believe, on
(24:51):
the Council on Foundation's website. You can go find your
community foundation and they can help you align your priorities
with organizations in your community that they have vetted and
know to be effective working in those areas that matter
to you. So that that's very cool the best advice
I can give. No.
Speaker 4 (25:12):
I think that's a helpful context to put it in,
because when you are looking at certain metrics like expense overhead,
like it's almost like a race to the bottom if
that's the only price that you're looking at, at which point,
maybe there are different sacrifices, not sacrifices, but decisions that
some of these nonprofits make.
Speaker 2 (25:26):
And at some point, why don't we just put up
red box machines with foods to feed the homeless? You
know what I'm saying, Like, there's no then there's no
personal touch, and so I get I get why that's
a faulty metric. So we've got so much more that
we want to discuss with you, Phil, including Okay, well,
then how do we come up with effective goals and
strategies to be wise givers. We'll get to a bunch
more with Phil Buchanan right after this we are back from.
Speaker 4 (25:55):
The break talking about giving done right with Phil If
Buchanan and Phil, you just mentioned how we should be
looking to different local community foundations, and a large part
of that too, when you're looking to organizations that are
geographically close to you, is the ability to even volunteer
in person totally. How important do you think that support is,
that non financial support to some of the different nonprofits
(26:17):
that we care about.
Speaker 3 (26:18):
I mean, to many nonprofits, it's absolutely vital that they
literally couldn't deliver their programmatic work without volunteers. It obviously
varies nonprofit and nonprofit depending on what the organization is doing,
but volunteering, as you say, can be a great way
also to just get educated about both the particular nonprofit
(26:42):
and just the nature of the work. And it's super fun.
I mean, one of the things that is interesting. And
this is not like research that we've done, but I've
read research by a variety of folks, including people at
Notre Dame, who have studied the effects on the human
brain of giving and volunteering. It literally will make you
(27:05):
happier if you get out there and give both of
your time and your money. And like I said, a
lot of nonprofits are really dependent on that volunteer support.
Speaker 2 (27:16):
What about someone who's listening and says, but doesn't the
government fund a lot of some of these causes? Aren't
they trying to tackle some of the same missions that
nonprofits are trying to tackle. How do you think about
the nonprofit response to certain issues versus government involvement, and
are they working in tandem or is this a cause
for some people to sit on their hands and not give.
Speaker 3 (27:37):
First of all, a lot of nonprofits do get government
funding in the form of contracts of various kinds, right,
So the government is often looking to nonprofits to do
certain kinds of work. I'll give you an example. I'm
on the board of directors at the National Council on Aging,
(27:58):
which worry about the quality of life of older adults,
and the National Council on an Aging gets federal funding
for programs that they then grant out to local senior
centers in communities that provide various services like education on
(28:19):
falls prevention, for example, or job training for older adults
who want to get back in the workforce. So we
sometimes think of government and nonprofit as more separate than
they are in the sense that nonprofits are often contracted
to do work with federal funds. I mean, I do
(28:40):
think that in other countries that have a more robust
social safety net, there is less of a need for
certain kinds of nonprofits. And there's been a lot of
critique of philanthropy and nonprofits from folks sort of on
(29:01):
the ideological left. Let's say, who will argue, well, this
should be the government's work and the billionaires should just
pay their taxes. And you know, that sounds kind of
convincing until you think it through and realize that actually,
you know, the American people have voted for the folks
(29:24):
who are who are making these decisions in this country,
and we have I might, I might like a different outcome.
I would like a different outcome, but the fact is
we have not. We have not elected to have that
kind of social safety net in this country. We literally
have not elected the people who want to put that
(29:45):
into place. And so in the meantime, yes, we could
focus on advocacy to try to get that to happen
so that the government does more. That's totally legitimate, and
you can do some of that legitimate, legitimately philanthropically. In
the meantime, there are needs that have to be at
every day. So it's too easy to just kick back
and say, well, the government should do this, because some
(30:05):
of it the government just isn't doing. And so, if
we care about our fellow citizens, if we care about
the most marginalized among us, if we care about our neighbors.
Then philanthropy matters.
Speaker 2 (30:16):
Like ideal is immerse reality on the ground, I think so.
Speaker 4 (30:19):
Yeah, one of the ways you've addressed our ability to
assess different nonprofits, like you mentioned the head and the Heart. Yeah,
I'm also thinking about just some of the different trends
that we've seen within like the giving space, Like there
are different organizations that just get really popular for one
reason or the other. And something else that keeps ringing
in my head that you said earlier is that an
(30:40):
organization has an ability to tell a story. And so
are there some organizations that just get lucky with how
it is that they're able to communicate the needs that
they're looking to address to the American public.
Speaker 3 (30:52):
Yeah, I mean, I think what you're saying is so
important because sometimes we confuse what sounds like it would
work with what works, and we give on the basis
of something sounding like it would work. So an example,
this is an older one, but you know program called
Scared Straight where the goal was to encourage high school
(31:16):
students not to get involved in criminal activity, and the
intervention was to have formally incarcerated people come speak at
school assemblies about the mistakes that they'd made. In their life,
and that program got a lot of funding when it
was like it would work. It sounds like it would work, right,
(31:37):
Like you see, well, I wouldn't want to be like
that guy and have spent seven years in prison. Well,
when it was rigorously evaluated, multiple studies discovered is that
it had the opposite of the intended effect. It made
young people more interested in crime rather than less.
Speaker 1 (31:58):
It was really cool, exactly, No, that's exactly it.
Speaker 3 (32:03):
And so that would be an example in sort of
a negative direction. I'll give you an example on the
other side. I think for decades people have assumed that
you can't just give money to poor people to help
them get out of poverty, because it won't be sustainable,
(32:24):
they won't make the right choices any number of reasons.
But there's increasing evidence that organizations like Give Directly, which
is international cash transfers to people in poverty and up
together here in the United States, which is a similar model,
(32:44):
where folks are literally being identified as in need and
able to benefit from direct cash transfers and they're receiving
that cash, and the evaluations that have been done suggest
that it does change the trajectory of their life. It
certainly changes the quality of their life in the near
term while they're receiving the money, but then also allowing
(33:06):
them to get on a different trajectory, whether that's by
pursuing educational opportunities that they might not have otherwise been
able to or retiring debt. There's another amazing organization called
called Rip Medical Debt, and you know, they're literally paying
off people's medical debt.
Speaker 1 (33:27):
Didn't they just change their name to Yes? I'm worried
trying to remember what the new.
Speaker 3 (33:30):
Name as I say this, Yeah, but formerly known as
RIP Medical Debt. I'm sure if you google it the
new name will come up. And you know, just as
simple as as helping people get that, you know, off
their back is transformative. But it is the kind of
thing that, you know, there's this kind of paternalistic sense
(33:53):
that people sometimes have of well, but that person won't
make the right decision and you know, won't use the
money the way the way that I would. But actually
people are smart about their own lives, you know, and
people are in a good position to know what they need.
And one of the things I'd like to see more
of in philanthropy is trust. Trust in the people in
(34:13):
communities who know what they need, trust in the nonprofits
that are working in those communities, that know how to
do the work, and a little bit less of the
assumption that I often see from you know, like the
tech billionaires, that because I was really good at that,
I'm going to be really good at being a philanthropist,
when in fact it's kind of a different set of skills.
(34:36):
There's a lot of knowledge already out there, and it
takes it takes sort of commitment and humility to really
get good at being at being a philanthropist.
Speaker 2 (34:47):
Yeah, by the way, the new name of RIP Medical
Debt is Undoe Medical Debt, so thank you. I don't
know why they changed the name, but they've been around
a long time now, and yeah, that's what the rest.
Speaker 4 (34:56):
I wonder if the RIP was just a little too
slightly negative, maybe they're just like this is a little
too much like the Scared Streak.
Speaker 2 (35:01):
They really were like acting and killing medical Debt and
they still are. But I like that. I like the
old name. But what's fine too, and they're just a
great organization with that.
Speaker 1 (35:11):
I love what they're doing. Phil.
Speaker 2 (35:13):
I'm curious you talk about not giving just because you
were asked to give and That is kind of one
of my pet peeves, and this time of year, I
think it's especially It may be claws on your heartstrings.
You're walking into the grocery store and someone's raising money
for a particular nonprofit. And sometimes I have no problem
with people who want to give in that way. I
(35:33):
feel like a scrooge because I'm saying no. But I
have plans for my giving, and so that's the reason
I'm saying no. In the moment, you talk about giving
in accordance with your goals and your strategies. Can you
kind of elaborate on that and how you see the
dichotomy I guess between being asked maybe in a moment
of emotional vulnerability, and having a pre thought plan for
(35:53):
how and when you're going to give.
Speaker 3 (35:55):
Yeah. Right, there's a crowd of nine people behind you.
It's the holidays. You're in the store, and the cash
here says loudly, do you want to give two dollars
and fifty cents to help end cancer? And you're like, oh,
do I want to be the guy the guy saying
no to that question right now? But you actually don't
know anything about where that money is going, and you're
(36:17):
not thinking about what your priorities are in that moment,
and maybe you do want to give to organizations working
to end cancer. Maybe that's really really important to you.
Speaker 2 (36:29):
And if you say no, it doesn't mean you love
cancer or anything either, right, but I think that's how
it makes you feel, exactly.
Speaker 3 (36:35):
Do it in your dining room out, do a little research.
Maybe there are maybe there are certain organizations that are
more compelling to you than others. Don't just respond in
that moment. And it's hard, but I think you can say,
oh no, you know, I really believe in that, but
I actually do you know my charitable giving, you know,
at the end of the year, and I have organizations
(36:56):
I give to or whatever, you know, not like the
person at the cash er is just probably needs to
hear all that. But I think if it's.
Speaker 2 (37:02):
Helpful for me to know my strategy giving plan.
Speaker 3 (37:05):
Yeah exactly. But I just think if you just respond,
you will look back and say, Okay, I spent all
this money, but it wasn't on my priorities. It was
just saying yes to people. And so you know, what
I say in the book is, look, you're not going
to be able to one hundred percent, you know, do
this when your niece says, I'm raising money for the
(37:26):
school project and it's this organization you know that does
X y Z. Like you're gonna help your niece with
her project, right, she's supposed to raise X amount of money.
Or your friend is doing a bike race or a run,
that's fine, but just try to limit that budget it
make it twenty percent for the stuff that you're going
to just have to be responsive to because it's your
(37:46):
niece or your friend, and then make the eighty percent
align with your priorities. And I think, you know, I
mean I made that up right. There's no magic to that,
but I mean it's it's something to provide a little
bit of guidance and clarity, and you can even explain
to folks like, you know, I have these charitable priorities,
(38:08):
like like I was saying before, and and I just
got to protect my ability to pursue those.
Speaker 2 (38:14):
I think it's possible this time of year too that
some people and I don't want to cast dispersions, but
it's just true when you look at the news and
you see reports of people who are trying to collect
money for charities they don't exist. So there are scams
out there as well that people need to be aware
of and maybe not even some nonprofits aren't scams, but
(38:34):
they are I don't know, I would call them maybe
scam adjacent. We've talked about on the show different even
professional athletes phil who start their own nonprofit and when
you look at the numbers, like it's not about like
high overhead, it's about pathetic results. And just some of
these nonprofits they've got a fantastic figurehead at the top,
the celebrity or something like that, but they're really they're
(38:56):
they've employed their best friend or something like that, and
they have a multi six figure salary. Like this nonprofit
is doing almost nothing, but it's it's gaining a lot
of acoleates because of the people that are attached to it.
How can we protect ourselves maybe from the worst kinds
of charities out there?
Speaker 3 (39:08):
Yeah, I mean I think I think first of all,
by not saying yes in the moment whatever the whatever
the moment is, whether it's the cash register, the phone call,
the person in front of you, but then also seeing
seeing who else supports them, like if you are interested, Okay, well,
let me see. I mentioned community foundations before, like community
foundations have staff who do a level of vetting that
(39:31):
makes it, you know, somewhat less likely that you know,
if they're giving a major grant to that organization, that
that it's that it's problematic. Other staffed private foundations similar situation,
you're going to know that they've been through some kind
of real selection process. And and you know, I mean
(39:57):
I try to be like nuanced about this, Like I've said, like,
don't fixate on overhead metrics, and I believe that, but
at the extremes they can be relevant, right, Like if
in fact, the bulk of money is going to fundraising
expense by some you know, third party corporate fundraiser. You know,
(40:23):
there are these sort of outlier examples where you have
what are essentially shell nonprofits that are just generating profit
to the third party fundraising consultant, and you want to
obviously avoid those, like the plague. But there are plenty
(40:44):
of resources out there on any particular issue area. In
the book, you know, I tried to describe like if
you care about this issue area, then here are some
resources to look at. If you care about this issue area. Yeah,
I can't go through it all here, we be here
all day, but like, once you start to zero in,
you will find the trusted sources that will allow you
(41:05):
to identify organizations that are really doing excellent work. And
there are so many out there in every issue area.
Speaker 4 (41:11):
Sounds like it's kind of issue specific or issue dependent.
Speaker 3 (41:15):
Yeah, it's either issue dependent or community dependent. I think
there's different slices on where to go for sort of
aggregated data about you know, these are some organizations that
are doing good work.
Speaker 4 (41:29):
Cool, Well, we've got more to get to if you Phil,
we're going to talk about how to create your own
shell nonprofit. Maybe we'll have had a money foundation.
Speaker 1 (41:39):
We'll talk about some.
Speaker 4 (41:40):
Different ways that we can all give more effectively and impactfully.
Speaker 1 (41:44):
Right after the break, we're.
Speaker 2 (41:53):
Back to the break, which is talking about giving and
giving effectively. And we've got the man who is perfect
for discuss that very thing, Philip Buchanan with us, who
wrote the book Giving.
Speaker 1 (42:03):
Done Right and Phil Matt and I.
Speaker 2 (42:06):
For a long time, I guess donor advice funds were
these really expensive things that were kind of for rich
elites and for the average middle class person. A donor
advice one just didn't make much sense because of the
expenses involved, and because I mean, let's be honest, average
folks aren't giving six figures away on annually. So what
do you think about donor advice funds though? As the
(42:28):
costs of come down, are they a helpful tool for
normal folks? Are they like total overkill?
Speaker 1 (42:32):
Well?
Speaker 3 (42:33):
I think they can be a helpful tool, and like
you say, the minimum balances have come down both, I
think at community foundations as well as at the other
like commercial donor advice fund providers like a Fidelity Fidelity
charitable or a Schwab. And I think it's very convenient,
right because you've you've got your money at the in
the DAFT, you can invest it and then you can
(42:54):
just designate which nonprofits you want to support it. You
could add to the DAFT over time. Now in the
world that I'm in, the operating nonprofit world, there are
a lot of critics of donor advise funds because of
the fact that you get the tax benefit for establishing
the donor advise fund when you put the money in,
but the money doesn't necessarily go out, you know, for years, right,
(43:19):
Like it depends what you choose. And again I'm not
a tax policy person, so I'm not going to wade
into that one. But what I would say is, if
you establish a daft, you know, use it, don't just
let it sit there idly, really use it for what
it's intended to be used for. And if you do that,
(43:41):
then I think it can be a good choice, particularly
if you know you've got at least a few thousand
dollars a year that you'd like to be giving away,
and certainly if you've got much more than.
Speaker 1 (43:53):
That, that makes sense.
Speaker 4 (43:54):
I mean, I think that's kind of one of the
criticisms I've had, even though I have a donor advice fund,
and yeah, it's something that I participate in. There's something
about I guess what happens to you as the giver
when it's still sitting there, because like in a certain way, like, yes,
it's technically not mine anymore, but I do get to
direct it, but it's not mine, but I still get
to you're still killing the string. I still get to
(44:16):
log into my account and see that number. And so
there's something psychologically or emotionally where it's almost like it's
it's like it still has a grip on you, phil
But so I guess maybe on that note, let's kind
of finish the same way you that you and your
book by talking about, I guess the paradox of generosity,
talk about how the impacts of giving, how obviously it
can not only impact those that you are giving too,
(44:38):
but just maybe that psychological, maybe that emotional component and
benefit that we receive as givers as well.
Speaker 3 (44:44):
Yeah, I mean, my colleague Grace Nicolett and I have
a podcast called Giving Done Right Creatively Enough, and we
have a mix of guests on. But the one thenversations
that have really stuck with me have been with the
families and donors who have just decided how much is
(45:09):
enough and have made a commitment to giving at a sustained,
you know, high level, and had what that has done
for them in terms of their own growth as people,
their own sense of what it is to have a
legacy on this earth. That ultimately, you know, if you're
(45:33):
fortunate enough to have considerable assets, you're probably not doing
your kids a favor by having them inherit them all,
but you probably are doing them a big favor by
modeling you know, what it looks like to really give
in a big way. And as much as we all
know stories of families that have been torn apart by
(45:56):
fights over money and resources, you know, their real life
in the business pages or you know, watching Succession on
HBO or whatever network it's on. I've witnessed almost the
inverse of that, the way in which a family commitment
to giving can bond siblings and parents and different generations
(46:19):
together in really beautiful ways as they learn what the
issues are that each of them cares about, and as
they try to support organizations that are really making a
difference against those issues. So I think you just get
so much out of it, And I don't think people
look back with a lot of regrets about having committed
(46:40):
a lot philanthropically. You might look back with regrets about
whether you really, you know, needed that that third car
which is now a pain to take care of, But
I don't think you're going to look back with regrets
about supporting a really great organization over the long term.
Speaker 2 (46:56):
Yeah, they say, you don't miss what you give away,
and and it's amazing, Yeah, how much of an impact
it can have on us as individuals. So thank you
for sharing that, Phil, It's a perfect place to wrap
it up. Thank you for joining us. Where can our
listeners find out more about you and your mission to
help people give more effectively.
Speaker 3 (47:13):
Yeah, we have a website CEP dot org. There's a
blog with lots of resources about giving that you can
access from that website. And there's also our podcast, Giving
Done Right and a website for that podcast, which is
Giving done right dot org.
Speaker 1 (47:28):
Perfect. We'll make sure the link to.
Speaker 4 (47:29):
The blog, the book, the podcast, all of the above. Phil,
thank you so much for talking with us today.
Speaker 3 (47:35):
Matt and Joel, thanks for having me appreciate it all.
Speaker 1 (47:38):
Right, Man, that that was a good chat with Phil.
Speaker 2 (47:41):
And man, he's just got so much good information about
giving effectively.
Speaker 1 (47:45):
Yeah, he does.
Speaker 2 (47:45):
And I feel like it's just especially this time of year,
this is something we want to highlight, but something we
like to highlight every year.
Speaker 1 (47:50):
I like that you address the guilt that one feels.
Speaker 4 (47:53):
Oh man, I feel it, Like Phil says, I still say,
do you want to give ninety nine cents to cancer?
You're like, and I will say I'm a people pleaser,
but I still say no every time you start freaking out.
But it's because I have such.
Speaker 2 (48:07):
A I know what I'm doing with that money, and
so I don't feel bad because I know that it's
not like I'm being stingy. I just have other places
that I've pre selected to give, so I don't necessarily
even give the spiel. I just say no, thank you,
not today. But I think you could say that and
not feel bad. Yeah, but what's your big takeaway from
this combo?
Speaker 4 (48:24):
Or you can just go ahead and give a little bit,
just just in the moment if you want to.
Speaker 1 (48:28):
I like what he said to you about you know, hey, the.
Speaker 4 (48:31):
Majority of the vast majority of your dollars, maybe designate
that towards organizations that are strategically aligned with how it
does that you want to give, and maybe that other
twenty percent not only can you support your niece, but
you see the Santa outside ringing the bell, you someone
to asks.
Speaker 2 (48:43):
You out the register. I kind of like that ability.
I don't put that Santa in a headlock or anything
like that. I just just walk on by.
Speaker 1 (48:50):
You don't do the duct taper underhand and drop the
web bandits.
Speaker 4 (48:55):
It's a nice little holiday movie call out. But my
big takeaway is going to be the resource that he mentioned,
which was the Council on Foundations. So it's COF dot
org where you can look to some of the different
local community foundations that work with a number of local
organizations that are vetted, and so I think in that
(49:16):
way you can kind of rest assured that these dollars
are being spent in a more responsible way. Right, there's
a level of accountability there, but then also the ability
to see some of these dollars that you're giving go
to serve the areas that are most geographically proximate to
wherever you are. I think there's a I don't know,
there's like a high level of satisfaction. I guess when
it comes to that kind of give to get to
(49:36):
see you're giving dollars a play exactly. No, yeah, COF
dot Org. I think about you though your big takeaway.
Speaker 2 (49:42):
I think my big takeaways when Phil talked kind of
early on about how we don't think about how certain
things came to be, and he's right, like it becomes
kind of the water that we swim in and we
fail to realize the impact that hundreds of nonprofits around
the nation, thousands of nonprofits in all likelihood right are
are having on a dayabaate day, week to week, year
to year basis. And so it makes me want to
(50:04):
dig in a little more to see, especially locally, like
what what impacts have.
Speaker 1 (50:09):
These nonprofits have?
Speaker 3 (50:09):
Like?
Speaker 2 (50:10):
What are the not just even looking at the numbers,
but man, how does my community look different because these
nonprofits exist? And so I think that is a really
good thing to recognize that the world we live in
would not be the world we live in without many
of the nonprofits that exist. And it just gets me
even more excited to support the ones that that matter
most to me, that are doing the work I want
to see happened in the world.
Speaker 1 (50:29):
I dig it sweet.
Speaker 4 (50:30):
All right, let's mention the beer you and I enjoyed
during this episode was called Farina. This is a beer
by Halfway Crooks, which is a top fermenting lagger.
Speaker 1 (50:39):
You know what that means. I don't technically know that
top and bottom fermented loggers. I know I.
Speaker 2 (50:45):
Prefer mine diagonally fermented.
Speaker 1 (50:47):
It's something that we should know, given how big of
a now we just like to drink it. We don't
we enjoy the flavors.
Speaker 4 (50:52):
I don't know anything, like truly hardly anything about actually
brewing beer, but this is one of our.
Speaker 1 (50:57):
Favorite local breweries. What were your thoughts?
Speaker 2 (51:00):
So this one was really interesting because I feel like
a lot of loggers are incredibly clean. This one was
more yeasty, it was had a thicker mouthfeel. It was
oh you think so, Yeah, it was like more chewy.
It was a jewel. I thought it was a joy
joy to drink this one. But it's also I'm getting
more and more into loggers because I've had my mouth
obliterated by so many beers over the years that just
(51:20):
kind of something a little bit chill, but that also
has a little bit of mouthfeel, a little bit flavor
action going on. This This beer's like hitting.
Speaker 1 (51:26):
The spot for me.
Speaker 4 (51:27):
Yeah, somehow it's got that weight in the body while simultaneously,
like right on the edge of my tongue, it's still
really bright and kind of lemon citrusy.
Speaker 1 (51:34):
Almost like where it still feels like it's a I
don't know.
Speaker 4 (51:36):
Maybe that's because it's a fresh beer as opposed to
something that's been sitting on the shelves for months on end.
Speaker 2 (51:41):
Or maybe it's because of the top fermentation, whatever that means.
Speaker 1 (51:44):
I'm sure it's that, Joel.
Speaker 4 (51:46):
But glad you and I got to enjoy this one
on today's episode, and head over to hotamoney dot com
or we'll have links to all of the different resources
that Phil Buchanan that he mentioned during our conversation's link
to we've got an article about Daffy ar favorite, Yeah,
donor advice fund. Yeah, we talked about Dafts there towards
the end, but yeah, we're big fans. And my criticism
(52:07):
that the little thing that it's not a doubt, I
guess in the back of my mind. But it's the
only question. Is the thing that he addressed where it's
just like, if you use a donor advised fund, folks,
make sure that you are not just sitting on it
and somehow using that increasing number to make you feel
good about yourself, right, Like it's really it should be
the number of dollars that you are able to deploy,
and sticking that money in a donor advice fund isn't
(52:29):
actually deploying the dollars. It's just sort of sitting there
in this charity purgatory of both sorts.
Speaker 2 (52:35):
But yeah, yeah, but we'll link to that too, because
Daffy is the lowest cost donor advice fund that we
know of, and they do a great job, and that's
where we have our do over there. They've got a
great product, no doubt, all right, Matt, that's going to
do it for this one. Until next time. Best friends
out and best friends out
Welcome to Hod of Money. I'm Joel and I am Matt.
Speaker 2 (00:03):
And today we're talking about giving done Right with Phil Buchanan.
Speaker 3 (00:26):
Yeah.
Speaker 4 (00:26):
So when it comes to being charitable and giving away money, Joel,
I think it could be easy for us to dismiss
our own efforts as just a tiny drop in the bucket,
at least like on my part, uh huh, no foundations
in my name, I'm selling hardcore right now. Like I'm
thinking for a lot of folks out there, maybe you
know you're giving just when prompted at the checkout register, right,
so it's just like five bucks on occasion, or maybe
(00:48):
you actually are being a little more disciplined about it, right,
you give away a certain percentage of your income, you
cut a check every single month. Maybe that's the easy
part you give, but then you don't think about it
beyond that. But that is not how we approach things
here at How to Money, we want you to get
the most bang for your buck, and here to help
us to learn how to do that is Phil Buchanan.
(01:08):
He is the president of the Center for Effective Philanthropy.
He's also the author of the book Giving Done Right,
where he emphasizes the importance of thoughtful and mission driven giving.
He is all about providing data driven insights to help
us to maximize our impact out there in the world. So, Phil,
thank you so much for taking the time and to
talk with Joel and I today.
Speaker 3 (01:28):
Thanks Matt and Joel really happy to be here.
Speaker 1 (01:31):
We're glad to have you Phil.
Speaker 2 (01:32):
The first question we ask everyone that comes on the
show is what do you like to sporgehn Matt and
I we spend a lot on craft beer, but hey,
it's okay because we're doing the smart thing with our
money at the same time, saving and investing for our future.
Speaker 1 (01:42):
What's that spurge for you?
Speaker 3 (01:44):
I'm going to take two if that's okay.
Speaker 1 (01:46):
Oh yeah.
Speaker 3 (01:46):
One is concert tickets, live music. I love to see
shows and I sometimes spend too much on tickets. And
the other is I try to push myself to quote
unquote splurge fill only that is to give a little
bit more than might feel comfortable to organizations that I
really really care about. I don't know if that counts
(02:08):
as a splurge, but I know the first one does.
Speaker 4 (02:11):
Very on mission, I should say to educated. I'm curious too, Phil,
who have you seen recently? What was the best concert
in reason memory.
Speaker 3 (02:18):
So a lot of my musical tastes these days are
influenced by my nineteen year old and twenty three year
old daughters. So this summer I saw Noah Khan with
my nineteen year old, which was fantastic, nice, and just
recently my twenty three year old kind of dragged me,
(02:39):
and then I ended up having a great time to
see The Far Side, a maybe somewhat obscure nineties hip
hop act who were amazing actually, And then actually a
few nights after that, we went my wife and I
went also with my older daughter to see Dar william
(03:00):
who's folks.
Speaker 1 (03:02):
I loved Dar Williams.
Speaker 3 (03:03):
She's a great songwriter, brilliant. We went to college together,
although I didn't know her.
Speaker 1 (03:09):
Oh that's cool.
Speaker 3 (03:10):
We've been seeing her shows for you know, the last
twenty years. So lots of different types of music.
Speaker 1 (03:15):
Cool, Okay, yeah, that sounds very eclectic.
Speaker 4 (03:17):
Phil just like scored so many more points with the
younger listeners than.
Speaker 1 (03:23):
Oh, can I ask one quick question you Pheel?
Speaker 2 (03:24):
Yeah, I think we can talk about music for a
long time, But I want to know the title of
your book is giving done right? I'm curious I just
kind of want to start this episode off by asking
the inverse question, what's giving done wrong?
Speaker 3 (03:36):
Giving done wrong is thoughtless, arrogant, top down giving giving
that constrains organizations from being successful or effective. And there's
a whole lot of it. So I'll give you one example.
A lot of folks fixate, and I understand why on
(03:57):
overhead rates of nonprofits. So they'll say how much is
going to the cause or the program and how much
is going to quote unquote overhead, And that gets defined
in different ways, And I like to back people up
and say, what do you really mean? So if you're
talking about supporting the food pantry that's serving hungry people,
(04:19):
are you saying that you want your gift to go
to pay for the chicken and the broccoli and the
other food that's served, but not the rent of the
establishment in which the food is served, or the salaries
of the staff who coordinate the volunteers to serve the food.
(04:39):
Because that makes no sense. And if you restrict your
giving in that way, you will constrain the ability of
nonprofits to be effective. Similarly, if you think you have
all the answers to what are the most pressing problems
or the ways to solve them rather than going in
more from a place of humility, will make the kind
(05:00):
of mistakes that we sometimes see billionaire philanthropists make, and
so that would be philanthropy done wrong or giving done wrong.
Speaker 4 (05:09):
I could say that being an instance of being cheap
as opposed to more of a frugal approach and looking
at the overall impact phil Can you talk about like
America has an interesting philanthropy history. I think that differs
from the rest of the world. Can you explain why
that is?
Speaker 3 (05:24):
Sure? I mean, I think that the founding of the
country was rooted in a desire for religious freedom. And
you know, freedom of association obviously is built right into
our Bill of Rights. And in the you know, early days,
Totokeville discussed about discussed Americans tendency to form, you know,
(05:49):
associations and groups of all types and and so there's
this sense of the autonomy to kind of organize around
the issues that you care about, the freedom to do that,
the importance of doing that. And then in I believe
it was nineteen seventeen, the charitable tax deduction became a
(06:13):
part of the tax code. So there was then an
incentive to give philanthropically, just as we give incentives for people,
for example, to buy homes. The notion was we want
to encourage giving. And so the US has one of
the highest rates of giving globally. As a percent of
(06:35):
GDP giving in twenty twenty three was five hundred and
fifty billion dollars charitable giving, and the bulk of that
three hundred and seventy four billion was giving buy individuals.
And well, we think of the ultra wealthy, and there
are some concerning trends in terms of everyday givers giving
(06:59):
at lower rates than was true twenty years ago, and
we can talk about that. It is still also the
case that the bulk of giving to most nonprofits is
not accounted for or not rather done by the biggest givers.
It is everyday givers who are helping fuel local nonprofits
(07:20):
in every community, who are working on important issues and
often helping the most vulnerable among us. So it is
an integral part of what keeps our country going. And
there's lots to be worried about in terms of the
strength of the nonprofit sector, the sort of trends related
to philanthropy, but historically it has been a great strength
(07:44):
of this country the nonprofit sector supported by generous donors.
Speaker 2 (07:49):
Can you give us like an overview maybe or kind
of going into some US history a little bit here,
which is really cool, maybe of the actual good. What
are some of the things that nonprofits have had the
most impact on in this country in your opinion.
Speaker 3 (08:02):
There's so much all around us that we take for
granted that is the work of nonprofits supported by generous donors.
So in the wake of the pandemic, you know, we
all rediscovered the trails.
Speaker 1 (08:20):
In our very area.
Speaker 3 (08:21):
You know, all the land conservation, the beautiful places that
we get to enjoy that are all around us. That's
an example of something we don't necessarily think about how
that came to be, that we've got that great path
to run on. But there's a philanthropy story there. The
diseases that we don't have to worry about our kids
(08:42):
dying from, you know, the Rockefeller Foundation developing a vaccine
in the nineteen thirties for yellow fever. That's not something
you find most people worrying about anymore. You think about
medical education and medical schools and way in which philanthropy
(09:02):
played a role in their development and establishment. I mean,
there's a philanthropic, you know, story for almost everything we
think about basic you know, civil rights and some of
which are are under attack again, their right to vote,
and the role that nonprofits supported by foundations and other
(09:25):
donors played in helping to make that happen. You think
about the progress that's made been made in terms of
criminal justice reform and the rates of incarceration. I mean,
there's much more progress to be made, but the progress
that's been made and things like the disproportionate rates of
incarceration of black men in this country, the progress that
(09:46):
has been made has been a result of amazing nonprofits
like Equal Justice Initiative supported by generous donors, Clean air,
clean water. These are the result as of environmental advocacy
to try to get companies to curb their their pollutants
(10:07):
or to get government to regulate certain activities, and that
have been successful and that have led to again cleaner
air and cleaner water than we would have had. The
list just goes on and on. Museums, arts and.
Speaker 1 (10:22):
CULTURELD would be bleaker is what You're a.
Speaker 3 (10:24):
Solutely bleaker the art that we enjoy, you know, I'll stop.
Speaker 4 (10:30):
No, I mean, regardless of anyone listening could identify with
some of the different acts you mentioned. We can all
get behind clean water and clean air.
Speaker 1 (10:37):
Well.
Speaker 2 (10:37):
Yeah, and just to think that, I think you put
it in perspective really well there that there's a lot
of things that we enjoy that we have a hard
time pinpointing where they came from. And to see that
nonprofits had an active role in the society we live in,
it just, I don't know, brings a smile on my face.
Makes me happy that they exist and that there's nonprofits
doing great work out there, even if their nonprofits I
(10:58):
don't know about that's that's.
Speaker 4 (10:59):
True, but if you trace it back and dive into
the history, oftentimes you probably can tie that to charitable
organizations phil So you kind of hinted at the fact
that philanthropy, how it's been declining in recent years. Maybe
shed some light there, like why has that been a
trend that we've been seeing recently.
Speaker 3 (11:15):
Yeah, it's hard to know exactly why, and I think
that what I've learned over the years is maybe blindingly obvious.
But the answer to most questions, you know, when we're
looking for why is it's a combo platter of reasons.
But just to start with the problem two decades ago,
(11:38):
and this data comes from the Lily School at Indiana University,
about two thirds of American households we're giving to charity.
The most recent data it's just under half. So the
rates of giving have declined for a while that I
wasn't maybe seen as the crisis. It is because there
(12:00):
was so much wealth creation that the sort of mega
givers were able to fuel an increase in overall giving.
That in a way mass the problem of a decline
in the rate of participation. But now we're seeing that
flattening out to particularly when you adjust for the inflation
(12:22):
that has occurred in the last couple of years. So
we've actually seen year over year declines in giving, which
is not something that we're used to and which has
real consequences for vital nonprofits. So to your question why
there's so many possible contributors, one I think is just
to decline in trust and institutions broadly in our society,
(12:45):
more cynicism, you know, polarization rite a sense that a
sense of distrust in institutions. Essentially, I think that there's
also there's a lot of religion and religiously affiliated giving,
and because there's been a decline in religious participation that
(13:07):
has probably played a role. Folks point to some of
the impacts on the middle class of the Great Recession,
even as long ago as it was that that you know,
played a role fifteen years ago, I guess now in
some decline in rates of charitable giving. My own sense
(13:31):
is also that is a society we have not sufficiently
paid attention to the accomplishments of nonprofits. There's a tendency
to see nonprofits as lesser than to not think about them,
as we were just discussing, or when we do, to
imagine that they might be staffed by people who you know,
(13:51):
couldn't quite make it in the business world or something,
when in fact, my view is that it takes everything
to run a nonprofit that it takes to run an
equivalent side business, and a lot more. It's a harder job,
and nonprofit staff are often some of the most talented
in the country. But I don't know that that story
has been told, and that there's been a tendency instead
(14:12):
to focus on the isolated scandals or controversies which are
real and should be you know, should be addressed, but
people generalize them and assume that there are widespread problems
in management or leadership of nonprofits when when that's just
not the case. So I think it's it's so many
different things. And I would then turn around and point
(14:34):
the finger at myself and those of us in the
in the nonprofit sector who've made careers of this work
and say we have not figured out how to tell
the story well enough. And so I think part of
the part of the blame lies there as well.
Speaker 2 (14:47):
Well, it's interesting you're talking about people who work in nonprofits.
I think a lot of times you're right, they're just
as talented, and they often choose on purpose to get
paid less absolutely able to do work that they feel
makes more of a difference than going out there into
generalized corporate America. Not there's anything wrong with that, but
I think that they're like, yeah, those people are taking
(15:08):
a significant pay cut off them to do work that
they think needs to exist in this world. I'm curious
to what about taxes, how do those impact how people
give and how much people give? Because like the tax
cuts and Job Act, in many ways it had some
significantly positive impacts or other potentially negative impacts, But how
(15:29):
has that impacted giving and the higher standard deduction just
means that a lot fewer people gets a tax benefit
from their donations.
Speaker 3 (15:39):
Yeah, I think that's probably on the list of contributors
as well, although I mean that's some more recent development.
And I think as I'm not a policy person, I'm
certainly not a tax policy person, but I would say
that it doesn't make a lot of sense to me
that it is only the wealthiest, right the itemers, who
(16:01):
we would give an incentive to give. Right. So, so
I'd like to see universal uh deductibility of charitable gifts
in our in our tax policy, so that so that
folks who are you know, everyday people uh making you know,
regular wages also get also get that level of incentive
(16:26):
for for charitable giving. So I think it's an issue,
and and you know what, I honestly think it's one
of those issues that people should be able to come
together on across the partisan divide. I'm not sure that
I have a lot of hope right now about people
coming together across the partisan divide on much of anything,
(16:47):
but but this shure should be one area where you
can imagine some some agreement.
Speaker 1 (16:53):
Yeah.
Speaker 4 (16:53):
So we've we've talked about effective altruism on the show
before a lot of folks know about that. How would
you say that effect to valtruism is different from effective philanthropy.
Could you talk about maybe some of the differences, some
of the compare and contrast.
Speaker 3 (17:06):
To Sure, Yeah, I would sort of describe effective altruism.
And you guys tell me if you see it differently,
because I think it's shifted a little bit. What what
what what people? How people define it? But as this
notion that you should be sort of maximizing the impact
on human lives of your charitable giving and that that
(17:31):
that's a that's your moral obligation. And Peter Singer, the
philosopher at Princeton, I think, is sort of the godfather
of this concept. And I think it's a helpful challenge
to one's thinking to say, Okay, maybe I should give
some of my charitable donations to parts of the world
(17:53):
where the dollar is going to go further and where
I could say, prevent a death from malaria potentially for
not that much money, or you know, seriously affect the
trajectory of someone's life. And I think that's sort of
a useful intellectual challenge. I think as a practical matter,
(18:15):
though effective altruism doesn't really work as a defining sort
of framework for most people. And that's because if taken literally,
if applied literally, it would mean you wouldn't give to
the arts, for example. It would mean that you wouldn't
(18:39):
give locally in your own community if you live, for example,
in the United States. And so I am skeptical of
its utility as a practical framework to actually guide people,
because I think the reality is that philanthropy is rooted
(19:00):
in our values and our sense of connection to other
human beings, and so well we need to apply our
analytic minds to it, we also need to use our hearts,
and that the two go together. And so I think
of effective philanthropy as something that allows for more diversity
(19:27):
in choice of goals based on people's values and interests. Right, So,
I think, you know, the goals that you guys would
choose might not be the goals that I would choose.
And I don't think one set of choices is necessarily
objectively better than another. I think the sort of pluralism
(19:48):
of philanthropy, the choice that people have, is a strength. Then,
but I do think you should have clear goals. You
should try to know what you're doing and make sure
that you're giving is consistent with those goals. You should
try to then give in a way that supports effective
strategies to achieve those goals. If you want to work
(20:12):
on a particular issue, whatever it might be, there are
more and less effective paths to follow, often more and
less effective organizations to support. So I think that's important
to pay attention to. And then I think it's important
to have information that you're looking at to gauge your
(20:35):
sense of whether the folks you're supporting are are in
fact making the difference that they intend to make. Are
they as effective as as you thought they were when
you made those gifts. Those are important questions to ask,
But we got to keep the heart and values center
to this as well.
Speaker 4 (20:53):
I think I like how you mentioned hearts there and
you said objective truth. It's almost like the difference between
more of an object of approach to charity and a
subjective approach, right, It's like, are we talking about some
sort of absolute impact that these dollars are going to
have on individuals or maybe the relative impact relative to
who relative to you?
Speaker 1 (21:14):
And as you know, you can see in front of
your eyes, Yeah, and.
Speaker 4 (21:16):
As you know, like I mean, this is a personal
finance show, and so much of kind of the decisions
that we make do have to do with personal preference.
So I like how you distinguished the two there.
Speaker 2 (21:23):
I want to ask specifically about you talked about the
fixation on overhead, and that's something Matt and I've talked
about on the show before too, and maybe we should
probably think a little differently about that. This conversation is
making me want to think about what other things a
nonprofit might be doing, and not just thinking about how
efficient are they, but what are some of the best
resources for finding the most effective charities? And how do
(21:46):
you judge whether or not a charity is effective?
Speaker 3 (21:48):
Yeah, I mean those are really difficult questions because there's
not like a universal metric by which we can compare
the organization and working to improve graduation rates in Cleveland
against the organization working to reduce CO two emissions, you know,
in Brazil. The metrics are different, and so that's why
(22:14):
I think people gravitate toward overhead because it is something
you can compare different organizations using the same ratios. But
that doesn't mean that you should look I think it's
reasonable to say, well, what does this organization's budget look like,
how are they allocating it? You know, I think it's
reasonable if two organizations are doing essentially the same thing
(22:37):
to look at the budget relative to the amount of
that thing that they're doing. Although it's relatively rare, you're
going to find that apple to apple kind of comparison.
But honestly, what I would ask is what is the
organization trying to do? It comes back to what I
was saying before. What are their goals, what are their
strategies for achieving those goals? And what indicators are they
(23:01):
using to assess progress? Can they tell you a story
that makes sense that answers those basic questions. If they can,
then they're in the best position to decide how to
allocate your gift. And if they're investing in something that
some might categorize as overhead, like increasing staff salaries so
(23:22):
they can retain the best people because they're having trouble
retaining their frontline employees or making technological improvements that will
help them do their work more effectively, do we really
want to disincentivize them for doing that? And if we
don't trust the leaders of organizations enough to be able
(23:42):
to make those judgments about how to allocate resources within
their budgets to pursue the mission that they're dedicated to.
Then why are we funding them at all? And then
in terms of your question about well, where do you
go to figure this out? I'm not a huge fan
of some of the popular sort of charity rating websites
(24:07):
because they do tend to be too focused on these
financial ratios, which I think are not helpful out of context,
and which rightly varied based on the kind of work
that are being done, and then people apply them without
that context or nuance. So where do you go? I
think your local community foundation is a great place to start.
(24:29):
So almost every community in this country has a community
foundation that exists to match donors and nonprofits in that community.
I think there are this might be an outdated number now,
but at least eight hundred community foundations in this country,
and there's a community foundation finder online I believe, on
(24:51):
the Council on Foundation's website. You can go find your
community foundation and they can help you align your priorities
with organizations in your community that they have vetted and
know to be effective working in those areas that matter
to you. So that that's very cool the best advice
I can give. No.
Speaker 4 (25:12):
I think that's a helpful context to put it in,
because when you are looking at certain metrics like expense overhead,
like it's almost like a race to the bottom if
that's the only price that you're looking at, at which point,
maybe there are different sacrifices, not sacrifices, but decisions that
some of these nonprofits make.
Speaker 2 (25:26):
And at some point, why don't we just put up
red box machines with foods to feed the homeless? You
know what I'm saying, Like, there's no then there's no
personal touch, and so I get I get why that's
a faulty metric. So we've got so much more that
we want to discuss with you, Phil, including Okay, well,
then how do we come up with effective goals and
strategies to be wise givers. We'll get to a bunch
more with Phil Buchanan right after this we are back from.
Speaker 4 (25:55):
The break talking about giving done right with Phil If
Buchanan and Phil, you just mentioned how we should be
looking to different local community foundations, and a large part
of that too, when you're looking to organizations that are
geographically close to you, is the ability to even volunteer
in person totally. How important do you think that support is,
that non financial support to some of the different nonprofits
(26:17):
that we care about.
Speaker 3 (26:18):
I mean, to many nonprofits, it's absolutely vital that they
literally couldn't deliver their programmatic work without volunteers. It obviously
varies nonprofit and nonprofit depending on what the organization is doing,
but volunteering, as you say, can be a great way
also to just get educated about both the particular nonprofit
(26:42):
and just the nature of the work. And it's super fun.
I mean, one of the things that is interesting. And
this is not like research that we've done, but I've
read research by a variety of folks, including people at
Notre Dame, who have studied the effects on the human
brain of giving and volunteering. It literally will make you
(27:05):
happier if you get out there and give both of
your time and your money. And like I said, a
lot of nonprofits are really dependent on that volunteer support.
Speaker 2 (27:16):
What about someone who's listening and says, but doesn't the
government fund a lot of some of these causes? Aren't
they trying to tackle some of the same missions that
nonprofits are trying to tackle. How do you think about
the nonprofit response to certain issues versus government involvement, and
are they working in tandem or is this a cause
for some people to sit on their hands and not give.
Speaker 3 (27:37):
First of all, a lot of nonprofits do get government
funding in the form of contracts of various kinds, right,
So the government is often looking to nonprofits to do
certain kinds of work. I'll give you an example. I'm
on the board of directors at the National Council on Aging,
(27:58):
which worry about the quality of life of older adults,
and the National Council on an Aging gets federal funding
for programs that they then grant out to local senior
centers in communities that provide various services like education on
(28:19):
falls prevention, for example, or job training for older adults
who want to get back in the workforce. So we
sometimes think of government and nonprofit as more separate than
they are in the sense that nonprofits are often contracted
to do work with federal funds. I mean, I do
(28:40):
think that in other countries that have a more robust
social safety net, there is less of a need for
certain kinds of nonprofits. And there's been a lot of
critique of philanthropy and nonprofits from folks sort of on
(29:01):
the ideological left. Let's say, who will argue, well, this
should be the government's work and the billionaires should just
pay their taxes. And you know, that sounds kind of
convincing until you think it through and realize that actually,
you know, the American people have voted for the folks
(29:24):
who are who are making these decisions in this country,
and we have I might, I might like a different outcome.
I would like a different outcome, but the fact is
we have not. We have not elected to have that
kind of social safety net in this country. We literally
have not elected the people who want to put that
(29:45):
into place. And so in the meantime, yes, we could
focus on advocacy to try to get that to happen
so that the government does more. That's totally legitimate, and
you can do some of that legitimate, legitimately philanthropically. In
the meantime, there are needs that have to be at
every day. So it's too easy to just kick back
and say, well, the government should do this, because some
(30:05):
of it the government just isn't doing. And so, if
we care about our fellow citizens, if we care about
the most marginalized among us, if we care about our neighbors.
Then philanthropy matters.
Speaker 2 (30:16):
Like ideal is immerse reality on the ground, I think so.
Speaker 4 (30:19):
Yeah, one of the ways you've addressed our ability to
assess different nonprofits, like you mentioned the head and the Heart. Yeah,
I'm also thinking about just some of the different trends
that we've seen within like the giving space, Like there
are different organizations that just get really popular for one
reason or the other. And something else that keeps ringing
in my head that you said earlier is that an
(30:40):
organization has an ability to tell a story. And so
are there some organizations that just get lucky with how
it is that they're able to communicate the needs that
they're looking to address to the American public.
Speaker 3 (30:52):
Yeah, I mean, I think what you're saying is so
important because sometimes we confuse what sounds like it would
work with what works, and we give on the basis
of something sounding like it would work. So an example,
this is an older one, but you know program called
Scared Straight where the goal was to encourage high school
(31:16):
students not to get involved in criminal activity, and the
intervention was to have formally incarcerated people come speak at
school assemblies about the mistakes that they'd made. In their life,
and that program got a lot of funding when it
was like it would work. It sounds like it would work, right,
(31:37):
Like you see, well, I wouldn't want to be like
that guy and have spent seven years in prison. Well,
when it was rigorously evaluated, multiple studies discovered is that
it had the opposite of the intended effect. It made
young people more interested in crime rather than less.
Speaker 1 (31:58):
It was really cool, exactly, No, that's exactly it.
Speaker 3 (32:03):
And so that would be an example in sort of
a negative direction. I'll give you an example on the
other side. I think for decades people have assumed that
you can't just give money to poor people to help
them get out of poverty, because it won't be sustainable,
(32:24):
they won't make the right choices any number of reasons.
But there's increasing evidence that organizations like Give Directly, which
is international cash transfers to people in poverty and up
together here in the United States, which is a similar model,
(32:44):
where folks are literally being identified as in need and
able to benefit from direct cash transfers and they're receiving
that cash, and the evaluations that have been done suggest
that it does change the trajectory of their life. It
certainly changes the quality of their life in the near
term while they're receiving the money, but then also allowing
(33:06):
them to get on a different trajectory, whether that's by
pursuing educational opportunities that they might not have otherwise been
able to or retiring debt. There's another amazing organization called
called Rip Medical Debt, and you know, they're literally paying
off people's medical debt.
Speaker 1 (33:27):
Didn't they just change their name to Yes? I'm worried
trying to remember what the new.
Speaker 3 (33:30):
Name as I say this, Yeah, but formerly known as
RIP Medical Debt. I'm sure if you google it the
new name will come up. And you know, just as
simple as as helping people get that, you know, off
their back is transformative. But it is the kind of
thing that, you know, there's this kind of paternalistic sense
(33:53):
that people sometimes have of well, but that person won't
make the right decision and you know, won't use the
money the way the way that I would. But actually
people are smart about their own lives, you know, and
people are in a good position to know what they need.
And one of the things I'd like to see more
of in philanthropy is trust. Trust in the people in
(34:13):
communities who know what they need, trust in the nonprofits
that are working in those communities, that know how to
do the work, and a little bit less of the
assumption that I often see from you know, like the
tech billionaires, that because I was really good at that,
I'm going to be really good at being a philanthropist,
when in fact it's kind of a different set of skills.
(34:36):
There's a lot of knowledge already out there, and it
takes it takes sort of commitment and humility to really
get good at being at being a philanthropist.
Speaker 2 (34:47):
Yeah, by the way, the new name of RIP Medical
Debt is Undoe Medical Debt, so thank you. I don't
know why they changed the name, but they've been around
a long time now, and yeah, that's what the rest.
Speaker 4 (34:56):
I wonder if the RIP was just a little too
slightly negative, maybe they're just like this is a little
too much like the Scared Streak.
Speaker 2 (35:01):
They really were like acting and killing medical Debt and
they still are. But I like that. I like the
old name. But what's fine too, and they're just a
great organization with that.
Speaker 1 (35:11):
I love what they're doing. Phil.
Speaker 2 (35:13):
I'm curious you talk about not giving just because you
were asked to give and That is kind of one
of my pet peeves, and this time of year, I
think it's especially It may be claws on your heartstrings.
You're walking into the grocery store and someone's raising money
for a particular nonprofit. And sometimes I have no problem
with people who want to give in that way. I
(35:33):
feel like a scrooge because I'm saying no. But I
have plans for my giving, and so that's the reason
I'm saying no. In the moment, you talk about giving
in accordance with your goals and your strategies. Can you
kind of elaborate on that and how you see the
dichotomy I guess between being asked maybe in a moment
of emotional vulnerability, and having a pre thought plan for
(35:53):
how and when you're going to give.
Speaker 3 (35:55):
Yeah. Right, there's a crowd of nine people behind you.
It's the holidays. You're in the store, and the cash
here says loudly, do you want to give two dollars
and fifty cents to help end cancer? And you're like, oh,
do I want to be the guy the guy saying
no to that question right now? But you actually don't
know anything about where that money is going, and you're
(36:17):
not thinking about what your priorities are in that moment,
and maybe you do want to give to organizations working
to end cancer. Maybe that's really really important to you.
Speaker 2 (36:29):
And if you say no, it doesn't mean you love
cancer or anything either, right, but I think that's how
it makes you feel, exactly.
Speaker 3 (36:35):
Do it in your dining room out, do a little research.
Maybe there are maybe there are certain organizations that are
more compelling to you than others. Don't just respond in
that moment. And it's hard, but I think you can say,
oh no, you know, I really believe in that, but
I actually do you know my charitable giving, you know,
at the end of the year, and I have organizations
(36:56):
I give to or whatever, you know, not like the
person at the cash er is just probably needs to
hear all that. But I think if it's.
Speaker 2 (37:02):
Helpful for me to know my strategy giving plan.
Speaker 3 (37:05):
Yeah exactly. But I just think if you just respond,
you will look back and say, Okay, I spent all
this money, but it wasn't on my priorities. It was
just saying yes to people. And so you know, what
I say in the book is, look, you're not going
to be able to one hundred percent, you know, do
this when your niece says, I'm raising money for the
(37:26):
school project and it's this organization you know that does
X y Z. Like you're gonna help your niece with
her project, right, she's supposed to raise X amount of money.
Or your friend is doing a bike race or a run,
that's fine, but just try to limit that budget it
make it twenty percent for the stuff that you're going
to just have to be responsive to because it's your
(37:46):
niece or your friend, and then make the eighty percent
align with your priorities. And I think, you know, I
mean I made that up right. There's no magic to that,
but I mean it's it's something to provide a little
bit of guidance and clarity, and you can even explain
to folks like, you know, I have these charitable priorities,
(38:08):
like like I was saying before, and and I just
got to protect my ability to pursue those.
Speaker 2 (38:14):
I think it's possible this time of year too that
some people and I don't want to cast dispersions, but
it's just true when you look at the news and
you see reports of people who are trying to collect
money for charities they don't exist. So there are scams
out there as well that people need to be aware
of and maybe not even some nonprofits aren't scams, but
(38:34):
they are I don't know, I would call them maybe
scam adjacent. We've talked about on the show different even
professional athletes phil who start their own nonprofit and when
you look at the numbers, like it's not about like
high overhead, it's about pathetic results. And just some of
these nonprofits they've got a fantastic figurehead at the top,
the celebrity or something like that, but they're really they're
(38:56):
they've employed their best friend or something like that, and
they have a multi six figure salary. Like this nonprofit
is doing almost nothing, but it's it's gaining a lot
of acoleates because of the people that are attached to it.
How can we protect ourselves maybe from the worst kinds
of charities out there?
Speaker 3 (39:08):
Yeah, I mean I think I think first of all,
by not saying yes in the moment whatever the whatever
the moment is, whether it's the cash register, the phone call,
the person in front of you, but then also seeing
seeing who else supports them, like if you are interested, Okay, well,
let me see. I mentioned community foundations before, like community
foundations have staff who do a level of vetting that
(39:31):
makes it, you know, somewhat less likely that you know,
if they're giving a major grant to that organization, that
that it's that it's problematic. Other staffed private foundations similar situation,
you're going to know that they've been through some kind
of real selection process. And and you know, I mean
(39:57):
I try to be like nuanced about this, Like I've said, like,
don't fixate on overhead metrics, and I believe that, but
at the extremes they can be relevant, right, Like if
in fact, the bulk of money is going to fundraising
expense by some you know, third party corporate fundraiser. You know,
(40:23):
there are these sort of outlier examples where you have
what are essentially shell nonprofits that are just generating profit
to the third party fundraising consultant, and you want to
obviously avoid those, like the plague. But there are plenty
(40:44):
of resources out there on any particular issue area. In
the book, you know, I tried to describe like if
you care about this issue area, then here are some
resources to look at. If you care about this issue area. Yeah,
I can't go through it all here, we be here
all day, but like, once you start to zero in,
you will find the trusted sources that will allow you
(41:05):
to identify organizations that are really doing excellent work. And
there are so many out there in every issue area.
Speaker 4 (41:11):
Sounds like it's kind of issue specific or issue dependent.
Speaker 3 (41:15):
Yeah, it's either issue dependent or community dependent. I think
there's different slices on where to go for sort of
aggregated data about you know, these are some organizations that
are doing good work.
Speaker 4 (41:29):
Cool, Well, we've got more to get to if you Phil,
we're going to talk about how to create your own
shell nonprofit. Maybe we'll have had a money foundation.
Speaker 1 (41:39):
We'll talk about some.
Speaker 4 (41:40):
Different ways that we can all give more effectively and impactfully.
Speaker 1 (41:44):
Right after the break, we're.
Speaker 2 (41:53):
Back to the break, which is talking about giving and
giving effectively. And we've got the man who is perfect
for discuss that very thing, Philip Buchanan with us, who
wrote the book Giving.
Speaker 1 (42:03):
Done Right and Phil Matt and I.
Speaker 2 (42:06):
For a long time, I guess donor advice funds were
these really expensive things that were kind of for rich
elites and for the average middle class person. A donor
advice one just didn't make much sense because of the
expenses involved, and because I mean, let's be honest, average
folks aren't giving six figures away on annually. So what
do you think about donor advice funds though? As the
(42:28):
costs of come down, are they a helpful tool for
normal folks? Are they like total overkill?
Speaker 1 (42:32):
Well?
Speaker 3 (42:33):
I think they can be a helpful tool, and like
you say, the minimum balances have come down both, I
think at community foundations as well as at the other
like commercial donor advice fund providers like a Fidelity Fidelity
charitable or a Schwab. And I think it's very convenient,
right because you've you've got your money at the in
the DAFT, you can invest it and then you can
(42:54):
just designate which nonprofits you want to support it. You
could add to the DAFT over time. Now in the
world that I'm in, the operating nonprofit world, there are
a lot of critics of donor advise funds because of
the fact that you get the tax benefit for establishing
the donor advise fund when you put the money in,
but the money doesn't necessarily go out, you know, for years, right,
(43:19):
Like it depends what you choose. And again I'm not
a tax policy person, so I'm not going to wade
into that one. But what I would say is, if
you establish a daft, you know, use it, don't just
let it sit there idly, really use it for what
it's intended to be used for. And if you do that,
(43:41):
then I think it can be a good choice, particularly
if you know you've got at least a few thousand
dollars a year that you'd like to be giving away,
and certainly if you've got much more than.
Speaker 1 (43:53):
That, that makes sense.
Speaker 4 (43:54):
I mean, I think that's kind of one of the
criticisms I've had, even though I have a donor advice fund,
and yeah, it's something that I participate in. There's something
about I guess what happens to you as the giver
when it's still sitting there, because like in a certain way, like, yes,
it's technically not mine anymore, but I do get to
direct it, but it's not mine, but I still get
to you're still killing the string. I still get to
(44:16):
log into my account and see that number. And so
there's something psychologically or emotionally where it's almost like it's
it's like it still has a grip on you, phil
But so I guess maybe on that note, let's kind
of finish the same way you that you and your
book by talking about, I guess the paradox of generosity,
talk about how the impacts of giving, how obviously it
can not only impact those that you are giving too,
(44:38):
but just maybe that psychological, maybe that emotional component and
benefit that we receive as givers as well.
Speaker 3 (44:44):
Yeah, I mean, my colleague Grace Nicolett and I have
a podcast called Giving Done Right Creatively Enough, and we
have a mix of guests on. But the one thenversations
that have really stuck with me have been with the
families and donors who have just decided how much is
(45:09):
enough and have made a commitment to giving at a sustained,
you know, high level, and had what that has done
for them in terms of their own growth as people,
their own sense of what it is to have a
legacy on this earth. That ultimately, you know, if you're
(45:33):
fortunate enough to have considerable assets, you're probably not doing
your kids a favor by having them inherit them all,
but you probably are doing them a big favor by
modeling you know, what it looks like to really give
in a big way. And as much as we all
know stories of families that have been torn apart by
(45:56):
fights over money and resources, you know, their real life
in the business pages or you know, watching Succession on
HBO or whatever network it's on. I've witnessed almost the
inverse of that, the way in which a family commitment
to giving can bond siblings and parents and different generations
(46:19):
together in really beautiful ways as they learn what the
issues are that each of them cares about, and as
they try to support organizations that are really making a
difference against those issues. So I think you just get
so much out of it, And I don't think people
look back with a lot of regrets about having committed
(46:40):
a lot philanthropically. You might look back with regrets about
whether you really, you know, needed that that third car
which is now a pain to take care of, But
I don't think you're going to look back with regrets
about supporting a really great organization over the long term.
Speaker 2 (46:56):
Yeah, they say, you don't miss what you give away,
and and it's amazing, Yeah, how much of an impact
it can have on us as individuals. So thank you
for sharing that, Phil, It's a perfect place to wrap
it up. Thank you for joining us. Where can our
listeners find out more about you and your mission to
help people give more effectively.
Speaker 3 (47:13):
Yeah, we have a website CEP dot org. There's a
blog with lots of resources about giving that you can
access from that website. And there's also our podcast, Giving
Done Right and a website for that podcast, which is
Giving done right dot org.
Speaker 1 (47:28):
Perfect. We'll make sure the link to.
Speaker 4 (47:29):
The blog, the book, the podcast, all of the above. Phil,
thank you so much for talking with us today.
Speaker 3 (47:35):
Matt and Joel, thanks for having me appreciate it all.
Speaker 1 (47:38):
Right, Man, that that was a good chat with Phil.
Speaker 2 (47:41):
And man, he's just got so much good information about
giving effectively.
Speaker 1 (47:45):
Yeah, he does.
Speaker 2 (47:45):
And I feel like it's just especially this time of year,
this is something we want to highlight, but something we
like to highlight every year.
Speaker 1 (47:50):
I like that you address the guilt that one feels.
Speaker 4 (47:53):
Oh man, I feel it, Like Phil says, I still say,
do you want to give ninety nine cents to cancer?
You're like, and I will say I'm a people pleaser,
but I still say no every time you start freaking out.
But it's because I have such.
Speaker 2 (48:07):
A I know what I'm doing with that money, and
so I don't feel bad because I know that it's
not like I'm being stingy. I just have other places
that I've pre selected to give, so I don't necessarily
even give the spiel. I just say no, thank you,
not today. But I think you could say that and
not feel bad. Yeah, but what's your big takeaway from
this combo?
Speaker 4 (48:24):
Or you can just go ahead and give a little bit,
just just in the moment if you want to.
Speaker 1 (48:28):
I like what he said to you about you know, hey, the.
Speaker 4 (48:31):
Majority of the vast majority of your dollars, maybe designate
that towards organizations that are strategically aligned with how it
does that you want to give, and maybe that other
twenty percent not only can you support your niece, but
you see the Santa outside ringing the bell, you someone
to asks.
Speaker 2 (48:43):
You out the register. I kind of like that ability.
I don't put that Santa in a headlock or anything
like that. I just just walk on by.
Speaker 1 (48:50):
You don't do the duct taper underhand and drop the
web bandits.
Speaker 4 (48:55):
It's a nice little holiday movie call out. But my
big takeaway is going to be the resource that he mentioned,
which was the Council on Foundations. So it's COF dot
org where you can look to some of the different
local community foundations that work with a number of local
organizations that are vetted, and so I think in that
(49:16):
way you can kind of rest assured that these dollars
are being spent in a more responsible way. Right, there's
a level of accountability there, but then also the ability
to see some of these dollars that you're giving go
to serve the areas that are most geographically proximate to
wherever you are. I think there's a I don't know,
there's like a high level of satisfaction. I guess when
it comes to that kind of give to get to
(49:36):
see you're giving dollars a play exactly. No, yeah, COF
dot Org. I think about you though your big takeaway.
Speaker 2 (49:42):
I think my big takeaways when Phil talked kind of
early on about how we don't think about how certain
things came to be, and he's right, like it becomes
kind of the water that we swim in and we
fail to realize the impact that hundreds of nonprofits around
the nation, thousands of nonprofits in all likelihood right are
are having on a dayabaate day, week to week, year
to year basis. And so it makes me want to
(50:04):
dig in a little more to see, especially locally, like
what what impacts have.
Speaker 1 (50:09):
These nonprofits have?
Speaker 3 (50:09):
Like?
Speaker 2 (50:10):
What are the not just even looking at the numbers,
but man, how does my community look different because these
nonprofits exist? And so I think that is a really
good thing to recognize that the world we live in
would not be the world we live in without many
of the nonprofits that exist. And it just gets me
even more excited to support the ones that that matter
most to me, that are doing the work I want
to see happened in the world.
Speaker 1 (50:29):
I dig it sweet.
Speaker 4 (50:30):
All right, let's mention the beer you and I enjoyed
during this episode was called Farina. This is a beer
by Halfway Crooks, which is a top fermenting lagger.
Speaker 1 (50:39):
You know what that means. I don't technically know that
top and bottom fermented loggers. I know I.
Speaker 2 (50:45):
Prefer mine diagonally fermented.
Speaker 1 (50:47):
It's something that we should know, given how big of
a now we just like to drink it. We don't
we enjoy the flavors.
Speaker 4 (50:52):
I don't know anything, like truly hardly anything about actually
brewing beer, but this is one of our.
Speaker 1 (50:57):
Favorite local breweries. What were your thoughts?
Speaker 2 (51:00):
So this one was really interesting because I feel like
a lot of loggers are incredibly clean. This one was
more yeasty, it was had a thicker mouthfeel. It was
oh you think so, Yeah, it was like more chewy.
It was a jewel. I thought it was a joy
joy to drink this one. But it's also I'm getting
more and more into loggers because I've had my mouth
obliterated by so many beers over the years that just
(51:20):
kind of something a little bit chill, but that also
has a little bit of mouthfeel, a little bit flavor
action going on. This This beer's like hitting.
Speaker 1 (51:26):
The spot for me.
Speaker 4 (51:27):
Yeah, somehow it's got that weight in the body while simultaneously,
like right on the edge of my tongue, it's still
really bright and kind of lemon citrusy.
Speaker 1 (51:34):
Almost like where it still feels like it's a I
don't know.
Speaker 4 (51:36):
Maybe that's because it's a fresh beer as opposed to
something that's been sitting on the shelves for months on end.
Speaker 2 (51:41):
Or maybe it's because of the top fermentation, whatever that means.
Speaker 1 (51:44):
I'm sure it's that, Joel.
Speaker 4 (51:46):
But glad you and I got to enjoy this one
on today's episode, and head over to hotamoney dot com
or we'll have links to all of the different resources
that Phil Buchanan that he mentioned during our conversation's link
to we've got an article about Daffy ar favorite, Yeah,
donor advice fund. Yeah, we talked about Dafts there towards
the end, but yeah, we're big fans. And my criticism
(52:07):
that the little thing that it's not a doubt, I
guess in the back of my mind. But it's the
only question. Is the thing that he addressed where it's
just like, if you use a donor advised fund, folks,
make sure that you are not just sitting on it
and somehow using that increasing number to make you feel
good about yourself, right, Like it's really it should be
the number of dollars that you are able to deploy,
and sticking that money in a donor advice fund isn't
(52:29):
actually deploying the dollars. It's just sort of sitting there
in this charity purgatory of both sorts.
Speaker 2 (52:35):
But yeah, yeah, but we'll link to that too, because
Daffy is the lowest cost donor advice fund that we
know of, and they do a great job, and that's
where we have our do over there. They've got a
great product, no doubt, all right, Matt, that's going to
do it for this one. Until next time. Best friends
out and best friends out
Hosts And Creators
Joel Larsgaard
Matthew Altmix
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