Ep. 41 Andy Ragone: Shaping Legacies Through Strategic Nonprofit Gift Planning

Welcome in. My name is Ron Greenwald. This is the Ron Greenwald podcast. This podcast is a lightning rod for informed decision making as you weave your way through what we call life. Life is going to have a lot of twist and turns and we kind of use the term now improv, but we have guests that are going to give you tools to maybe reduce that improvisational role and give you some ideas of how you can leave a legacy now and then in the future. I am honored to have as my guest today Andy Ragone. Did I say that right, andy?

That's good enough.

No, no, no, no, no. Ragone Right, yes, ragone, ragone. Okay, he is the CEO and partner and co-founder of here's another one, pleiades. Pleiades nonprofit advisors LLC.

We're just here to make things difficult for you, ron. Yes, pleiades, that's correct, pleiades.

Andy, tell us a little bit about your background and a little bit about yourself, so we can move and you can take a journey into what you're doing today.

Oh my goodness. Yeah, that can be a fairly long story, but I'll give you a short version.

Yeah, I'll give you the short version.

So, yeah, so we started Pleiades. My business partner, kimberly Jiton, and I we had known each other for probably about seven years prior to. I worked for a gift planning organization called Crescendo and kind of cut my teeth in the gift planning space based on what I learned there. So we started Pleiades in light of the fact that we saw a specific area that nonprofits needed help with and we felt like we could be able to fit that particular space well. Prior to being with Crescendo, I was in pastoral ministry as a pastor, serving as a pastor for probably the better part of 30 years. So at least in that nonprofit space as well, a little bit different when you're in the church world, but at the end of the day, there's some similarities too.

So, Andy, as someone who has, I like to delve into that a little bit. How do you go from pastor to crescendo? Was that the pastor to crescendo? If you don't mind, I have to delve into that.

Yeah, so as a pastor I mean, like any sort of organizational structure you're going to be having maybe a title that says pastor. Well, oftentimes people think of pastor as the main speaking individual who maybe is upfront in front of people and that sort of thing.

But there's, an entire staff.

That oftentimes goes with a church that kind of grows in its sophistication. In many cases you'll have multi-staff sort of church environments and, if not, mega-staff environments. Mine was a church that wasn't. I wasn't the lead pastor, I was an executive pastor there and functioning kind of in a similar role. Perhaps there's some overlap, of course, when you're just dealing with organizational structure and just dealing with the payroll side or dealing with the staffing side or dealing with the programmatic side. I mean there's a lot of overlap in terms of how operations are overseen.

So you go and then Crescendo comes to you and says I really would like you to take this on and you kind of have the personality to do that.

Yeah, I mean as far as my role with Crescendo and how that started, I'm truly indebted to Charles Schultz. I've known Charles probably since 1999, I think, so our relationship goes way back and I didn't realize the giant that he was in the get-planning industry. I knew of his company because he and I prior to coming on to Crescendo, he and I knew each other and would periodically meet and connect over coffee and just touch base on different things related to the church environment, because he was a part of our church he and his wife already and so the connection was there and it started there. I also was friends with his son-in-law and daughter, kristen and Chris Jarda, who are both attorneys and when I came on we're both the senior executive VPs over at Crescendo and so they were very instrumental in bringing me on board as well.

So, Grishendo, and then you and Kimberly start this company. How long has Pleiades? If I'm saying that correctly, You're cringing, so I must not be no, no, no, no, it's good You're good, okay, okay, I'm empathizing. Oh, you're empathetic to my inability to say the word. It's a constellation.

By the way, it was what it is, that's right, yeah, real quickly on that side, just on the constellation side. Right, we'll just kind of touch on that real quick. So Pleiades is indeed a cluster of stars and you can see about seven with the naked eye, but of course, once you put a telescope on it you'll see a much, much, much larger and much more intricate tapestry there within that star cluster. But as far as how it works within our own perspective is that it was used for maritime sailors when they would start their sailing season, because they would see the Pleiades beginning to emerge in the eastern sky at about five in the morning, four in the morning, and once they did, that was kind of like the all clear for them to go and start their sailing season. The other thing that the Pleiades does is when they are looking at night navigation, which is of course a component of any sort of maritime sailor from years prior to instrumentation, or compass for that matter, and they would use the Pleiades as a primary guide, or at least one of the primary guides, for latitudinal direction finding, and so it's really kind of the idea of that navigation tool that was used for maritime sailors, and so, of course, the navigation tool for nonprofits, specifically in the area of gift planning.

So let's go right into that transition. That was beautifully said in the transition. What is plan giving and what should nonprofits pursue, and how should nonprofits pursue it properly?

Yeah, I mean I would say that gift planning in its very essence is any sort of time and thought that goes into making a gift that is going to require some sort of plan and benefit not only the organization but also benefit the donor, and I don't know if I like that definition just how I said it, so maybe I'll say it one other way is when people have assets and they are, maybe it could be like a rental property, or it could be a stock portfolio, or it could be a life insurance plan or it could be some sort of appreciated property. It could be personal property, like a nice ring collection or a car collection or a business interest. There are so many different ways that we as individuals will derive income from these sources and I think that there are streams of income that maybe we got into it just because we wanted to start investing right and we wanted to start thinking okay, how can I make and generate some passive income or maybe even begin to create future dividend income that's going to come as a stream of regular income. The problem comes when you have a business or you have a property, let's say a rental home. I got into rental homes back in the early 2000s and discovered the roller coaster that they would present, and I discovered that I am not a big fan of being a landlord. That's just not something I enjoy doing Some people great, but not for me. That said is now it's a good problem to have, but at the same time it's a problem because when we bought the property back in 2001, my wife and I we're now fast forward to 2024 and we now have a large capital gains that we have to contend with should we turn and sell the property? So when you start thinking in the world of planned giving, it is now joining philanthropy but also helping on the tax benefit side. So one of the things that's probably good to point out on that front is Congress made it possible and they've done this through a series of steps that they had taken over the last hundred years, way back, as far back as 1915, to where, instead of giving to the IRS in the form of taxation I wouldn't say it's exactly giving, it's not a giving. Yeah, I would just say, burdened with the reality of paying taxes, congress has made it possible for you to bypass some of your taxation by giving philanthropically to some nonprofits or any public charity of 501c3. So if I can give to my favorite nonprofit and bypass my taxation towards the IRS, I'm a happier individual because it's really benefiting a cause that I believe in rather than giving to the government.

So who's calling your firm is reaching out to whom? Who is your perfect client or who do you want me to refer you to?

Yeah, so any sort of nonprofit 501c3 that is probably at a certain level of sophistication, and what I mean by that is in the development shop of that particular nonprofit there are directions that a development department has, there's best practices that a development department does, and usually when a professional development officer arrives on the scene they usually have multiple things that they need to give attention to events they have to do maybe an annual giving program. They have to do a gala like an event, but they also have a number of other things that are front and center for them, because many nonprofits board of directors are just saying we need money in the door to fund our mission. What happens with gift planning? Because gift planning gets a little bit more technical and involved, it oftentimes doesn't happen right away and so, because of that, the convenience of money in the door is oftentimes where a lot of our nonprofits are thinking. The more sophisticated a giving program develops into, the more they begin thinking that well, do you want money in the door now which comes from a very small bucket of disposable income, from a very few amount of donors who are going to give anything of size or substance, or do we want to tap into the wealth which makes up of around 97% of all American income, coming from various forms, whether it be a retirement plan, stock appreciation or portfolio or whatnot, and can we help people give from them while also solving their tax problem? So the people that look to come to us are going to be organizations that have at least one professional development officer who's a frontline fundraiser, and then they begin to now move into the reality of gift planning, which they know or they've heard that this is tough stuff to get into, but we're going to forge ahead and try to figure it out, and that's when they'll call us and do it.

You're the strategic planner for long-term strategic planning.

We certainly do lay out a plan, we do lay out a calendar, we do lay out you know, kind of like the direction, but it's far more. We actually implement programs. So we are fractional gift planning officers that are working based on four levels of service to carry out the program in its entirety. And if you want to hire a full-time staff down the road specifically for gift planning, great, in the meantime you might want to use us.

So give us some examples of what you've implemented on behalf of a non-profit.

Sure, I can give you a number of examples in terms of, you know, of clients themselves. I'll take a homeless conglomerate out of Miami, florida. We are national and this homeless organization, which is a fairly large organization they're kind of, like you know, the main homeless organization that Miami thinks of and they've done a wonderful job of integrating themselves within the Miami community and there's some really cool things that they've accomplished. That said is they had one front-line fundraiser she's a VP of development and it's just her and she does have a couple of support staff somebody doing database management, somebody doing maybe some marketing and that sort of thing but they had no idea about gift planning, language gift planning, gift structuring. They had no idea how to do that. They don't know in terms of what best practices look like in order to bring donors to a level of interest that they didn't know of before, and so they ended up bringing us on board. It was our first client and they took a chance on us, which is great. You know, I appreciate the fact that they took a chance on us.

Well, you do have the pedigree.

Well, I mean it helped going in, but they did take a chance on us nonetheless, and so we will do all of the marketing on the gift planning side and we work together with our Markham individuals and we sent out anywhere between and a lot of people get shocked when they hear this number but about 25 to 30 touchpoints per year. We also then move people through a survey, through an estate planning seminar, to a legacy event, and there's this momentum and traction that begins to be developed in that period of time, usually about eight months, and ROI begins to show up at the end of this eight month period and then it cycles through and then we do it again each and every year.

Okay, so you are the marketing arm of a non-profit, you're the strategic marketing, you're the go-to guy.

But the biggest thing about marketing and this is very important is there's a lot of legal information and simplifying charitable tax law to explain to donors what they can do. They don't even know their options and if they don't know what they don't know, then they're not going to go where they don't know If they're advisors, like a professional wealth advisor or even an estate planning attorney many of them never delve into the area of philanthropy. It's just not their space and so consequently, they're not going to advise in several of the giving vehicles out there if they're not normally working with them. So consequently, people don't hear about it simply because there's nobody else telling them about it. So that's kind of the marketing component. But then it goes from there into donor activity, where there's donor relations, where there's cultivation, where there's planting of seeds, where there's also providing solutions for different gift structures that might work for their case-by-case scenario.

Are you actively engaging with the donor? Are you behind the scenes planting those seeds so that the frontline people are?

Yes, it just depends on what level you decide to hire us at. So if we are doing just marketing implementation, then we are the behind the scenes individuals and we'll work with the frontline fundraiser to have those conversations. If they want to bring us on at a comprehensive level, then that now allows for us to do joint visits and to actually structure gifts on their behalf of the organization At our highest level. We're doing independent visits as representatives of the organization itself.

So you have the knowledge I mean again for people that you know. Again, crescendo is something that only a nonprofit person would know. In terms of what you know, in terms of this listening audience, if you're not in the nonprofit world, crescendo is not something they're gonna know in terms of your pedigree and your background to be able to bring that information, that full service information, to the donor For sure.

Yeah, the only way that I could possibly be doing what it is that I'm doing is having that background and gift planning, as well as you know, the education and certified in two different certification levels and that sort of thing.

Yeah, without that I couldn't do what I do so to go really into the weeds on this and I hope we don't lose the audience because they're gonna. What Like if somebody says you know, chair of a remainder trust, the old CRT world, do you run the numbers? Like I'm 85, I'm not. But I bring to you an 85 year old, you know, client who's got a rental property worth $2 million and she wants to donate it to her favorite and create a legacy of the charity and get an annuity on behalf of that property. Do I come to you to put that? Pull that all together.

Yeah. So I mean, we'll certainly run the proposals for a CRT or a charitable gift annuity. When you're doing just on the side, when you're doing gift annuities in exchange for real estate, that gets a bit tricky and there's some things that you have to be very mindful of and protective of the nonprofit to make sure that they're not getting themselves into a bad spot. But on the charitable remainder trust, simply because the trust is in itself its own charitable entity, that that's something that is a little bit easier to manage. And so what we will do, we won't draft the trust, but we do outsource to individuals who will. And I've discovered, you know, just in the time that we've been doing this, that there are many who I would not want to have draft the trust with it, because they just don't have that experience and even though they're maybe, you know, phenomenal attorneys, that's just still, at the same time, it's just not their scope of operation. And so there are individuals that we like to work with and outsource to in order to now, you know, take up the ball or the baton and actually draft the trust and have it appropriately managed.

So let's take the scenario, which I think is pretty common. Somebody is listening to this and goes yeah, I would really like to Andy to talk to about that, can I? I'm you know, I'm Miss Jones. Miss Jones calls you. Would you go and please talk to my attorney, my estate planning attorney, who thinks this is a bad idea, or my wealth manager, who thinks this is a bad idea, and not to say, hey, I'm gonna try to convince them. Otherwise, I just want them do they understand? Do they understand what's their, their objections are? Maybe they don't know.

Yeah, in many cases that's exactly what it is. Maybe they've heard of it. A lot of wealth advisors have heard of CRTs and they've you know kind of, but they've never necessarily worked with one and so, again, they're just not comfortable in that particular space and so, because of that level of discomfort, they don't know how to advise in the appropriate way. The trick is, with a lot of our professional advisors, again, they're very qualified and very good at what they do. They're just not in the space of philanthropy. And because they're not in the space of philanthropy, their goal for their particular client base isn't necessarily philanthropic in nature. But what happens if you do have a client that is very philanthropic in nature and would like to be able to understand these types of solutions that would otherwise not be available to them? You know it should either the advisor not necessarily provide that for them, that information. So, yes, there is a fair amount of education and we'll provide them with, say, a proposal and and you know we usually when you start off with the proposal, there's a lot of things you don't necessarily know about the donor because they may or may not necessarily disclose that to you. But that said is it can be a very helpful place to start, especially for a CPA or a financial advisor, to see how this now begins to come in the in the, in the frame. And so that ends up saying oh okay, I get that, that makes sense, oh, there's value there, and eventually they just go. That's a really good idea, just takes a while to get them there.

You know I want to go in a little bit of a tangent because I've you know, I've been in this Space of what I do for 15 years of working with the state planning attorneys and wealth managers and the state administration and I've heard every story from every. You can't even I literally now have to when I when the state, when the attorney says, ron, I want you to go change the locks on the home because I don't want the, the children, the beneficiaries and these, these children are 60, 70 years old and they all hate one another. I actually bring a secure. I have a gentleman who packs heat with me to be when I go to these houses nowadays Because I don't know what I'm gonna be confronted with. But that's it. If that's way, different story. But my question is how many 501 C3s are there in the United States of America? I don't know if you have that in. I mean there are millions Given your. You know you have a 30 year. Sounds like a 30 year history in this. I don't know how many year history in the space of Crescendo and now what you're doing, or 20 year history? Do you see consolidation as a tool to Do we need these as many 501 C3s as we have? I'm just as a Curious question.

I don't know how to answer that. I my understanding is that there's like about 1.5 million charities. So I think that in church world and I can probably speak to that a little bit better I would say that we are in a very interesting Place right now within church world where a lot of those mainline denominational churches that that have been in existence for maybe you know, 120, 150, 200, 400 years and beyond that, there has been a number of churches closing doors and then a number of churches that have begin to, kind of by nature of their programming and by nature of who's the one, who's the speaking pastor or their team of pastors that are speaking and they're quite good and and and so they're their churches grow and grow and grow. In many cases it does come at the expense of maybe a midsize or a smaller church that does have to close its doors and it begins to merge. Well, I would imagine that a lot of nonprofits out there kind of function similarly. I can think of a few that we've even worked with that has had leadership change and Because of the leadership change that means, you know, something didn't happen quite right. Or maybe a retiree, you know a leader resigned or for whatever reason, they're no longer in the place of leadership that they were, and so now the board is Trying to restructure and you find new leadership and and oftentimes there's just this point of volatility or instability that goes along with the organization and sometimes that opens up talks to you know, maybe we do need to join and when maybe we do need to merge with some other organizations that are thinking and acting like us.

I mean if somebody, if two nonprofits, came to you and said, would that be something that you could strategically Look at them and go, hey, you know what, I think I could help you Be me, given your background and your expertise and your knowledge, and you as a team with Kimberly I, I mean I see that as I'm just talking kind of as a strategic plan. Yeah, because again, the, the transfer of wealth and we can talk about that till the cows come home in over the next 20 years, the 30, 40 trillion dollars that's gonna transfer, we all know I mean not that we all know that, but those in the industry know what's coming with the baby boomers. I just your business model is certainly ripe and kudos.

Yeah, I mean, as far as our role, I would say that we stick to primarily the fundraising, gift planning space. That said, kimberly was the Executive director for the Orange Catholic Foundation. Prior to that she was with the Archdiocese of LA for a number of years and has a 30 year Fundraising effort and of course we understand that your CEO, your executive director, is going to be your chief, not only visioncaster but fundraiser as well. So of course there is a fair amount of experience that comes from the both of us to be able to maybe Possibly navigate that. But I wouldn't say that's really our space of where we are Intentionally trying to work with them. So let's make sure people know how to get a hold of you, what's the best way to reach you, Sure, you just have to know how to spell it, but it is Pleiades, npa calm, short for nonprofit advisors, but NPA. So yes, if you go to Pleiades, npa calm, and maybe I can give you that link on the show notes, or you can put it on the show notes for people, and then that might be, that might be the place to put it. But it's very simple to just type in and We'll kind of take it from there.

So I know everybody's already. You know it's watching this going one of the guitars up on the wall all about. So we want to adjust that. And then Also, I am become a pickleball fanatic. So you have to get down here to San Diego where this is being recorded so you and I can go place on pickleball. But let's talk guitars first.

Oh my goodness, yes, well, I'm anxious to talk on both the guitars. I will say that's like well, andy, do you play? And the answer is no. My children did, and both of them actually have three children, and two of them were were fairly proficient guitarists. One was much more of a technical guitarist. The other one was, I think, on our way to become the next Taylor Swift. You only can imagine yeah, right, and so, yeah, so, anyways. So both of them played a lot and and we pretty much had a fairly musical family and my wife is a harpist and I have a vocal and Operatic way way back when, background that so you're not either.

partridge family have you guys actually gone out in before? We have Now anybody under the age of X won't know what I'm talking about with Google, the partridge family and that's right, that's right.

We did have a little bit of a a partridge family experience a few times, which was kind of fun.

Are you performing now or?

no, I haven't performed for some time. Okay, maybe karaoke, and that's about it, I don't know, but my anyway. So when we were in the process of, you know, giving all of our kids the boot and and moving them on to their next stage of life and All of them are doing well, and and but they decided that they weren't going to take all of their guitars with them, and so we had to figure out okay, what do we do with them? And so this is pretty much the product of that.

Okay, so they, they don't. They never come off that wall, apparently, or for holidays, for holidays or any.

You know it's a good question. I mean, we have more guitars that didn't make it on the wall, so it's possible that they would likely get played, but honestly, I wouldn't want to play any of these.

Well, andy, I can hear the viral moment for you at the next holiday, the next gathering, they all get together, get those guitars off the wall, do a little two-minute YouTube on it on gift planning. Come up with a little him or a little two-minute, put it out there on YouTube. You never know. I mean on reels I guess I don't even know all the words because I don't understand all that stuff. But reels, I think, is now the thing, is, the is the short version of all that. So I Don't know, I don't know. Well, andy, it's been an honor and a privilege, and I also. Again, we have to come down here because I know pickleball, come on my favorite things, pickle you, and I probably you know what is it? The mothers from another, whatever that's right. Right, because pickleball IPA beer and smoked meat. Yeah, we have a smoker on our deck In the pickleball Beer. I've actually, covid, made me more of a wine person than a beer person, but I can go, I can.

Well, you got some fantastic breweries down in your neck of the woods.

Yes, we do, and actually we're recording this in vista, california, which has some amazing breweries right around us. So go ahead, summarize in the last minute that we have here, summarize who you are all about, you and Kimberly, and who when you're going with this, because it's fascinating, certainly the.

The quick summary is that we are here to implement your playing giving program and we are here to do it at a very affordable rate in comparison to trying to run it on your own. There's usually about a five-year onboarding process to really get familiar with this particular space, and so you'll see the ROI that comes within about a year. Actually wrote a blog just on that very subject itself, that playing giving ROI starts about a year into it and this way you'll see the momentum and the traction that you need it or really in order to secure the largest gifts You'll ever get and you'll find that one particular gift can show up and the equivalent of seven gala's worth of events and far less effort, just far more precision in terms of how to approach it. But you'll find that you will never look back and you'll never fundraise the same way again. I promise you that.

Well, Andy, thank you. I know Kimberly couldn't join us today, but I want to thank her too. I know you guys are a dynamic duo out there in the world of philanthropy, so I thank you for joining us today. This is Ron Greenwald, the Ron Greenwald podcast. Please listen to this podcast and share it. Share it with those that you know that have a passion for a charity, for a 501 C3, to create a legacy. And I Encourage I can't speak it to it enough to encourage people to do things why they can enjoy to see the fruits of their labor. I understand a bequest, but I also understand doing it why you are Fully aware of your and have capacity to see the benefits of what you're doing. So again, thank you, ron Greenwald, the Ron Greenwald podcast. Make it a great day.