Understanding Nonprofit Titles

In about 80% of nonprofit organizations, the highest-ranking paid staff person is the executive director. For most others, it’s the CEO or the president & CEO. In the charitable world, we often use these titles interchangeably, with little thought to the distinctions among them.  

However, every year or two, some local charitable board begins contemplating a title change for its top staff person and asks me to comment on the differences. Although I’m no attorney, I’ve spent nearly 30 years working for foundations, dealing with many nonprofit leaders. Writing this column about the differences seemed like a useful reference for our community.

In many ways, the titles executive director, CEO, and president & CEO are interchangeable. To paraphrase Harry Truman, the buck really does stop with the person who holds this top job, regardless of the individual’s title. The distinctions among them, however, begin to emerge when you determine whether this highest-ranking staff person is also a principal officer of the corporation.  

Per Wisconsin state statutes, “Principal Officers: Unless otherwise provided in the articles of incorporation or bylaws, a corporation shall have a president, a secretary, a treasurer and such other officers as are appointed by the board.” Therein is the first significant difference among the executive director, the CEO, and the president & CEO: All three are the highest-ranking executive, but only the president & CEO is defined in Wisconsin state statutes as a principal officer of the nonprofit corporation. Although the CEO is not defined in this statute, CEO means chief executive officer. One can assume that if an organization has a CEO, its board has likely imbued that position with the powers of a principal officer.

Conversely, the executive director is often not a principal officer of the corporation. Instead, it’s the head of the board that holds the title of president. In nonprofits with a CEO/president & CEO, the leader of the board is usually the board chair.

As a principal officer of the corporation, the CEO/president & CEO is typically empowered to execute documents and act on behalf of the corporation. The executive director does not normally have that authority unless it is explicitly granted to that individual in the corporation’s organizing documents or is so authorized by a resolution of the board.  

When I joined the Door County Community Foundation in 2008, my predecessor held the title of executive director. At the time, we were just a few years removed from the scandals of Enron and WorldCom, during which the leaders of those companies falsified financial statements to cover up their fraud.

The primary reason that the Door County Community Foundation’s board named me president & CEO was because we handle a lot of money, and the board members wanted me to accept the responsibility of certifying the accuracy of our financial statements under the pains and penalties of perjury. That’s why my signature is on the federal and Wisconsin tax returns of the Door County Community Foundation. 

If our financial statements have been manipulated to cover up malfeasance, I cannot claim ignorance because I’m the person who certified that our financial statements are true, correct and complete. In organizations with an executive director, it’s usually the leader of the board who signs the tax returns as its president.  

Therein is perhaps the biggest differentiator between the uses of these titles: sheer size. The national search firm Scion Staffing notes that the title CEO/president & CEO is most common in charities with annual budgets of $5 million or more. In an organization such as the Door County Medical Center, with 595 full-time-equivalent employees, you’ll find it led by a president & CEO such as the talented Brian Stephens.  Similarly, a charity with more than $17 million in contributions and complex financial statements such as the Door County Community Foundation is also led by a president & CEO.

Scion Staffing articulates another key difference: “Whether an organization requires a CEO or an executive director to lead their organization often depends on the culture of the nonprofit board, and if they themselves are setting the full mission, vision, values and strategy for the organization. The more strategic and visionary the needs of the role are, the more likely the role will be named as a nonprofit CEO.”

I know a couple of executive directors who really are CEOs. Over the last 30 years, I’ve also encountered a handful of CEOs who really should be executive directors. Regardless, my dream is that someday the Door County Community Foundation’s board of directors will finally give me the title I truly desire: “Big Kahuna.”  

This article, written by Door County Community Foundation President and CEO Bret Bicoy, originally appeared in the Peninsula Pulse.

When Free Markets Fail

People are often surprised when they hear me say that a market-based solution to a problem is usually the best one, and I suppose I can understand their surprise.

From the first recycling drive that I helped to organize in the third grade to my current role at the Door County Community Foundation, I’ve spent nearly all my life volunteering and working for charitable organizations. Heck, one of the strategic goals of the Community Foundation is to be our community’s most articulate advocate for charitable giving, and I even write this column about philanthropy for the Peninsula Pulse.

Thus, it’s easy to understand why most folks assume that I think private philanthropy should be the first – and usually is the best – response to a societal problem. In fact, what I actually believe is almost exactly the opposite: that our initial response to any of society’s challenges should be to first see whether the free market can come up with a solution.

Here’s an example. Before modern building techniques and flame-retardant materials became commonplace, many people died while they were asleep in their homes when a fire broke out and smoke overwhelmed them. An engineer in the 1960s set out to design the first practical home smoke detector, and in doing so, gave our world one of the great safety innovations of the last century. This entrepreneur saved countless lives – and probably became very wealthy in the process.

An effective, market-based solution offers the promise of a financial benefit to the one who can solve the problem, thereby incentivizing private individuals and companies to search for answers. Smoke detectors are so enormously effective at saving lives that people were willing to pay for them. Then, as more detectors were sold – thus lowering the price of individual units – they became affordable for more people.

Yet perhaps the greatest aspect of successful market-based solutions to societal problems is that they are inherently sustainable. If people are making a profit by producing smoke detectors, they have a strong financial incentive to keep doing so. Smoke detectors have become so impactful and so inexpensive that they are now ubiquitous. Although nothing lasts forever, an effective free-market solution can create an unmatched level of sustainability.

Unfortunately, there are plenty of areas in our economy where the free market fails. For instance, there is simply no profit to be made in helping a woman escape an abusive husband. Nor is there any revenue to be earned from an out-of-work father who cannot afford to buy groceries for his family. That’s why we need human-service charities such as domestic violence shelters and food pantries. If there were money to be made from serving people who are experiencing situations like these, some smart entrepreneur would have figured it out by now. The vast majority of human-service organizations require outside subsidies to be sustainable, and the form of that subsidy is very often a charitable gift.

However, it’s not just in human-service organizations where the market fails. There are many charities that have earned income, but that revenue is insufficient to meet their expenses. For instance, the Travel Channel regularly publishes a list of the 15 best performing arts centers around the country outside of Broadway, and the websites of these centers have two things in common: There’s a button where you can buy tickets, and usually right nearby is another button asking for a donation. They all need private philanthropic support to be able to put on the performances that we enjoy.

Similarly, although health care in America has become big business, there are places such as Door County where the economies of scale that lead to profitability simply do not exist. That’s why nearly six in 10 hospitals in the United States are still nonprofit. 

These organizations are nonprofit precisely because there is no profit to be made. Often they have no earned income, or the revenue they do earn is insufficient to cover the true cost of offering their services. That makes them inherently unsustainable without the support of the community. In some cases, that subsidy comes from the government in the form of a service contract. In other situations, sustainability is achieved only when people like you and me choose to make a financial contribution to their work.

The search for effective, market-based solutions should always be our first priority because they are the only truly sustainable programs. However, when the market fails to provide an answer because there is no profit to be made, that’s where we need private philanthropy. For many charities, your generosity is their sustainability.

This article, written by Community Foundation President and CEO, Bret Biocy, originally appeared in the Peninsula Pulse.

We Cannot Allow Lines to Become Walls

In his recent Peninsula Pulse article “Where Is the Line? Defining Northern Door,” my friend Myles Dannhausen Jr. asked a wide range of people to draw the line that separates the greater Sturgeon Bay area of central Door County from what we refer to as “Northern Door.” Different people he spoke with defined that line from as far south as the ship canal in Sturgeon Bay to as far north as Baileys Harbor.

My reaction to Dannhausen’s question was quite visceral and very different from most of the others. My answer was, “Who cares?”

I have long worried that we as a society are increasingly looking to create identities for ourselves that divide and separate us from one another rather than searching for ways to unite and come together.

When I shared this with Dannhausen, his response began with the eminently practical.

“For the paper, it matters from a factual standpoint,” he replied. “If we’re going to use the phrase, we (at least internally) have to know what we’re referring to.” That makes perfect sense and is a testament to the journalistic integrity of my friends at the Peninsula Pulse.

Dannhausen then went further, saying that “ultimately, I think it’s OK to recognize the differences – maybe even vital to do so.”

There is great truth in those words as well. We all have a basic human desire to belong to something bigger than ourselves, to know that we are a part of like-minded people. What we belong to helps us to define and shape who we are. For most of us, the first groups that form our identity (outside of our family) are where we come from and our ethnic heritage.

I have been in Door County for 15 years and fully intend to spend the rest of my life here, but I will always be a Hawaii boy at heart. I was born in Aiea, spent summers with my extended family on Molokai and graduated from Iolani School. Where I was born and raised remains central to my identity because the Aloha spirit will always live within me.

This instinct to draw lines and define our identity is even more pronounced if you belong to a group that is disenfranchised from the larger society around you. My father was a Filipino man who experienced enormous prejudice during his life even though he was a highly decorated veteran and genuine hero of World War II and Korea. During the 1950s, Dad was one of the founders of the Filipino Chamber of Commerce so that businesspeople who were being discriminated against could stand together and push back against the prejudice.

Dividing ourselves into groups based on some part of our identity is not only natural, but it can also be necessary if those who have been relegated to the margins of society are to have an opportunity to thrive. Yet when taken too far, our natural inclination to draw lines can also become a destructive force.

Celebrating my identity as a Hawaii boy is entirely different than separating myself from those who are not. When I celebrate that part of my identity, I am connecting to my past and sharing the joy of an important part of me. However, when I use my identity to separate and cut myself off from those who do not belong to my group, I am both creating fertile ground for prejudice to take root and simultaneously losing the opportunity to meet someone different from me who might one day become my friend.

Similarly, disenfranchised groups collectively advocating for equal rights is entirely different from discriminating against those who are not part of the group. My father rightfully brought Filipino businesspeople together in hopes of building a society in which their children wouldn’t need to endure the same discrimination they did. However, were they to have persecuted those who weren’t Filipino, they would have been guilty of the same kind of pernicious prejudice that had been imposed upon them.

Fundamentally, there’s nothing wrong with defining the border of Northern Door. The desire to belong to a group both shapes our identity and is one of the building blocks that make us human. Yet even if you live in Northern Door, always remember that you equally belong to the community of Door County as a whole. You also live in Wisconsin and therefore belong to the collective people who constitute our United States of America.

We must always be vigilant so that the lines that define us never become insurmountable walls that divide us.

This article, written by the President and CEO of the Door County Community Foundation, Bret Bicoy, originally appeared in the Peninsula Pulse.

The Unexpected Things We Love

The room smelled of disinfectant and the floor was cold, but the exceedingly kind staff had placed a blanket on the floor. I sat down and began to cry, leaned against the wall, then invited Buddy to join me on the quilt. He was nervous and uncomfortable, but mine was the face he trusted most in this world, so he lumbered over and lay down between my legs. His health had degraded so quickly that my wife, Cari, couldn’t find a substitute teacher to cover her classroom for the afternoon. So this final goodbye was just between my Buddy and me.

When you live with a golden retriever, it is a fundamental truth that you’ll always have a little dog hair on you. Yet today both my pullover and pants were completely covered with Buddy’s hair. Before arriving at the veterinarian’s office, I had spent the entire afternoon lying next to him on our kitchen floor, running my hand over his head and body in an effort to bring him comfort. Every few minutes Buddy would raise his head and turn to look at me, silently asking that I rub his chin and neck.  Then his strength would leave him, and he’d turn away, lowering his head back to the kitchen floor.

It was only 10 days prior that we had received the news that Buddy’s cancer was terminal. At 11 years of age, Buddy was already old for a golden retriever, but he was always a puppy to me. He had been prescribed some medication that we hoped might give us a few months, but the initial burst of optimism quickly faded as his lymph nodes continued to swell until they felt like hard-boiled eggs.  

Buddy came into my life while traveling on business for the Door County Community Foundation. On that first Monday night away, I lay in bed talking with Cari on the phone. She shared with me her desire to get a puppy – a desire I most assuredly did not share. We have six children, and the last thing I wanted to add to our crowded house was a dog. On Tuesday night we spoke, and she had found a breeder in Milwaukee with a litter that was almost ready to go to their new homes.  Once again, I expressed my distaste for the idea. Throughout Wednesday I received text messages from Cari with pictures of this puppy. 

On Thursday I asked about this new obsession. Cari confided in me that her sisters were finally beginning to have children of their own and she was feeling the longing for another baby. Suddenly, adding a puppy to our home seemed like a really good idea to me.  

The irony is that although Cari did far more to care for Buddy, for some reason he decided that I was his human. Every morning when I came down the steps, Buddy excitedly waited there to greet me. He could identify the engine sound of my car, so when I pulled in the garage, he barked enthusiastically at the prospect of seeing me. I know that my wife loves me and that my children appreciate me, but there was simply no one in the world who was as consistently happy to be with me as my Buddy.

It’s amazing how something you didn’t seek out, or even want in your life, can become so overwhelmingly loved by you. Be it a person, a pet or a place, I am always in awe of our potential to love.

If years ago I were to have written up a description of the traits I want in a friend, I’m not sure many of my current friends would meet the minimum qualifications. Yet when I go too long without seeing them, my heart begins to ache. 

I was born and raised in Hawai’i, a place that is referred to as paradise. It’s a sentiment I fully understand because I am, and always will be, a Hawai’i boy at heart. Yet the last time I sat on the sands of Waikiki, I told Cari I couldn’t wait to get home to our life in Door County. Sometimes the most unexpected things sneak into your heart and become the ones you love the most.

After saying my final goodbye, I brought Buddy home. Cari and I buried him next to our firepit, where he will always sit by my side. What a wonderful gift it is to be able to love.

This column, written by President and CEO of the Door County Community Foundation Bret Bicoy, originally appeared in the Peninsula Pulse.

It’s Not About the Tax Deduction

During a recent drive to visit one of our children, my wife and I found ourselves scanning the radio to find something interesting to pass the time. Although I’m not normally a fan of talk radio, we stumbled upon a program that piqued my interest. The host and his guest were discussing the state of charitable giving in their community. 

Unfortunately, it didn’t take too long before a caller began an uninformed diatribe that has long frustrated philanthropic professionals like me. The caller was insisting that wealthy families give to charity only because they want the tax deduction. The caller seemed to believe that a charitable tax deduction is some sort of secret loophole that allows wealthy donors to avoid paying taxes and to actually generate a profit from their gift. Unfortunately, this is not the first time I’ve heard this specious argument.

I’ve worked in the world of philanthropy for three decades now. In all that time, I have yet to find a tax deduction, charitable trust or other secret formula through which a donor wouldn’t be better off financially if they just kept the money rather than giving it away. 

The most you can hope to accomplish with charitable deductions and other tax-planning tools is to lower the cost of the gift. For example, a high-income donor who gives $100,000 to charity might avoid paying $35,000 in taxes. Yet at the end of the day, even after subtracting the tax savings from the money given away, the donor has still experienced a net financial loss of $65,000. If the donor truly wanted to maximize the amount of money she or he has, the easiest and most obvious solution is to not give the money away in the first place.

There’s a simple truth that every charitable professional knows: When it comes to major giving, it’s not about the tax deduction. It never is.

BNY Mellon Wealth Management recently released its inaugural Charitable Giving Study after interviewing individuals whose wealth ranged from $5 million to more than $25 million. The most commonly cited motivators that drove charitable giving among these exceptionally wealthy families were:

1. Personal satisfaction: I feel good about sharing my wealth; giving makes me happy.

2. Special cause: I have a personal or emotional connection to a cause or organization.

3. Impact: I want to see how my giving supports sustainable change for causes that matter to me.

4. Give back: I see it as my duty to give back because I feel that I’ve “made it.”

Tax planning is near the bottom of the list of the top-10 motivations for the giving habits of these high-net-worth individuals. 

The findings of this report aren’t unique. Time and again, across numerous studies over the years, the research on charitable giving concludes that the tax benefits of a gift are not a primary motivation behind major contributions. These enormous charitable gifts are realized only after a donor has made a visceral connection with an organization or the cause it serves. The fundamental driving force behind major gifts is that they make the donor feel good.

As most nonprofit professionals will tell you, only after donors decide to make a major contribution will tax planning become a significant consideration. First they have to decide that they want to make the gift. It’s at that point that the issue becomes how to make it.

The study also found that 91% of these high-net-worth individuals incorporate a charitable-giving strategy as a part of their overall wealth strategy. That typically involves the counsel of an investment adviser, attorney or accountant when structuring their charitable giving.

Frankly, that’s a good thing for philanthropy. The guidance offered by tax and estate-planning professionals can significantly reduce a donor’s tax liability, thereby making it “cheaper” for them to give money away. The resulting tax savings often allow donors to make a larger contribution than they had initially envisioned.

Sadly, so many of us have grown disillusioned by the world that we now ascribe ulterior motives to even the most noble of deeds. We see people of great wealth giving away enormous amounts of money and assume that these wonderfully generous acts must somehow benefit them more than it benefits the community. That’s never true in a financial sense.

I suppose these major donors do enjoy the personal satisfaction that comes from knowing that their wealth is making a difference in the world. But there’s absolutely nothing wrong with that.

This article, written by Door County Community Foundation President and CEO, Bret Bicoy, originally appeared in the Peninsula Pulse.

Making $12 Billion Worth More Than $12 Billion

Even if you don’t follow the trends in the philanthropic world as obsessively as I do, there’s a good chance you’ve heard about MacKenzie Scott, who has been giving to charity from her Amazon.com wealth at a record pace.

Three years ago, she signed the Giving Pledge and became part of a society of billionaires – brought together by Warren Buffett and Bill Gates – who have promised to dedicate the majority of their wealth to charitable causes. Although most of these pledges will be honored as part of an estate plan, Scott is not waiting until she dies to give her money away.

Since she signed the Giving Pledge, she has donated at least $12 billion to charity. As a basis for comparison, last year her donations exceeded the total grants awarded by the Gates Foundation – the largest philanthropic institution in the United States.

By any measure, $12 billion is an enormous number, yet the manner in which Scott gives her money away arguably makes that $12 billion worth even more to the charities that receive it.

When publicly announcing her first round of grants in July 2020, Scott wrote, “I gave each [charity] a contribution and encouraged them to spend it on whatever they believe best serves their efforts. Unless organization leadership requested otherwise, all commitments were paid up front and left unrestricted to provide them with maximum flexibility.”

Without question, an unrestricted gift is by far the most valuable gift a charity can receive. Every organization appreciates a contribution designated for renovating its building, buying a new piece of equipment or supporting a specific program, but there is no more precious charitable resource than a dollar that a top-quality management team can deploy to whatever aspect of its organization’s work it concludes will make the most impact at that time.

This kind of giving requires a remarkable level of humility on the part of the donor. Unlike the way it’s done with many grant programs, Scott and her team identify organizations they deem to be impactful, then choose to respect that these charities are led by people who are the real experts at what they do.

As she noted in that July 2020 announcement, “All of these leaders and organizations have a track record of effective management and significant impact in their fields.”

Rather than dictate to these leaders what they should do and how they should do it, Scott recognizes that successful nonprofit professionals are just that: the professionals who are best qualified to lead a nonprofit organization to success. When donors make an unrestricted gift to a charity with a documented history of impact, they are not only empowering quality leaders, but they are also following a path that’s most likely to realize their philanthropic goals as donors.

I have worked for community foundations for 25 years, so established deadlines, application processes and restricted grants have long been a part of my professional life. Formal grant processes do play an important role in philanthropy because they offer a way for newer charities to make their case and allow for untested, but innovative ideas to connect with funding.

Yet the most impactful projects of which I have been a part were rooted in humility – in recognizing that I will never know as much as the nonprofit leaders who have dedicated their lives to their cause. Donors and those of us at foundations make our greatest impact when we bring together a coalition of charitable professionals and respect that they, collectively, are far more likely to find solutions than we are.

In another announcement in December 2021, Scott wrote that she “trust[s] the track records of impact and on-the-ground insights of hundreds of carefully selected teams working from within communities, offering them all the money up front and then stepping out of their way, encouraging them to spend it however they choose. I understand that this approach, and probably any approach, will mean having given to organizations that might make choices I wouldn’t make myself, but that’s the point. I believe the gifts will do more good if others are free from my ideas about what they should do. And this trust … is the aspect of gifts that many have said they value most.”

The respect that MacKenzie Scott gives to nonprofit professionals and the humility with which she approaches her philanthropy will result in a far greater impact than if she tried to dictate to those organizations that benefit from her generosity.

This article, written by Door County Community Foundation President and CEO, Bret Bicoy, originally appeared in the Peninsula Pulse.

What Door County Can Teach the Country

The late Howard Baker Jr. was a giant of Republican politics. He served for nearly 20 years as a U.S. senator from Tennessee, achieving the role of Senate Majority Leader and ultimately serving as the right hand of President Ronald Reagan as White House Chief of Staff. In Baker’s obituary in 2014, the Washington Post described him as playing a “central role across two decades of Republican politics.” 

As certain as Baker was of the righteousness of his conservative ideals, he humbly rooted himself in the words of his father: “You should always go through life working on the assumption that the other guy might be right.”

In their book, How Democracies Die, political scientists Steve Levitsky and Daniel Ziblatt write, “When societies divide into partisan camps with profoundly different worldviews, and when those differences are viewed as existential and irreconcilable, political rivalry can devolve into partisan hatred. Parties come to view each other not as legitimate rivals, but as dangerous enemies. Losing ceases to be an accepted part of the political process and instead becomes a catastrophe.” 

Our ability as Americans to work together for the betterment of all our citizens, even those with whom we disagree, is in jeopardy. 

Last month I wrote a column, “The Problematic Shift from the We to the I,” highlighting research showing that our country has been losing a central tenet of what made this nation great. Namely, that our founders’ first commitment as citizens was not to a king, a church or a politician, but to each other. In his book The Upswing, Robert Putnam discusses Alexis de Tocqueville’s observations from 1831 about what made America unique among the nations of the world at that time.

“[Tocqueville] noted a fierce commitment to personal liberty among the descendants of rugged pioneers who had fought so hard for it. But he also observed the coming together of people for mutual purposes, in both the public and private spheres, and found that a multiplicity of associations formed a kind of check on unbridled individualism.” 

Putnam notes that “[American] citizens were profoundly protective of their independence, but through associating widely and deeply, they were able to overcome selfish desires, engage in collective problem solving and work together to build a vibrant and – by comparison to Europe at that time – surprisingly egalitarian society by pursuing what [Tocqueville] called ‘self-interest, rightly understood.’”

The ability for ordinary citizens to so effectively exercise their personal liberty in the context of a common good was, at the time, a uniquely American trait. Arguably, it was the essential piece of what many would eventually refer to as “American Exceptionalism.” Our challenge, as Putnam explains it, is that over the last half century, we have shifted from “the we to the I,” in which our shared commitment to each other has been eclipsed by a growing focus on our own self-interest.

Neither a government program nor a charismatic political leader will reverse this trend, yet Putnam’s book is titled The Upswing precisely because he believes the lessons of our past provide hope for our future. Our pathway to national rejuvenation begins with individual people, exercising their personal liberty to associate with others in service of a common future. American Exceptionalism was made possible because ordinary people didn’t obsess about how they disagreed. Instead, they focused on what they had in common, then worked together to make those things better.

So many politicians and pundits focus on how we differ that we’ve forgotten the values that almost all Americans share. We love our families. We want what’s best for our children, our neighbors and our community. In our little county, virtually all of us have one more critically important thing in common: We love living in Door County. 

There are seeds sprouting all around the peninsula. Think of how the citizens of Door County responded to the COVID-19 crisis. The Door County Emergency Response Fund received more contributions, on a per capita basis, than any other community in Wisconsin. That’s evidence of the passionate commitment that both year-round and seasonal residents have to the place they love. Yet ultimately, the fund is just a fundraising tool. Consider how many of us during the past two years volunteered shoulder to shoulder to help our fellow residents.

For years, Door County has had eight food pantries, seven of which were faith-based organizations, each rooted in a separate denomination whose differences compelled it to operate independently of the others. Yet during the past two years, the volunteers of these pantries from Washington Island to Southern Door have united to form the Door County Food Pantry Coalition (feeddoorcounty.org). Today they coordinate their efforts, buy food in bulk, share a storage facility and truck resources among pantries as needs warrant.

Then there are the response efforts of the Door County Fire Chiefs Coalition. Since the start of COVID-19, perhaps a thousand people have stepped forward to help. At the start of the pandemic, enormous numbers of volunteers distributed 900 prepared meals every day to people out of work. Even more folks pulled together to distribute 1,000 food boxes at a time on so many occasions during the first 18 months of the pandemic. 

Although not directly related to COVID-19, during the past two years, a coalition of Door County businesspeople, nonprofit professionals, housing developers and ordinary citizens have been volunteering their time to explore strategies to build more affordable housing. Later this year, that group will announce the details of its plans for a new nonprofit corporation that will foster the construction of hundreds of affordable rental units in Door County. 

Working side by side with each other isn’t unprecedented around our peninsula, but during the past two years, our issues and experiences have become universal. Therein is perhaps our greatest opportunity in a generation: We’ve once again come together in service of each other. Now we must keep the work going.

It’s naïve to think that the whole nation will change because of what we’re doing in Door County. Yet during the pandemic, similar collective efforts were occurring in communities across our nation. Regular citizens, working together, have unknowingly begun reaffirming the American commitment not to a king, a church or a politician, but to each other. 

Tocqueville didn’t see American greatness in national efforts, but in community-level action that collectively moves the nation. Few of us will ever be able to change the world, yet almost any of us can change Door County when we work together. So join with your neighbor to do something. Get involved. Help make Door County better. That is how we rebuild our nation.

This article, written by Community Foundation President and CEO Bret Bicoy, originally appeared in the Peninsula Pulse.

The Problematic Shift from ‘We’ to ‘I’

I read something truly fascinating the other day that is indicative of a troubling trend in our nation: During the past 50 years, in all the books published in the United States, the frequency of the word “I” has doubled.

This fact comes from Robert Putnam’s book, The Upswing: How America Came Together a Century Ago and How We Can Do It Again. Putnam is a Harvard professor best known for his groundbreaking research into our country’s loss of social capital. He summarized his original findings 25 years ago in the landmark book Bowling Alone

The title comes from Putnam’s observation that more Americans were bowling than ever before, yet rather than joining with friends and neighbors in bowling leagues, most were, instead, bowling alone. His research documented the slow erosion of interpersonal connections that have bound Americans together for generations.

The predilection of Americans to join with one another in service of a common purpose has been the essential ingredient in our country’s success. Consider the document that gave birth to our nation, the Declaration of Independence. It begins with our country’s founding principle: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” Yet to realize these rights, our founders set forth an equally important and, at the time, uniquely American principle: that our success as a country requires us to commit to our fellow citizens. 

Our founders explicitly rejected the idea that a monarchy, church or aristocracy should command our loyalty. They were imagining a new kind of nation in which our first loyalty was to each other, so they explicitly bound themselves to one another. Recall the last sentence of our most hallowed national document: “And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.”

During the 25 years since Bowling Alone, Putnam has documented that the decline of our shared commitment has only accelerated. In The Upswing, he identifies common trends across economics, politics, society and culture. He defines a “meta-trend, a phenomenon we have come to call the ‘I-we-I’ curve: a gradual climb into greater interdependence and cooperation [which peaked about 50 years ago], followed by a steep descent into greater independence and egoism [today].” 

This waning of one of the founding principles that is essential to American greatness – our willingness to mutually pledge to each other our lives, our fortunes and our sacred honor – is undermining the very thing that makes our liberty possible.

Two centuries ago, Alexis de Tocqueville, a young French political scientist, visited the United States to study our new form of government. His book Democracy in America remains an iconic summary of American society and political life.

“Americans of all ages, all conditions and all dispositions constantly form associations,” wrote Tocqueville. “If it be proposed to inculcate some truth, or to foster some feeling, by the encouragement of a great example, they form a society.”

This was a completely foreign concept to Europeans such as Tocqueville. In his experience, ordinary people did not voluntarily band together around causes of their own choosing. 

“I met with several kinds of associations in America of which I confess I had no previous notion; and I have often admired the extreme skill with which the inhabitants of the United States succeed in proposing a common object to the exertions of a great many men, and in inducing them voluntarily to pursue it.”

Tocqueville was surprised that these associations of ordinary people weren’t organized or led by those of high office or great public stature. Instead, they were gatherings of regular citizens. This simply was not how things were done in the “great” nations of his time.

“Wherever, at the head of some new undertaking, you see the government in France, or a man of rank in England, in the United States you will be sure to find an association,” wrote Tocqueville. “Thus, the most democratic country on the face of the earth is that in which men have, in our time, carried to the highest perfection the art of pursuing in common the object of their common desires, and have applied this science to the greatest number of purposes.”

This ability to come together in common purpose, to commit to one another as a united people, has long formed the central tenet of American exceptionalism. Yet as we increasingly turn away from the “we” to focus on the “I,” it has become politically advantageous for demagogues to demonize those who are different or who have opinions that differ from their own. Rather than enter civic life rooted in a shared identity as Americans, we are increasingly segregating ourselves by our differences and thereby losing our willingness to commit our lives, our fortunes and our sacred honor to each other in service of the whole. The implications of this shift are profound and enormously troubling.

“As Tocqueville rightly noted, in order for the American experiment to succeed, personal liberty must be fiercely protected, but also carefully balanced with a commitment to the common good,” writes Putnam. “Individuals’ freedom to pursue their own interests holds great promise, but relentlessly exercising that freedom at the expense of others has the power to unravel the very foundations of the society that guarantees it.” 

Thankfully, the lessons of our past form a road map for our national rejuvenation. Putnam notes that between 1870 and 1920, Americans founded more civic organizations at a greater rate than at any other point in history. This explosion of shared civic action formed the foundation of a renewed national commitment to serving a common – and more inclusive – good.

Consider the collective national accomplishments that were to follow: victory over Nazi tyranny, women’s suffrage, overcoming the Depression, rural electrification, civil rights, the national highway system and so many other blessings that we all enjoy today. The seeds of these shared national successes were planted in ground made fertile by earlier local collective efforts in communities across the nation. 

Today, hope can be found in the rebirth of local organizations and charitable groups whose work reminds us that the “we” must be central to our identity if our communities and our nation are to thrive. 

In my next column, I’ll write about some of the efforts underway on our peninsula to help the people of Door County bind themselves to one another in service of a better future for us all.

This article was written by Community Foundation President and CEO Bret Bicoy and originally appeared in the Peninsula Pulse.

Insights on Giving in Affluent Households

For nearly a decade, the Bank of America Study of Philanthropy: Charitable Giving by Affluent Households has been conducted in partnership with Indiana University’s Lilly Family School of Philanthropy. It is the most comprehensive, longitudinal study of the giving habits of America’s wealthy families. The study’s 2021 version was recently released and offered insights and lessons for our charitable community.

Let’s begin with a definition. For purposes of this study, “affluent households” are those with a net worth of at least $1 million (excluding the value of their primary home) and/or having an annual household income of at least $200,000.

Perhaps the most heartening news for folks like me who work in the world of philanthropy is that ours is by far the most trusted segment of society. That is, when members of wealthy families are asked which entities they most trust to solve society’s intractable problems, nonprofit organizations are at the top of the list. 

America’s charitable sector is trusted 24% more than small businesses, 42% more than churches, 44% more than the president, 56% more than large corporations and 67% more than Congress. About seven out of every eight people in affluent households express some reasonable level of confidence in the nation’s charities and philanthropic organizations. Not surprisingly then, especially considering their wealth, affluent households donated 17.5 times more money to charities than donors in the general population. 

What is surprising is the enormous disparity in the rate of giving, even if you exclude consideration of the size of the donation. Of affluent households, 88.1% make a gift to charity every year while only 48.8% of the general population does. In other words, affluent households are 80% more likely to donate to charity in any dollar amount. 

Further, the gap in the giving rate between wealthy families and the country as a whole grows even larger if you exclude churches from the statistics. Affluent households are more than twice as likely to give to a nonchurch charity compared to the population as a whole.

Interestingly, younger and older generations of affluent Americans are increasingly approaching giving from a different perspective. Younger people are significantly more likely to say that concern about a specific societal issue is the fundamental motivation behind their giving decisions, regardless of the charity that ultimately receives the gift.  Conversely, older Americans are far more likely to say that faith and confidence in a particular organization are why they donate, rather than to confront a single issue facing society.

The study also found that affluent families are becoming far more savvy about the enormous tax advantages of using giving vehicles to facilitate their charitable donations. Since 2017, nearly 50% more of America’s wealthy families have begun using a Donor Advised Fund as a means to simplify and centralize their giving. Similarly, during that same time period, 42% more wealthy families have added a charity as a beneficiary of their estate plans.

One of the more recent trends among affluent households is the use of impact investing to achieve philanthropic goals. Impact investing involves making financial investments in for-profit companies with the intention of generating positive, measurable social and environmental impact alongside a reasonable financial return. 

About one out of every seven wealthy families explicitly uses an impact-investing strategy to achieve both its financial and philanthropic goals. Although this still remains a relatively modest portion of affluent households, the trend is clearly pointing up. Since 2017, nearly twice as many wealthy Americans have begun participating in impact investing.  

Finally, only 11.9% of affluent households did not give anything to charity last year. The most common explanation, offered by 30.9% of wealthy Americans, is that a family need took priority. Obviously, if a family has a specific financial challenge that constrains its giving, there’s nothing a charity can do about that. 

However, consider the next three most common reasons: “No connection to an organization” (21.9%), “Do not want to give to charity” (20.8%), and “Was not asked to give” (19.8%). Each of these reasons why wealthy families didn’t donate is the fault of those of us who work in the charitable sector. No connection? We failed to engage. Do not want to give? We failed to inspire. Never asked? We failed to respectfully ask.  

This longitudinal study provides invaluable insights on the giving patterns of affluent families, but ultimately it is incumbent on those of us who work and volunteer for charities to engage, inspire and ask people to give back to the Door County community we all love.

This article, written by Bret Bicoy, President and CEO of the Door County Community Foundation, originally appeared in the Peninsula Pulse.

Take Advantage of These Expiring Charitable Deductions

In my last column, I wrote about the enormous tax advantages of placing highly appreciated stock in a donor-advised fund at your local community foundation, particularly when “bunching” several years of tax deductions into a single year. In the column titled “Maximizing Your Charitable Deduction,” I noted that this has long been a highly effective way to avoid capital-gains taxes and reduce income taxes, thereby maximizing your ability to give back to the community. 

Thankfully, this giving strategy will be around for the foreseeable future, but there are several short-term changes to charitable tax law that are expiring Dec. 31. You’ll need to act fast to take advantage of them.

Let me begin with one caveat. I am neither an attorney nor an accountant, which is something I lament every time my children’s college tuition bills come due. Please check with your own personal wealth adviser to understand how these general strategies will affect your specific tax situation.

When Congress passed the Taxpayer Certainty and Disaster Tax Relief Act in 2020, it temporarily extended several changes in tax law that were originally enacted during the early days of the pandemic through the Coronavirus Aid, Relief and Economic Security (CARES) Act. The IRS recently issued guidance (IR-2021-190) reminding taxpayers that they have until Dec. 31, 2021, to take advantage of these giving strategies.  

Charitable Deduction in 2021 for Non-Itemizers

Contributions that you make to charity are normally reported to the IRS on your 1040 Schedule A, the form used to itemize deductions. The standard deduction for the average taxpayer is $12,550 for individuals and $25,100 for married couples. The overwhelming majority of folks don’t have nearly enough deductions to exceed these levels, so nearly nine out of every 10 taxpayers claim the standard deduction instead. In practical terms, this means that during a typical year, almost 90% of us receive absolutely no tax benefit at all for the charitable gifts we so generously make.  

However, through the end of 2021, there is a special deduction available for individuals who do not itemize their taxes. 

“Ordinarily, individuals who elect to take the standard deduction cannot claim a deduction for their charitable contributions,” according to the IRS. “The law now permits these individuals to claim a limited deduction on their 2021 federal income-tax returns for cash contributions.” 

Through the end of this year, individuals can claim a deduction of up to $300 for most cash contributions they make to charity, and married couples filing jointly can claim a maximum deduction of $600 without having to file a Schedule A to itemize their deductions.

Temporary 100% Limit on Contributions for Itemizers

For the 10% of folks who itemize their deductions during a typical year regardless, Congress has offered a temporary benefit as well. 

The charitable gifts that itemizers can deduct on their taxes is normally capped as a percentage of their adjusted gross income. The specific limit can range from 20% to 60%, depending on the type of asset and the kind of charity receiving the gift. Regardless, the IRS says that the “law now permits electing individuals to apply an increased limit, up to 100% of their adjusted gross income, for qualified contributions made during calendar year 2021.”  

Although cash contributions to most charitable organizations qualify for the temporary 100% limit, the IRS says it does not apply to donations to private foundations, supporting organizations, donor-advised funds and most charitable remainder trusts.

Corporate Limit Temporarily Raised to 25%

During a normal year, the maximum allowable deduction that a corporation can claim for gifts to charity is capped at 10% of the company’s taxable income. Congress has temporarily raised that limit to 25% of corporate taxable income for charitable contributions made in 2021. 

The IRS reminds us that companies should be aware that the increased corporate limit applies to C corporations and that the tax filer must elect the increased limit on a contribution-by-contribution basis.

Increased 2021 Business Limits on Donated Food

Businesses that donate food inventory for the “care of the ill, needy and infants” may also qualify for increased limits on those in-kind contributions. The IRS announced that for “[qualified food inventory] contributions made in 2021, the limit for these contribution deductions is increased from 15% to 25% [of the business’s taxable income].” 

The increased limit of 25% specifically applies to C corporations. The IRS says that sole proprietorships, partnerships and S corporations will generally qualify for a higher limit, but the amount will vary based on other factors.

This article which was written by Bret Bicoy, President and CEO of the Door County Community Foundation, originally appeared in the Peninsula Pulse.