Inspiring Donors to Invest Rather than Just Give to Your Charity

Are there new models for donors and charities to work together to effectively support causes and concerns?

While both donors and charities need one another, they often appear to be on two sides of an equation that addresses human and social problems. Donors need the charities to carry out the causes that they believe in. Charities need donations to provide the human and physical resources for their mission.

As the pressure on charities grows to compete for donations, marketing and promotion efforts are steadily improving. But as direct mail gives way to online giving which is now morphing into mobile giving, some charities are not much more stable than the people they serve, living from one fund-raiser to the next. So while charities are providing commendable services, telling their story and demonstrating results is a challenge which is growing rapidly.

On the other hand, donors, dedicated to making a difference with their assets, are challenged to discern the best investment for their charitable choices. Donors want more transparency, more assurance of stability and more results.

Can there be a new way to help charities and donors achieve objectives?

Yes, there is a revolutionary model to balance the equation of donors and charities. The National Catholic Community Foundation, now in its 15th year, was started to bridge some of the gaps in the donor-charity relationship. And, it was designed to encourage philanthropy today and across the generations.

If you haven’t heard of the National Catholic Community Foundation (NCCF), you’re not alone. This quiet organization aims to revolutionize the way individual donors, charitable organizations, parishes, schools, and even dioceses use and protect their assets.

NCCF, initiated in 1997 by the esteemed Raskob Foundation and several religious orders, is designed to be different. Some refer to NCCF as a “Catholic bank” where donors place funds on deposit for distribution to various charities.

Philanthropy is a ministry. And like all ministries, it enriches both the giver and the receiver. This belief motivated the founders to create NCCF, and it is for this reason that NCCF offers donors an array of services to help them become more effectively engaged in philanthropy. The NCCF model permits donors to deposit their assets into a “donor advised fund” (NCCF also offers other financial instruments such as Gift Annuities, etc.). The funds are held by NCCF, and invested to earn respectable returns, until donors ask for distribution to a charity of the donor’s choice.

NCCF has developed a growing “Catalog of Ministries” on its website which is available for charities to tell their story to potential donors free of charge.

NCCF has several distinguishing characteristics.

First, it has a Catholic core. The NCCF Board of Trustees consists of lay Roman Catholic men and women. Through them, donors can benefit charitable activities that reflect the Gospel, whether these activities serve the ministry of the Catholic Church specifically, or the larger community.

Second, NCCF is national (with some international dimensions, too) and can arrange for funding charities anywhere within the United States and, under certain circumstances, anywhere in the world.

Third, in NCCF perpetual funds, the role of advisor can be passed on indefinitely. Consequently, succeeding generations of one family can remain active in the family’s fund providing an opportunity for multi-generational philanthropy. Donor-Advised and Donor-Designated funds allow one generation to instill the family’s philanthropic ethic in their children and their children’s children by giving them the opportunity to participate in the decision-making process.

The NCCF structure fosters a culture of accountability, credibility, and integrity. As a publicly-supported charitable institution, NCCF manages financial resources in an ethical manner so that donated funds are used for their intended purposes. Donors and charities benefit from NCCF’s fiduciary, administrative and investment expertise. Participants also enjoy the satisfaction of being part of a national community of donors.

For individual donors, the NCCF model offers many advantages. For example, funds can be treated like a small foundation, via a donor advised fund, without all of the expense and responsibility that goes with having a private foundation. All of the tax advantages of a private foundation are available to NCCF donors. They maximize the use of their funds by cutting down on administrative overhead of running a private foundation.

The NCCF model is attractive because it reduces cost, maintains control, and provides inter-generational continuity. It also provides an advantage that donors know that they are participating in a “Catholic community of philanthropists” who are local, national and global.

For charities, the NCCF model provides an economy of scale in investments and investing expertise. Because donors are not spending so much on overhead, they have more to contribute. Also, charities benefit from an “economy of scale” by managing smaller donors without incurring heavy expenses. Economy of scale

But more than dollars, one need to go no further than newspaper headlines to recognize an important concern for donors. Law suits, accountability, and leadership repeatedly break into public scandals. A fund with NCCF is protected for the donor. Because the funds are in the hands of NCCF, which is audited and directed by an independent board of 12 trustees, a donor’s funds are preserved from law suits against a charity or religious organization. Because the funds are technically owned by NCCF and advised by the donor, risk is minimized.

One additional thought: are charities also donors? If a charity wants to protect its assets, and the trust that donors have given to it, would a fund, protected by NCCF, serve the greater and long term needs?

Is the NCCF model a different way for donors and charities to work together? Yes, it’s actually revolutionary. However, it matches the times that we live in where donors are looking for security and charities are looking to expand their donor base.

Since the creation of NCCF in 1997, it has developed a Catalog of Ministries, a web-based index of charitable organizations. Donors find this information useful when searching for organizations that would be of interest to them. If you would like to be listed in the Catalog of Ministries, please go to the website for more information.

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