A Strategy That Benefits Everyone

The history of charitable giving in the United States is long, storied and unprecedented in size and scope in the modern world. In addition, throughout the last decade financial products such as annuities, insurances, trusts, etc. have been employed to address both the donative and estate planning objectives of donors. While these products represent positive strides, they don’t address the drawbacks associated with the vast majority of funding strategies employed by charitable organizations that have focused primarily on garnering support based on the intangible benefits of offering a donor the feeling of having achieved social, spiritual and economic good with his or her donation.

In a secular world, if an organization wishes to raise money it must provide something tangible in return. It doesn't matter if the organization or group seeking funds is a bank, financial institution, private company, or public corporation. If the entity asks for dollars, it either provides a means to return some or all of the principal (usually with interest) or it provides a growth or profit sharing factor. While this precept is obvious, it is also obvious that charitable organizations seeking donations or financial support do something quite different. They ask for money without providing any tangible economic benefit other than occasional tax relief. As a result, most consider donating money to a charitable organization as something desirable, but less of a priority.

There are additional problems as well. For example, seldom is there just one organization competing for a donor's attention. National and local charities, churches, political organizations, special interest groups and others all market their causes to donors. Unless there is a "hook" (an approach geared toward a specific donor desire) the chances that any one organization will garner all a donor's allocated funds are slim. Additionally, charitable gift giving and fund raising has grown into a cloistered industry in which ideas are sought and developed inward rather than outward. Financial engineering, or the art of creating financial solutions, has practically disappeared from the charitable fund raising arena. It has been replaced by stagnate concepts promoted by those who have seldom worked in any other industry who only tend to parrot the ideas generated by others in the same field. Finally, other factors contribute to perpetuating this mindset in the sector. Planning tends to be limited both by what is perceived to be scarce resources within the donor community and a self imposed ceiling established by those seeking funds based on what is “anticipated” can be raised from among constituents.

We believe there are solutions to these problems.

Present Realities

The economic downturn of 2008-2009 created serious hardships for many charitable organizations. However, the benefits that have emerged are at least two-fold. Non-profits are open to taking a fresh look at how they view their donors and the strategies they employ in their approaches. Secondly, donors are looking at the shrinking pool of assets from which they typically give and looking for better ways to support their favorite charities.

This has set the stage for a change in thinking on all sides as to how funds can be raised successfully in this environment. LaSalle Risk Management has begun to champion combining the best financial instruments and strategies available today in the secular world in order to create customized approaches for the non-profit world. At the root of our approach is to create approaches designed first and foremost to do what is in the long term best interest of the investor/donor.

Important Disclaimer

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