August 6, 2021

Barry Taylor, Senior Wealth Manager and Managing Director at Sand Hill Global Advisors joins Pamela Doherty, Senior Director of Gift Planning and Acting Chief of Philanthropy of The San Francisco Foundation to discuss what the role of community foundations is with prospective donors if donors can just give locally, what a typical engagement looks like for donors, what a donor advised fund is, and more.

Below is a transcript of the video interview.

Barry Taylor:

My name is Barry Taylor. I’m a Senior Wealth Manager and Managing Director for Sand Hill Global Advisors. Today I’ve invited Pamela Doherty with the San Francisco Foundation to join me so we can have a chat about how community foundations can help those of us with charitable intent give both meaningful and informed decisions. Welcome, Pamela.

Pamela Doherty:

Thank you, Barry. I’m happy to be here.

Barry Taylor:

Pamela, as you know, wealth management firms like Sand Hill, one of the critical benefits that we provide to our clients is financial planning. It’s a process whereby we identify their goals, help them identify their goals, what matters to them. And we also look at the assets they have, the resources that they either already have or will be accumulated in during their lifetime to see how well they can satisfy those goals. It’s not unusual that some clients will ask us to include donor giving as part of their plan.

Barry Taylor:

With that said, it’s also not unusual that we’ll end up with the completion of a plan where at the end of the plan we’re looking at what the estate might look like at the end of one’s lifetime. This number frequently will lead to a discussion about legacy planning. Often, clients don’t want to leave all of their money to their children. When they see how much they will have accumulated, they’ll start talking about charitable giving.

Barry Taylor:

At that point, it makes sense in our minds to bring into the discussion an estate planning attorney. If the client has one of their own, we’ll engage that attorney. If the client doesn’t have one of their own, we’re happy from our 35 years of working in the community with the estate planning attorneys and others, for example, to introduce one to them. It’s kind of at this point when we’ve helped them identify that they can in fact be charitable and the extent to which they can be charitable.

Barry Taylor:

And when we help facilitate how that might occur, both in estate planning documents and through other means. This is kind of where we draw the line. It may be my role to help you as a client identify that in fact, you can be charitably inclined. At the same time, it’s not my place to tell you who you should give your money to or how. And as you know from our years of working together, this is where I enjoy working with foundations, especially the San Francisco Community Foundation. So with that as a lead-in, could you please tell our viewers what the role of a community foundation is typically when you’re engaging with prospective donors?

Pamela Doherty:

Sure. Well, a community foundation is a public charity focused on improving the quality of life in a particular geographic region. And of course, the San Francisco Foundation is focused on the Bay Area. A community foundation, pools assets and resources to address the most pressing issues of a community in its present-day and for generations to come. And a community foundation plays several roles. It’s a grantmaker and it to your point is a great resource for individuals and families looking to engage in philanthropy.

Pamela Doherty:

And a community foundation strives to be a civic leader and often engages in public policy to affect positive social change. A community foundation is a terrific resource for individuals and families and businesses and private foundations and other nonprofits that want to take advantage of the foundation’s knowledge and expertise and relationships in their community.

Barry Taylor:

Pamela, as an example, let’s just do a hypothetical here. I’ve just wrapped up a financial plan for a client. We concluded the client would like to make contributions to the community, give back to community. Their attorney has helped us identify how they might do that through their estate plan, but they’re not clear where they might have impact. This is one of the areas where I love about the community foundations. You made the comment that your focus is the San Francisco Bay Area. First point I would make is that that said, if I’m a prospective donor working with you, I can give contributions anywhere in the world, correct? So I’m not restricting to the Bay Area?

Pamela Doherty:

That’s correct, Barry. So oftentimes what donors will do is establish charitable funds with the San Francisco Foundation or any other community foundation for that matter. And they use that fund to fulfill their own philanthropic objectives to give to the nonprofits that they are engaged with, to give to the causes that they care about. And they can do that whether those nonprofits are local, across the country, or even internationally.

Pamela Doherty:

The San Francisco Foundation with its own assets and its own programs is certainly focused on the Bay Area. And in addition, we are squarely focused on issues of equity which we describe as racial and economic inclusion.

Barry Taylor:

Thanks, Pamela. I’m very much aware of the work that you’ve done locally. The San Francisco Foundation has certainly been one of the leaders in identifying needs in our community and also acting on that. Not just as a resource to individual donors, but actively involved in community itself. And I really appreciate and respect that. When I think of our clients, the mix of clients, we have that are just starting out. We have individuals that may be divorced, may be widowed. We have couples of course that may be getting ready for retirement or already retired. So we have a wide range of niches if you will. I’m going to use that marketing term because it’s a lead-in to a question I have for you.

Barry Taylor:

One of the things that the foundation does for a typical client is to help identify the niches, if you will, within the at-needs community. So be it social justice, be it education, health issues. Can you talk a little bit about just a little bit deeper dive into that kind of work? So can you talk a bit about a typical engagement? I come to you as a prospective donor. I don’t have a clue what all the needs are in the community. What would a typical engagement look like when you and I first meet?

Pamela Doherty:

Sure. So much like you do in your profession, I sit down with people and I asked them about what their objectives are, what is it that they’re trying to accomplish and where are they in terms of their philanthropic journey. So to your point about where your clients are, often people are just getting started and really are trying to focus and be strategic and learn how to be impactful with their giving. Some people have been engaged in philanthropy for a long time, and so they want to get more organized and streamlined.

Pamela Doherty:

Some people have been engaging in philanthropy on their own and now want to be part of a larger community and exchange ideas and information with other donors. And so the first step is to gauge where people are and where they might want to go. And then from there, I would recommend the type of vehicle that they might use to reach their goals. Often, that is a donor-advised fund where someone sets that charitable fund up during their lifetime and engages in grantmaking. But sometimes it’s a testamentary fund that gets established through their estate plan.

Barry Taylor:

Pamela, you identified a couple of vehicles that individual donors can use to give back to community. Most common one, as I understand, is the donor-advised fund oftentimes referred to as a DAF. Would you mind elaborating a little bit more on how they work with some of the tax benefits are, et cetera?

Pamela Doherty:

Sure. You are correct that the donor-advised fund is really the most common vehicle and increasing in popularity over time. And it is a charitable fund that is established when someone makes a contribution. It’s an irrevocable gift to the San Francisco Foundation. That fund then is invested for growth if that’s what the donor wishes to maximize future giving. And then that donor has the ability to make grants from their fund to nonprofit organizations, again, in the Bay Area, across the country, or around the world.

Pamela Doherty:

After a donor establishes a donor-advised fund, they are at least at the San Francisco Foundation paired with a philanthropic advisor. The philanthropic advisor is someone on our team who can provide guidance for the donor’s grantmaking can help make sure that the donor is being strategic if that’s what they wish. And can help make sure that the donor is having a rewarding experience that meets their goals.

Barry Taylor:

Pamela, a couple details about the donor-advised fund that I find really effective for clients relates to a great extent to tax planning. And specifically, as our viewers may or may not know, one can give appreciated stock, for example, to a donor-advised fund, avoid the capital gains on it, and therefore actually increase the impact of their giving. I also like using it, as I mentioned earlier, when you think of the range of clients that we work with a number of them are, as I mentioned earlier, near retirement or in retirement. These are often their last high-earning years just before they retire. And for individuals that let’s say hypothetically give away $20,000 a year, I find it a great suggestion that they do what I call front-loading.

Barry Taylor:

So instead of putting 20,000 into a donor-advised fund, they open the donor-advised fund with San Francisco Foundation. Maybe they put in five years of contribution, so 100,000. So they now have $100,000 in deductions in one of their higher earning years. And they can simply give away 20,000 a year for the next five years to give away whatever want they want for the rest of their life.

Barry Taylor:

So once they make the gift to the charity or to the donor-advised fund, they basically get the tax break, but they’re not forced to give that money away within a short period of time. So clearly a great vehicle.

Barry Taylor:

Pamela, thank you again for joining us. I know this is an extremely busy time for you and for the foundation given the post-pandemic work that has to be done. And you are wearing two hats, Senior Director of Planned Giving and Acting Chief of Philanthropy. So thank you for making time with both those hats and with all the work that is going on at the foundation right now. Anything you’d like to add in addition to if I’m a viewer and I’m interested in contacting you, how should I go about that?

Pamela Doherty:

Yes. The best way is to go to our website, www.sff.org. You can find me on the team page and you can find my email there. I’d be happy to talk to anyone who wants to explore philanthropy and the options at the San Francisco Foundation.

Barry Taylor:

Thank you to our viewers for joining us for this edition in our interview series at Sand Hill Global Advisors. For more information, please visit our website. Thank you.

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