The need for philanthropic peer counsel and mastermind groups

A couple of weeks ago I received a phone call from a Generous Giving consultant. I was invited to join a group of 11 men who were going to visit the founder of a $2 billion company to talk about his and our philosophies and practices of giving . . . and of transferring our material wealth, our values, and our philanthropic perspectives to future generations.

As it turned out, we were to meet not only with the founder (a man in his late 60s), but with his sons, and one of his grandsons. The meeting occurred about a week and a half ago over the course of an afternoon and evening and the next morning.

As I’ve tried to work through the implications of what transpired, and as I’ve attempted to explain to others what occurred, I have realized I carried at least two lessons from the experience. This post is about the first–a lesson I’ve learned before, but never applied in quite this way to my charitable giving interests.

The lesson: That we benefit from participating in peer-level mastermind groups–groups of like-minded individuals who are willing to share their insights, experiences, knowledge, etc., in order to help each other attain a definite goal or purpose. In this case, then, to help each other improve our ability to make effective and generous charitable donations.

I was talking with my sister the other day and I mentioned how valuable this particular meeting had been for me “because I was meeting with fairly wealthy people who are already giving at a high level.”

“Why would that make a difference?” she asked.

“Because they are dealing with the kinds of issues Sarita and I are dealing with as we consider our giving,” I said.

“Like what?” she asked.

What follows is more or less what I discussed with her.

Basic concept: When you are a wage-earner who is bumping along somewhere around or below the poverty line (a place where we lived for many years), your questions and concerns are–of necessity–very different from, say, the successful business owner who receives a very large percentage of his fairly substantial income in the form of profits that are often calculated only in the last few days or weeks of the year (another place where we lived for many years).

I recalled several of the different stages through which we, ourselves, have progressed over the years:

Poverty; barely making ends meet: We never questioned tithing, but we never questioned going beyond the tithe, either. Of course, we questioned, somewhat, to whom or what cause we wanted to give. But that was the extent of our thinking.
Beyond poverty: We could begin to think about stretching a bit beyond the tithe every now and then.
Business owner with a rapidly growing business: Now, suddenly, taxes became an issue, and giving wisely in consideration of the tax code became a major concern–especially when we never really knew what our income for the year was going to be until the last few weeks of the year.
For several years, we would figure our profits a week or two before the end of the year, and then engage in a mad dash to write 10 or 20 or 30 checks simply to cover our tithe of the profits.

Finally, when that kind of multi-dozen check-writing in the space of one or two days became too painful (physically), it became time for us to create and utilize a “structure” like a Private Foundation or DAF to enable us to give large sums of money to charity for tax purposes before the end of the year, but yet, then, enjoy a more leisurely period in which to evaluate to which specific projects or organizations we really wanted to give.
Being able to offer matching grants: The idea had never crossed my mind. Sarita and I had written a check for $50,000 to one of our favorite charities. I received call a few days later from the man who headed that organization’s development department. “John,” he said. “I am wondering if you would allow me to return this check to you and turn it into a matching grant?”
“I’m not exactly sure what you mean by a matching grant,” I said. “Are you saying you would like to tell people that for every dollar they give, we will match at?”

“Right!” he said.

“Is $50,000 enough for such a grant?” I asked.

“Absolutely!” he said. “It would help us greatly.”

“Well, if it would be of help,” I said, “we would be delighted for you to do that. But you certainly don’t need to return the check! We want you to have the money whether you raise any other funds are not!”

“Thank you,” he said. “But if it is to be a matching grant, the money has to be ‘at risk.’ If we don’t match it, we should not receive your gift.”

“But we want you to have the money!” I said.

“That’s great,” he said, “and if you decide you want to give us funds we don’t match, that’s your business, and we will be grateful. But for the matching grant, I need to return this check.”

And so we were introduced to the concept and practice of matching grants. Most of our gifts since then have taken this form. Rather than sending a check and waiting for the development officer to call us, we call him and ask if he would be interested in a matching grant. I’ve yet to be told no!
Giving appreciated assets and gifts in kind: For those who have the capacity, this kind of giving can offer tremendous benefits both to the giver and the recipient. I intend to write another post on this particular subject in a few days since, for me, one of the key insights I felt I gained from my time with the other givers a couple of weeks ago had to do with a particular kind of “appreciated asset” gift.
Giving other non-cash gifts: I have written here before about one of my personal favorite non-cash gifts to one of our favorite charities. I’m talking about gifts in the form of introductions and endorsements to the people in your social network; donations in the form of unique knowledge or skills you own offered and applied to the needs of a charity; and so forth. Read the post I reference above for a longer discussion.
Hitting the 30% and 50% of AGI limits: This is where we are today.
There are certain rules in the tax code that limit how much you can give in and what forms–or to whom–you can give and still acquire a tax deduction for your gifts. There are ways of doing this wisely and well, and there are ways of doing it less wisely and less well. We would prefer the former!
Giving beyond the 50% of AGI limit: Now, this is something I have only begun to learn about. I have met just a couple of people who are able to discuss giving at this level. In fact, the billionaire with whom we were speaking to weeks ago is discussing with his family and with appropriate legal counselors how they might give a majority of their business at its profits to charity.
I have heard of one person–Stanley Tam–who, I am told, gives 90% of his income each year to charity.

“But,” as I said to my sister, “this cannot be ‘normal’ giving, because, even if you give 90% of your income away, the government wants its tax on all the income you earned beyond the 50% level–even if you gave it away. –You’d better have cash to pay the taxes you owe . . . or you’ll be in trouble!”

So, I guess, Tam must have done what the Barnharts did–and as the billionaire I spoke with is considering doing: he must have donated a large portion–90%–of his business to charity, so all the income of that 90% of the business inures to the benefit of the charity/ies and not to Mr. Tam.

–That’s what I expect.

But I still need to learn about these matters.

My point in all of this: If you’re at a particular level, or you are contemplating how you might step up your giving to the next level, it can be very helpful to talk with peers who already have experience. They can give you ideas, suggest resources, offer perspectives, provide moral support, help you get where you want to go. Clearly, if you have moved “up” the line, you can help those who may not have worked through some of the issues you have, and it is possible they, too, may be able to offer you moral support or pray for you. But they are highly unlikely to be asking the same questions you are or even to be able to comprehend the issues you face at whatever level you find yourself.

If you want to move forward in your own giving ability, your best resources are likely to come from peers or those who are “ahead” of you.

By the way: It is for the purpose of creating these kinds of peer support groups that we are working to finish the Strategic Inheritance forums. I am hoping to have them on line and ready for use by the end of next week.

Thanks for your patience!