091: Budget Building Basics & What To Do When The Donor Dies – Tony Martignetti Nonprofit Radio

Tony’s guests this week:

Paul Konigstein, principal of Mission First Finance

Aviva Boedecker, senior consultant at The Sharpe Group

Read and watch more on Tony’s blog: http://tonymartignetti.com

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Welcome to big non-profit ideas for the other ninety five percent of the show is tony martignetti non-profit radio i’m your aptly named host. I very much hope you were with me last week. I’d be in distress if i found out that you had missed survey savvy paul gear in, a partner at professional survey group, explained how surveys are cultivation tools for your donors. You can increase awareness of your work gage willingness to support heightened sensitivity to challenges and get feedback on how you’re doing, but you have to do it right to get those reliable results. Also, it was content marketing scott koegler renamed it for us authority marketing, which i objected to, but he’s a longstanding contributor, so i was willing to accept that he’s, our long term technology contributor and the editor of non-profit technology news, and he encouraged you to give away high quality, interesting content through your blogged this week. Budget building basics paul connick stein of mission first finance has five steps to help you construct a budget, which is your critical financial and program tool, plus how to use your budget through the year and what to avoid in your budgeting process. Also, what to do when the donor dies? The legal notices staring at you, telling you a plant e-giving donor has died. Now, what do you do? Aviva benwikere, senior consultant at the sharp group, answers that that’s, a pre recorded interview from the national conference on philanthropic planning last year between the guests. Tony’s, take two. Avoid planned e-giving schemes, use hashtag non-profit radio to join the conversation with us on twitter. Right now, we take a break, and when we return budget building basics with paul connick stein, stay with me. They couldn’t do anything to get inventing things. You’re listening to the talking alternative network waiting to get in. E-giving good. Are you stuck in your business or career, trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. Dahna hi, this is psychic medium. Betsy cohen, host of the show. The power of intuition. Join me at talking alternative dot com mondays at eleven a. M call in for a free psychic reading learned how to tune into your intuition to feel better and to create your optimum life. I’m here to guide you and to assist you in creating life that you deserve. Listen. Every monday at eleven a, m on talking alternative dot com. Are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics, politically expressed hi and montgomery taylor and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com talking alternative radio twenty four hours a day. Durney welcome back to tony martignetti non-profit radio. My guest now is paul connick stein. He leads mission first finance. He has over twenty years experience as a controller and chief financial officer in arts, culture, education and international development charities to include the metropolitan opera, new york hall of science, helen keller international and the american montessori society. I’m very glad that his work and his practice bring him to the show. Paul context and welcome to studio. Thank you, tony. Thank you for having me, it’s. My pleasure. Why is a budget important? Well, but it is important because it’s a road map of your organization, i mean, you won’t get in the car and just drive around aimlessly without knowing where you’re going in a generation or two ago. We used to do that, and we used to call sunday driving. You wanna be a sunday driver with your not-for-profits? You know, when gas was forty cents a gallon, that was fine. But now that gas is four dollars a gallon, we can’t afford to do that anymore. And the cost of labor and all the other things that not-for-profits purchase has risen like ass says okay, but so should we say that budget is your gps? Since maps are kind of antiquated, maybe budgeting is your gps. I’ll go along with that going okay, okay, i’m already changing the man’s. The man came with some things to say, and i’m already screwing him up. Okay, so if if this is your gps than you, you need to know where you’re headed and i know you have five steps toe building a budget knowing where you’re heading is, i think, is the first part of that, right? And where you’re heading is knowing the goals for your organization and how you plan to measure success of the organization, which hopefully have already done before you even thought about the budget. Okay, so by success, you mean the impact through the impact of the outcomes? Okay, well, okay, now. So that’s interesting. I’ve had some guests who distinguished between outcomes and impact. And like they’ll say, you know, an outcome would be a nen creased graduation rate. Maybe. But then an impact would be that person went on to find a job and be a more successful family. Ah, mother and mother and worker in a in a family. So there are some people who distinguished between outcomes and impact, right? As do i on dh you need tio have no measure ideal, you’re measuring impact, but not all organizations have evolved to where they’re capable of measuring their impact. That’s a particular challenge for arts organizations, right? So if you’re not measuring, impacted how we’re going to measure outcomes, but either one ties in the budget process because you need to know, figure out what’s going to cost to measure either of those okay, and it is it is particularly challenging for arts organizations, and you’ve worked for one metropolitan andhra. What is the what is the advice around measuring those that impact for for arts organizations? How can you help them be better at it? Well, actually, i like the way the new york hall of science measured its impact. Well, the whole of science used to do is serve a visitors before and after going into the exhibit to measure the impact of the organization. So, for example, we would build an exhibit that tries to teach about evolution. So we were designed a questionnaire with those questions about evolution and give it to visitors before and give it to after and if they’re scoring, proves that’s the impact we’ve had a measurable impact we’ve had on their knowledge of evolution arts organizations, hall of science, a sort of hybrid between art organization in the museum pure art organization like the metropolitan opera. They’re not serving their audience, they’re measuring their impact. Mohr informally based on reviews articles in the trade press, i think they have a little bit further to go to become mohr rigorous about measuring their impact directly with audience that’s the tough part surveying right, say a knopper or theatre audience as they’re on their way out, you know, that’s that’s kind of a tough thing to do, right? What would what would you base line b? Yeah, and then, of course, there’s wine at the intermission. I mean, that’s going to impact, you know, that’s gonna impact your impact assessment. So especially since the champagne at the minute is very tasty. Ok, but it’s expensive too. So maybe most of the most people are not drunk as they’re walking out. Probably. I always sneak mine like a little flask in my jacket. But let’s, see it’s these goals, so okay, we’re right step one the goals disease could be multi year could be were you thinking a couple of years in advance? Well, you have to walk before you can run, so if you already successfully doing it one year at a time, then you can do multiyear. But if you’ve never attempted this before, you need to start with one year and master that before you do multi year planning, okay, okay. And wei have just about a minute before a break. What are the things that you’re that you’re looking at it again in this? His goal setting? Well depends on the type of organization, but generally you’re looking at how many you’re looking at volume. So how many constituents are you going to serve? How many locations air you’re going to have? And then you’re looking at the outcomes you’re looking at, what do you want those constituents to achieve? So as you said before, an example could be if it’s an after school produce development program, you want them to graduate from high school or you want them to master a job skill, okay? All right, we’re going to take a break and we’re going to continue. Talking with paul connick stein of mission. First finance about budget building basics. Stay with us. You’re listening to the talking alternative network. Are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com. We look forward to serving you. Is your marriage in trouble? Are you considering divorce? Hello, i’m lawrence bloom, a family law attorney in new york and new jersey. No one is happier than the day their divorce is final. My firm can help you. We take the nasty out of the divorce process and make people happy. Police call us ed to one, two, nine, six four three five zero two for a free consultation. That’s lawrence h bloom at to one to nine six four three five zero two. We make people happy. Grayce hey, all you crazy listeners looking to boost your business? Why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com lively conversation top trends, sound advice, that’s, tony martignetti non-profit radio and i’m samantha cohen from the american civil liberties union. Welcome back. We’re talking about budget building basics with paul connick stein. You’ll find him at mission first finance dot com paul, your arm after your goal setting. You know where you want your organization to be after a year or maybe a couple of years if you’re if you’re involved in this process, what is the, uh, what’s the next step? Because we need to know what it’s going to take to get there. Exactly need to determine the inputs necessary to achieve those goals. Inputs. Okay, so what are what are examples of inputs? Well, for example, i worked with helen keller international. Our signature program was vitamin a supplementation. So examples of inputs would be the vitamin a capsules would be health workers who’d go to remote villagers take a baseline survey of their health. Then you come back at mr the vitamin e capsules, then come back again and to follow-up health surveys to measure how people health improved after supplementation on it would be the staff needed to oversee the program interface with the company’s ministries of health. It would be transportation. So you need to have a vehicle traveled his remote villages in to put gas in the vehicle travel expenses now, is this where you would include things like insurance for the for the employees that are traveling and ah, in case they’re injured or something? I mean, how far do we go in thinking about what the what the inputs are? Well, the first step is thinking about the inputs that are specific to the program, and then once you’ve identified those inputs for each thing that you do, then you need to think about the administrative and put such as insurance, okay? So like overhead let’s, talk about things that aren’t going to be so obvious. Sort of hidden means going to hidden expenses, right? Let’s, talk a little about those so people think, you know, in detail about what, what else might be involved, what others like hidden costs or indirect cost of things. Well, there’s the cost of your office? No that’s. Most organizations have rent or if they own the building there’s the mortgage servicing course. There’s all your office equipment, thie computers, andi all the things you do with the computers or the software you use the cost of keeping, creating your website and keeping it up. To date and your social media participation? Yeah, and i mean, they were getting into you like utilities and things. I mean, let’s, let’s, this is where we’re costing out everything. So, you know, can we just be like, looking around the office and seeing what we spend money on? We can, and if we’re not a brand new not-for-profits we could also look at what we spent money on last year, i question people against doing that against having what they spent last year be the primary determining factor in the budget for several reasons. First of all, the environment is changing more rapidly now than it ever has before. So given last year’s information is outdated. Okay, second of all, people know that you’re basing your budget off last year, those spend as much as they can so that they’re working from a bigger base. So wait say some more about that creates an incentive, right? Use it or lose it incentive. If people know that your basic budget on last year, they’re going to make sure that they spend their whole budget from last year, you know? So the budget doesn’t get cut. You see that? A lot of government. Okay, okay. And so your first reason and sounds like you have more reasons, but let’s, go back to your first one, which was things change rapidly, but couldn’t you just look at what you spent last year on an item and then apply a rate of inflation? Say three percent or something, whatever and then and then use that? Or is that not a good idea? You could ah, but you could but it’s bad. Tell me if it’s bad i mean, you’re the you’re the budgeting basic expert, you tell me. Well, there’s a role, best practices there’s no absolute right and absolute wrong. I’ll give you a good example of that. All right, i tell everyone, don’t base a budget on last year, do it by costing out your inputs for your plans for this year. But yet, just yesterday i was talking to someone who’s, executive director of a marine rescue organization on dh he was insisting to me that the only way he can do the budget is based on last year because he has no way of predicting how many’s sea turtles are going to wash up on the beach and how many dolphins air going toe beached themselves? So he has no idea how much medicine he needs to buy and so forth, and i want to push back a little on that to see if he was just like trying to take a shortcut to avoid rigorous thinking, right? So i said them, surely there must be some mathematical models that you can use, you know, the american zoological association or somebody has done research into this turtle modeling turtle modeling it’s common knowledge, i think. Yeah, so he said to me, well, yes, as a matter of fact, you know, i’m the leader in the field who’s tried to create those models, and i still haven’t figured it out yet, okay? I said, okay, well, then, i guess, you know, there’s a good example of there’s, no one size fits all to not-for-profits budgeting or not for-profit anything else? So you’ll accept that from this from the total modeling expert who hasn’t quite got it yet. Okay, um, all right, so this is i’m just trying to think of other things that people might not think of in their budget and in their budgeting in this step in this step and then they get surprised. I mean, so are their examples of other things that you see commonly that people forget. And then the bill comes or the and they get shocked examples of other things that people commonly ignore in there in there figuring of costs. Well, people commonly ignore in their budgets non-cash items elect appreciation. So okay, what? Z now on twenty martignetti non-profit radio of jargon jail on your teetering close to the entrance to the prison doors. Everybody’s not gonna know what appreciation is, so explain explained appreciation. And this will be your shot at early parole. Well, a basic concept in accounting is to try and match your revenues to your expenses view by an expensive piece of equipment. Let’s, say all the equipment that’s used to put on this radio show xero of tin cans, we have strings on their sam and he’s monitoring the length of the string. Okay, right, but they’re very expensive tin cans and strings because tens of thousands of dollars. But we’re also i expect that they’re going to last for five years. The very durable tin cans and strings. Yeah, we only by the best. Here, right. Talking, of course. So are not profit here. That sorting non-profit radio hypothetically is going to benefit from those tin cans and strings for five years. Okay, so if we put the whole ten thousand dollar cost of those tin cans and strings in the year that we buy them, then there’s a mismatch between our expense and when it benefits the organization so depreciations away that accounts came up with the try and spread out the thie expense over all five years. So that matches the time period that those tin cans of strings are benefiting us. Okay, even though we incurred the expense in your right even though we wrote the cheque for thousand dollars in year one were gonna save it last five years. There’s lots of different ways to divide up that ten thousand of the five years. But the most common one is to just divide by five and have an expensive two thousand dollars each year. Okay, okay. So, so depreciation is is an expense. Appreciation isn’t expense. So when your orders come in and give you ordered financial statements and you go oh, my god. I have a deficit. But i was so sure is going to have a surplus. My budget has surpluses. You didn’t budget for the depreciation on all the everything you bought to invest in your organization this year, i think. And since this is radio and podcast have to tell you that when paul said oh, my god, he put his hands up to his forehead is very dramatic. So it’s is definitely something to pay attention. Okay, um all right, so, that’s, you’re paroled from drug in jail for the time being. Watch what? Your step. Okay. Any examples of other things that that’s a great one depreciation. Is there another one that people commonly ignore? Bank fees, credit card processing fees? Yeah. Okay, she’s, right? We see them every month, but we ignored them as we’re planning a budget for the year. Right? We don’t. We don’t tend to think about them there, it’s. Not any thought or effort required to pay them. So we tend not to think about them. So the bank takes it automatically. So, it’s not part of our consciousness, but it’s obviously an expense of the organization. Okay, i’m gonna go further. These air, good depreciation, bank fees and other things that are commonly missed that listeners should know about. No. Ok, ok, s o i want to make sure we’re exhausted. We’ve gotten through everything that you think you see people missing commonly. Okay? Um so then now we know the inputs and i guess, well, your step three is really determining the costs, so we sort of looked at that already, you might get help from some vendors or providers, right? If you’re not able to look back, or if something is going to be new expense, you might, especially in the administrative costs, especially in categories of course, that tend not to file inflation rates such as medical insurance or other types of insurance you ask, you broker and they’re happy to tell you, you know, is the market softening this year? Is the market getting tighter and where they see premiums going on budget for the increase that they i expect? You know, if your copier is coming off leased this year in the coming year and you call up the copier salesman as long as you make it clear, then that you’re doing this for budget purposes and there’s not going to sail right now, you know, so that you’re not leading them on you. Know they’re happy to tell you where the market is going with, you know, with the hope that they’ll get the sail down the road, okay, okay, and i think the health insurance is excellent one very hard to predict and also reveals that as you think about your employee in points, your labor in puts all the costs around those all the benefit costs and obviously labor very is labour always the highest not-for-profits a very labour intensive sector i’ve yet to see not-for-profits where labor was not their biggest expense. Paul comics diniz principle of mission first finance and we’re talking about budget building basics. We’re going through his i get five bullets for budget building omigosh alright, we’ll stop there with thehe liberations. Okay, what’s what’s next what’s your fourth step in building a budget. Once you’ve costed out the inputs and edit everything up, you have a total expense budget. But obviously the money has to come from somewhere to pay these expenses. So that’s, your next step is to figure out where the money is coming from and how much is coming from its source. Okay, if you have a fund-raising you do that collaboration with your fundraiser. If you are an arts organization, for example, is a museum or the opera that sells tickets or revenue they have, you know, you have what we call earned revenue. You gonna have government revenue. You may have a lobbyist who could give you an idea of how much you can expect your government contract to be renewed for for the following year. So you add up all your total revenue, you compare it to your total expense, and i guarantee you the first time you do it, the expense will be more than the revenue. Okay, uh, all right. So that’s a problem. But let’s hold off. Did we do we identify all the all the potential sources of revenues? We have fund-raising revenue earned income. Wei have government, right government contracts and write the big ones is the big one. We missed us for organizations that a fortune to have an endowment is earnings on the endowment. Yes, of course. And that’s going to be hard to predict from year to year. Ah, you talk to your investment adviser, the the professional who’s investing the endowment for projection or what you can most organizations have. A plan for how much that they’re going to draw down from their endowment and bringing toe operations each year right there spent there spend right, right, there’s three and four and a half or five percent. Buy-in but you also want to know if you’re going to earn more than that spend rate, right? Because then can we count that we can count that his revenue, can’t we? Even though we’re not gonna spend it or we can’t no, we can count it as revenue. Okay, this is why i failed. Well, i didn’t fail accounting in college. I quit. Before. Before i knew i was going to fail, i walked out and dropped the class because i never understood how assets and plus liability equals equals equity. Is that what supposed to happen? No. Actually asked articles, liability plus, like what you see? This is it’s. Simple is okay. Everyone over and deducted. Okay, so even mathematics is arithmetic eludes me. But i’ve never understood how that really work. How does that work? Why? Why does that always work? What is that? A white? Those two columns always equal each other. Well, you know the old joke. How? Do accountants have sex? I don’t know it with double entry, so it always works because oppcoll kottler yes, i wouldn’t put you in jail, but you enjoy jail for that that’s so bad joke jail. I just can i just created that joke. Jail, you’re in it. You’re the first one and it’s going to be a small prison is one one cell and no toilets, so it works because of what accounts called double injury counting, which means that everything that happens, we write it down twice. We write down once on the left saints are the ledger, which we call the debit side, and once in the right hand side of the ledger, which we call the credit side and that’s to check against making mistake writing it down if are the end of the day we had a paper on the left side and we have everything on the right side and you don’t agree, we know we made a mistake on one of the sides, right? So that’s, why i asked that secrets lie bilich specifically because assets to the left side liabilities necklace is the right side, so they’ve got equal otherwise we made him stake writing it down somewhere. All right. It was right after that explanation that i ran out of the class on dh signed up for biology for poets is that it was my substitute class. But i went to a very respectable school, so it was very good class. And i mean, a very mediocre class in a very good school. Carnegie mellon university. I almost went there really didn’t take you. What? No, they did. That was my second choice. I would’ve gone there if my number one choice hadn’t taken me. What is your number? One choice. University of pennsylvania. You made a big mistake, pittsburgh’s and much nicer set of philadelphia. Okay, well, okay, there’s. Another way of getting revenue. What if we sell thing? If we have assets, sale of assets, is that possible? Revenue source. It’s possible it’s. Not a common one for not-for-profits, but it’s. Certainly possible revenue source. And if you make money on the sale than the gain is revenue for the organization. Okay. Okay. All right. So that’s that’s, our revenue step. And what is the last part of building this budget ilsen iterative process now? Because we are most likely scenario, our expenses are more than our revenues. The next step is going back to expenses and saying, where were we a little too aggressive? Where did we dream a little too grandly? What did we put in the budget was aspirational that we really don’t need. This is where this is, where the senses are greater than revenue writes this is where we’re going back to where a goal and say, all right, we set a goal of serving ten thousand students this year, but we’re not projecting revenues support that. So we have to cut back a goal to serving only nine thousand students. So now we know we can all the inputs that change depending on the number of students, which would be maybe the number of snacks we serve them. The number of teachers would be like what we call step variable because you’d have to like it in your teacher for every thirty students let’s say instead of everyone, students like the snack go back to cut those back until the expense agrees with the revenue. Okay, okay, we’re gonna take just a couple of seconds to go a little bit long, teo, for ah, how you use the budget year after year. So just in, like, less than a minute or so what i suppose to do with this budget now that you have it? Well, you should look at monthly the difference between what’s actually happening and what you plan to make sure that you understand the difference on dh it’s something attributable, like, for example, you changed your plans and your serving more or less people for a program was delayed into the vitamin supplementation was a coup in that country. So we’re under budget if you can’t explain the variance and that’s a warning sign that there’s something funny going on, you know, the funny i mean, you have a potential financial control issue, which means that you know, money is going out the door and don’t know where it’s going. Okay, which is bad that’s. Very bad. Okay, we have to leave it there. Paul connick stein leads mission first finance, which you find at mission first finance. Dot com also university of pennsylvania. Lem. I’m sorry. And the soul prisoner in joke jail right now we take a break. And when we returned to tony’s take to stay. With me. You’re listening to the talking alternative network. Are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics, politically expressed, i and montgomery taylor and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. Hey, all you crazy listeners looking to boost your business? Why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com welcome back to tony martignetti non-profit radio time for tony’s take two on my block this week, it is avoid planned e-giving schemes sometimes you’re presented with legitimate plans for your plan giving program or programs of giving and other times you’re presented with schemes, and you can tell it’s a scheme if its first if it sounds too good to be true, and another hallmark of these is that they’re so complex that they just become hard to understand. And i’ve been in that situation where somebody tries to explain something that they’re pitching for a client’s program planned e-giving program and thirty minutes after they explain it to me, i can’t regurgitated so that that’s a bad sign, because even though i went to carnegie mellon, i mean, i could still understand some things. Plus, you know, there’s always eyes almost always there’s some sheet there’s, a sheet of paper, which has lots of boxes on it. There’s a box for your donor and a box for your charity and a box for the life insurance policy. Because often these include life insurance and then a box for the trust that owns the life insurance policy and one for the trustees of the trust and there’s, all these arrows shooting in and out of the boxes and they’re going around corners and going halfway around the page, into and out of these boxes. That’s ah that’s, another hallmark of what i think is a scheme it’s, very complex and it’s usually not really a way of helping your donors to make a charitable gift. It’s more a way of selling some financial product, sometimes it’s life insurance and sometimes not. But watch out for these schemes, you’ll find that on my blogged the post is avoid plan giving schemes on my block is at tony martignetti dot com want to remind you that we’re on linked in you go to the linked in page and comment on the show, make suggestions for future shows or future guests, and there’s a link to that also on my block. But it’s not hard to find once you been linked in, because it’s just the name of the show and that is tony’s take two for friday, may eleventh, the nineteenth show of the year. Right now i have a pre recorded interview with aviva benwikere what to do when the donor dies and here’s that interview welcome to tony martignetti non-profit radio coverage of the national conference on philanthropic planning. Hosted by the partnership for philanthropic planning. We are in san antonio, texas, on the river walk it’s two thousand eleven october two thousand eleven my guest now is aviva benwikere and she is principal of viva shift benwikere charitable associates in tiburon, california. Her conference topic is what to do when the donor dies. It’s a pleasure to welcome her back to the show of evil. Welcome. Thank you very much. I need to catch you up on the latest news. I’ve joined the sharp group. Oh, well, you’re it must very late, because that comes after absolute it’s. This very new news. Okay, then what is your title with the sharp group i’m a senior consultant in in which office? I am the san francisco office. You are the san francisco was the sand on the west coast office to be the west coast. Ok, well, congratulations. Thank you very much. No more tiburon. Okay. Well, is san francisco near tiburon? I don’t even know. Yeah, tiburones. Just the other side of the golden gate. Okay. Okay, senior. Consultant, senior consultant. Okay, your topic. What to do when the donor dies? Let’s, let’s. Start with a rumor. I heard a rumor that i’m going to share with charity that someone close to the charity has died. What should the charity do? Well, it kind of depends. I mean, that’s a lawyer’s answer. It depends. Yeah, yeah. No, no. We won’t go there, but it it does depend on how well you knew the donor how close the donor was to the charity on what you’re going to dio certainly, in all cases, you’re going to find out who to write a condolence note too. If you don’t already know if the person was closer to the charity and there’s time you may water, go or send someone to memorial service. You want to be careful, though, about sending flowers and things like that? Because it’s not appropriate in every culture and unless you sure about the donors, religious, ethnic customs don’t send something, okay? Just a condolence now. But it could be appropriate to go yourself. Oh, sure. Goto a memorial service or a work or something and make, you know, make a point of telling the family. Members, you know how you knew the person and how important they were and what contribution they made to the organization, ok? Do we? Does it? Does it depend also on whether we have documentation of what kind of a gift there might have been for the charity, whether there is or isn’t documentation? No, because when we’re doing, you know, right after the person dies and we’re sending condolence, condolence notes and going to a funeral. It’s not about the money it’s about the relationship and if he knew the person or the person that was in alum of your university to have the chancellor write a note, it’s, nothing to do with a gift. Okay. However, if you have reason to believe that the person had included your organization in their state plan, then you need to start looking out for some notice. And again, it depends on whether it was a request. You need to get noticed within a certain amount of time that the estate is being probated or that there’s a trust. If it was a life income gift that your charity was, perhaps i’m the trustee of then you need to get the death. Certificate and stop sending payments. Okay, the notice of the notice that you refer to would be a notice of probate and that probate process one just explain what that i remember. We have your your repeat guests, so i don’t know if you were in jargon jail on the first time, but we do have jog in jail on the show. So for people who might not know what probate means, what what is that in just a sentence or two? Well, when someone dies, all of their their affairs need to be settled, and that includes everything from collecting all their assets and getting them distributed to the right people to collecting all of their bills and getting those paid they’re variations on pro probate is just the legal process on dh. It happens through the court of collecting the assets and redistributing them to the right people. The’s days a lot of people have living trusts, which do not go through probate, right? They don’t like that court supervised probate process, and the living trust avoids that process exactly to the extent that person’s estate is in the trust, right about how whoever is handling the estate. Basically has to do the same things just without lorts without question, right? Okay, but so all right, so the charity now has noticed one way or another. Either they know because they’ve been involved in a a life income gift might have been a charitable gift annuity let’s say, or they might be the remainder beneficiary of a charitable trust, and they’ve known that in advance. Or it could just be a simple request. And they’ve now received this notice of probate. Now that means that any of those circumstances, the charity has rights and responsibilities right after we talk about those little bit. Well, if it’s ah, life, income gift, the responsibility is to make sure that the tail end of life income gift is handled properly. First of all, was there a successor life income beneficiary? Because if there is, then you need to make sure that the new person is getting the income and it’s not going to the old person and let’s. Just talk about the other example of a will. If there’s a will, you need to find out what exactly was in the will. Make sure that you get the notice. Charities will. Any beneficiary is entitled to get notice if they have been included in a state of some sort, okay, and so let’s. Now the audience for the show is small and midsize charity, so i’m going to stick more with the will example because that’s the most likely for our listeners now they have that notice, but let’s say they don’t have a copy of the will because the notice doesn’t always come. The notice of probate on ly occasionally in my experience, comes with a copy of the will. Is it appropriate to reach out and contact the attorney that’s named in the notice of probate? Not only is it appropriate, but it’s really required ok it’s the charity’s responsibility to get that notice because if you leave me, no doubt is to get the document the world, because if you don’t know what’s in the document, how do you know that you’re going to get what you’re entitled to? Ok now, listeners, maybe a little apprehensive about calling a law legal office. A law firm that’s named in the nose of probate. How did they carry on the conversation? What are they? What are they asking for? They’re saying g, you know i am from x y z charity. We just got this notice of probate. We know that this was one of our donors. A close friend. Wait. We don’t know what this means. Can you tell us? You know, ask because asking questions and say, is there some documentation? Is there a will? May we have a copy of it, please? And of course, the answer has to be yes. Any experienced attorney experienced law firm will expect to be asked now, why do you say that? Thie answer has to be yes for the for the request for a will. Because, it’s a legal requirement that you’re given that documentation and that and that will is a public document at the person’s death, right? The will is a public document that trust is not. But any beneficiary of a trust is entitled to a copy of it. Okay? And not just gift portion the entire thing. Okay, and so i think it’s important to just spell this out because people may not know that they’re entitled to receive a copy of the wills you’re not calling the attorney, asking for a favor? Oh, no, no. No, no, no, that is something that charitable organizations need to get over there’s this idea out there, the charities are getting a favor that they should be grateful for any crumbs that they received. That is absolutely not the case. First of all, they have a fiduciary obligation, as you know, for the charity, their public organization to get the money. They have the same obligation to get the money that they’re entitled to as they have to invest the money that they have appropriately excellent, because they’ve worked hard to earn that gift, right? And the donor wanted them to have it. I think they have a responsibility to their donors to follow through and make sure that the donor’s intent actually is realized. Good. I like to advise that in that same conversation, when you’re making the first call to the attorney that you just confirm the contact information, sometimes the notice of probate will be sent to the general office of the charity, but we’d like the information to come to a specific person, and we’d like to love from tow have that contact information, anything more that you’d like to, well and the other thing. Is if you’re not sure who to write a condolence note too that’s where you can get the information, you know, did they have a surviving spouse or partner or, you know, other family member? Can you tell us the name the address, you know? Or if you don’t want to give us the address, can we send it to you? And you’ll forwarded on excellent advice, it’s very consistent with what i hear generally and my own practice too. Ask the attorney, you know, you write a letter to the the name the person’s name and then have the attorney forward it to the family member, you know, you’re dealing with people so it’s, you know, never mind the fact that this is a donor, this is a person with whom you or your organization had a relationship. So, you know, how would you behave if someone with whom you had some sort of relationship passed away? All right, so then after this phone call, we’ve received a copy of the will what what do we do now in the in the in the will example, you read it, you look and see what it says, you know, just stick it in a drawer and say, okay, we’ve got we’ve got a judge to know what happened, what it says, so it khun say, you know, say it says i give to my favorite charity twenty five thousand dollars. Okay, then you know you’re going to get twenty five thousand dollars that’s easy, you might want you call back the attorney’s office and say, is there an estimated time of distribution? What you need from us? You’re going to need our tax i d number if you don’t already have it, you may need our iris letter that we’re a non profit organization that’s easy, and then just keep a look out to make sure that you get it within the time frame that the attorney said, and it could easily be six to twelve months, maybe even more for the for the actual check to arrive, the actual check for you. Okay, what that’s pretty simple was more complicated is if you’re going to get the residue of the estate or a portion of it, and what that means is whatever is left in the estate. After all, the expenses were paid after everyone else gets their twenty. Five or fifty thousand dollars in whatever there is they’re supposed to get they’re supposed to get then there’s going to be something left over that is often the biggest part of any state and that’s the most complicated thing because you don’t know what it is. So then you need to ask for an inventory of the estate assets because if you’re going to get, you know, fifty percent of what remains, you need to know what remains and how the other part that the was spent. You want to know if you want to know how the estate has been managed on dh money spent because you’re getting fifty percent of what’s left? Yeah, you wanna make sure that what’s left is the size it’s supposed to be? Well, exactly right and that’s a little bit down the road? Because, you know, first, you need to know what there is, and then you do need to know what’s left and you’re set and you have to know, you know what fees have been paid and are those reasonable and and whether the assets on the inventory we’re ultimately sold for liquidated for an amount that is reasonable compared to what was on the original inventory? Because if there’s an inventory that says two million dollars, you know a piece of property in new york city, and then later on, you get in accounting. And, by the way, that’s, the other piece of it, you’re entitled to get in accounting, which is when the estate closes or is about to close. There has to be, i mean, literally an accounting of what there was, what was spent, what was paying when i was sold for. Yeah, and compare that. Because if you had this two million dollar piece of property on the accounting and it was pay, it was sold for two hundred thousand dollars. No what’s going on here talking alternative radio twenty four hours a day. Eddie hi, this is psychic medium. Betsy cohen, host of the show. The power of intuition. Join me at talking alternative dot com mondays at eleven a. M call in for a free second reading. Learned how to tune into your intuition to feel better and to create your optimum life. I’m here to guide you and to assist you in creating life that you deserve. Listen. Every monday at eleven a, m on talking alternative dot com. Hi, i’m carol ward from the body mind wellness program. Listen to my show for ideas and information to help you live a healthier life in body, mind and spirit, you’ll hear from terrific guests who are experts in the areas of health, wellness and creativity. So join me every thursday at eleven a, m eastern standard time on talking alternative dot com professionals serving community. Hi, this is nancy taito from speaks. Been radio speaks. Been. Radio is an exploration of the world of communication, how it happens in how to make it better, because the quality of your communication has a direct impact on the quality of your life. Tune in monday’s at two pm on talking alternative dot com, where i’ll be interviewing experts from business, academia, the arts and new thought. Join me mondays at two p m and get all your communications questions answered on speaks been radio. This is tony martignetti athlete named host of tony martignetti non-profit radio. Big non-profit ideas for the other ninety five percent. Technology fund-raising compliance. Social media, small and medium non-profits have needs in all these areas. My guests are expert in all these areas and mohr. Tony martignetti non-profit radio friday’s one to two eastern on talking alternative broadcasting. Talking. Another concern in reading the will it is, will the designation for the purpose of the gift. You know what if in that request language that there’s something that the charity may have trouble carrying out? Well, that is why it’s it’s a really good idea if it all possible to get copy of at least the gift language from the donor while the donor is alive, this is something that comes up. I mean, this is should have thought of this before, but organisations often ask, should we asked the donor for a copy of the will or shouldn’t we in order to include them in the legacy club? And you know no, because that’s the cultivation tool, however you do want to get if the donor is willing to share it a copy of the gift language, not because you want to count up in advance what we’re going to expect. Tell the donor i want to make sure we want to make sure that we understand exactly what you have in mind and that we’re going to be able to carry out your wishes and there are no questions later on, you know that you have our arse name too properly, sometimes there’s like a local organization and in national organization, we need to make sure that’s the correct one. I’d like to see the tax i d number and make sure we were like, make sure that’s correct in the bequest. You can’t always do that because person doesn’t necessarily even tell you that they have a gift plant. But that is why, whenever possible you want teo, you know, as protect the donor’s intention. Are there instances where the charity should engage an attorney to oversee this process? Um, yeah, and it’s not always, but it’s pretty often whenever people of charity either don’t understand what’s going on or aren’t sure, or if there’s a dispute in the estate, even if the charity is not directly involved, get an attorney to either explain to you and even say, oh, yes, this is just exactly what’s supposed to be happening. Don’t worry about it or say oh, chu is this is you know this is not right. One of the things the attorney needs to or the charity needs to look for is that the costs and expenses of the administration are being allocated properly. It’s not just a matter of whether there was some real fraud that, you know, the two million dollar piece of property was sold for two hundred. But, you know, with it do they said oh, well, you know, there are all these expenses the siblings, air fighting. We’ll just assign them all to the charities portion, you know, it’s like no that’s, not okay. You need to pay attention, okay? And the charity might find that expertise on its board. Or maybe if there’s a plan giving advisory committee theater. Neto, help them with the process. That’s a good starting point. But i would suggest that there may be more work necessary than is just probono okay. And also the attorney on your board or your the committee may not have that particular expertise. It’s a good starting point to say, take a look at this. What do you think? You know? And then you say, who’s, who do you think we should hyre toe? You know, it could be a very good investment of weapons, especially if it turns out in that initial review, the attorney decides it’s a pretty complex case. And there is a likelihood of some kind of challenge. Or even without the challenge, then you’d need teo engage someone you know beyond just to make sure that your interests were represented appropriately. How about continuing stewardship with the with the family that’s important? I would not necessarily expect that the family is going to continue to give you more money. That may happen, but it is the gracious thing to do, especially if there was a fund that the donor set up, like for easy example scholarship fund invite the family to see the scholarships awarded, have the scholarship beneficiary write thank you notes, and who would you send that? Thank you note too well, you know, it could be the surviving spouse or the children or, you know, you need to find out who should be the recipient of that. It might still be the case that you have to go through the attorney it might might be, and that brings up another thing. Don’t forget to thank the attorney over good people forget that these requests wouldn’t happen without the attorney making them happen writing, writing the state documents and the attorney has done a lot of work in making sure that the estate is distributed properly and sometimes standing up for the rights of the charitable organization, so you’d like to be known as a gracious charity in the community, right? Right. You want to be known as a gracious charity, you want to get the attention of the trade, you want to get into situation where someone says, oh, i want to make a bequest to my favorite charity, and they said, oh, you know, we’ve had experience with, um they really don’t have their act together. That would be awful. That would be terrible. So you want, you know, you you’re not going to expect that the charity’s going? I mean that the attorney’s going to say, oh, this is a great charity. You should give them your money, but you want them to have a favorable impression because if there’s been a negative one, that one is apt to be shared. Yeah, yeah, all right, we’re going to end on the continuing stewardship note. Viva becker is the recently appointed senior consultant for the sharp group in san francisco, california, and her conference topic is what to do when the donor dies of evil. Welcome was good to have. You back to the show? Thank you very much, tony. Real pleasure. This is tony martignetti non-profit radio coverage of the national conference on philanthropic planning, hosted by the partnership for philanthropic planning. And we’re in san antonio, texas my thanks this week to paul connick stein for being a guest and viva bet occur and the organizer’s of fund-raising day or the national conference on philanthropic planning, where i interviewed aviva last year, we’re gonna have our first remote not in san antonio, but in new york city. Coming up june eighth, i’ll be doing interviews on the exhibit floor of fund-raising day at the marriott marquis. So if you’re going to be at that conference come by booth for fifteen, we’re very easy to find you’ll see bright lights and hear a lot of noise next week. Susan gordon of causes dot com is with me that site is a simple and valuable way for you to connect your supporters to an action campaign and to get new supporters, bring to your cause and causes dot com is free for charities. Susan will explain what that’s all about also professor gen shang fromthe center on philanthropy at indiana indiana university shares her academic research five, words to boost your fund-raising, check us out on facebook, check us out on the loo linked in page were on youtube, my channel, their israel tony martignetti khun, listen, live our archive. You’ll listen archive by checking us out on itunes at non-profit radio dot net. We’re on twitter. You can follow me, i’m at tony martignetti and use the show’s hashtag non-profit radio. Our creative producer is claire meyerhoff. Sam liebowitz is our line producer and the owner of talking alternative broadcasting shows. Social media is by regina walton of organic social media and the remote producer of tony martignetti non-profit radio is john federico of the new rules, and as i said, we’ll be remote on june eighth, and i hope you’ll be with me next friday, one, two, two p, m eastern for tony martignetti non-profit radio, which you will always find at talking alternative dot com. I think the good ending. You’re listening to the talking, alternate network, getting anything. Thank you, cubine how’s your game. Want to improve your performance, focus and motivation than you need. 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