Family Office Connections: philanthropic giving best practices

For significant philanthropists seeking best practices, don’t miss our latest podcast discussion. Bill Woodson, Head of Strategic Wealth Advisory and Family Enterprise Services, sits down with Steven Finn, Co-Founder & Co-Managing Partner, Siddhi Capital, Geoff DeLizzio, Chief Development Officer, Epilepsy Foundation of America and Colin Stewart, EVP, Strategic Partnerships & Philanthropy, Arjuna Solutions to discuss philanthropic giving best practices.


Bill: Hello, everybody, welcome to "Family Office Connections." My name is Bill Woodson, I'm head of Strategic Wealth Advisory and Family Enterprise Services at Boston Private, an SVB Company. Today, we have the great pleasure and honor welcoming a distinguished panel to discuss philanthropic giving. I'll that each of the panelists gives a brief introduction so let's just kick it off. And then I will go over a series of questions and a conversation will ensue from those. I'll start out Colin, with you, please tell everybody about yourself and what it is that you're doing.

Colin: Hey, Bill, thanks a lot for having me on this great conversation, really excited to be here. I've been working at the intersection of technology and nonprofit fundraising for really, you know, over a decade at this point. And I work at a company now presently called Arjuna Solutions. And my role there is connecting philanthropists, donors, a lot of people probably listening to this podcast, with opportunities to multiply the impact of their existent giving. And also helping to empower nonprofits with new technologies. And I think, you know, over the course of this conversation with my fellow panel mates, we'll really get into what that means and different ways of doing that.

Bill: Great. Next up, Steve Finn, please introduce yourself, to everybody.

Steven: Hello, everybody. I'm Steven Finn. I'm the co-founder and co-managing partner of Siddhi Capital that's S-I-D-D-H-I. We're an operationally-focused food and beverage focused venture fund and growth fund. We're investing currently out of our second fund, we've got a couple of portfolio companies in there and are finalizing our raise now, closing it out.

We're laser-focused on food and beverage. So we see two sides of that, one is basically the consumer products companies that are coming up in the better for you food and beverage world. And the other side is the scienc-y, what I'll call, future of food tech, including advances in plant-based technology and cell-based meats and precision fermentation of animal proteins and all that fun stuff.

And then in all of my free time, and my family's free time, we like to work together on philanthropic causes that resonate with us. And the way that we operate is we can all sort of do our own thing individually, and then choose to come together when it makes sense and support causes as a group.

Bill: Great, thank you, Steven. And then last but not least, Geoff, please tell us a little bit about yourself.

Geoff: Bill, thanks for having me here today. My name is Geoff DeLizzio, I'm the chief development officer at the Epilepsy Foundation of America. I oversee philanthropic operations plus marketing and digital strategies for our national organization. I've been in the nonprofit space for well over 15 years now, including a long stint at the American Red Cross, some time abroad in Africa, and pretty much everything in between. So I'm excited for the conversation.

Bill: Thanks, Geoff. Look, the purpose of this call, while broadly philanthropy, is going to be really focused on best practices as they pertain to significant philanthropists so wealthy individuals and families, their family offices, from the perspective of I think, three very relevant and insightful panelists. You have here, a family office in Steven who does exactly what it is that many who are listening to this podcast do, which is evaluate charities. Determine where they want to give, how they want to give, the effectiveness of that giving, and he will share some of those best practices.

You have Colin Stewart of Arjuna Solutions, who is both an advisor and a technology vendor, to charities and nonprofits. And their solution, which we'll talk about at length later on is really an enabling tool for the philanthropists themselves, in addition to just serving the nonprofit. And he'll talk about that.

And then finally, we have Geoff DeLizzio and he is running a nonprofit and in that capacity understands, and will give a perspective on how not only donors interact with nonprofits but maybe some best practices from both directions, i.e. what should donors keep in mind as they're engaging with nonprofits. And then how should nonprofits interact with the donors themselves for the mutual benefit that that partnership was designed to achieve.

The format over the next hour will be that I will ask a series of questions, and a conversation will come out of those questions. And we hope that this helps not only improve your philanthropic endeavors but really gives you confidence that there's a significant role that you can play not just in donating money, but also in helping the philanthropies themselves be better at their jobs. And in some respects, taking on greater responsibility for helping those nonprofits.

So why don't we kick it off and this is to all three gentlemen, feel free to weigh in. At a high level, as you've worked with philanthropists, what are some of the greatest challenges that wealthy families face in developing, conducting, and evaluating their philanthropic activities?

Colin: Well, I can take that off, Bill. Never been too shy, and I guess I won't be here. You know, one thing that I've heard a lot from the philanthropists, the major donors that we speak to. Frankly, there's a lot of pressure put on them to increase the size of their giving, provide recurring donations. We just saw today, I just got a New York Times alert that there was a $125 million gift given to the Metropolitan Museum of Art. Geoff, I'm sorry, you missed out on that one, it would have been a good one for you. That they alone, these donors are the ones who can kind of write the checks that can sustain these organizations and help deliver and distribute their kind of life-saving care and services. Now, is that message flattering? Maybe. Is it stressful? Certainly. Is it sustainable? Definitely not.

So you know the challenge and opportunity that I see is, how do we help organizations become self-sustaining with philanthropy? And I'm actually going to quote a letter from Melinda French Gates that she just wrote for The Giving Pledge reasserting and reaffirming her commitment to giving away most of her fortune. And the quote is this, "The ultimate goal of any philanthropist should be to render the need for philanthropy obsolete." And I think that's a really interesting and powerful sentiment. That's really hard to figure out, right? How do you donate it in a way that makes it so you don't need to donate anymore? So that's what I think a really big challenge and opportunity facing donors today is.

Bill: Let me drill down on something you said, which is, you know, helping the charity become self-sustaining. Why is that important for philanthropists, particularly larger charities who, in theory, have a broad base of support? Is there an actual role that a philanthropist can play in that regard? And then, related to that would be certainly, many of the family offices here are not just emerging philanthropists, but they are philanthropists in niche areas, in smaller areas, maybe they're the front runner in helping provide assistance in an area. And so what's important to them to help that charity, and how should they go about conducting activities to help that chair to be self-sustaining?

Geoff: You know, I'll jump in and just say I... this is Geoff. I think that what we don't want to see and one of the challenges are often this can be a transactional relationship, right? We're moving into this world where, you know, oh, I need the money and it's operational funding. And we need to, you know, just to get the next point to get to the next point. So is, I think one of the challenges that philanthropists face is getting outside of that transactional relationship and actually starting to build the infrastructure and leverage their skill set.

So for me, it really comes down to, you know, how are those relationships made? And whether it's a large nonprofit like the American Red Cross or a solid, like the Epilepsy Foundation, those gifts have meaning and are powerful, and they want to make sure that they have that impact. And where that impact is, will really be zeroed in or should be zeroed in based on the background, the interest, the skill sets of that philanthropist. Because they bring a lot more than just money to the table.

Bill: Yes, this is interesting. Look, we're going deep quickly, and I wasn't going to get to this until later, but I thought just giving it. I think, just based on our prior conversations, part of what you're conveying is the ability for charities to use their donations to help create that infrastructure that allows them to be self-sustaining, i.e. fundraising or other means. And that there are challenges to that, in light of how the industry evaluates and communicates to donors, how effective a charity has been with their dollar in terms of allocation to G&A. Is that partly what you're meaning?

Geoff: You know, that's exactly what I'm hitting at. I think that... and there's a lot of opinions on this. But I think there is way too much focus and attention on the administrative functions of nonprofits. It's, of course, something we want to keep in check but the reality is you have to build the roads. I've said before, you know, when you're trying to give mosquito nets in Africa, or vaccines in Africa, certain areas, that's great. But you need to have the roads built to actually make that happen. And that's not as sexy as putting vaccines out there.

So, you know, for us in the nonprofit world, you know, often, you know, again, we're focused on that operational component of I've got a budget, I need to hit that budget every year for revenue targets. But the reality is, is if I can have somebody help me build out some infrastructure, which typically goes into that G&A category. You know, let's just call it like a million dollars, that might be able to build, a million dollars could turn into $3 or $4 or $5 million, if done correctly. And that really changes the game in terms of how, you know, we're operating. And not to sound too cliché, but it's in a way, it's like teaching you how to fish, rather than just giving you a fish.

Colin: And Bill, I'm just going to tack on to this, this is Colin again. You know, this concept, and I'm not smart enough to have come up with it but it's something that I believe very strongly in is this concept of multiplication philanthropy. The brainchild of... a great banker in the nonprofit space, Dan Pallotta, go check out his stuff, "Uncharitable" is a great book. But the theory is that when you see a great program, let's... you know, Geoff is the chief development officer of that Epilepsy Foundation. So let's take that we want to cure epilepsy. And they have, maybe you're funding a great, you know, a research program for that.

You know, our initial instinct is to put money into that research program. And when I donate a dollar into that research program, that research program then has a dollar to spend, which is great, we love that. But how can we leverage those dollars? How can we multiply the impact of that dollar?

And fundraising in that kind of G&A bucket is kind of the function at these nonprofits that has the ability to multiply dollars. So if you think about it as a for-profit enterprise, you put money into marketing or advertising, to help grow your customer base. This is when you invest in fundraising, that's paying for the people and the systems, the technology, the events that you know, raise more money. So you care about finding a cure for epilepsy, how about donating to the fundraising apparatus, let's give it to Geoff, right? So he can turn that dollar into $2 or $3 and $10 for the mission to then solve epilepsy. So my 1 dollar then becomes $5, $10. So this is multiplication impact.

I mean, you look back, in 2020, this country, we gave over $470 billion to charity. It's an amazing number. That's more than $100 billion in the entire digital advertising marketplace. Imagine if we started the multiply that $470 billion, that's when you start getting into the trillions. That's when you start getting into the space that Melinda French Gates was talking about, where we're starting to make philanthropy obsolete because the resources are so abundant.

Bill: And just to be clear, it's not just about helping the charity with fundraising, it's about helping the charity get the right people.

Steven: That's right. It's about everything. And I, as someone who spends my day reviewing opportunities for investment, and then I look at nonprofits for philanthropic opportunities. Every decision for investment for me and for presumably, other investors, boils down to some combination of product, market and team every time. And in most of the companies we invest in, the vast majority of that is the team as it is, unless they're building factories or have some giant CAPEX need.

So we love that, right? Having the best people working on your problem adds tremendously more value than it costs to pay them more than the next guy. And it's strange for me to live that all day and then pivot into looking at nonprofits who are racing to the bottom on G&A costs, as if basically, like having worse people was a badge of honor. That just doesn't make sense to me.

Bill: Well, and Steven, that's a great point. So what influence can the donor have in terms of helping achieve exactly what you just said? What do you guys do, for example?

Seven: It's, we really try to back nonprofits whose leadership we trust, and then let them do what they need to do with it, I would say is how we generally approach it. We've found that to be best for nonprofits, we're totally open to suggestions, but that's how we look at it.

Bill: And is that because you take a bit of a direct investing mindset towards your nonprofit engagement?

Steven: Yes, I mean, I would say I think about it very similarly, right? I'm trying to back smart people doing things I believe in on both sides of the coin. And it makes total sense for the dollars that we're deploying it to philanthropy, but it's just like Colin's saying, right? If you want to multiply impacts, get the right people working on a problem. Don't get someone who costs $28,000 a year because they cost $28,000 a year.

Bill: So that's helpful. And it's a nice segue to a very related question, which is, as you would for direct investment, you're going to want to evaluate effectiveness in philanthropy. You want to have profits and revenue in a business over time. What are some of the best practices, and this is a question to all three of you, that charities adopt now for their own purposes of assessing accomplishment in terms of what their mission is? And what might philanthropists look for in the nonprofits that they support to ensure that they're disciplined in exactly that measure?

Geoff: You know, I think that we hear so often about, you know, impact investing, and the impact piece of that, and it's absolutely correct. I mean, what you want to see in terms of effectiveness is how are you using these frankly, you know, very precious resources that you have at your disposal? How are you utilizing that to have the greatest impact? And that impact can mean a lot of different things. So, you know, depending on the organization, depending on the mission, depending on the people, you know, that could fall into a variety of different categories.

But in terms of, you know, the effectiveness, I think that for us, you know, we really want to make sure that we are staying laser-focused on our mission. So often that, you know, that you could get scope creep in the nonprofit space, and you could have an impact, but it may not be in the thing that you're really trying to accomplish. So for me, it comes down to, can you leverage, you know, not just the treasure piece of this, but the time and the talent of your donors and your partners to really, you know, enhance all aspects of your mission.

You made a point, Bill, it's not just about, you know, the fundraising infrastructure, although that in many ways is the engine. But it's how do all those things connect and, you know, be able to grow your mission effectively and smartly? Which is a real challenge for a lot of nonprofits, frankly, because they want to say, yes, they want to do things, they want to help the people in front of them.

Bill: Well, I'm going to make an observation, and, Steve, I'd like to ask you what you guys are doing in that regard. My observation is something that you made reference to both on this call and in prior conversations that we've had, which is a scope creep. That at least in a prior call you had mentioned sometimes is influenced by the donors themselves. And can you talk a little bit about that? Because I think it's cautionary for donors. It's understandable that they want to impart their own particular idiosyncratic needs and desires on a large nonprofit or even a smaller one. And that might raise money for the nonprofit. But is that in the nonprofit's best interest?

Colin: Scope creep can have a real detrimental impact on a nonprofit organization. You know, it might have a short-term benefit at first. Yeah, you get some cash in the door, you might be able to deliver some mission, but again, nonprofits need to think sustainability over a long period of time. And we often see that you know, there's an opportunity for donors to really influence the mission there. And that's a really good thing. The way that works as a best practice from our standpoint in the nonprofit world is, I don't need you to just be a partner. I need to have a real relationship with our philanthropists, with our donors. I need to make sure that they are bought into our mission, that they understand what we're doing and where we're going.

It is more than just sending you an email or a blast out there, you really need to be in our mission, especially in the family office world, when we're talking about gifts, that can be significant. There should be nothing held back here. So I want to open my books to you, I want to be able to bring you in. And that will limit the potential for scope creep because you have that real alignment in vision between the donor and the leadership of the nonprofit's.

Steven: That's a much more eloquent way of saying what I was saying earlier, which is basically buy into the people on top and then trust them to do the job, right. Just because Geoff is into nonprofits in epilepsy and I'm into nonprofits in epilepsy doesn't mean that we would do the same thing with the dollars. And if I'm devoting a bunch of dollars to Geoff's foundation, we should be fully aligned on what those dollars are for. And in a perfect world, they should be for what the nonprofit's mission already was.

Otherwise, you wind up in what is effectively a treadmill situation. Where you're just trying to keep up with last year's thing, right? If I'm donating a bunch of money to epilepsy, and it creates a program, and then next year, I'm gone, they have to decide whether or not they're continuing to support that program that may or may not have been on a mission in the first place. And the treadmill speeds up.

Geoff: I need to feed the beast, right? I mean, that's exactly right.

Bill: Well, that's a really interesting point. And I do want to move on to other topics. But, let me share a statement and get your reactions to it. You know, they say that four out of five restaurants fail in the first five years. And usually, that's because the restaurant hasn't been able to deliver the product, the service, the cuisine, the quality that the marketplace demands. Shouldn't it be the same with philanthropists, with philanthropy, with nonprofits?

Steven: Probably. I mean, most startups fail too, just because you choose to exist doesn't mean you got to continue existing. And that should apply to everybody.

Geoff: I think the cautionary tale there for me, is what we tend to see from my vantage point, that nonprofits don't necessarily fail faster or even fail straight out. It's they limp along for quite a long time, and they're doing some good. But that can be really... if you're a philanthropist that's looking to really impact something, that is another area to pay attention to. Is, you know, that there is some good that's happening there. But is it the, for lack of a better term the best good?

So is it really the best thing that can be happening? And that is a hard thing to determine, which is why I tell people to get involved and to really dig into it a little bit. You have that right. So I think that's a more cautionary area of really trying to discern, you know, is a little bit of good, good enough. And I would say oftentimes, it's not.

Bill: So Geoff, let me follow up on a phrase you use, which is doing the best good.

Geoff: Oh, yeah.

Bill: I've seen many philanthropists, particularly those who are just now engaging in philanthropy, they came into an enormous amount of wealth. And they have the time now to engage in their passions in that area. And they just dive right in and they get started. They want to support early childhood education in their city, for example. And then a couple of years into it, they're frustrated by the inevitable challenges that come with managing a business, with having to fundraise if they don't want to be the sole funder. Or they get tired of being the sole funder or they're having a hard time managing people.

And all along, there was another charity that does early childhood education in that community. And yet they chose not to partner with them, they chose not to support that one. And therefore, they weren't doing the best good because over time, as they become discouraged, they stopped supporting, they sort of limped along, so to speak. How do you, you know... what's your thinking on that? Because on the one hand, you want to encourage philanthropists to give and in order to do so you got to give something back to the philanthropist, which is something that's in it for them. They're participatory, they get to create.

On the other hand, you want that philanthropic dollar to be both, you know, as well used as possible and sustainable. And those two aren't necessarily aligned all the time. Do you have any thoughts on that as it pertains to the philanthropy that you and your family conduct?

Steven: Yeah, I mean, I think it cuts both ways. And it actually goes back to what I was saying earlier with Geoff, right, if the other early childhood nonprofit is not aligned with what I want to do in early childhood, nonprofit, maybe that's a direction I would take. I have personally started a couple of companies that I know what that looks like. And you're either all in or you're not. So for anyone who's not, I would strongly advise against starting anything.

But I don't think, on the flip side of that, like the world is big enough for multiple nonprofits in the same space. It's just like, you need to be really willing to dedicate yourself to it and should definitely take a lap, and see if there's anything else that is similar enough, that could, like Colin was saying earlier, multiply your dollar. If you need to set up the same G&A infrastructure to do the same thing as someone else you're wasting dollars and those dollars should be presumably combined. And then you'd have tremendously more impact with the dollars you are deploying.

Bill: Yeah, I think that's good advice, which is not to discourage folks from doing it. But be mindful of the challenges and try to leverage those who also do it because...

Steven: Frankly, all-encompassing, right, if you want to do anything else with your time, find someone else.

Bill: Yep, fair point. Let me move on, Colin, you know, you're Arjuna Solutions. You know, what it is that you do for nonprofits dovetails into our conversation nicely, for reasons that hopefully we'll get into just a second. Maybe you can describe what it is that Arjuna does. But you know, more broadly, what it is conceptually, that Arjuna is providing, including some other resources and technologies and vendors in the space.

Colin: Yeah, absolutely, Bill. So in order to kind of zoom out and talk about how this impacts the model of philanthropy and your listeners, I'm going to have to zoom in a little bit to explain just kind of what we do at a nuts and bolts basis. But I'll keep it, you know, hopefully, in plain English. What we do is we marry Arjuna Solutions' behavioral economics modeling with artificial intelligence to help nonprofits personalize communications, and raise more money in direct response fundraising.

So what does that mean? It's actually fitting that we're recording this on Giving Tuesday, which I'm sure Geoff is very busy, they've raised a lot of money for Epilepsy Foundation today. It's the second biggest fundraising day of the year, except for December 31st.

So when you get an email, or a direct mail piece, or a telemarketing call from a nonprofit, they're asking you for a specific amount of money. They've made a decision about how much to ask each individual donor. And this is not, you know, your listeners who were soliciting for, you know, major gifts, this is $5 gifts, $50 gifts, $200 gifts that you write a check for, or, you know, fill out your credit card information from the website.

So those decisions about who to ask and how much to ask each individual, when you're talking about the Red Cross, or Alzheimer's Association, or Epilepsy Foundation, you're talking about hundreds of thousands, millions of individuals who you have to make... who each has a unique relationship to that organization. And has a unique, kind of what we call giving elasticity. So this is where the behavioral economics modeling comes in, based on a variety of factors.

So, you know, Bill, you would have a different relationship to the Epilepsy Foundation than Steven, than I do. And all three of those relationships are unique. And each of us would be willing, most likely to assign a different dollar value on that relationship and a different level of giving on that relationship.

So what we do and what our models do, is we figure out exactly how much to ask each individual donor across hundreds of thousands, or even millions of donors that maximize fundraising results. And so what that results in, is an increase of fundraising revenue by about 15%. And the interesting number here, the 15% is a great number, we're proud of it. But the more interesting number and how that kind of fits into this philanthropic component is we provide a return on investment of 307% across our portfolio of nonprofit accounts. And, you know, so every dollar invested in Arjuna's services delivers more than $3 back to that nonprofit. Going back to that concept of multiplication philanthropy.

So, you know, what does this mean for your listeners, for donors about kind of, you know, and how we work with donors? You know, this practice that I lead, you know, wasn't our idea initially, like any good ideas, we steal them. And there was a philanthropist who had heard of Arjuna Solutions and this was about three, four, or five years ago. There was a nonprofit that he donated to, you know, wrote a sizable checks, six-figure check. And like any good nonprofit, their major gifts officers, were constantly asking him to increase the size of his gifts.

And it just wasn't in his strategy and in his budget to provide gifts at a high level. So you know, his response was, "Look, guys, I'm not going to give you more. But there's this company over here, Arjuna Solutions, who if they do what they say they can do, can turn my $100,000 into $300,000 for your mission, and your cost." So he donated,,, made a gift of our services in the form of about $100,000. And that's exactly what happened, it multiplied into $300k. And we realized, this is a great idea. It's a win-win for nonprofits and donors, donors get triple the impact of their existing giving. And nonprofits get triple the revenue on top of being introduced and being able to adopt artificial intelligence technology and services in a way they wouldn't have otherwise.

And, you know, going back to that Melinda French Gates quote of making, you know, philanthropy obsolete. Since we've never delivered less than 100% ROI, this is a gift that can be self-sustaining, so a one-time gift that can kind of start a flywheel. Organizations can pay for continued adoption and expansion of our services, other services that raise more money out of the gains from that initial gain. So if you give $100k it delivers $300k, you can keep paying for, you know, our services out of that while having more money for your mission as well.

So the philanthropist can make themselves obsolete. And, you know, it's a model that we're really proud to have deployed to places like Easterseals, Special Olympics, Alzheimer's Association. And Arjuna is obviously, you know, this is something that I care deeply about, I work for Arjuna, that's why I joined the company, this model.

But there are certainly other technologies and platforms out there with similar models that I think you can have a similar impact. For instance, Social Solutions is an exciting tech platform, they focus on case management. So really arming those people on the frontlines, providing them, providing services, with, you know, technology to help measure their impact. They work I know, with Steve Ballmer and the Ballmer Group in terms of funding, the proliferation, and the expansion of that technology through philanthropic giving.

And the other thing I caution for your listeners or just kind of remind them is, while funding great technology is a critical step here, there are other services you can fund as well. But I'm focused on technology... you know, don't forget the people and processes along with that. And the example is, you know, if you buy someone a plane, that's great. But if you don't hire a pilot, or at least pay for some flight lessons, that's just an expensive piece of equipment that you can't do anything with. But I see Geoff shaking his head there, you know, it's really... or nodding his head. It's really important to not forget, you got to pay for not only the shiny thing, the shiny toy over here but also the people who know how to put that toy to work in a way that can drive revenue, impact mission, etc.

Bill: And how open to those types of suggestions do you find philanthropy? So Geoff, you know, if somebody came to you and said, "Look, I'm going to give you a six-figure gift, but you got to do X, Y, and Z." You know, obviously, depends on what X, Y & Z are. But you know, is that an important role that philanthropists can make? Or is it sort of the exception, because often, they don't really understand what it is you do and what you need. And that's really why you have to have a robust dialogue and bring them into the kitchen, so to speak, to better understand it so that they make the right suggestions.

Geoff: You got to have that robust dialogue because that's a two-way street. Nonprofits are not always the greatest experts in the most advanced technology in what's happening out there. So for example, you know, there's still a lot of nonprofits that are very traditionally focused, that's not a bad thing, but the world is changing very fast. And, you know, we've made a commitment at the Epilepsy Foundation, to be a digital-first organization. And to really embrace AI and data and to be smart, really smart as far as we can about how we're engaging this.

And Arjuna just as an aside is a perfect example of, you know, for us a getting a 15% 16% ROI or lift on our gifts is significant for us, especially since we've had to do extremely little work on our end, and in the nonprofit world, you know, resources are generally limited. So this is something that lays on top. But the important part there is that we have the infrastructure, you know, we're utilizing Salesforce for our donor data, we had that to build off of very easily.

But the other piece of this, which I think is a really hard lift and the structure that Arjuna brought to play, I think is another thing that family offices can really play an important role on is nonprofits, almost across the board are risk-averse. There's never enough to go around it for all the things that people want to do.

So for us to say, "Yeah, I need to make a $200,000 investment to start seeing a 15% lift in all of my gifts across the board," I mean, that's something that I absolutely should do. But it is really hard for me to go to our board and to say, "I need this 200 grand in cash. And I think I'm going to make 15% down the road." That is not typical, you know, an investment strategy that nonprofits think through, we need to change that mentality. Absolutely.

But when you can structure something and say, "Here's the deal, you're going to give us that runway." And what we've done with Arjuna, you're going to give us that first year, through a family office and maybe... And in the second year, assuming our first year is successful, which it is. We're committing to saying and we're committing to that donor, by the way, not necessarily to Arjuna, to say we will match your first-year gift, and we want you to continue with your gift. So basically, year one is $200,000. Year two is $400,000. But 200 of that is for me, 200 of that is from the donor. And then in year three, the donor goes away. And I now have enough trend data to be very comfortable with making that expense revenue prediction that I can bring to our board.

That is such a perfect example. Because that donor can now, you know, fund other areas of our organization. Continue to grow that world if that's what they want to do, go to another organization. But we are not now, you know, year after year hitting the same donor for the same thing over and over again, because that is not a recipe for success for us. Or something that, you know, typically a donor will want to do and say, "Oh, crap, now I have to give $200,000 like for the next 30 years of my life, you know, for this one particular thing." So anyway.

Steven: Right. And that's what attracted me initially to Arjuna when I found these guys. We've found generally that nonprofits are totally hesitant to adopt technology like Geoff is saying, but it's two things, right? One is, you can't go to the board and say I need the $200,000. And that's because the $200,000 isn't there. It's all on that treadmill, again, paying for last year's programs and this year's iteration of it, right? And so the money doesn't exist, first and foremost. And, you know, then comes the risk-averse. So if the money does exist, it's just almost impossible to get nonprofits over the hump to adopt new things. But that's what got me excited initially about Arjuna.

And the case of Arjuna, like I know that if I'm giving this company a dollar, and it's... or this nonprofit a dollar and it's for Arjuna Services that they're going to get three. And back to the multiplicative impact of that. I mean, that's obviously something that I should be doing. But it's way more powerful than that when you realize that it's not just turning that dollar into three. It's enabling that nonprofit to adopt the technology that will allow it to build the roads Geoff was talking about earlier, and get into a self-sustaining flow. That's like when your dollar can be hundreds, thousands, It just keeps going and going.

Bill: And so look, I mean, you guys have talked a lot about the benefits of Arjuna. But I just want to make sure that the listeners understand that that just happens to be the technology that is represented on this call. The purpose of talking about it is it's an enabling tool. It's an enabling technology. And in this particular example that Colin shared, it was introduced by a donor that then helped the charity help itself. And there are sort of broader applications across that, whether it's matching gifts. Whether it's using the donor celebrity to help drive awareness and get publicity. Whether it's strategic introductions, whether it's expertise in a particular area, whether it's leveraging corporate resources to help the charity.

The point is that the philanthropist can do a lot more than just write a check. They can leverage their experience, they can leverage so much that they bring in and help them be successful. They have greater influence over the nonprofits than perhaps they think. And that's where I think Geoff's point of inviting the donor into the kitchen, as I said earlier. To understand how they do things so the donor can be better at providing those insights and experiences and talents. That's what we're trying to get across with the Arjuna example.

Now, Arjuna is for large organizations, admittedly looking for many, many thousands, if not hundreds of thousands or millions of donors. Are there analogous technologies and solutions for smaller charities that you guys might be able to mention, or approaches?

Geoff: Well, so you know, I think for what I'll just say, kind of, generally speaking, is, it, you know, really depends on the specific organization, the size. There's a lot of nonprofits out there that are trying to modernize, and maybe can't. And, you know, whether you're just going from... I mean, I know people that are using, you know, Excel spreadsheets for their donor database. And that is something that you may want to put a little bit of investment and get something off the shelf. So that's, you know, those types of things, it doesn't necessarily always have to be the AI, you know, whiz-bang technology. Just upgrading from post-it notes to something tech, you know, on the cloud could be a real benefit for a lot of the smaller nonprofits that are out there.

And I just want to say, Bill, I think, you know, we're connecting all of these dots now. So, you know, if we're working backwards, to have a philanthropist come in, and really, you know, kick something into high gear. Like an Arjuna solution, like another technology that's going to help us be risk-averse, you know, manage our risk, but also make that investment to grow in a sustainable way. It all goes back to that kitchen table. It always comes back to the, you know, build that relationship. And I would say it's on both sides of the equation, if a nonprofit is treating you like a checkbook or a transaction, then that might not be the best-case scenario for you. But also know that you know, that that relationship, the deeper that is, the more impactful both sides can be, and you can learn and grow in a significant way.

Colin: And, Bill, I'll just chime in there, you know, just going back to that kitchen table analogy, I think that's so important. And you asked a question earlier, I'm not sure if we totally addressed which is, say a donor comes in and says, "Here's 100k, but it's only for you know, technology X." Whether that's Arjuna, or Salesforce or EveryAction, or whatever, Blackboard, whatever the system is. You know, that sort of, you know, kind of mode of outdated, even paternalistic sort of philanthropy is obviously something that... or I don't know if it's obvious but it's certainly something that is going out of style. Because we know that, you know, as Steven says, it's important to find people you trust. Find people with who you can connect, who you are aligned with and, you know, trust them to make great decisions with your dollars.

I can speak from Arjuna's perspective, you know, that doesn't work very well for us when you know, we just have the donor say, "Here's $100k for Arjuna." And the nonprofit's like, "What is Arjuna? I don't know what this is, I have no use for this thing." That's not a good relationship for anybody to be in. We want to be sure the organization wants what we are offering. And typically they do if they're a good fit for. Not always, but usually, and if they don't, we'll part as friends and wish them the best. And, you know, I would think most of, anyone else in my position would feel the same way. We want nonprofits to feel, you know, excited about what they're asking their donors for.

Bill: Let's have it, let me close by asking, you know, Steven a question. And I didn't really prepare you for this, Steven. So I'm going to go slowly, as you probably think it through, which is what is it that you guys and your family have gotten out of your philanthropic efforts that is both most significant? And then separately, what have you been most surprised by as you engaged in your philanthropy?

Steven: I would say significant has probably been the direct relationships with people that have come out of it all over the place. And that applies as much to you know, the guys from Arjuna I came across and philanthropic paths as it does to the nonprofits we've supported and become friends with over the years. I guess what's been very surprising is how easy it really is to have a big genuine impact. Getting involved is not hard, helping, like Geoff says, helping out in ways that your skill sets can be helpful. And, you know, others can't do that, it really, that's going to stretch dollars even further.

Bill: Are there things, Geoff... you know, look, what I'm trying to get across here is sort of, you know, sort of another way to ask a question. If somebody comes to you, they just sold their company, they got a ton of money, and they want to start their philanthropy, what advice would you give?

Geoff: You know, I would, I mean, that conversation has happened, you know, so as we go down that route, you know, we want to meet, we want to talk through. You know, this is not something that we want people to just dive right in on if we can help it. So, the first steps of those equations is to build the relationship, you know, really get them to understand the ecosystem of the world they're trying to participate in. If it's early childhood education, if it's epilepsy, if it's disaster relief. I want to make sure that they are as educated in this space as possible. And then we lead into, you know, where that right impact is.

And I will just say, the other side of that coin for smart nonprofits, you know, is going to somebody like Steve and tapping his resources beyond his check. So it's not... you know, Steve is a strategic thinker. You know, a lot of people that are in that position have skill sets that are incredibly valuable. Again, the nonprofit has amazing... the industry has amazing people in it but the skill sets aren't always that diverse, necessarily. So for me, as part of that relationship building, I ask, you know, hey, what do I need to look at in terms of this technology? Or, you know, hey, when you're talking about marketing. I just had a conversation with, you know, the CMO of, who is, you know, one of the largest marketing agencies in the world. It was an hour of him just telling me, you know, what we should be doing with our marketing, a lot of valuable stuff.

That hour was probably just as valuable as a check, in some ways. So, you know, I think we really need to look at the full scope and the picture, but take the time to engage and understand that world and move forward together.

Steven: Yeah.

Bill: Well, that's very helpful. You know, I'll wrap up by saying, individual donors in the U.S., I think the U.S. is by far the greatest philanthropic country, by many magnitudes. It is something that you know, we should collectively be enormously proud of. Philanthropy, however, is not easy. And, you know, hopefully, you got a sense from the call today that it is a business. And it's more than just money, right? It's excellence in execution. It's hiring the right people. It's leveraging the right technology, the right strategies, just being thoughtful about when you do go alone, when you partner. And family offices, because of the size of the checks that they write, because of the other attributes that they bring, can be enormously influential beyond just the check. And we just gave you a couple of examples in the talk today.

And it starts with understanding what you want to do. Engaging in those relationships, which Steven mentioned was so valuable. Working with folks like Geoff to understand where you can contribute. Understanding the technologies and the solutions out there, like Colin represents through his company and others. And then engaging and probably iterating over time, you know, based on how things progress, how they unfold, and where the opportunities present themselves. And through that engagement, I suspect the family and the family office will get that return on investment, which comes with charity.

You know, they say that philanthropy is the most selfish act. And there's a reason why they say that is because the philanthropist gets as much if not more out of it. But in order for that to be maximized, we as an industry want to help the philanthropists, we the speakers here, do so in an as effective and efficient, and as successful a manner as we possibly can. And we appreciate everybody listening to us and I want to thank Colin Stewart of Arjuna, Steven Finn for sharing his perspective as a Family Office significant contributor, and then Geoff DeLizzio, certainly of the Epilepsy Foundation for your insights. Thank you, gentlemen, very much.

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Bill Woodson

Bill Woodson is the head of Strategic Wealth Advisory and Family Enterprise Services at Silicon Valley Bank.

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