John Hayes, the Senior Vice President of Charitable Estate Planning at the American Heart Association, made an appearance on YAFPNW this week. When people think of Certified Financial Planner™ professionals, they often think of directly working with clients, but our conversation with John opens up all-new doors for planners and other financial professionals. In this episode, John also talks about how CFPs and larger organizations like the American Heart Association are working together more and more to make an impact on the state of charitable giving.

In this episode, we talk about changing trends in charitable giving, the role financial advisors play in their clients’ giving, and how personal and organizational philanthropy has changed over the past decade. We also talk to John about his journey to the charitable estate planning world, which wasn’t a direct path (none of them ever are). 

A new career in a new sector

John started out as a business finance major and, after connecting with a friend who worked at the Salvation Army, more or less stumbled into the world of planned giving. He found out the Salvation Army was hiring for a “Planned Giving Director” and, even though he had no idea what that meant, he asked anyways. Before he knew it, he was hired for the job. Like most of us when we first start out, John said he had no idea what he was doing. Thus began his career in planned giving, starting off at the Salvation Army in the early 90s. 

By 2004, he was hired on at the American Heart Association and took over the entire “Mission Advancement Department” for the organization in 2010. Today, John works with nearly 130 office directors around the county who align donors, volunteers, and board members with the American Heart Association’s mission of planned giving. With his department, John and the other directors are on the frontlines, working with volunteers and financial planners, wealth advisors, tax attorneys, and more who all play an important role in enabling people and companies to give back in big ways.

Connecting with financial professionals (and donors)

A key part of his work with the American Heart Association is directing teams who offer support to financial planning professionals, attorneys, wealth advisors, and more. While the organization runs on donations, John and his large team know that these professionals play a big role in facilitating their clients’ donations and planned giving. Rather than expecting planners, lawyers, or other entities to single-handedly create and execute on these planned gifts, the AHA Mission Advancement Department really makes it their duty to connect with professionals to help them provide value to their clients — without adding a ton of work to their plate. 

This relationship ensures that philanthropic individuals can support causes and organizations that are important to them, that planning and legal teams can support those interests, and that (eventually) the nonprofits and causes will receive their planned gifts. It’s a mutually beneficial relationship that John and his department have spent a lot of time on. Today, the department offers a number of resources for planning and legal professionals, including the Professional Advisor Network and the Advisor Referral Program. Both of these are designed to provide resources that support charitable giving, and to strengthen the connections between the donor, the charity, and the recipient. 

Donor-Advised Funds on the Rise

There was another major theme to our chat with John: donor-advised funds. Because DAFs allow clients to commit a lump sum of money to their charitable giving goals, it meets multiple needs: tax deductions, ease of setup, and professional management. Instead of wondering how to choose multiple charities or causes to donate to — and how to get those payments out — clients can work with their financial planners (or charitable giving experts like John) to determine how much they want to commit, open a fund, and go. And with the right person, clients won’t need to go through a third-party management service; it can all be done through their planner. 

John mentioned that donor-advised funds have exploded in popularity, with billions of dollars allocated currently. They’re something to consider for clients who are ready to set aside that money but don’t know what to do with it quite yet, and on the professional’s side, they’re simple to set up and manage. He also shared some really uplifting stories about clients who manage their donor-advised fund as a family. 

Next Generation’s Focus on Charitable Giving

More than anything, we talked about how charitable giving has been on the rise since the early 2000s, and how more and more people have monthly, yearly, and legacy contributions that prove just how important giving back is. There’s also a rising trend among the Millennial generation, which offers a great opportunity for next-generation planners to offer a service that is important to their future clients.

We also discuss how, as financial planning professionals, it’s possible to support your philanthropic clients through value-added services like charitable gift planning. Designations like the Chartered Advisor in Philanthropy are also becoming more and more common — and sought after in the charitable giving space. Charities and nonprofits like the American Heart Association have plenty of resources to support you as you do this, and there are plenty of opportunities for planners to develop a career built around this amazing work.

 

If you’re wondering how to support your clients as they plan for charitable gifts, or you want to know how to find resources about planned giving, this is a great episode to check out. John’s insights into the charitable world are invaluable, as are the American Heart Association’s resources.

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What You’ll Learn:

  • CFP®s, CAPs, and the future of charitable gift planning
  • What has changed in philanthropy and planned giving since the mid-2000s
  • How to have a conversation about charitable giving with clients
  • Misconceptions about generational giving differences
  • The focus on community giving and its “ripple effects” to broader global issues
  • Best practices for notifying nonprofits and charitables of a planned gift
  • The value of “buffered” engagement after a client decides to contribute to a charity
  • The partnership between charities and financial planning professionals 
  • Why donor-advised funds can be a fantastic asset for clients

 

Show Notes:
In this episode, John Hayes, Senior Vice President of Charitable Estate Planning at the American Heart Association, discusses:

 

Show Transcript

Episode Transcript


Hannah: I’m excited to be interviewing John Hayes today, who is the Senior Vice President of Charitable Estate Planning at the American Heart Association. This whole idea of charitable giving is such a fascinating idea, and before I met you John I wouldn’t have thought of a role within the American Heart Association. So, I’m curious, could you tell me more of what it is that you do and how did you get to this place within the American Heart Association? A little bit more of your story.

John: So, it’s kind of a weird one I think in many ways because I’ve only ever heard this happen once in my life, and it was from my son, who now he’s a senior in university, and it’s “How do I become a Charitable Estate Planning Director?” No one has ever asked me that. You don’t go to college saying “I want to be a Planned Giving Director. What’s the curriculum for that?” It just doesn’t happen.

John: So, mine was kind of a weird way in that I was going through business finance as my major, and I came out of there and was walking home one day from school and I remember my friend at the time was working for the Salvation Army. And so, I stopped in to see what he was up to, and he told me at that point that they were looking for a Planned Giving Director. And I said “What in the blazes is a Planned Giving Director?” And he sent me down the hall to talk to the Business Manager, Landry Hall. The next thing I knew I was a very young Planned Giving Director with no idea what was going on, or what to do. In fact, to this day my parents still live back home in Ireland, in England and Ireland, and my dad shakes his head when I tell him, even now he says when I’m on the phone with family or whatever, “John, tell them what you do for a living.” Because he gets a good laugh out of it.

John: And that is literally in America giving and philanthropy is so ingrained in the DNA of American culture that I, in its essence, just help people give their money away to the charity and mission of their choice. That’s literally how I do it, but in a very tax efficient process.

John: So, I started off with the Salvation Army. I was there with them doing planned giving about 14 years, and then in 2004 came over to the American Heart Association on the West Coast, I’m out here in the California area, and have been doing planned giving there. Then in 2010 I was blessed with the opportunity to take over the entire program for across the country.

John: And so, we have with us now, and our whole department is called Mission Advancement Department, we have about 120, 130 major gift type officers, directors around the country who help donors, volunteers, board members focus their philanthropy on mission aligned projects within the American Heart Association.

John: And within that 120, 130, there’s 15 of us, 14, 15 of us, who specialize in charitable estate planning, and really our jobs now have evolved now to where we used to be the frontline person really working hands on with a lot of donors, now we work with a lot of staff and a lot of volunteers to support, leverage, collaborate what it is they’re doing. Financial planners, wealth advisors, tax attorneys, and so forth, what it is they’re doing with their clients and with their philanthropy.

John: So, that’s how I came about to doing this. So, I’ve been at this now, in this role as the SVP since 2010. So, nine years? Yeah, about nine years.

Hannah: The scope of this is just crazy to me. And you said 120 to 130 offices? Not just people, but offices that have staff?

John: Oh no, sorry, officers. Not offices.

Hannah: Oh officers. Okay.

John: Yeah. 120, 130 of us, but we do have a good number of offices, American Heart Association offices around the country. I don’t know what that number is but it’s up there.

Hannah: Tell me more. So, when you hear charitable giving within the context of the American Heart Association, what are the different departments or areas?

John: So, within Mission Advancement of that 120, 130 plus officers around the country, we’re broken up into four divisions within the department of Mission Advancement. So, the four divisions are the Foundation/Relationship Team, they’re about the same size as us, 12 to 15 staff. Then we have the Corporate Relations Team who focus specifically on corporations who want to partner with the American Heart Association, brand to brand type of thing. Again, similar size. Then there’s us, the Charitable Estate Planning division, who focus specifically on deferred giving, which is planned giving, whereas all the other divisions really focus on outright type of giving. And then the biggest division within the Mission Advancement Department is the Major Gifts Team, and I would say they’re about 55, 60 plus in that department, excuse me, division around the country.

John: So, those four divisions report up under Mission Advancement.

Hannah: We talk about charitable giving and I talk with a lot of new planners and there’s definitely an interest in charitable giving, that philanthropy, the philanthropy side of financial planning. And so, when I hear them it’s often they’re going to get a designation, but when I hear you talk there’s a whole career just on the charitable giving side.

John: Oh, absolutely. In fact, I would encourage anyone who’s in that field, in that financial planning field, if they are looking for something of that nature, and once again, Maslow’s Hierarchy of Needs, or whatever, once you get to that point where you’ve built out your career, or you’re looking for something new to be more altruistic, this is a great, great avenue to really be fulfilled that way.

John: Within the scope of financial planning, or excuse me, charitable planning, over the years we’ve hired I can’t even tell you how many people I’ve hired who have been attorneys. They themselves call themselves ‘recovering attorneys’ because they work by the hour, or work by the clock, and so forth, and then they come over to this field and it’s such a wonderful release, if you will, to be able to not work the clock, but to really work with what it is that they truly wanted to do, and that was just work with people and help people around either their finances, their estate planning, their planning in general.

John: And so, that has been a real eye opener for me over the past years of when we have an opening and we put it out there, how many attorneys would sign up for an interview for something like that.

John: So, my focus, my goal going forward is I want as many CFPs to be part of that process. On our team right now we have, gosh, three or four attorneys, two or three financial planners with the CFP designation. A lot of them now are going for what’s called the CAP Charitable Advisor and Philanthropy designation. That’s a good one.

John: So, there’s definitely all kinds of avenues of how to get there, but it’s one of those things where once you get into it it’s such a fulfilling profession because it engages both sides of your personality. IF you’re a people person, or if you’re really very technically oriented and you like to work with different types of scenarios, giving vehicles, that engages that side of your brain too. So, it really is a great way to connect your passions, your vision of what it is for your life for what a lot of people want to do, and need, there’s a great need for a lot of those types of financial planners in our field right now. I think a lot of charities are going to be vying for a lot of people with this CFP designation in the future in my personal opinion.

Hannah: And so, is that a trend that you’ve been seeing? Has it always been the case with these large [inaudible]. Yeah, tell me more about that.

John: No, in fact that’s part of it is that one of the things that we’ve realized over these past few years, I would definitely say five plus years, but we used to work exclusively with mostly estate planning attorneys and CPAs. We used to call them the gatekeepers to a lot of the donors and clients that they worked with. So, we spent a lot of time with those types of folks.

John: What we’ve realized over the past five plus years is that they are no longer the gatekeepers, they are the tacticians if you will, and the gatekeepers, that hub in the wheel, are the financial planners. And so, we have devised a program over the past two years called Provisional Advisor Network, we’re bringing that online, where we can really engage with financial planners in their field as to what their needs are to bring online a support and a program effort to support their clients, really focused on financial planners, as opposed to where it was focused on estate planning attorneys.

John: So, what we have done is we provide assistance nationwide with our team, like I mentioned earlier. We have key planning tools and resources for both you and your clients, including sample and personalized illustrations, and we break that down even on two levels, which we never did before, which now we’ve done and that is one illustration can be very technical in nature for the financial planner so he can fully understand the giving vehicle, and one’s really broken down into more of a graphic type of scenario for the client so that they can work with their clients on what it is they’re trying to explain to them as far as the charitable giving.

John: And then, we’ve devised turnkey programs that make gift giving of non-cash assets very simple. I’m very proud of our real estate program that we’ve brought online in the past several years. We created our very own American Heart Association Donor Advice Fund Program, we talked about that earlier. We wanted to respond to the market rather than react to it, and that market, that giving vehicle alone has just exploded in growth over the past several years.

John: So, we saw that as an opportunity to provide not only ease and access for charitable giving for donors, but also for financial planners because we really built out that program with financial planners in mind. Also, a key part of that is that we have, which I wouldn’t say is unique to us but it’s up there, it is an open platform. So, a lot of donors who have had the same financial advisor, they’ve built that relationship for five, seven, 10 years plus. That advisor can work with them on their donor advice fund on our platform so that it’s all managed through that financial advisor rather than having a separate account at some other entity.

John: And then the last thing we do within our Professional Advisor Network is provide the latest tax and legislative news that’s happening in charitable giving, which as they saw when Congress meets “The tax law changes, you never know what’s going to happen.” So, we keep up to date with that, and we send that out, we push that out as far as alert emails and so forth around the country to those who are a part of our network.

John: So, that’s the biggest change that we have seen over the past several years is that we have definitely seen a need for a financial planning Advisor Network where they can come and get a comprehensive view, not only on the technical side of things but also on the relationship side of things when it comes to working with charities.

Hannah: There’s a lot to dive into there. So, we’re going to get into all of these pieces here, but I’m curious, you’ve kind of hinted at it with your answer there, but how have you seen charitable giving change overtime? With the different tax laws that are in place, how are you seeing that landscape shift?

John: Yeah. Well, I’ll tell you the biggest change, you’re familiar with the business term everything is disruptive. You’ve got to be disruptive in this day and age. If you’re not disruptive you’re not doing anything.

John: And what we have found, and it could be good, it could be bad, but it definitely causes a reaction, and definitely a chain reaction, and I would say to specifically answer your question, things started to change the mid 2000’s, 2005, 2006 or so, you can see things changing on the landscape of philanthropy. This is when donor advised funds, this is the disruption I’m talking about, started to really come online. They had bene around for 20 plus years, but they really started to come online and gain traction then.

John: But things really started to disrupt after the recession in 2008, 2009, and with that we saw a lot of donors really look to their financial planners for guidance. One of the key things that has been a key trend is that, and we’ve been taught this for years, decades even, in the charitable planning arena, especially the deferred planned giving arena, that the majority of donors, they do these types of planned gifts, deferred gifts, charitable planning, charitable gifts, for tax purposes. They do not do it for tax purposes. That’s second or third.

John: Well, that’s part of what the disruption is with the donor advised fund is that nine times out of 10 a lot of donors we have found through surveys and research, they do it specifically for a tax situation first and foremost. So, it kind of flips it on its head. And the reason for that is because they’ll encounter some type of tax situation, either could be a bonus, or a small business that is going through a situation where they’re liquidating it or something of that nature, and they have this huge tax consequence. “How do I do it?” Whereas before they would have two choices. They’d go “Okay, I’ve got a tax consequence. What do I do? The only thing I can do is some type of charitable planning. Who do I give it to?”

John: So, two big conversations and thought processes need to happen, but with a donor advised fund you just take care of the one. They’re very simple, they’re very easy, they’re very easy to make happen, and you get all of those tax write offs right away, and then as you grow into your fund you get to choose where you want that giving to go to, where you want those grants to go to. So, you have that time to do that.

John: And then definitely this past, what was it? December/November 2017 with the tax law changes there things started to disrupt again. What has happened now in the industry, philanthropic industry, is that the larger gifts are coming in because that’s where the tax consequence is in a positive nature to the donor, and financial planners are seeing that as well.

Hannah: Yeah. I can tell you in my personal practice I’m having a lot more conversations about donor advised funds of, you know, “Can we front load a bunch of your giving. Get the bigger write off right now, and then you can make a lot of these decisions later.”

John: Yeah. I think it’s called ‘bunching’ or something, this strategy.

Hannah: Yeah. Because they’re not getting the normal benefits right?

John: Exactly.

Hannah: So, when you look at it from, you know, your job is to get donors and donations for American Heart Association, has that driven the age of who you’re working with down to more income earners instead of just at their death?

John: When you look at the scope of philanthropy, even your own life Hannah, I mean my life as well, when you get to a certain age and you saw where life situations happen you start thinking differently. When you get married you’re a different thinker than you were when you were single. Same when you have children, or when you have grandchildren. These life circumstances happen.

John: And so, we’ve always really worked with, in the deferred planned giving arena, worked with donors who are probably 50 plus because the studies have shown that that’s when they’re really thinking about not end of life, if you will, because that’s kind of a negative thing, but more legacy type of a scenario. You know, “Where are my kids? Where am I going? What’s it about?” Like we were saying, that mid-life situation where “This is how I was, where do I want to see fulfillment for the rest of my career?”

John: So, we’ve found, and it’s becoming even more so today, that a lot of double income families are having those types of conversations still, but we are seeing now with the onslaught of Baby Boomers. What is there? It’s something crazy. 15,000 Baby Boomers are retiring or turning 65, or even 70, every day now for the next 10, 12 years, or something like that.

John: So, we’ve really focused on age 50 plus, but now with my team we definitely focus on those donors who are in their 55, 60, 65 plus. Within our own world we have over four million donors, active donors, and by active I mean they contribute each year, how are age 65 plus. That’s a phenomenal number to be working with, and you’ve only got 15 people on your team working with them. We need as much help as we can get.

Hannah: So, it’s interesting, you talk about how you’ve worked with a lot of financial planners in having these conversations with the clients, and more of that legacy piece, but I’m curious, how do you position this conversation of charitable giving? Is this something that advisors are bringing to the table, or are clients bringing to the table? What have you seen as you’ve been coaching financial planners and having these conversations?

John: Yeah, that’s a great question. I love that question because you’d think it would be an easy conversation to have, but it really isn’t because when people start thinking of that nature, they start thinking of death and taxes, and who wants to have that conversation? No one wants to have that conversation.

John: So, what we’ve found that is the most appropriate way to speak to clients is around legacy planning. You know, “What is it that you’re hoping to achieve in the future?” And so, we definitely have that conversation around that topic.

Hannah: It’s interesting. So, looking at new planners as they’re coming into financial planning, one of the common things that I hear is “How do we relate to somebody who is in their 50’s or 60’s when we’re not there?” Can younger planners still have these conversations with their clients?

John: Oh, absolutely. You know, it’s interesting in that because at the end of the day what we all want to achieve, besides putting food on the table, is we want to add value right? We want to have a meaning, and that’s what I love about the financial planning world, and especially those who have the certified financial planners, CFPs, and those in the charitable planning arena as well, is that they want to have value at the end of the day, and when you speak to a client about their full life, just having a life conversation. You know, “What are your hopes and dreams? Where do you want to go?” Part of that conversation is your legacy. I mean, it’s just a natural part of that conversation.

John: And when clients hear that from their financial planner they recognize that it’s not all about the money, it’s all about what their principle’s, value’s, and goal’s were throughout their life. That’ their legacy. That’s what they want to bring together.

John: And so, when you have those types of conversations, it’s a natural way to bring up, the simplest way is “Do you have any charitable inclinations? Do you have any philanthropy?” And if they say “Yes.” Then the next question I love to ask is “Tell me about your favorite experience when you gave a gift.” And then you can just see people light up with that, and that’s where the juices get going and you can have a great conversation around that.

John: So, if you’re young into the arena, Next Gen, or something of that nature, those are excellent conversations because you start with the end in mind, as a Stephen Covey principle if you will back when he did 7 Habits is that you begin with the end in mind, and people in their 50’s and 60’s they’re thinking that way.

John: And so, when they’re sitting down and they’re having an active engaging conversation, a listening conversation with their financial planner, that speaks volumes to them because it’s all about them and not about their assets, because the assets is just one piece of the puzzle.

Hannah: And I love it too, you just said “It’s all about them.” And it’s all about them and not our age, or whatever that may be.

John: Yep. Exactly.

Hannah: That’s great. I’m going to start incorporating that question I think all my clients. I think that sounds really good.

Hannah: So, one of the topics that I hear often is “Us Millennials” have been more or less charitable than older generations. Tell me what your thoughts are on that?

John: Nope. Absolutely disagree with that, and I’m very passionate about it, and I don’t know if it’s because I have two Millennials myself. Actually, no, one of them he’s a Gen Z, or something like that, the 20 year old. I don’t know what they are now.

John: But, no, it’s the same thing I used to hear about the Baby Boomers you know? We used to say that about the Baby Boomers all the time, and they’re becoming one of the most generous generations ever in America. I don’t know if that’s because they have so much more money than they ever had before. I don’t know if that’s a part of it.

John: But I will tell you this, that Baby Boomers are very, very generous, and I see Millennials, where I see the difference between Millennials that I’ve worked with, and then my own two boys myself, they’re in their 20’s, and their friends, and what I’ve seen in Baby Boomers, and in my generation. I’m a Gen X’er, just want to throw that out there. Yay for the Gen X’ers. Is they’re very engaged in their giving. That’s the trick. That’s the disruption piece that a lot of charities kind of struggle with, which is really excellent as far as we’re concerned with the American Heart Association because we’re all about being engaged with volunteers, and a lot of Millennials, they want to know what they’re giving to, what it’s doing, where it’s going, and that engagement, if you’ve got that kind of engagement, it’s the horse and cart scenario, the treasure just follows that.

John: So, I would think, one I’ve seen it everywhere I go, because I’ve spoken at some universities as well, and they’re highly engaged, they want to have an impact, I see that as being a very, very philanthropic generation into the future.

Hannah: So, here you say all of that. I know one of the big questions that our generation is having to face is “How do we help do financial planning and serve our generation within financial planning?” So, I’m curious, hearing what you’re saying about these Millennials and how they want to be engaged givers, how would you advise financial planners as they’re working with Millennials versus how they work with Boomers? What would be the differences you might recommend?

John: What are they passionate about? That’s one of the questions I would have for Millennials is “What are they passionate about?” And nine times out of 10 when I’ve spoken with Millennials about those types of questions they are quick to jump on that, because they are very passionate about… You know, a lot is happening in our world today right? So, you can name the top two, or three, or four things that they’re passionate about, but what I have found, and what we have found, not just myself but in my staff when we have these conversations, what they have found is they’re very community focused, which is really fascinating to me because when you look at the world that we’re in of social media and how it’s very global, and everything is global, global this, and global that, globalization and so forth. They’re very community focused. They want to have an impact in their community.

John: So, they’re starting there like pebbles in a pond and it ripples out. I find that just fascinating, and excellent, which really prompts me to have those next level conversations with either financial planners, or the Millennials that we speak with, is that “Where is your family in this type of scenario?” And they always give me that cockeyed look like “What do you mean by that?” “Where did you get this community focus from?” And they think back to either their mom did something, or their dad something, or their grandparents did something.

John: So, that’s one of the things that we try to focus on as well with financial planners is that let’s bring the family involved in this whole philanthropic conversation too. That’s another reason why donor advised funds, I hate to keep harping on them but they’re such an amazing giving vehicle that you can bring the family into that. We have one donor that every Thanksgiving, he has a significant donor advised fund, and after, I think it’s the Friday, the Black Friday, whatever that’s called, whatever they call it these days, they get together for brunch and they discuss as a family where they want their giving out of their donor advised fund to go each year. And the grandkids now, they started out with the kids, the grandkids now come and they bring their one page proposals. It’s hilarious, with crayons, or whatever, about who they want their donation to go to as a family, and it’s just wonderful to hear things of that nature, to bring that family together. It’s a real family philanthropy and I think it’s fantastic.

John: It’s that next generation, and that’s part of being a financial planner. You want to help that client out, but where are they going? Again, it’s a part of that bigger picture. We’ve got to keep that in mind and keep going to that bigger picture because, again, it’s all about them and what they want to see happen. It’s good stuff.

Hannah: Yeah. Talk about a legacy too of, you know, what of those kids… I always ask my clients, you know, ask them of their money memories, and I just imagine what those kids are going to say someday of “Here was something impactful in my life.”

John: Yep. We had one, a quick story, we had one, he was saying that they went out to brunch at Denny’s, the little place is Denny’s, and the grand kid was like six or seven years old and he requested the server to box up his pancakes. Seven years old, box up his pancakes, because there was a homeless person outside and he wanted him and his dad to go out and give this guy some pancakes.

John: So, this was back in July or something like that, that following November when they sat down and had that conversation he spoke up and it all went to the homeless shelter there in their little community. That is fantastic stuff. I love that stuff.

Hannah: That’s so cool. These are all ideas everybody can buy into of wanting to help clients and really helping them to do these types of things. And so, I’m curious, we talked a little bit about this earlier, about this Professional Advisor Network. And so, a client comes to me and is really interested in giving to charity, you have your resource that I could turn to to help have those conversations. Is that right?

John: Yes. In fact we touched on those earlier. We built out our professional Advisor Network specifically around financial planners and wealth advisors around the country, and we’re trying to make it as comprehensible as possible for what their needs are.

John: In fact, just real quick a quick bullet is if they went to www.heart.org/fpaclients you would be able to just sign on and see the plethora of different resources we have available specifically for financial planners, for not only themselves, but for their clients.

John: But really quick, the top five that come to mind is that we have a team across the country who are ready, willing, and able to come alongside and teach, and coach, and participate in those client conversations. Real quick on that, part of the struggle is that a lot of times people think that’s the easiest thing in the world. “Well, we’ll just put a will together and just name the American Heart Association in there for 5%.” And so forth. That’s part of what my staff do as well is come alongside, the simplest little thing can cause a reaction, and so we want to get that right form the beginning, again, beginning with the end in mind. So, we have a team of professionals who do that.

John: We have tremendous tools and resources for not only the professional, but also for client, and we speak to them at their level of what they want. You know, the engineers of the world they want the 15 pages of “What does a charitable gift annuity do? And how is it funded? And what is a charitable trust?” And so forth. We can provide all of those things.

John: And then, we have those turnkey programs. Two of the things I’m most proud of over the past couple of years is our real estate program. We have, so from 2004, as I said earlier, to 2010 when I took over as the senior person for planned giving program, we had a total of five real estate conversations. Those are donors who wanted to give some type of real estate to charity. Five either gifts or conversations that were listed in our database, five.

John: I saw that as an opportunity, because when you look at an overall portfolio of a donor, or a client, really it comes down to two or three things. Either they have a stock portfolio, a funded IRA, or real estate. The home, family home, a condo, or some type of vacation home or something of that nature. Those are the top three that are usually in a portfolio and the most that’s untapped is the real estate piece.

John: And so, we created a real estate program that back in the day, I keep saying that, back in the day when you started to a client or a donor about doing a real estate gift it could take anywhere from day one, to six months, to nine months to make that gift happen, if it ever happened because it’s so fraught with different scenarios of what could go wrong.

John: Our program from the day one to closing most cases will be done in 30 days. That is unheard of in the industry, and we’re very, very proud of that program.

John: And the other thing too about that for professionals is that these are assets that they’re not being used. They’re just sitting there, like a vacation home, and they’re just paying all these fees on it. And so, we liquidate that, put that into the donor advised fund for the donor, and so everyone is happy with that type of scenario. So, that’s another great resource we do.

John: And then, we have an advisor referral program that we definitely utilize.

Hannah: So, a couple of quick things, you can’t even hardly close on a house in 30 days anymore.

John: I know, right? Exactly.

Hannah: But as you were talking one thing that really stood out to me, and maybe I’ll raise my hand and say “I’m guilty of this too.” I have several clients who do want to give to charity and have listed multiple charities in their will, and I’ve never reached out to the charity even just to let them know.

John: Yep.

Hannah: So, is that best practice?

John: Yes.

Hannah: Yeah, so if I have a client who puts American Heart Association, like you were saying, 5% in their will, from a planning standpoint what does that look like? So, I call you up, I’m like “Hey, a client wants to do this.” Then what?

John: A client wants to leave the American Heart Association in their will, or trust, or IRA, or something of that nature? Very, very easy. I’ll say “Thank you very much Hannah. That’s wonderful.” A quick couple of questions I’ll ask you is “Do they want to remain anonymous or do they want to be known? Because we have a legacy society that we can steward them and thank them.” Because, you know, it’s important to be thanked, I think, but many donors want to remain anonymous, and again, that’s totally fine.

John: We would provide you with exact words, we would ask you for the client is “What is it that they’re hoping to achieve?” Because hopefully when they’re putting their will and trust, or whatever, together, they’re going to live a long and healthy life. 10, 15, 20, years. So, meaning we ask those very specific questions because whatever it is that they’re hoping to do today may not be around in 20 years from now, so we want to keep the language as general as possible, but also as specific as possible so that it honors what the donors and clients wishes are for that gift.

John: So, we definitely have a conversation around that, and then we give you the wording that we feel that would provide for that to happen, and then the legal address, and then the charitable tax ID number, and then once you’ve got all of that done, and that honestly is a 10 minute conversation, if that, you’re good to go. And that would be a best practice honestly, it really should be.

Hannah: Yeah. I think that makes a lot of sense. So, if they wanted to give 5% or 10% in their will to the American Heart Association, are you engaging them continually outside of that? What does that engagement look like?

John: Yeah. So, and again, as part of that first question, “Do they want to remain anonymous or do they want to be” I’m using air quotes, the technical term is “stewarded.” But it’s really being engaged, it’s being thanked, and let’s say the… I can answer that in two scenarios.

John: Let’s say they want to remain anonymous. So, with that, what we would do then is that we would cultivate and steward you Hannah, the professional advisor, so that you would know what’s going on and so if you wanted to relay that information to your client, or clients, that’s entirely up to you. We’ve found that that has happened quite a bit. That they want to remain anonymous, they want to have that professional in between them and the charity, and so we give them the information that they’re interested in, and then they pass it on.

John: We also have many donors, and this does happen more times than not, because that’s one of the benefits of a donor advised fund they tell you is that you can remain anonymous, and some folks do, but most do not. They want to be known, they want to be engaged, they want to have that impact. And so, what we do then is that we have in our legacy society we definitely engage them, and here’s the critical part, on their level. And what I mean by that is how do they want to be engaged because the worst case scenario is what, that you hear many times over? It’s that “Okay, now you’re going to get 50,000 emails in any given week from the charity. You’re going to get 20,000 direct mail pieces in your mailbox.” These horrific stories. Phone calls at dinner time, and all this kind of stuff. We don’t do any of that anymore. With the way technology is today it can be very, very customized to what it is the donor wants, how they want to be engaged.

John: So, that can be anywhere from that, the email alerts new and breaking in the cardiovascular disease world, either weekly or monthly. There’s newsletters that we can connect with them, a lot of people still like to receive those, and touch and feel what’s going on with our legacy side newsletters. There’s engagement opportunities that we are part of within most communities around the country, whether it be a volunteer opportunity or some type of engagement with our Heartwork program, the Gala programs, all of these different types of scenarios happen around the country. So, there’s a whole plethora of how that person wants to be tailored in their engagement for their charitable giving.

Hannah: And it seems like it’s very much enhancing that client experience, and enhancing the value that we can provide as financial planners because I have several clients that I have no idea what their involvement with some of these organizations is outside.

John: Yeah.

Hannah: Much less if the organization even knows if they’re listed in that will.

John: That’s interesting right because the number one thing that you do, and the number one thing that we do is a shared responsibility, and that is we build relationships right? You cannot operate in a vacuum when you’re building out financial plan. I mean, you could right? But it’s not very impactful, and to your point, that whole client experience. You can only limit what you can do with them with what their needs are.

John: So, we have found that in both our worlds, whether in the financial planning world, or in the planned giving deferred world of the American Heart Association, we’re all about building relationships. And so, we really take our time working with the donors about what it is they want. We call it donor centric, you probably call it client centric, it’s the same thing. And that is, “Okay, what is it that you want to achieve? If you just want to give a quick 5,000, 10,000, $100,000 to a charity of your choice for a tax purpose. Fine, we can do that.” And of course we’ll take that, but many times as we work with donors it just never ceases to amaze me how much information they want to share with you because they want to have a full impact.

John: And so, as you gain that trust, and you build that relationship, that can go on for years. We have many advisors around the country who go to birthday parties, graduations, New Years Eve parties with donors at their houses, because it’s part of that relationship. You get to know them, and what their needs are, and what their wants are, and it’s very, very fulfilling and quite fun.

Hannah: It’s just so neat you talk about financial planners and really using charities as a professional partner. That’s really exciting.

John: Yeah, that’s exactly right, and when we look at our Professional Advisor Network that is our number one principle is how do we partner with financial planners across the country, and that is truly what it means because it’s not about “I’ll give you this, you give me that.” Or that we’re just out here trying to get as many donations as possible. We know that in the long run that when you build that partnership, when you build that relationship, that is worth so much more than any of those gifts can come into the charity for the American Heart Association because it provides so much leverage and partnership for all things. Like I said, to that family philanthropy and so forth.

John: So, we focus on that perspective, especially when it comes to financial planners, we come alongside, as I like to call it, come alongside and partner with them as much as they want, or as little as they want. It’s very tailored for what their needs are so that we can help them in that charitable aspect planning arena because there’s a lot to this, as you know, there’s a lot to this financial planning field and you can’t know everything and be everything to everyone. You have to have partners, you have to have friends, colleagues, if you will, who can work with you and you can build that relationship and trust them with your clients. That takes a lot of work, but it’s very, very worthwhile.

Hannah: So, one of the pieces that you had mentioned was the advisor referral program, so you can talk just a bit about that as well?

John: So, the advisor referral program is something that we are bringing online more and more as we build it out, and that is we like to come out, so with you and I, I would come out to visit with you and spend anywhere from 15 to 20 minutes, just like we’re doing today, getting to know each other, getting to know your practice, getting to know your philosophy. That’s very important. Your values and principles and how you go about working with your clients to see if we can partner with each other, because many times, as I mentioned earlier, we have a massive database of donors who are engaged, actively giving of the age of 60, 65 years old.

John: It never, again, never ceases to amaze me. It still happens to this day where you’ll sit down with a donor who they have no idea, we call it… What’s that book called?

Hannah: Oh, The Millionaire Next Door.

John: The Millionaire Next Door, there you go. The Millionaire Next Door. Big hat, no cattle, that’s right. That they have no idea how much they’re really worth. Even if you’re in the 50’s, or mid-50’s, they’re just really working hard and they’re thinking about retirement and so forth, but they don’t know really how much they’re worth. Same thing with donors that we work with that are 65, 70 plus. They don’t really know how much they’re worth, and we sit down with them, and we look at them and say “Okay, you are a millionaire.” And they just can’t believe, “What do you mean I’m a millionaire?” “Well, you are now worth 3.2, 3.4” whatever, “four million dollars when you total it all in.”

John: And they have no idea, one, and then two they have no financial planner. They have no CPA, they have no attorney, they have no estate plan. It happens so many times at that kitchen table. I can’t tell you how many times I’ve heard that statement.

John: So, that’s part of what we do with the Advisor Network is like “Okay, we work with several people in the Dallas, with several people in the financial arena in the Sacramento area,” wherever, “Chicago area. Would you be interested if I provided you with some of the folks that we’ve met with and worked with over the past several years that you can connect with because you need to have someone help you with this.” And that’s part of our Advisor Network is that we provide them with names of people that we’ve worked with, we trust, who is part of our network who helps them and brings their plans together. That’s a big piece of it.

Hannah: That’s really exciting, and it’s just crazy to me that people get to that point where they don’t realize they’re a millionaire-

John: Oh, it’s crazy.

Hannah: And they’ve never thought of, or maybe they have thought about it, but they’re not working with a financial planner.

John: Not working with a financial planner, and I’ll tell you what’s even crazier than that is they’re telling me. I mean, who am I? You shouldn’t be telling me this kind of stuff, but they do because of that trust factor, and it’s that brand, and that’s why when you come into the American Heart Association is that’s one thing we get drilled into our heads, and it goes into your heart very much so, and that is: our brand is everything. Integrity is everything. And so, when we show up I may represent the American Heart Association, but once I cross that threshold they connect with me, with our advisors, and that trust just starts almost right away, and they start sharing some amazing information that there is a tremendous responsibility with that, and so we want to make sure that when we’re partnering with financial advisors that they are a part of those values and principles that they hold their integrity and trust as well.

John: So, it’s a big deal, but we’ve been very, very blessed with it, and its worked very, very well for a lot of our donors.

Hannah: You know, the one thing I want to ask you more about is this donor advised fund, because I know I’m having more of these conversations with my clients, and I’ve been researching them, and in full disclosure I didn’t know that American Heart Association had a donor advised fund. But, with you donor advised funds, are donors obligated to give to the American Heart Association if they go through you to set up this donor advised fund?

John: No. Not at all. And so, that was part of it is, like we were talking about earlier, is that we really wanted to respond to the market, but what I mean by that is respond the needs of what we were seeing happening with these donor advised funds, and what was happening was that they were just exploding in growth. They’re the number one giving vehicle of how people give over the past several years now, and it’s going to just continue to grow into the future. I believe the numbers are staggering. It was 100, $110 billion or something insane, that kind of number. But they’re now, the wealth advisors I’ve been speaking with, they’re predicting that that number is going to go to $300 billion in the next three to five years. I mean, that’s an amazing giving vehicle and growth.

John: And so, when we saw this several years ago we saw that there was a need for our donors who wanted to have a very flexible, easy to use giving vehicle where they weren’t stressed out. Basically what it is is it’s a glorified tribal giving account, if you will, and I have a good story about that that happened just this past Christmas and I’ll come back to that.

John: So, we saw that as a real need, and so our biggest thing, a couple of the big things that we wanted from that is two things. One, we wanted an open platform. And what I mean by that is that whoever wanted to contribute or establish an account with us, if they wanted to use their trusted financial advisor that they could bring that person online as well, rather than “No, you have to use one of our advisors from one of our custodian accounts.” That was not partnership, and so we didn’t want that. So, that took a while to bring that online so we have that.

John: And then the other thing is too is that no minimums, meaning if you start one of our funds, you’re 25%, 50% of that, whatever that fund is, has to come to the American Heart Association. No, because that’s not donor centric, and that’s part of our philosophy is to be donor centric. And so, we haven no minimum. So, if you create an account for $50,000 and $50,000 of that goes to the local humane society, that is completely up to you.

John: Now, I would question why you would want one of our funds within the American Heart Association because it’s very mission aligned, as opposed to one of the others at an institution or a bank, but again, that’s up to you, and we have donors like that within our fund.

John: And a classic story of that, last Christmas I had a donor call up very frustrated. It was like December 27th. You love getting those calls as a fundraiser in December. He was very frustrated, very heated, and he gives to 15 charities every year to the tune of like $3,000 per charity, and he was saying “It’s impossible to reach someone at your organization. All I want is a tax receipt. I just want a tax receipt. Give me my tax receipt.”

John: And so, I got what he needed, and basically what it was it was the Christmas rush and madness and he was being passed around, but the beauty about that was as we talked I said “Have you heard of a donor advised fund?” And he said “I don’t even know what you’re talking about.” Because he was still pretty upset. And I spelled it out for him, and I said “What that can do for,” let’s call him Mr. Smith, “is that instead of calling around to all of these charities getting your tax receipt.” Because he was having this kind of trouble with quite a few of them. “You put it into this donor advised fund and every January or February you will now get a statement because you will just call them up, or do it online, do it on your phone, whatever, and say ‘I want this amount of money to go to these 15 charities on this date at this time.’ And you will get a statement in January or February with all of that spelled out, all of your tax receipts done, and so forth.” He was blown away.

John: So, he came online and did a donor advised fund with us too because it’s just so easy, and efficient, and you can do it 24/7. It’s great. They’re a really great giving vehicle.

John: Have I spoken enough about donor advised funds? Because they’re pretty good.

Hannah: Well, it’s such a great planning tool. Yeah.

John: It is. And for the planner as well because they’re so efficient. I mean, if you had a client come in your office today you could turn around and have one set up within 15, 20 minutes, and I think I’m being very generous with that time. It’s quicker than that. I don’t know another giving vehicle that can make that happen like that, but it’s that efficient, and that effective and easy. So, it’s very good for the financial planner themselves, and it’s excellent for the donor as well.

Hannah: So John, as we wrap up is there anything else that you want to leave the listeners with?

John: You know, I think the number one thing is, we talked about it earlier, but definitely reach out to that website we talked about earlier. I’ll give it to you again. It’s www.heart.org/fpaclients. And/or call our number, which is 888-227-5242 to request joining the Professional Advisor Network. I promise you you will not regret joining that type of network. We have found many, many times over since bringing this online both with donors and financial planners that this has been one of the best business decisions they’ve made because the whole client experience just gets elevated to another level when you’re working in partnership and collaboration.

John: So, definitely reach out to the charities. They are there ready, willing, and able to help, especially in American Heart Association. We have a cadre, a team, of professionals with a CFP designation, and attorneys who really just want to come alongside and partner with financial planners to not only coach them and teach them, but to aide and assist them in what it is their needs are for building out that legacy because at the end of the day it’s all about value added, and that’s what we want to do. We want to be able to lay our head down at night and say “You know what? That was a good day today. I did this thing with the American Heart Association, and this client, and it was good.”

Hannah: Well, thank you so much for joining for us.

John: Well, thank you Hannah for the invitation. It has been very, very fun. I appreciate it. I’ve never done a podcast before so this was a lot of fun for me.

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