Lessons for Non-Profits from 50,000 Wills

People’s reluctance to talk openly about their charitable giving has always frustrated me.  Most folks will excitedly share stories about their beautiful new sailboat or the vacation they took to some exotic far away land.  Yet when it comes to the charities we support, we tend to be far more hesitant to share.

I’ve always found this sadly ironic.  We think nothing of exulting the ways we spend money on ourselves, but we consider it unseemly to talk about us at our most noble – when we’re giving away our money to help others.  Our world will be far better off when we talk as publicly about our leadership gift to the United Way as when we tell stories about our vacation exploring the south of France.

Beyond the establishment of societal norms, there is another more modest implication of most people’s unwillingness to talk publicly about their giving.  The field of philanthropy doesn’t have very good data.  That can be problematic because its hard to design a fundraising program if you don’t know a lot about what your donors are doing.  This lack of data is by far most problematic in the realm of estate gifts.

Most of what we know about estate planning comes from self-reported surveys and anecdotal experiences from people who work in planned giving.  Yet an increasing number of people are turning to the internet and online companies to craft a will.  As a result, for the perhaps the first time ever, we can examine trends in more than 50,000 wills created using the online will company FreeWill.

Before we look at the data, let me begin by saying that writing your will online may not be the best idea for you.  Your last will and testament is your final statement to the world and it will only be read when you’re gone.  Hence, you won’t be around to correct any errors or omissions.  Further, complex estates typically involve a trust.  Visiting with an estate planning professional to seek tax and legal guidance customized for your unique situation is a good idea for most folks.  However, regardless of the efficacy of online wills, there is value in reviewing the data.  Here are a few key takeaways from the study.

The average gift to charity through a will created online was $78,630.  That’s amazing especially when you consider that few wealthy families use an online will service.  The company that released the data refers to their clients as “everyday” people.  Yet the average charitable bequest of these average Americans is $78,630.  Because estate gifts typically come from assets, they are far larger than most of us can afford to give during our lifetime.  The lesson for charities is that estate planning efforts should not be limited to our most wealthy friends.  Middle class families can also make a significant contribution through their estate plans.

People without children give nearly twice as much money to charity in their estate plans as compared to parents.  This seems like a pretty obvious statement, but it’s good to have the data to back it up.  If you don’t have any children to include in your will, you have more money available to give to charity.  Interestingly, while parents have less to give, they are slightly more likely than non-parents to give to charity in their will.

Men comprise a minority of people writing online wills, but they bequests they leave to charity are almost 50% higher than those written by women.  The traditional thinking is that when it comes to planned gifts, efforts should focus on women for practical of reasons.  In most married couples, the woman is the younger of the two and they tend to live longer.  Yet this data indicates that the traditional thinking might lead charities to miss opportunities by not focusing enough on men.

People aged 44-64 are the ones most likely to include a gift to charity in their will.  This runs counter to many planned giving programs which tend to focus on retired people age 65 and above.  The data implies that many charities are missing an opportunity to begin an estate planning conversation at a much younger age than typically occurs today.

Of course, the key takeaway for any charity is that if you don’t already have a planned giving program in place you should start one soon.  It takes years for estate planning programs to reap rewards, but the gifts received can be large enough to transform a charity for the better.

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

Life Without Me at the Community Foundation

About 10 years ago, Dick Egan – my friend and, at the time, board chair of the Door County Community Foundation – shared a perspective that completely turned my thinking on its head. He fundamentally reshaped how I view the responsibility of a charity’s board of directors relative to its CEO.

I am the president and CEO of the Door County Community Foundation. At other charities, the highest-paid professional staff person is the executive director. Although there are some important differences between a president and CEO and an executive director, for purposes of this article, let’s just refer to a nonprofit’s highest-ranking paid staff person as its CEO.

Almost all CEOs who have spent a lifetime in the charitable sector share at least one common perspective: We see board members come and go every year. Even the best board member serves only a handful of terms of a couple of years each. Thus we, as CEOs, consider ourselves to be the providers of stability and continuity in our respective organizations. Indeed, there is a lot of truth in that idea, yet Egan had a different point of view. He said, “The board is here forever. The CEO is not.”

He wasn’t disagreeing with my perspective. Now in my 13th year at the Community Foundation, I have provided stability and continuity as members of our board have come and gone. Yet he was reminding me that the board of the Door County Community Foundation as a whole was here before me and will continue to exist long after I’m gone.

For those charitable CEOs who consider our profession a calling, the line between what is personal and professional often gets blurred. If you’re blessed with a job that is closely aligned with your skills and values, eventually it’s no longer possible to achieve any personal success in your career without commensurate organizational success. Your very identity becomes intertwined with your work. At its best, this kind of leader allows a charity to enjoy a lengthy period of impactfulness and prosperity that far exceeds anything that would have been achieved by a more dispassionate executive.

However, there is one great limitation among CEOs who have this kind of personal commitment. Eventually it becomes hard for those who view their life’s work as a vocation to imagine anyone else at the helm.

That’s why it’s so important to recognize that the board will be there forever, but the CEO will not. The board of every charity needs to look beyond the term of even the most talented and committed CEO to ensure that thought has been given to life without that leader.

There are lots of highly effective nonprofit CEOs in Door County who, I hope, will remain in their current positions for many years to come. Yet inevitably, change will come, and hopefully those transitions will be planned and executed in an orderly fashion. But unfortunately, sometimes life just happens, and fate ignores the plans we’ve made. If a charity plays an important role in Door County, then we need to ensure that it can thrive even after the most inspiring CEO has moved on.

This is a conversation we’ve been having at the Door County Community Foundation for several years now. Although I wouldn’t presume to include myself on a list of the most talented nonprofit CEOs, I do believe that during the last dozen years, I have developed and demonstrated a personal commitment that goes far beyond that of a hired gun. That’s a good thing, and it’s something we should hope every important charity in our community experiences.

Yet we never know what surprises life has waiting for us just around the corner. Thus the Community Foundation’s board has rightfully pushed me to prepare our organization for a future without me at the helm. That has led to reimagining our structure, shifting responsibilities, documenting processes and planning to create new positions. Our goal is to build an even more vibrant and impactful Community Foundation that we are certain will thrive forevermore.

The board of every important charity needs to do the same thing: Look beyond the term of your current CEO to ensure that you’re prepared for the transition that inevitably will come.

Personally, I plan to do what I do at the Door County Community Foundation until I’m not physically or mentally able to do it anymore because I simply cannot imagine having a good life without this work. But there will be a day when the Community Foundation will have a good life without me.

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

Giving to Charity Makes Us Happy

“If you want to feel good, you have to go out and do some good.”

Oprah Winfrey articulated a fundamental value that many of us share, but sentiment isn’t sufficient for scientists.

Thus researchers set out to answer a complex question: Can people enrich their own lives through charitable giving? The answer brings us to a beautiful place where hard science and the human spirit intersect.

Research demonstrates that giving does indeed make us happier. With funding from the Bill and Melinda Gates Foundation, the Women’s Philanthropy Institute at Indiana University published the study “Charitable Giving and Life Satisfaction” in 2017. The researchers stated their conclusion with wonderful simplicity: “The more a household gives as a percentage of income, the higher the household’s life satisfaction.”

Their findings are universal. Whether your income is less than $50,000 per year or several times more, the trend holds true. It doesn’t matter whether you’re married, cohabitating or single: The more you contribute to charity, the happier you are.

Of course, there are variations as to the degree of improvement in life satisfaction that each demographic group experiences with increased charitable giving. Statistically speaking, single men are traditionally the group least likely to donate all. Not surprisingly then, the study found that single men receive the greatest boost in life satisfaction when they do become donors for the first time.

With both single and married women, on the other hand, the act of giving has a cumulative effect that accelerates their life satisfaction. It’s exactly the opposite of the diminishing returns you’d expect with most things that we think make us happy. Women experience more happiness with the next dollar they give away than they did with the last dollar.

These findings are consistent with what other scientists have discovered. Studies published by the American Psychological Association as well as researchers in the United Kingdom have demonstrated many positive links between the amount of money and time a person donates to charity and their psychological well-being and physical health.

In the 2017 study “A Neural Link between Generosity and Happiness,” published in the journal Nature Communications, researchers noted that “generous behavior is costly” because obviously you’re giving away your time and/or money. Yet generosity is commonplace in our world, and thus “standard economic theory fails to explain generous behavior.”

These scientists wanted to see whether there was an observable neurological and physiological basis that explains the fundamental human desire to be generous with others. They randomly divided the study participants into two groups. The first group was instructed to spend a sum of money for other people’s benefit during a four-week period; the second was told to spend the money on themselves. At the end of the month, the participants were put into an MRI machine. In the participants who were generous with others, the researchers mapped increased neurological activity in the areas of the brain that are associated with increased levels of happiness. In other words, giving feels good.

The work of neurological scientists aligns with the conclusions of psychologists and the research of social scientists: There is neurological evidence linking a person’s willingness to give to others and their own life satisfaction.

This is something I experience virtually every week in my professional life. One of the primary roles of the Door County Community Foundation is to facilitate gifts from estate plans to charities and causes in the community. In my field, the old saying is that “you don’t give to the community foundation; you give through the community foundation.”

Thus far in my career, I’ve had the privilege of assisting hundreds of families whose estate plans have – or one day will – collectively donate almost a quarter of a billion dollars to charity. I’ve sat with an older woman on a fixed income who is leaving $10,000 to help our local kids as well as a wealthy couple whose estate will eventually contribute more than $30 million to fund a wide range of charitable activities.

Regardless of how much money is involved, all these people have one thing in common: They universally experience a tremendous amount of personal satisfaction because of the charitable legacy they’re creating.

Almost inevitably, when we finish planning for the charitable part of an estate plan, these generous people thank me for the Community Foundation’s assistance. Just stop to think about that for a moment: They are thanking me. The scientists finally can explain why: Giving to charity makes us happy.

 

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

Revisiting Predictions about Charitable Giving

Political prognosticators love to make extreme claims on how a new policy will affect the future, then conveniently forget their predictions when the doom they imagined never arrives. In an effort to avoid being lumped in with those gasbags, I thought it would be intellectually honest to revisit a prediction I made one year ago.

In September 2018, I wrote the column “The Impending Decline in Charitable Giving” , in which I voiced a concern of many experts that the Tax Cuts and Jobs Act of 2018 would decrease the amount Americans donate to charities every year. The annual Giving USA report was recently published, so we now have a full year’s worth of hard data to review.

As a refresher, the anticipated decline in charitable giving was rooted in the fact that changing the standard deduction (from $12,700 to $24,000 for married couples) would dramatically reduce the number of households that itemize deductions.

This prediction by tax experts on both sides of the political aisle has come true. In 2016, more than 46 million households itemized their deductions. In 2018, only about 18 million did.

Taxpayers can claim a tax deduction for charitable gifts only if they itemize their deductions. Hence, the new tax law eliminated the deduction for contributions made by 28 million households. Although most of us give for altruistic reasons, financial incentives still matter. By removing the financial incentive to donate, experts predicted that charitable giving would decline.

We can definitively say that the prediction has become reality. Giving USA found that donations from individuals fell by an inflation-adjusted 3.4 percent last year. Unfortunately, that’s not the only troubling indicator.

Total giving consists of donations from individuals, foundations, corporations and bequests. Individual giving tumbled to just 68 percent of total giving, the first time it’s fallen below 70 percent since 1954.

My personal belief is that giving will decline in 2019 as well. Most people don’t follow tax-law changes closely and didn’t realize their donations were no longer deductible until April’s tax deadline. For those families, the loss of the financial incentive to give will have its greatest effect in 2019.

Please note that I’m not commenting on the wisdom of the new tax law – that’s above my pay grade. An argument can be made that putting more money into taxpayers’ pockets is better for our nation. I certainly hope that proves to be true. However, the inescapable reality is that charitable giving is falling, and it is in my job description to figure out how Door County can adapt to the laws of the land.

That’s where a tool long offered by community foundations is more important than ever. At community foundations across the country, we are combining a tool called a Donor Advised Fund with the tax strategy of “bunching.” In effect, this “restores” the deductibility of charitable gifts for many families.

Consider a real example of a couple at the Door County Community Foundation. Bob and Sally Johnson (not their real names) are retired and annually donate about $12,000 to charity. Before the new tax law, the Johnsons’ itemized deductions included their donations, Wisconsin taxes and medical expenses. With the new tax law, they found themselves claiming the standard deduction of $24,000 and thus received absolutely no tax benefit for their $12,000 in contributions.

Thus Bob and Sally recently created the Johnson Family Fund, a Donor Advised Fund at the Door County Community Foundation. They plan to “prefund” their charitable giving for the next four years by donating $50,000 into their fund before 2019 ends. As a result, the Johnsons will claim itemized deductions of about $60,000 this tax year. Then in tax years 2020, 2021 and 2022, they will claim the standard deduction of $24,000 and make no direct contributions at all. Instead, they will donate $12,000 each year to their favorite charities in Door County (and beyond) from their Donor Advised Fund.

Bunching several years’ worth of contributions through a Donor Advised Fund at your local community foundation is proving to be an exceptionally effective tax-planning tool for many families that once itemized their deductions but now claim the standard deduction. If Bob and Sally use highly appreciated stock to make their $50,000 contribution, their tax savings will be magnified even more as they avoid capital-gains taxes.

Talk with your tax-planning professional to determine whether bunching several years’ worth of charitable gifts through a Donor Advised Fund might help you maintain your level of giving. Our charities need all the help they can get.

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

Remembering the Birth of the Women’s Fund

The Women’s Fund of Door County is celebrating its 10th anniversary this year, and I thought it would be interesting to reflect on how it began.

It was February 2008 when Jane Stevenson and I were dreaming up ideas about how the Door County Community Foundation could make our community stronger. Just a few months prior, Stevenson had announced her intention to retire, and I had been hired to fill the very large shoes of this petite woman. Although our assets were extremely limited in those days, the Community Foundation’s board decided it was worth paying both of our salaries for a month so I could enjoy the benefit of her wisdom and experience before she retired.

Stevenson shared that she regretted not being able to create a women’s fund before she retired. As a parent of three daughters (and three sons as well), this was an issue near and dear to my heart. I suggested that instead of letting her talents go dormant during retirement, perhaps we could work together to get one started.

That’s how the Women’s Fund of Door County began: with the only two employees of the Community Foundation sitting in a 393-square-foot office with a beautiful, grand dream and no practical way to bring it into reality.

If you’re going to undertake an impossible task, it’s best to do so in the company of people you know and trust. BJ Cassidy had spent many years at WPS, eventually overseeing its philanthropic activities. Sue Todey had grown up in Door County but left to serve as an administrator for the Green Bay Area Public School District. During my years in Green Bay, I virtually “grew up” working under their leadership on many community projects and had great respect for them. They had both retired to Door County and become active citizens here, so Stevenson appreciated them as well.

“BJ and I had worked together in Green Bay on equity issues and brought those efforts here when we both became full-time Door County residents,” Todey said.

During the spring of 2008, the four of us gathered for the first time at Door County Coffee to begin making plans. Rather than just launch a new fund focused on women and girls at the Community Foundation, we thought it was important to first determine whether there was actually a need for this new fund.

“We gathered a lot of data to show the needs and then began recruiting others to get the message out there,” Todey said. It wasn’t long before Orlaine Gabert, Sherry Mutchler, Barb Perloff and several others joined us as we interviewed local charities and studied the issues facing women and girls in Door County.

“It was astounding to learn that many women suffered from a lack of self-respect and self-worth,” Stevenson said. “They desired and desperately needed to be financially secure.”

“It was very apparent that the communities of Door County needed to identify the skill sets young women and girls needed to be able to achieve their dreams and aspirations for a prosperous life,” Cassidy said. “Many opportunities seemed to be out of reach for girls to be able to make a sustainable future.”

After a winter filled with meetings, interviews with charities, and considerable research, the need became clear. Thus, in 2009, the Women’s Fund of Door County was formally launched as a fund of the Door County Community Foundation. Our success was far from certain, however, and many were still skeptical about whether we needed such a fund.

“The biggest challenge was to create awareness in the community that – in this beautiful and idyllic county – there were women and girls struggling and needing support and hope for a better life,” Stevenson said.

If there’s one thing I’ve learned over the years, it’s that these women are never intimidated by a challenge. Thanks to the perseverance and commitment of these leaders, plus Sally O’Brien, Sharon Lutsey, Vicki Wilson and the many others who followed them, the Women’s Fund of Door County now has an endowment in the seven figures and invests more than $100,000 every year in programs that improve the lives of women and girls in Door County.

“The Women’s Fund is the voice and hope of women in Door County,” Stevenson said. “We believe when we give women and girls the tools they need to succeed, their families and our communities will prosper.”

“Today a dream has come true,” Cassidy said. “We are making a difference.”

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

20 Years of the Door County Community Foundation

On August 16, 1999, prominent Door County residents Tom Herlache, John Herlache, Mike Felhofer and Eric Paulsen met with representatives of the Greater Green Bay Community Foundation to formally organize a board of directors and adopt the articles of incorporation to create the Door County Community Foundation. As the foundation celebrates its 20th anniversary, it seemed appropriate for me to talk with a few of the visionaries who brought this institution into existence.

“In 1999, it became obvious that Door County needed its own community foundation,” said John Herlache. “It was felt that Door County should have its own foundation to preserve and grow its own charitable dollars, eliminating outside interests in controlling those funds.”

His brother, Tom Herlache, recognized the significant role that philanthropy plays in our quality of life. Building a strong community foundation would raise the level of charitable giving to benefit all of the community’s charities.

“As you know, Door County’s character and attractiveness are dependent on a high level of philanthropy,” said Tom Herlache. “I was also aware that we wouldn’t need to start from scratch because the Greater Green Bay Foundation would help us get started.”

The Door County Community Foundation was initially organized as an affiliate of the Green Bay entity. Twenty years ago, as a young staff person for the latter organization, one of my responsibilities was to drive up to Door County regularly to help the newly formed board grow its young institution.

Frankly, it was audacious to believe that a county as small as Door could sustain a community foundation of its own because the vast majority of Wisconsin’s counties are served by a larger, multi-county foundation in a big city. Yet ignoring conventional wisdom and making bold, strategic decisions would become a hallmark of this board.

Just a few years after the Door County Community Foundation was launched, the board decided it needed someone to focus exclusively on the county, so it climbed out on a financial limb to hire its first paid staff person.

“Bringing in Jane Stevenson as our executive director was a very big step for us,” said Mike Felhofer. “She was part-time, but we needed her because she kept us organized and focused.”

Then, in 2007, with only about $4 million in total assets, the board made the courageous decision that Door County would be better served long-term if the foundation became fully independent of its friends in Green Bay. Around the same time, Stevenson announced her intention to retire, which presented an enormous challenge for the board. Yet in typical fashion, board members embraced it as an opportunity to chart a bold, new course forward.

“Our next big step was in hiring Bret Bicoy as our president and CEO,” said Felhofer. “As an accomplished professional in this area, it would be a stretch for us, but we knew we could grow into his capability.”

In 2008, I came to work for the Door County Community Foundation full time and quickly learned that thoughtful, visionary thinking was the norm for this board of directors.

In the years since, the Door County Community Foundation has dramatically increased its ability to serve the community by growing its granting programs, expanding its professional staff and working hard to build collaborative solutions to address our shared concerns.

Last year, the foundation stretched itself again by purchasing a building. Thanks to renovations that were paid for completely by a few generous donors, the newly christened Community Foundation Square not only provides ample room for future growth, but it has also become a meeting place for the boards of many charities and local civic groups.

During the last 20 years, the people of Door County have entrusted the foundation with more than $37 million in contributions, $31 million of which has come in during the last decade alone. As a result, nearly $21 million has been granted out to charities in our community. The remaining dollars have been invested to form the corpus of endowment funds that will forever generate revenue for charitable work in Door County.

Under the board’s wise financial stewardship, the foundation’s total assets have increased to nearly $24 million today. This remarkable growth in a county of our size far exceeded the dreams of the people who founded the organization 20 years ago.

“Even $10 million in 20 years would have seemed like a stretch,” said Felhofer. “I don’t think I fully envisioned what our potential was or what we were able to achieve in such a short time.”

Tom Herlache said of the Door County Community Foundation today, “It is larger monetarily, and it is a bigger presence encouraging philanthropy and helping other nonprofits than I envisioned.”

John Herlache noted that ultimately, though, the foundation is just a tool. Money is merely a means to an end.

“The significant community leadership emanating from the Community Foundation has far surpassed the initial concept that most of us had. Convening the public and local agencies and effectively applying resources … to create positive change in the community has been probably the greatest unanticipated accomplishment of the Community Foundation to date.”

 

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

The Freedom to Commit

The Celebration of Giving is a free, annual community luncheon that honors the great philanthropists of Door County. As president and CEO of the Door County Community Foundation, I offer the event’s closing comments and summarize the lessons we can draw from the honorees’ lifetime of service.

The 2019 Philanthropists of the Year are Mike and Marge McCoy, who have always been passionate about philanthropy, both as volunteers and benefactors. Their civic and community service was celebrated in Iowa and Minnesota, and they continued their giving tradition when they retired to Door County. Through organizations such as Bethany Lutheran Church, the Crime Prevention Foundation, the Door County Land Trust, Northern Sky Theater, United Way and the Door County Community Foundation itself, the McCoys’ wise counsel, tireless volunteerism and abundant generosity have touched many lives in our community.

During the weeks leading up to the luncheon, I spoke with people who know the McCoys well and listened for common themes. The word people used to describe Marge and Mike more than any other was “commitment.” They don’t do anything halfway.

Whether it’s traveling long distances to spend time with family or diving headlong into a fundraising campaign for a favorite charity, the McCoys fully commit themselves to the people and things they love. And the depth and authenticity of their personal commitments inspire others to join them.

These days, when we talk about commitment, we tend to refer to it as the terms of a contract, as in, “I’m legally committed to do this.” Yet when we anchor our definition in the context of a contract, we diminish the very spirit that makes a commitment unique.

A person negotiating a contract seeks to balance the costs and benefits of a relationship: You give me this; I give you that. At its best, a contract is a fair and equitable exchange that serves both your interests and those of the other party.

But author and New York Times columnist David Brooks argues that a commitment is far more than that: It’s a promise made from love. At its best then, a commitment is an obligation willingly made to another without any expectation of compensation in return.

Rabbi Jonathan Sacks, the former spiritual head of the largest synagogue in the UK, goes even further than Brooks to say that a commitment is a covenant. A contract can benefit you, but only a commitment has the power to transform you.

When we commit ourselves to someone or something we love beyond ourselves, we discover that it’s almost as if we’re serving a part of ourselves – that carrying the mantle of responsibility for the people and places we love doesn’t weigh us down, but rather, it gives our life meaning and purpose.

Brooks says that the best life is lived by those who make voluntary commitments, then fulfill them. That is, we are our best selves when we make a promise to another and then remain faithful to that promise.

As one person who knows the McCoys well told me, “They don’t do things for recognition. They don’t even do it for self-satisfaction. They do things because they’ve made a commitment, and it needs to be done.”

In this life, we have been blessed with remarkable freedom, and its value is not that it frees us from obligation. Its blessing is that it frees us to choose for ourselves that which we will love and to fully commit ourselves to it.

There’s an old Tibetan saying that the Dalai Lama is fond of quoting: “Wherever you have friends, that’s your country, and wherever you receive love, that’s your home.” 

We who are at home here in Door County celebrate Marge and Mike McCoy not because of the boards they’ve served on or the money they’ve given away. We celebrate the McCoys because of the commitments they’ve made. Through their actions, they’ve said, “Door County is our home.” They’ve found the parts of it they love the most, and they’ve accepted the responsibility of making those parts stronger.

The best way we can celebrate Mike and Marge McCoy is to learn from and follow their fine example: Find a part of Door County that you care deeply about. Then willingly make your own commitment to make it better.

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

Nine Months That Changed Everything

As a father of six children, I have personally experienced the monumental difference that nine months can make in a life. Apparently, that applies to charities as well. During the last three fiscal quarters, the leadership of the Boys and Girls Club of Door County has made dramatic changes and is successfully addressing its financial crisis.

Quite simply, the organization had become a victim of its own success. After opening the David G. Hatch Center in 2016, it had more activity space than ever before. With good hearts and the right spirit, its leadership threw the doors wide open and invited in every child who needed its resources.

Unlike a business in which new customers translate into more profits, whenever a new group of kids walks through the door, the Boys and Girls Club loses more money. Most of its children could never afford to pay the full cost of the services they receive, yet the organization must always maintain a ratio of at least one adult for every 15 kids. More kids mean greater costs but almost no new revenue. It’s a nonprofit precisely because there is no profit to be made.

Throughout 2018, the Boys and Girls Club was running an absolutely alarming deficit. It had to borrow money to meet its current obligations and was having difficulty covering payroll. That’s when its leadership came to visit us at the Door County Community Foundation.

After a painstakingly thorough evaluation of the Boys and Girls Club’s financial crisis and proposed workout plan, we at the Community Foundation felt confident enough to encourage the people of Door County to join us in giving the organization a second chance to thrive. We sent letters to our friends, and I wrote the column “Don’t You Quit.” I’m pleased to report that not only did our community give the Boys and Girls Club that second chance, but it’s now well on its way to thriving.

Since the crisis began, the Community Foundation has been receiving regular strategic and financial reports and has met with the organization’s leadership on several occasions. Our most recent meeting was just a few days ago with CEO Julie Davis, CFO Cindy Neuville, and board member Erich Pfeifer. I’m pleased to report that things are trending in a very optimistic direction.

On the revenue side of the ledger, consultants were brought in to help implement proven strategies to acquire new donors, and a stewardship committee was formed to better engage current donors. As a result, the number of donors increased by 29 percent. Nationally, the average donor-retention rate (the percentage of last year’s donors who gave again this year) typically hovers around 45 percent. The Boys and Girls Club’s rate is 61 percent.

On the expense side, the organization has consolidated operations and found efficiencies in how it deploys staff. As a result, payroll was cut by 14 percent, and overall expenses were reduced by 17 percent compared to the fiscal year before the crisis began.

Of course, all of these changes come with a human cost. The Boys and Girls Club cannot afford to serve the same number of children that it did a year ago. Then again, the reality is that it couldn’t afford to serve all those kids last year either. The only way it was possible then was to borrow money and go into debt.

Gratefully, because of our community’s generosity over the last few months, the organization is now completely debt free.

The fundamental causes of this financial crisis were overly optimistic revenue assumptions combined with exceedingly aggressive program expansion. Although that was a strategic mistake and a long-term recipe for disaster, we should pause to celebrate the spirit behind those decisions.

Within the leaders of our Boys and Girls Club is the compelling and sometimes overwhelming desire to help every child who needs them. That’s the kind of spirit we want in those who run the organization. Yet we also need the leadership of human-service organizations to make sure that their hearts remain in balance with their heads. Although we may want to rescue everyone who’s fallen into the water, we must also ensure that we aren’t so overwhelmed that we end up sinking the boat.

The Boys and Girls Club has used our community’s recent generosity wisely. It has plans for future growth, but those plans are realistic and appropriate, and they should be implemented at a far more measured pace. Thankfully, it appears that the Boys and Girls Club of Door County will be here for our children for many years to come.

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

Charity, with a Glass of Wine

At the Door County Community Foundation, we recently learned some really interesting things about each other. One of our board members wrote a musical. A member of our professional staff used to dress up as Clifford the Big Red Dog at public events for PBS. The husband of a board member wrote the definitive history of U.S. Senator Philip Hart, for whom the Hart Senate Office Building is named. A member of our team even learned that the “scary” board member is actually “really funny” and a “nice person.”

These are just a few of the things we learned about each other when we and our spouses gathered outside the office to spend some time together as colleagues, volunteers and friends. Gather a group of people who share a common mission, add a few glasses of wine, mix in a couple of plates of hors d’oeuvres and suddenly you find yourself enjoying each other in a whole new and refreshing way.

According to the respected nonprofit governance experts at BoardSource, the leadership of a charity is two and a half times more likely to work as a collaborative team when it deliberately creates social opportunities. In corporations across America, there are many examples of exercises and activities that companies use to build stronger teams, yet too often team building is seen as a wasteful expense in the nonprofit world. A common criticism is that we should be spending our money on our charitable mission, not on an evening of wine and cheese for our nonprofit board and professional staff.

Private companies, however, invest enormous amounts of time and money to build stronger interpersonal bonds among their people precisely because this investment delivers business value to the organization. A strong team fosters good communication and better problem-solving. It encourages camaraderie, which is essential for a motivated workplace. It leads to more satisfied employees, which promotes better customer relations and lower employee turnover. In essence, a strong team creates a synergy where the whole is greater than the sum of the individual parts. Businesses invest in socializing and team-building activities precisely because they’re good for business.

As important as team building is in the for-profit world, it’s arguably even more important for the charities of our community for one simple reason: Private companies don’t need volunteers to get their work done.

At a for-profit business, employees tend to interact with each other on a frequent, if not daily basis. Although companies still choose to invest in team-building activities to foster strong interpersonal relations, those bonds are reinforced organically through the daily interactions among co-workers.

At a charity, those regular interactions can be more rare. Even the most involved volunteers might interact with each other and the professional staff only a few times a month. Some boards of directors, like that of the Community Foundation, meet as a whole only four times a year. If we are not deliberate in building vibrant interpersonal bonds among the volunteer board and professional staff, they might never develop at all.

Further, although building a strong sense of teamwork at a charity has all of the same benefits that you’d find in a for-profit business, there is the added benefit to nonprofits of increased volunteer retention. At a corporation, everyone is paid to be there. A charity’s professional staff is obviously paid as well, but by definition, its volunteers are not. If volunteer board members do not find their service experience rewarding or do not appreciate their time spent with colleagues, they will likely resign before their work is truly done.

A board member who reports a strong sense of teamwork among colleagues and the professional staff is almost four times more likely to fully serve out the board term.

BoardSource notes that social opportunities are a critical ingredient in a charity’s organizational culture and overall board satisfaction. Being intentional about creating strong interpersonal bonds makes a real difference in how the board functions, how it interacts with the professional staff and organizational effectiveness as a whole, yet fewer than half of charities report investing in social activities that promote a sense of teamwork.

So gather together your board, professional staff and their spouses and partners over a glass of wine and some hors d’oeuvres. If don’t know how, invite me, and I’ll gladly show you how to have a nice time with your friends and colleagues – especially if it’s a good glass of wine.

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

Principles of Collaboration

Collaboration has become one of the trendiest ideas in the nonprofit world. Donors and grantmakers are increasingly demanding it, and the charities are responding accordingly. Generally speaking, this is a good thing.

A strong and robust collaborative partnership leads to greater organizational efficiencies and increased effectiveness, and it can accelerate the speed of social and/or systems change. The problem is that too many efforts at collaboration are anything but strong and robust. Donors and grantmakers have put so much pressure on charities to collaborate that partnerships are now being formed simply to relieve that pressure.

The problem is that although a good collaborative partnership can lead to better outcomes, a bad collaboration isn’t just benign: A poorly constructed collaboration can actually hinder a community’s ability to achieve its goals.

Morten Hansen, a management professor at the University of California-Berkeley, conducted a comprehensive study on collaborations. He spent 15 years examining how different teams work with each other to achieve a shared goal. Hansen said that the greatest surprise in his research was the realization that bad collaboration can lead to far worse outcomes than if the partners simply chose not to collaborate at all.

For example, poorly structured partnerships between project teams can overwhelm schedules with unproductive meetings, distract the teams from focusing on their core missions and create cloudy lines of accountability that actually result in less work getting done. A poorly conceived collaboration can make things worse than if the partners had simply tried to work by themselves and failed to achieve their own goal. There is significant research that suggests society is often better off if two organizations choose to go their own way rather than work together in a poorly constructed partnership.

Of course, just as a bad marriage should not cause a person to give up on the promise of love, the possibility of a bad partnership is not a good reason for an organization to decline to collaborate. The rewards of a good partnership are simply too great to ignore.

In my many years of working in the world of philanthropy, I’ve helped facilitate numerous collaborations between charities. One thing has become clear to me: Similar to a marriage, perhaps 80 percent of the likelihood of a collaboration’s success can be traced directly to selecting the right partner in the first place. The challenge is to identify what constitutes the “right” partner.

In the case of my marriage, I chose someone incredibly determined, remarkably kind and absolutely gorgeous. Of course, if you’ve met my lovely wife, Cari, you’re laughing out loud right now at the idea that I chose her. It was sheer dumb luck that my “collaborative partner” chose me. Thankfully, charities don’t have to search for a four-leaf clover before building a collaboration. There are three principles an organization can rely on to be more deliberate when selecting a collaborative partner.

First, the partners need to have a shared or complementary vision. Everyone involved must have their own clear vision of what defines success for the collaborative effort, and those individual visions must be in harmony with one another. It’s easiest when that vision is the same. For instance, a public school and a church might both envision a safe place for kids to play in the neighborhood. Collaborating to build a playground is obvious and logical. The public school might use the playground on weekdays and the church only during Sunday school, but essentially they have a shared vision for the kids.

It isn’t always as obvious when organizations have different visions. Collaborations can still work between organizations with differing visions of success as long as they complement one another. For instance, a housing charity’s vision might be to ensure that all working families have safe, affordable housing. An economic-development organization’s vision could be to help local businesses thrive.

Their visions are very different, but it makes perfect sense to work together to develop a multi-family housing unit: The housing charity is all about putting working families in affordable homes, and the economic-development organization might be responding to the lack of workforce housing in the community. Although each organization exists for a very different purpose, their visions complement one another and thus make them natural collaborative partners on this particular project.

Second, the partners should have complementary capabilities. If the vision is to develop a vibrant, intergenerational program, it doesn’t make sense for a children’s charity to attempt to collaborate with another youth-serving organization because they have the same skill set: working with kids. A better partner would be an organization that serves senior citizens because it has skills and experiences that complement those of the children’s charity. In a successful collaboration, each partner brings a capability that is both unique among those sitting at the table and critical to achieving the partnership’s goal.

Third, the partners must have shared values. No matter how much two organizations’ visions are in harmony and how complementary their capabilities, there will inevitably be bumps in the road. The likelihood of two partners successfully addressing a challenge depends on their ability to work together under pressure, and how teams react when times get tough is dictated by their values. Do the organizations place a greater value on stewardship or innovation? Do they prioritize teamwork or empower the individual? Are they dedicated to a culture that is honest, open, ethical and fair; or do they focus on impact?

These are all real value statements from some of America’s largest companies. They are not necessarily mutually exclusive, but they do say a lot about what these organizations consider the “right” or “wrong” way to get something done. If you work with a partner whose values are in conflict with yours, you’ll waste a lot of time trying to resolve organizational conflicts about how you’re supposed to deal with one another. When you collaborate with a partner that shares your values, however, you can focus your energy exclusively on getting the work done.

 

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