Monument Resource Center
Our clients hire us because they recognize the value of our Team’s unique, straight-forward, unfiltered opinion and our tailored advice designed to answer their questions, not everyone else’s. Below, you’ll find some of the most important questions we have been asked over the years to help you better understand the role we play and the advice we give.
Transformational gifts got their name for a good reason—they have the ability to positively support or redirect the trajectory of a program, project, or even organization. Transformational gifts can take many forms, from endowing a scholarship fund to supporting the construction of a new building, creating or expanding a community support program, and more.
A transformational gift doesn’t necessarily mean a huge donation amount. Depending on the size of the organization, a transformational gift can be $25,000 or $25,000,000. What marks a gift as transformational is the outstanding impact it will have on an organization’s mission.
When you make a transformational gift, you are becoming a partner with the organization. That’s why it’s important to identify beforehand both what is important to the organization AND what is important to you, the donor.
How to Know If the Time Is Right to Make a Transformational Gift
Making a transformational gift means you’re going above and beyond your usual giving. You most likely aren’t going to make transformational gifts all the time or to every charity you support. But, if you’re considering making a larger donation, how do you know that the timing and organization are right?
- Relationship: You’ve been working with this organization for years or possibly decades. You trust their leadership and financial stewardship and understand their priorities and strategic objectives. You know the organization’s leaders are open to your questions and feedback.
- Impact: Can you pinpoint how your past support has made an impact on the organization’s mission or the community it supports? This will give you confidence that your transformational gift will have a similar or greater impact.
- Timing: If the organization is approaching a point that could be pivotal for its future growth, it could benefit from a financial boost. Or maybe you’re experiencing a big income year, and you want to make a larger gift as part of your tax planning strategy.
- Potential: You feel there is a reasonably high chance that the organization will be successful and/or be able to scale their work.
Questions to Ask the Organization
Before you write a check or schedule a wire transfer, you should talk to the non-profit, university or hospital you’re considering donating to. A transformational gift isn’t like annual support for general operations. Because it is extraordinary, you will want to make sure you and the organization are aligned on needs, goals, and implementation.
To start, get in touch with a development officer at the organization. They’ll be able to tell you about the organization’s priorities for the future and help you figure out which of these priorities best fit with your own philanthropic goals. Your gift will mean more if it’s supporting a cause that you believe in.
Ask the development officer these questions:
What will be the impact of this transformational gift?
Maybe your gift will combine multiple programs under one umbrella, expand operations to serve more people, or be an anchor gift that inspires donations from others.
What is the strategic plan for implementing your gift?
Just like how you have a plan for making your gift, the organization should have a plan for how it will spend your donation. Ask the development officer how your donation will be used and on what timeline.
Will the donation cover the costs involved?
The organization should have a good idea of the costs that come with a large-scale undertaking. Will your donation cover all of those costs? Or will others need to donate as well in order to accomplish the vision?
Is there an advisory council or leadership body that you’ll be a part of?
A fantastic way to ensure your gift will accomplish its goals is to get involved yourself. A role on a board or council can be beneficial, but it isn’t critical. As long as you’re able to keep up a relationship with the development officer or program director, then you’ll be able to get updates and ask questions.
Questions to Ask Yourself
In addition to the organization’s priorities, you need to think about your own. And once you do answer these questions for yourself, share the answers with the development officer to ensure the organization’s expectations align with yours.
How do I want to fund and structure my gift?
Let’s be honest: most non-profits will take your donation any way you’d like to give it. But that doesn’t mean you shouldn’t think strategically before transferring funds.
Step 1: Choose YourCharitable Giving Vehicle
Determining how to fund your gift comes down to cash flow and tax planning. Working with a wealth management team can help you decide if it’s best to donate cash, transfer appreciated securities (but double-check with the organization that they can accept stock transfers), or use a Donor Advised Fund (DAF) or another charitable giving vehicle.
Step 2: Create a Timetable
Do you want to make your gift as one lump sum, or pay it out over the course of several years? Lump-sum can provide a major cash infusion to get a project off the ground. But multi-year gifts can help the organization forecast its finances and make steady progress.
If you do a multi-year pledge, I don’t recommend making future-year payments contingent upon the organization meeting certain metrics—go into it planning to make all the payments (unless something completely goes awry).
Regardless of timing, the organization may ask you to sign a pledge letter agreeing to the total amount and scheduled payments of your donation. Thinking about using your Donor Advised Fund? Know one important thing first: The IRS prohibits donors from using DAFs to make payments on any pledges to contribute funds, either one-time or multi-year payments. You can talk to the organization about your intent to make a donation, but avoid committing in writing.
Step 3: Determine Where Your Donation is Going
Knowing where your donation is going isn’t referring to what your funding will support, but rather its actual account destination. Do you want your donation to be put in a cash account for immediate use? Or do you prefer it to be invested as part of the organization’s endowment for future use? If in the endowment, ask: how is the endowment invested? What is the investment philosophy? Is it managed in-house or by an outside manager? Ask all the same questions you would ask your own investment manager.
How do I want to be acknowledged and recognized?
Do you want to be publicly acknowledged for your support? It’s a great way to let others know that you believe in the work the organization is doing. Aside from being listed in the organization’s annual report and possibly on a donor recognition wall, do you want to be part of an event launching the initiative you’re supporting? Do you want your name associated with the program, scholarship, or building?
Do you want to make your gift in honor of someone else, and have them share in the recognition?
Or would you rather your gift be anonymous? People give anonymously for various reasons–because they don’t like the spotlight, they prefer privacy, or they don’t want to be targeted by other non-profits for a donation (yes, non-profits look at other organizations’ donor rolls to find new donors).
There isn’t a right answer here. It comes down to what’s the best fit for you.
How do I want to receive updates on the impact of my gift?
You’re making a major donation, and your gift can have an impact over the course of years, so you want to be kept in the loop on how it’s going.
Whether you prefer written reports, financial statements, invitations to events, or conversations with the project’s leader, work with the development officer to decide on the form and cadence those updates will take.
Getting the Answers You Need
By making a transformational charitable gift, you have the opportunity to make an extraordinary impact on an organization’s mission and promote the values that are important to you. These transformational gifts need careful planning, but you don’t need to do that alone. A wealth management team that understands your bigger picture and has expertise in charitable giving can help you reap the greatest benefits for yourself and the organization you’re supporting.
Not every wealth management firm is created equal. You should look for a team of experts who create individual Private Wealth Designs and will walk you through every step to achieve your charitable goals. You should look for a team that will be fully transparent, throw aside industry jargon, and talk to you like a real person.
The Monument Wealth Management Team is ready to help you build a charitable giving strategy that works for you. We’re straight-shooting, dog-loving, financial experts who will help you develop a wealth strategy as unique as you.
It’s time to find clarity around your finances and remove the anxiety of the unknown.
Read our case study, “High Earners Eye Retirement,” to see how we helped one of our clients with their wealth planning.
Ready for straightforward, unfiltered opinion and tailored advice for YOUR
questions, not everyone else’s?
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.
A copy of the Monument’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.monumentwealthmanagement.com/disclosures. Please Note: Monument does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Monument’s website or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your Monument account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Monument accounts; and, (3) a description of each comparative benchmark/index is available upon request.
Please Remember: If you are a Monument client, please contact Monument, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.