Ep 453: Making An Impact For A Nonprofit You Love
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Hey, everyone. Thanks so much for joining us today on Her Money. I'm Jean Chatzky. And

Here at the end of what I cannot believe is 2024, we're going to talk about charitable giving and not just how to make sure our favorite nonprofits continue to thrive, although that's really important and we will get into it, but also how to know what type of donations, what type of philanthropic efforts are going to have the most impact in today's giving landscape.

Because the truth is, these days, impact matters more than ever before. Unfortunately, Americans have become less generous in the past few years, according to the most recent GivingUSA report. Charitable giving dropped 2.1% in 2023, and Vox's

has gone as far to say that we are in the middle of what it's calling a generosity crisis. Less than half of us now give to charity on an annual basis. And sure,

We have had a couple of rough years. We can lay some of the blame at the feet of inflation. But the biggest culprit may actually be how we do our taxes. Tax changes that went into effect during the first Trump administration made it far less advantageous for people to itemize taxes.

on their taxes and that dealt a blow to nonprofits that depended on people making small donations every year, often at the end of the year in order to snag a write off.

The thing is, and I know that you know this, tax breaks are hardly the only reason to give back. We give because we believe wholeheartedly in the work that a not-for-profit is trying to accomplish. So with that in mind, today we're going to explore how we can make sure that the organizations that are nearest and dearest to our hearts are

have the ability to continue to thrive. And we're going to dive in with Nancy Brown. Nancy is CEO of the American Heart Association. She's held that title since 2008. And over the last 16 years, the AHA has invested close to $6

billion to accelerate scientific discoveries in cardiovascular and cerebrovascular care. Additionally, I'm sure you've all heard about the organization's Go Red for Women movement. The AHA created the largest known dedicated women's health venture fund in the U.S., and

Those are just a few of the accomplishments that Nancy's got to talk about, but we're going to leave it there because I know that you all want to hear it from her. Nancy, so good to see you. It has been a minute.

Hi, Jean. Boy, it has been a minute. It's so great to see you. And I couldn't agree with you more about how quickly 2024 has passed us by, but a great opportunity, as you said, to talk about giving at your end. So thank you for including me in your podcast. Absolutely. Thanks for being here. Because when we're talking about charities, most of us have heard of the American Heart Association. The AHA was number 31 on Forbes list of the top 100 charities last year. But you

Give us a quick rundown on what you do and how specifically you're supporting women. Absolutely. You know, the American Heart Association is this country's largest voluntary health organization, which means that in addition to the paid staff of the AHA, we have millions of volunteers who work in communities actually here in the U.S. and around the world to help improve care

cardiovascular health, so heart health, brain health, to make sure the world is a better place. And we know that heart disease is the number one killer of women in America and in the world. And so our Go Red for Women campaign educates women that heart disease is their greatest health threat. We provide tools and solutions to women and to health care providers. And we really seek to continue to inspire a movement so that women will put themselves first

as it relates to their health and well-being. I have to say, I think the only reason that we know that heart disease is the number one threat to women is because of the work that you all have done, because of the Go Red campaign. I mean, you should take full credit for that. I hope that you do.

Thank you, Jean. We're very proud of the Go Red campaign, which is brought to life by millions of volunteers, millions of donors over the 20 years that we've had Go Red for Women that have helped inspire the work and have helped us have the resources to be able to focus on women's health. And, you know, we know that as we stand here today, women are underrepresented in clinical research.

They're misdiagnosed and underdiagnosed when they present to the emergency room. And often women themselves minimize their symptoms. And so we're very focused on making sure every single woman has the tools and resources they need to live their best life. You and I are talking today.

the day after what has come to be known as Giving Tuesday in this country. Do you guys tend to see a surge in donations or volunteer applications that day? I mean, how meaningful has this actually become? And how do you think of this day and its importance in the landscape of the work that you try to do all year?

You know, Giving Tuesday is such an important moment. I think it's a time when all charitable organizations rally together to remind their constituents the importance of giving in supporting the work of their organizations. And certainly for us at American Heart Association, it's a really important moment in time. We especially see the uptick in digital contributions on Giving Tuesday. And that's probably because our focus is promoting Giving Tuesday through digital means.

And again, any time we can remind people in their very busy lives that organizations like the American Heart Association and so many other very important organizations rely solely on contributions from generous people, that's how we're able to serve the public and how we're able to do the work that we do.

So what I did yesterday on Giving Tuesday, and I do this every year, is I went into my donor advised fund at Fidelity and I recommended grants. That's what they call it. When you want to give money to a particular organization, they call it, you recommend a grant and they approve the grant and then the money goes out and it gets distributed. And a donor advised fund for anybody who's not familiar with it is an investment, a

account that is essentially earmarked for charity. You put money into the account. You get, if you itemize, a deduction on your taxes in the year that you make the contribution to the DAF or donor advised fund. But then the money can grow because it's invested, which allows you to give away more later, which I just love. I like this idea that I can give away more for less. But

This year, I also lost my mom. I'm so sorry. Well, I've been talking about it a lot. So my listeners really know that I'm struggling. But I'm her executor. And so I have been going...

going through all of her papers. And one of the things that I didn't know about my mother was the huge number of charities that she supported with small donations, smaller automatic donations,

every single month. It added up to about the same percentage of money that I tend to give year over year, but she was just doing it automatically. She didn't have a day at the end of the year where she wrote those checks. And I've actually heard that her way is better for the organizations. Is that true?

Well, I think every way is important. You know, no matter how a person chooses to give to an organization, it's important. The idea of being a sustaining donor, you know, someone who makes a contribution on their credit card and then it automatically continues the way your mother was so graciously and generously doing, is really helpful to organizations for planning purposes, right? To know that contributions will be coming in month after month

is very helpful, especially for organizations that maybe are a bit smaller or have perhaps a more limited ability to raise large donations from donors.

major donors. I can, having been around, you mentioned my role at AHA, you didn't mention I've worked for the American Heart Association since 1986. Oh my goodness, I don't think I knew that. Yes, I am dating myself and I'm so passionate about the opportunity I have every day to make a difference in the lives of people. And I can tell you that whether it was 1986 or 2024, contributions of

any size from individuals make a tremendous difference. And giving is a very personal thing. And we just urge people to give what they are able to give in the spirit of helping organizations do great work to help other people. And it sounds like your mom, you know, without you even knowing she was doing that, she certainly instilled that in you as well, probably at a young age.

Yeah, she definitely did. We were one of those households on the block. You sound like you're about my age if you've been working since 1986, but we were one of those households on the block that used to have a carnival during the summer for muscular dystrophy. McDonald's would hand out these kits that would help you throw a backyard carnival for muscular dystrophy, and I think that was my first experience.

I think that was my first sort of go-round with charities, although I do remember her collecting dimes for the March of Dimes. I'm curious, in today's social media age, if giving money is the...

sort of be all and end all. For people who are feeling a little bit strapped for resources, does it make more of an impact or a similar impact to gather a bunch of friends and do a charity walk or to share a clever TikTok raising awareness or to

make another sort of a post on social media that drives people, drives a greater number of people to the site.

All of those things matter. When you think about what allows a nonprofit organization to thrive, first of all, I can speak mostly about AHA, but I serve on a number of boards and I'm involved actively in a number of organizations myself. Volunteers really matter. At the American Heart Association, volunteers matter.

are the gateway to helping us do advocacy, do screenings in communities, focus on important programs, and to raise money. And so digital volunteers, you know, volunteers on TikTok or influencers,

that get the message out. That's really important because what are the kinds of things we spend money on? You know, at the American Heart Association, we spend money on research. We spend money on advocacy. We spend money to help people have the tools they need. If someone has just been diagnosed with a heart problem or high blood pressure or high blood cholesterol or any of the number of risk factors, they want to quit smoking, they want to eat better, learn how to get more sleep, all of those things.

We produce those materials to help people. And when digital influencers can also get those messages out for us, it really helps.

And I would say to people who have a digital presence, you can do both. The digital platforms, whether it's TikTok, Facebook, they've really become expert at helping just everyday caring people have the resources they need to be able to get important messages out as well as to raise money. I talked at the start of the show about the fact that giving overall is down, especially when you take inflation into account.

What has that meant to organizations like the AHA and how have you all coped? Well, you know, you're absolutely right. Giving is down. I think one of the unintended consequences of doubling the standard deduction for individuals is that fewer Americans are itemizing their taxes, you know, and therefore people

perhaps not being as inspired to donate money to charitable organizations. And I can just say that donations are the way that organizations like the American Heart Association can do the important work that we do. And so it does matter. I think for us in specific, we have gotten creative. We've we in addition to focusing on

on giving through our normal platforms, our Heart Walks, our Heart Balls, the Go Red for Women luncheons that we have, our digital fundraising. You know, we've really elevated our work in major giving with large donors. We are very focused on promoting the importance of giving through estate plans, giving through donor advised funds. You know, I think we have elevated

our work in those areas. And that's positive. You know, that's a positive outcome of something that could otherwise be negative. But what I think about all the time is in life, not-for-profit organizations are part of the social fabric of this country.

And, you know, whether it is someone who has a stroke and dials 911 and, you know, you just assume that you're being taken to the best hospital that knows what to do and you get high level treatment. And by the way, these days you do. But why is that?

That's because the American Heart Association made that happen. We wrote the guidelines. We changed protocols so stroke patients could be taken to the nearest hospital. We've helped doctors and nurses have the tools they need, and we help people when they return home. That doesn't just happen. It happens because of money that organizations have.

to invest to make a difference in the world. And all of the charitable organizations that I know of and that I support personally are very focused on their mission to make sure that they are giving a voice to the voiceless, helping to make sure the resources are there so that people can live their best life. And so donations really matter, large or small.

I want to talk specifically about donation strategies, Nancy, but before we do that, we're going to take a very quick break. Her Money is proudly sponsored by Edelman Financial Engines.

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We are back with Nancy Brown, CEO of the American Heart Association. People often make charitable gifts at the end of the calendar year. I know that has been the case for me year in and year out. So we're talking about charitable giving, which is a very important part of our lives.

recently has actually seen a slowdown and it's caused hardship for some organizations, large and small. We want to make sure that your money is doing the very best work that it can. So once again, we're talking with Nancy Brown, CEO of the American Heart Association. As she reminded us, she's been working with the American Heart Association since 1986.

which is just insane. It's a lifetime. It is. It is. It's my working lifetime. I graduated from college in 1986. I've had a lot of different jobs, but boy, oh boy, that is loyalty and longevity and commitment and

I want to talk about small sums of money. Sometimes people feel as if, gosh, I only have $10. What difference is this going to make? Can you talk about how your organization will put a $10 donation to use versus a million dollar donation? Yeah.

Absolutely. Every dollar matters. Every dollar. For us at the American Heart Association, as an example, $10 would allow us to give a hands-only CPR kit to a school.

Why does that matter? Or to a community organization? There's a lot of recognition these days, thanks to our work with Damar Hamlin, the Buffalo Bills football player who had a sudden cardiac arrest on Monday Night Football. We've worked with Damar to help educate people on the importance of knowing CPR. And let me just give you the stats of why that's important. There are

about 360,000 out-of-hospital cardiac arrests that happen every year and fewer than 10% of the people who have a cardiac arrest will survive. Why is that? Because the people around them don't know how to do CPR and chances are there's not a defibrillator near them. And so we are on a mission to help train everyone everywhere

on how to do high quality CPR. So a $10 contribution would help us be able to do that, give the resources to a school, to a community organization, a faith-based organization, a company, to be able to help train people on how to do CPR. That's an example. A million dollar donation is going to help us fund a large research grant or fund a large advocacy campaign

or help us create resources to think about equity in prenatal care. You know, there's a wide variety of things that can happen, all very tailored to what a donor is interested in. But never think.

that your dollar doesn't matter because it truly, truly does. Another smart way to donate that I think people don't think about often enough is this idea, and we should be talking about it seriously this year because the stock market has been on such a tear, this idea of donating appreciated stock, appreciated securities, instead of donating cash.

Why does this make sense? Can you take us through the math and what happens when a charity receives appreciated shares?

Sure. Oh, yes. We love when the stock market is way up because it really does inspire individuals who have a portfolio of stocks to think about using that vehicle for making a donation. So for a person, you know, if I had $100 one day that became $1,000, I'm just making up numbers, and I donate that stock.

versus cashing it out and giving the cash to the charity or using the cash for something else. I don't have to pay capital gains on the increased value of that stock. I can donate it to the charity and the entire amount of the stock is a tax write-off for the person. So it's a real win for the charitable organization and it's a real win for the individual because they are able to make an even bigger difference

and they're not having to pay tax on the capital gains on their stock. And from the perspective of the charitable organization, you get 10 shares of Meta, you are able to sell those shares and not pay taxes on the gain, right? You're not charged taxes. That's exactly right. Because we're a not-for-profit organization. We have a status that we don't

pay income tax. So that's exactly right. And at BHA and in most charities, when a stock comes in, we immediately cash it. We're not like playing the stock market with someone else's money. There's another wrinkle, so to speak, that allows people who are in retirement to give directly out of their IRAs. And in some cases, this can be helpful. Can you walk us through that?

Absolutely. You know, we are very proud of the Legacy IRA Act, which has been a big priority of the American Heart Association's public policy efforts. You know, we wanted for individuals who may not have a robust personal stock portfolio, but may carry a lot of money.

securities in their IRA to be able to donate those for a similar kind of tax break, if you will. And so the Legacy IRA Act allowed that to happen. And it really focused more on

on maybe middle earning individuals and not top earning individuals and giving them the same kind of tax opportunities to be able to support great organizations, you know, help missions get accomplished and also have, you know, a tax benefit to their own personal situation.

Right. If you're 73, you can give money from your IRA directly to a charity. It counts towards your required minimum distributions. So if you're thinking, I don't actually need this money to live on, but I'd like to make a charitable donation, this is a way to get that money out, not pay taxes on it and give it away, which is, again, a good idea.

a benefit for for people who who want to give now or ever and nancy i want to ask you to take off your aha hat for just a second and put on the hat of a donor the the choices can feel overwhelming this time of year especially you are swamped with mail email text messages gofundme and other crowd funding options

How do you decide where to give? You know, what I always say to people is, first of all, follow your heart. You know, what are the issues that really matter to you in your life situation? What problems do you hope that your giving can help solve for your community or for society? Like that should always be the first thing.

There's so many great organizations to support. You, of course, want to give your money to a place that speaks to you, that you can feel a great sense of pride in making that contribution.

The second thing I would say is your listeners should always research the charities before they donate. There are organizations like the Better Business Bureau's Wise Giving Alliance, the Charity Navigator, you know, that these organizations very objectively evaluate not-for-profit organizations and provide ratings around accountability and transparency as well as impact.

And so understanding how your dollars will be used, I think, is another very important thing that I would encourage your listeners to know and understand. When it comes to accountability and impact, what are we looking for? And

Should we be holding small local organizations to the same standards that we hold big organizations, big national or international organizations to? I think that's a really interesting question that probably has a number of dimensions to it. How I feel is that

Any organization I give my money to personally as a donor, I'm speaking as a donor, I want to know that the majority of those dollars are going to support the mission of the organization. And so one of the very important ratios that Charity Navigator, the Wise Giving Alliance look at is the percent of the total revenue of the organization that is spent on the purpose versus management in general. And so

I think that doesn't matter if it's a $5 million nonprofit organization or a $500 million or a $5 billion nonprofit organization. Every organization needs to spend its money wisely. I do think that

you know, very small local community organizations might rely more on things like in-kind contributions, which matter as well. And so when we think about giving cash, that is very important because it propels organizations. In-kind contributions really matter to a lot of organizations as well. When we're looking at ratios, one of the ones that I tend to sort of

focus in on is the percentage of money that is taken in that is deployed every year. I mean, I don't want to see an organization just sitting on my money waiting for it to do something. I want it to put my money

to work. How do you think about that ratio? Those ratios are quite important for exactly the reason you mentioned, Jean. We need to get this money to work. People do not donate money for us to build nest eggs with on one hand. You know, on the other hand, we've seen

I can tell you in my long time, I've lived through 9-11 and I've lived through the 2008-2009 financial crisis, through the pandemic and many other things, wildfires, hurricanes, many other things that cause a pause in charitable giving. And so it's important that boards of not-for-profit organizations create a, we call it a reserve policy, like you need to keep some money in reserve.

I remember in March 2020, sitting on a phone call, a Zoom meeting with my board saying, thank goodness we have a financial reserve because we were right in the heat of the time when most of the money in our fiscal year comes in. We have 20,000 Kids Heart Challenge events. All our heart balls, our heart walks, all of them happen February through June like

not all, but most of them. And, you know, suddenly, boom, one day they were happening and the next day we were trying to make them virtual. And thank goodness we had reserves because imagine what would have happened to the research we were funding or the hospitals we were supporting or all the other things we were doing. So you need to have some reserves, but not so much that you're not doing the work that as a donor you would expect an organization

organization to do. And I would say for every organization, that's a different level of money. For a very small organization, the reserves might need to be more significant than for a large organization, as an example, as a percent of revenue. Percentage-wise, yeah. Last question, Nancy. I want to go back to that very exciting six

billion that your organization, the AHA, has put toward accelerating scientific discoveries. What's on your mind that we should get excited about right now, specifically as it relates to women?

Yeah. Oh, my gosh. There's so much exciting research that's happening for women. And we're very proud to have funded a lot of it. And we're very proud that we just launched our Go Red for Women Venture Fund that's going to allow these scientific projects.

discoveries, those that have commercial application to get moved into the marketplace more quickly. That is important. There was $43 billion spent on healthcare venture investing in 2023 in this country. Less than 2% of those dollars went to women's health, ladies. And of the 2%, very little of that money went to things like heart and brain health. And so through our Go Red for Women Venture Fund, we're going to try to change that.

It's important because women, as I said before, are understudied, underfunded. And so I'll give you an example of an exciting set of research projects we're working on for women. Often women will have a very stressful moment in their life or a series of stressful moments.

that may trigger a cardiovascular event. And sometimes women show up in the emergency room and they get the normal heart review. They get the troponin blood test and EKG. They get some imaging tests. And there's no obstruction, no blockage in their coronary arteries. And they're sent away.

But actually, there's a phenomenon called monoca, myocardial infarction, which is a heart attack with no coronary obstruction. And so something is happening in some women that they're having these monoca heart attacks without their coronaries being obstructed with plaque. Right.

And so we're investing a huge amount of money in a research center at NYU in New York City that's studying this phenomenon. And the dream of these researchers that we're hoping to bring to life is to be able to understand the relationship of stress with Minoka heart attacks.

and to be able to create a diagnostic test so that when a woman presents, that there could be another blood test added to the panel of blood tests that are taken that could help identify that this could be a Minoka heart attack. These heart attacks are unique to women. That's just one example of the amazing things that we're studying for women's health at the AHA.

Fascinating, really fascinating. And we talk about stress, specifically financial stress, but we talk about stress so much on this show that I can't think of a better use of your research dollars or some of them.

Nancy Brown from the American Heart Association, thank you so much for doing this with us today. Jean, thank you for the opportunity. It's always such a delight to see you. And thank you for giving us the chance to talk about charitable giving. You as well. And we will be right back with your mailbag.

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And we're back for Mailbag with Kelly Haltgren. Hey, Kel. Hi, Jean.

We've got significant questions today. So I would love to catch up with you, but I think we should just do them. No time for chit chat. Let's dive in. The first question comes from Karen. She writes, I have three total HSA accounts. Should I combine these into the HSA I have at my current job? Or should I spend the money in the first two and close them out? The first two have less than $250 in them each. Also, is there a fee to close an HSA account?

HSA consolidation. I don't think I've ever thought about this. You know, I hadn't really thought about it either because HSAs are relatively new. Most people at this point, I would think, just have one. But if you're switching jobs and your former job used a different provider for their health savings accounts, I

I think it's probably possible. Clearly, it's possible, as we see in Karen's case, that you end up with these orphan HSAs just like you end up with orphan 401ks. I am a big fan of not having more accounts than you need to have. I think

it's probably going to be easiest for you to go ahead and spend the money out of these accounts, just sort of use it up. Assuming you have the kind of regular prescription costs and other things that make it possible to blow through the $500-ish in the first few months of the year, then I would do that.

But if you are the kind of person that spends very little money on healthcare, then just look at rolling these accounts together. There is typically a fee to close a health savings account. From what I can see, it runs about $25. But

There are also sometimes fees to maintain health savings accounts. Generally, they don't go higher than about $5 a month. Not every firm has them. Some are free, but you'll want to sort of just run the numbers here and see if it makes more sense to just close it out immediately or try to spend it down before you close it out.

Either way, you're looking at a small out-of-pocket fee, but you want to get rid of them just for administrative ease. Make sense, Kelly? Yes, it does. Thank you. And thank you, Karen, for writing in. Our next question comes from Mary. She writes, hello, Jean. Congrats and welcome to the sixth decade. You are going to love it.

I am five years ahead of you in that respect and retired in 2022 at 63 from a career in nursing. I first started following your writings in Parade Magazine and my hometown newspaper years ago, and now I thoroughly enjoy your podcasts and financial advice.

A little background on my current financial situation. My spouse and I have been married for 14 years and he is retired as well. Jean, we saved, saved, and saved while working to be able to enjoy our retirement and travel. We live modestly in a townhouse. It is a second marriage for both of us and we have no mortgage or debt. I recently purchased a used two-year-old vehicle with cash. I have an emergency fund of $75,000 in a CD. I have a

$250,000 in an IRA, one-third is in a Roth and two-thirds in the traditional format. She has $100,000 in a 401k and she writes, I am planning to hold off on collecting my social security until 70. My question is the following. In 2020, I purchased a variable annuity with $430,000 on advice from my financial advisor.

The accumulated value is now $605,000 with a guaranteed 5% annual return and bonus opportunity. It would provide a lifelong income of $31,000 a year if I started to withdraw today. It also has a death benefit for my spouse who is 68, collects Social Security, and has a nest egg of approximately $1 million.

I'm having some regrets about investing in this product as I have been learning some not so good things about annuities such as high fees, commissions, etc. I was wondering if it might be advisable to request the surrender free amount now at $175,000 and transfer it to my IRA to be invested in the market, thereby reducing the amount I have in the annuity.

The total surrender fee is still upwards of around $25,000, so it is not a good option. So Mary, I first of all love the story. Thank you so much for following me for such a long time. That's incredibly flattering. I hope that you and your spouse are enjoying your retirement, that you are getting from it everything that you want to get from it.

I wish that I could give you a solid answer on whether or not it makes sense to hold on to this annuity. I think you know from listening to the show that

One thing I am a fan of is having a chunk of what some people call protected income, what other people call guaranteed lifetime income. It's money that you know that you can count on year in and year out to supplement Social Security that will last as long as you do.

An annuity, like a pension, provides that kind of stream of money. And so in theory, this is something that I...

like the sound of. Whether this particular annuity is actually performing for you as well as it could or should be performing, I can't tell that without seeing what's called an illustration on that policy. It's something where you need

You basically need an actuary to look at the policy and tell you if your idea of getting out of it and investing the money in a different way, either in a different annuity or just in your IRA makes more sense. But I can tell you who will do this for you at a very reasonable price.

His name is Scott Witt. He is an actuary. In fact, I know him because I used him to evaluate a couple of life insurance policies for my AARP column recently, and he was incredibly helpful. His website is Witt, W-I-T-T.com.

actuarial services.com. So reach out to Scott, send him an email, tell him what you've got for a couple hundred bucks. He really should be able to help you figure out exactly the right way to go by the numbers in the way that only an actuary can. And if it was my policy, I

I would be calling him. So that's what I think that you should do. And if anybody's got life insurance policies that have cash value built up and they're unsure if it's better to roll them into a new policy, if it's better to take the money out, when you know that you don't need the life insurance anymore, a guy like Scott is somebody that you can

contract with, again, doesn't cost a ton of money to help you make a decision by the numbers that make sense for you. I wish there were more people like him. So that's my two cents on that. But thanks for a really, really good question, Mary. Yes, thank you, Mary. And for anyone listening who would like to ask your own question, we love hearing from you. You can email us at mailbag at hermoney.com.

That's where we get most of our questions. We also get questions from our newsletter subscribers. You can subscribe for free at hermoney.com backslash subscribe. We'll put everything in the show notes as well. And thank you, Jean, for answering a couple today. Absolutely.

Thanks so much for joining me today on Her Money. If you love this episode, please give us a five-star review on Apple Podcasts. We always value your feedback. And if you want to keep the financial conversations going, join me for a deeper dive.

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