Four Pillars of Philanthropic Impact

Pillars of Philanthropic Impact

The media these days is full of articles, blogs, research papers and enthusiastic descriptions of new ways of engaging in philanthropy, most of which employ the words ‘impact’, or ‘investment’. This is in contrast to the old-fashioned words ‘charity’ or ‘goodwill’. The focus has moved from a philanthropist making donation to an initiative, to an entrepreneur making an investment in that initiative. Much of this change in perspective is driven by young, successful business visionaries entering the philanthropic space and bringing with them new language to describe what they expect their generosity to accomplish. They also bring the governing principles used in successful startups and business models and expect to apply these principles to their philanthropy.

Four pillars are often seen in this modern view. These pillars are not new, they have been part of the philanthropic landscape for decades, but they have risen more firmly to the top of expectations and conditions for giving. The first is a documented need, not just one that tugs the heart, but a condition that is clearly documented to threaten or damage a population or environment. Second is an organization’s ability to scale their efforts to address larger, greater goals around this need over time. Measurable outcomes are even more critical to today’s social impact investors, and these outcomes are identified on the front end as goals or expectations, before they are achieved. Finally, philanthropic organizations soliciting funding are increasingly expected to have earned revenue as a component of their efforts and not be entirely dependent on donor support.

Many of the best known and successful global efforts use these pillars in their reporting and as proof of their success. The philanthropic model will determine the need in a foreign country where vaccines are unavailable, then calculate the ability to scale from one village effectively, to a region or even a nation or country. Providers will measure the health outcomes of the populous to prove success, and seek ways to bring in revenue from those who are able to pay, for example governments or hospitals, to insure the initiative can reach those too poor to pay and thereby replicate their efforts.

In most cases, these expectations are value added to the sector, bringing clarity and discipline to the work being done. One caution is that philanthropy will increasingly be focused on initiatives that inherently conform to this model, while leaving behind those needs that are too desperate, small, messy or difficult to attract this kind of funding. Let’s hope this great next generation of entrepreneurs entering the sector can help all of us figure out how to solve these problems as well.

Some Good News in the Tax Bill

Tax image Here comes the New Year, and with it the new tax law. Reviews tell us that as the nation ages, the new law shifts many benefits to younger families. But there is a special tax break available just for seniors, passed by congress in 2016, and it doesn’t go away in the New Year. In fact, the newly signed tax bill makes it even more advantageous.  It’s called a qualified charitable distribution and only applies to Individual Retirement Accounts (IRAs).

Did you know that if you are 70 ½ or older and taking mandatory distributions from your IRA, you can convert these withdrawals from taxable income into a tax-free event? When you donate your IRA distribution directly to an eligible non-profit as a charitable contribution, the event is not taxable as income and it may even lower your total Adjusted Gross Income.

If you do not need your IRA assets to support your current or future living costs, this may be your best charitable giving strategy going forward.  The exemption is good for up to $100,000 of IRA assets annually.  That’s a big benefit! Especially if, with the new, higher standard deduction, you may no longer be itemizing your charitable gifts.

Also, consider that IRA assets increase the tax liability for your estate after your death. By distributing these assets to charity during your lifetime or as part of your estate planning as a charitable rollover, you can eliminate the taxes on these assets.

At Rodman & Associates, we would be happy to work with you, and your financial advisors, to strategize sequential gifts to the charity or charities of your choice. By using IRA assets for your giving, you can help dreams to come true for the causes you support, during your lifetime and beyond.

See, Santa does come to visit, even to seniors!

Is 2017 the last year you take a Charitable Tax Deduction?

We will not know for certain until the final vote, but it appears we may have only a few weeks remaining to get in front of expiring tax provisions. Both the Senate and the House version of tax reform include an increase in the standard deduction, while eliminating many other deductions. That means in the future, fewer people will benefit from itemizing their deductions, such as charitable donations.

Below we offer a few key charitable strategies to consider before the close of 2017:

  • If you have made a multi-year pledge, pool the pledges made toward upcoming years and give now.
  • Ask a charity if you can pre-pay for annual subscriptions or memberships in advance.
  • Establish a Donor Advised Fund and contribute as much as possible.
  • In the future, it may make sense to “bunch your donations”, e.g. make your charitable gifts every other year in order to increase the amount and get them over the standard deduction threshold.

And in closing, here is a few ideas for family gifts that include deductions. Contribute to an IRA for your adult children who have earned income, but do not yet have available assets to contribute to retirement. Contribute to the education foundations where your children or grandchildren attend school in their names. Invite family members to make a joint giving decision, complete with a family visit to the charity you wish to support.

Sometimes Charity Begins at Home

Whenever we sit down to visit with new clients about the most important things for them to pass down to the following generations, we hear about values, faith, family stories and life lessons. Occasionally we hear about a personal possession with a strong emotional value. Inevitably it takes a while to come around to financial assets and real estate.

What is money for?
How do you view your wealth?
What is your obligation to the younger generation, and to the world at large?
Top of mind for many of Rodman & Associates’ clients is “how do we raise charitable offspring”?

Philanthropy is a powerful tool for strengthening family ties. This Thanksgiving season, let charity begin at home.

Wondering where to start?  Actively seek volunteer opportunities that allow the entire family to participate:

  • Hold a family-wide garage sale and donate all the proceeds to charity
  • Form a Family Giving Circle with a group of friends: each family contributes a pre-determined amount to the pooled fund and working together, over the course of a few weeks, determine where that money will go
  • If you are fortunate enough to have a Turkey Trot in your community, sign up as a family today
  • Clean your neighborhood park, greenbelt or school yard
  • Deliver meals or pizza to an affordable housing complex; it  is nice to include a gift card to the neighborhood grocery store for those favorite items and treats. offers a feature that allows you to search for volunteer activities by zip code and time frame. Be sure to apply the Family Friendly filter!

 It is not what we say about our blessings, but how we use them,
that is the true measure of thanksgiving
.  –W.T. Purkiser


I’ve known Austin’s Gary Cooper for years, as a fine man and an effective community activist. Recently I learned that as a youth he received a full college scholarship from a successful businessman he was referred to by a newspaper editor who had interviewed Gary at his inner-city high school. Gary knew this was a gift he should pay forward and when the time came, he chose another fine young man, David Reyna, as his recipient. (Read David and Gary’s story here )

Gary had known David since he was 5 years old, when his mother began working for Gary. Gary has funded David’s dental care for several years, and now is paying college tuition, housing and transportation for David as he pursues his dream of becoming a petroleum engineer. Gary is also introducing him to engineering professionals and community cultural events to expand his vision and encourage his aspirations. I asked Gary to lunch so I could learn more about this compelling philanthropic story. I learned much more.

Gary had a hardscrabble youth. He had multiple stepfathers, earned his own way from an early age, was forced to leave home while still in high school and endured a mistaken arrest and near imprisonment in his late teens. But other experiences shaped him as well: a Hispanic family that made room for him to come live in their already crowded home, a stint as a VISTA volunteer with farmworkers in California, as well as service and leadership during the early years of the AIDS crisis after he tested positive for HIV himself. What did Gary learn from his experiences? “It is in the act of giving that we find grace,” he told me. Grace—that deeply mysterious word that helps explain how we are able to endure in the face of the unendurable.

Then he added, “I believe we find our own courage in the act of encouraging and helping others.” Giving to others makes us more whole, it makes us strong, it makes us brave enough to confront the difficulties of our imperfect lives. Generosity has advantages for the other, but profound advantages for the self as well.

In closing, Gary let me know he is now challenging his former classmates at North Dallas High by offering a matching grant to provide services that help the school’s current students have a rich extracurricular experience in spite of the burden of poverty and in some cases, homelessness. Then he smiled and said, “People tell this story like I am so good, so generous. That’s not it. The truth is that through this experience I am having the best time of my life”.

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Austinites Annual Charitable Donations Revealed: Average $6,249 per tax payer


Do you earn $50,000 or more?  Itemized tax returns of U.S. Citizens earning $50,000 or more were examined to determine giving habits in the 50 largest U.S. cities.

This data represents almost 80 percent of all individual charitable contributions and offers the best possible view into charitable giving in distinct metropolitan areas.

A breakdown of top Texas cities:

Austin Metro area

Population: 1.9 Million

Average annual charitable donation: $6,249

Percent of income donated to charity:  3.0%

San Antonio Metro area

Population: 2.3 Million

Average annual charitable donation: $6,576

Percent of income donated to charity:  3.8%

Houston Metro area

Population: 6.3 Million

Average annual charitable donation: $7,949

Percent of income donated to charity:  3.7%

Dallas Metro area

Population:6.8 Million

Average annual charitable donation: $7,626

Percent of income donated to charity:  3.8%

Although the report benchmarks Austin against the top largest 50 cities in the United States, it is important to note that Texas is unique as the percentage of Texans who itemize on their tax return may be lower.

Lisa Rodman, President, Rodman & Associates, explains, “Texans, who may be giving generously, would not be reflected in this study if they did not itemize on their tax return.  As Texas does not have a State income tax, fewer residents may be itemizing.  And in Austin, where housing is especially expensive, those who do not purchase a home might not itemize to take advantage of the mortgage tax deduction either.”

“For most Americans, charitable giving is completely framed by their percent of discretionary income.  Austin’s high cost of living may, in the future, diminish the amount our citizens are able to support local charities.  This is something we continue to watch”.

Social Impact Investing Explained

Social Bonds

For decades, the primary tool available to philanthropists were cash gifts and grants to nonprofit organizations. In the ‘60s that began to change as forward thinking organizations started offering low-interest loans to create low-income housing.  Today philanthropists employ multiple tools to harness the power of capital markets and spur societal change:

  • Debt offerings such as bonds to improve municipal water systems
  • Microfinance
  • Deposits with Community Development Financial Institutions (CDFIs), and
  • Mission Related Investments, such as investing in new diagnostic technology to improve health outcomes.

These examples illustrate how strategic financial investments, coupled with innovate business models, can serve as a catalyst for an even greater impact.

In fact many entrepreneurs argue that the world’s most pressing large scale problems might better be addressed by business rather than nonprofits at all—universal access to high-speed internet, tackling global waste (e.g. resource recovery) and, as featured in this WIRED Magazine article, phone applications to enable individuals and families to manage food stamp benefits.

All donors want confirmation that their dollars are being put to work in a measurable way.  Social Impact investors measure their return on investment by benchmarking social outcomes and financial returns.

Two common reasons impact investors partner with Rodman & Associates is to receive support for a one-time need, such as drafting an Investment Policy or research into a specific field of interest, and to increase long term capacity through annual evaluations of social return, which can insure the needle is moving–and in the right direction.

Interested in learning more about Impact Investing for yourself or your clients?  Let’s have lunch.

Creating a Meaningful Legacy No Longer Requires Great Wealth

American philanthropy has multiplied 6 ½ times since the 1950’s. As our giving grows, the ways to create a philanthropic legacy have extended beyond naming a building or establishing a large endowment. While 91% of high net worth families give to charity, 59% of families with moderate incomes also give, and creating a meaningful legacy no longer requires great wealth. Today, having an enduring, positive effect on a cherished cause or organization can be achieved through service, leadership and donations during life—as well as through gifts from your estate.

Creating a meaningful legacy relies on the combination of clear intent on the part of the donor, thoughtful communication regarding the current and longer term needs of the benefitting organization and an assessment of financial capacity—at present, in the years to come and after death. Addressing each of these will benefit from collaboration with a skilled philanthropic advisor, to thoughtfully engage with your existing estate and financial advisors and the benefiting nonprofits, to arrive at the most effective strategy. Bringing the next generation into these conversations results in deeper family ties, more purposeful philanthropy and can extend the family legacy through generations.

This longer view often results in a combination of aligned gifts. For instance, a one-time gift for a particular program or initiative, with annual support to sustain that gift and finally a bequest that will allow the organization to take your generosity to the next level. Taken together, this is a powerful legacy.

There are many estate planning strategies that do not require complicated and expensive financial instruments. For example, simply designating a non-profit as the beneficiary of all, or a percentage, of your IRA will support your philanthropy, reduce the taxes on your estate and does not require added legal advice. The same is true for other retirement plans, insurance policies and annuities.

Want to learn more about Legacy Giving? Click through to our Q&A with Joy Selak, CAP® Legacy Giving Q&A

Rodman & Associates was recently quoted in the Austin American Statesman’s analysis of the Giving USA 2017 report.  Here we recap three key takeaways from the report as researched and written by the Indiana University Lilly Family School of Philanthropy.

Giving-USA-2017 report cover

All of the philanthropic focus areas tracked went up, a rare occurrence.  For only the sixth time in the last 40 years, every single nonprofit sub-sector tracked—from health, to religion, to human services—realized an increase in donations in 2016.

The arts, environment, and international causes had the largest growth year over year, and we believe this is no coincidence. These are the types of nonprofit organizations working at the cutting edge, utilizing technology and innovation to re-think donor engagement.  Our favorite case in point is the San Francisco Museum of Modern Art’s recent Text to See campaign.

Particularly noteworthy: Giving to international groups grew 4.6 percent in inflation-adjusted dollars, to $22 billion. Especially impressive given there were few of the large-scale international disasters that usually drive that type of engagement.

Individual givers continue to drive American philanthropy.  Charitable giving by families, foundations and corporations all increased in 2016, with a 4% jump in donations from individuals alone. In total, donations from individuals amounted to nearly three-quarters of all giving in 2016.

New patterns emerging. Una Osili, Director of Research for Indiana University’s Lilly Family School of Philanthropy and lead researcher for the Giving USA 2017 report, said they are seeing successful young technology leaders starting their philanthropy earlier in life, as early as their twenties and thirties. These donors are adopting new forms of philanthropy using program related investment, impact investing and more collaborative models of giving.

Giving USA, the longest-running and most comprehensive report of its kind in America, is published by Giving USA Foundation, a public service initiative of The Giving Institute. Year after year the report provides an unparalleled look at how and why people give, and how those patterns unfold over time. A copy of the full report can be purchased here. And as a free resource download the infographic for an overview of major giving trends.

The greatest transfer of generational wealth in American history, coupled with a rising tide of new wealth among American entrepreneurs, has increased the need for donors to be supported in making strategic and effective philanthropic decisions. Rodman & Associates brings years of experience in designing philanthropic giving models, achieving meaningful results and assessing impact.

10 Big Hearts = 1 Tiny Home


The story of the newest residence in Community First! Village started with a group of 10 retired guys who played golf a couple of times a week. Their wives became friends and the group began to socialize, starting a dinner club and even traveling together.

One couple, Skip Helms and his wife Connie, belonged to Lake Hills Church, a congregation providing volunteer services for Mobile Loaves and Fishes, a program that delivers dignity, opportunity and healthy meals to disabled or homeless citizens. This led the couple to Community First! Village, the visionary, ground-up Austin community providing housing for the disabled and chronically homeless and led by the indomitable Alan Graham, CEO of Mobile Loaves and Fishes.

This 27-acre east Austin property is providing individual homes for nearly 200 men and women, with amenities such as an outdoor theatre, a vegetable and flower garden, pens to raise chickens and goats, art and welding studios, and a shop where handmade products can be sold. After Skip Helms visited the Village, he couldn’t wait to tell his golfing buddies about this amazing place.

The group wanted to know more, so the couples all went to Community First! Village and took a tour, then shared a group meal on the property. They learned that the project was supported entirely by private funding, that there was a packet of Tiny Home designs that donors could choose from and see built, that residents were carefully selected and supported, and that all residents worked on the property to pay their rent and other expenses. Skip’s son in law, a builder, said “If you fund one of these houses, I’ll build it.” (more…)