The Value Of Foundations And Community Trusts with Jason Baxendale

DSP 29 | The Value Of Foundations

 

Not many people understand the value of foundations and community trusts. In this episode, Jason Baxendale, the Chief Development Officer of the Chicago Community Trust and the Co-Director of the We Are Chicago campaign, enlightens us about the wonders that these organization can do for everyone in the community. Jason shares his approaches to issues concerning their trust, his thoughts on their creative economy, and the importance of entrepreneurship to under-resourced communities. Learn more from Jason as he shares their campaigns and the massive goal they have reached.

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The Value Of Foundations And Community Trusts with Jason Baxendale

Our guest is Jason Baxendale. He’s the Chief Development Officer of The Chicago Community Trust and was the Co-Director of the We Are Chicago campaign. Welcome, Jason.

Thank you. It’s great to be on.

Jason, one of the things we ask our guests right off the top is to say a little bit about themselves and tell us a little bit about your work at The Chicago Community Trust.

I’ve been with the community trust now for several years. It’s in my second stint. I’m like a lot of those fundraisers where I fell into fundraising. I never would have imagined that I’d be doing this for my career, but at the same time, I find it incredibly fulfilling. During the summer, after my second year of law school, I interned for a large law firm in Kansas City. I did not enjoy it and decided at that point that I did not want to become a lawyer. I was always interested in business, banking and finance issues. After law school, I started in Kansas City as a trust advisor with a regional bank called UMB Bank. I was there for about a year and a half. One of the accounts that I advised amongst estates, conservatorships and investment accounts was the endowment for the local Boy Scout Council.

One day the CEO of the local Boy Scout Council said he wanted to meet with me and I thought he wanted to meet to talk about how we were investing their endowment. It turns out he wanted to talk to me about coming to work for the Boy Scouts as an endowment director to build their endowments. I had no idea that this career path existed. I’m not going to lie and say that I was terribly enthusiastic about it, but I heard him out. He made a very compelling case. I’m an Eagle Scout and I had a fantastic scouting experience. I made the leap and became the Endowment Director for the local Boy Scout Council in Kansas City. I was there for three years. I was promoted to the regional office, which is what brought me to Chicago. After a year in the regional office, I was recruited to come over to The Chicago Community Trust as a Director of Gift Planning. That was also a very interesting move because I did not have deep experience nor exposure to community foundations. Working in endowment building, I had a lot of experience with gift planning. I came over here and a few years ago I was promoted to be Chief Development Officer.

Tell me a little bit about that first day. You’re working at a regional bank. You’re working at the trust company. On one Monday you go in and now you’re the endowment director for the Boy Scouts. What was that transition like?

It’s scary. The previous endowment director had launched a $2.5 million endowment campaign. They had strong volunteer leadership. They were about 80% to 90% of the way there. That was a good thing. The bad thing was I had no idea what a campaign was or how it worked. I read every single thing about plan giving and endowment building that I could get my hands on. One of my favorite stories that I like to tell was in my second week at the Boy Scout Council, there was a very lovely woman named Dorothy Jones, who goes by the name Dottie, who wanted to make a gift to the endowment of $250,000 to provide college scholarships for boy scouts who worked at the summer camp.

My predecessor had done all the work to tee this gift up. It was my responsibility to essentially negotiate the gift agreement with her. I had a couple of phone calls that first week and the next week I went over to her house. I brought the gift agreement and I sat down. She’s absolutely lovely. I put the agreement in front of her and I said, “Here’s the agreement, Dottie, as we discussed. Here’s the first line, ‘I, Dorothy M. Jones, agree to give $250,000,” and the number was on the page. I was so nervous. I couldn’t imagine how someone would give that much money to a charity that instead of saying the dollar amount, I said, “That amount that we’ve talked about on the phone.” It wound up being a great gift and she signed it. My predecessor did all the work. I remember I was so excited. I told my father about it and he said, “Be careful because now they’re going to expect that from here on out.”

The worst question in fundraising is how much money have you raised?

It should be how many relationships have you cultivated but such is life.

What truly makes a community foundation so unique is its ability to offer philanthropic services. Click To Tweet

It sounds like you work at a community foundation with a response like that. Tell us a little bit more about your work that happens on any given Tuesday or Wednesday there at The Chicago Community Trust.

My work now as a chief development officer is much different than my work as senior director of gift planning. On the community foundation world, the gift planners are the frontline fundraisers. Community foundations receive the overwhelming majority of donors as referrals from professional advisers so attorneys, bankers, wealth advisors and life insurance agents. Our goal at the community trust is to engage the professional advisory community such that when philanthropic planning comes up in their work with their clients, they’ll think of the community trust to assist them. That’s everything from liquidity events to selling a business to multi-generation planning, everything along those lines, our goal is to have the community trust position to the resource for advisors and their clients.

When I was senior director of gift planning, so much of my time was spent nurturing and cultivating relationships with those advisors to have them send their clients our way. When the clients were prepared to make gifts or open funds with the community trust, I would structure those gifts in partnership with the professional advisor. It’s absolutely fascinating work. We facilitated gifts over the years, everything from a patent application to business interests, to real estate, to artwork, all the way to regular cash and securities. A few years ago, I was promoted to chief development officer and so now I lead our team. My work is much less directly with donors and professional advisors and more building a team and facilitating a culture of philanthropy with our leadership and our board, setting a strategy to do that here at the community trust.

One of the big issues I know in community foundations, both in the United States and in Canada, is the relationship between other social profit organizations, other charitable organizations in the community and the community foundation. Many community foundations take the approach that they don’t want to be viewed as competition for other social profits. How do you approach that issue at The Chicago Community Trust?

It’s an excellent question and one that we continue to grapple with in the field. One of the things that we’re so fortunate at the Chicago Community Trust is to have a substantial endowment that was left to us via bequests over our 104-year history. Having this substantial endowment allows us to generate nearly all of our administrative revenue from fees from our endowment. That means that we do not need to run an annual fund for our operating budget. We’re not out there in the community raising money for gen-op in an annual fund that would directly compete with those charities that we support. The second thing is we position the community trust as a philanthropic advisor and a philanthropic partner that’s designed to cultivate and nurture those charitable organizations across the city.

DSP 29 | The Value Of Foundations
The Value Of Foundations: Fundraising is not about how much money you raised; it is about how many relationships you cultivated.

 

That’s why we focus on very high-level philanthropic planning. That’s why we cultivate advisors the way that we do. That’s also why we aggressively promote planned giving and bequest giving to build Chicago’s endowment. There are additional resources going to those charitable organizations. Our goal is to have our donors have as rich a philanthropic experience as possible by engaging them on what they’re passionate about using this 104-year history of the knowledge of Chicago’s charitable community and connecting those donors to those organizations to have a great impact. I can’t emphasize enough. Having the endowment is an incredible privilege and affords us that opportunity to avoid annual fundraising.

I want to come back to the endowment because that’s where we want to get to with the We Are Chicago Campaign. Before we jumped there, I wanted to follow up. How often are you acting as the gatekeeper for your fund holders where other organizations are approaching your organization saying, “We have this need. Would you talk to your fund holders about us? Would you get them to invest in us or would the trust invest in us?”

Our gatekeeping role is more from the perspective of the donor as opposed to the charitable organization. Every charitable organization that we’ve ever supported is a part of our database in Salesforce that informs instant impact, which is our donor’s online system. When a donor logs onto their account to recommend grants and check their balance and see where they’ve given, they have access to our database, which reflects every organization in Chicago. We also have an Amazon-like feature online that suggests organizations with similar charitable purposes based on an analysis of what they’ve supported in the past. Some other things that we do are what are called donor dialogs where four to six times per year, we’ll bring our donors together around a subject matter area of interest. We’ll also bring in charitable organizations throughout the community to present about not only their work but more importantly the sector and space broadly.

In fact, we’re doing on what we’re calling the creative economy and how important entrepreneurship is to under-resourced communities or having a couple of grant partners there. It happens based on the donor’s needs. No two donors are alike. We have some that are incredibly philanthropic or sophisticated. They know exactly where they want to give and we provide an administrative platform that makes it easy and frictionless for them to do that. We’re thrilled to do that. We also have donors all the way across the spectrum who have said, “I’ve spent my career. I’ve been raising my family. I’ve been building my business or I’ve been working. I want to start thinking now more strategically about my philanthropy. I want to involve my kids or my grandkids and my philanthropy.” That’s where the philanthropic advising role of the community trust comes into play, where we sit down with them, learn about what they’re passionate about, learn about what they want to accomplish. We introduce them to our community impact staff, which is our program, our grantmaking staff, craft mission statements for the family and introduce them to organizations and take them on-site visits. There’s a service scale that is as basic, as transactional and as robust as philanthropic advisory. It varies across our donor base, which is which.

You mentioned that your organization is 104 years old. Going back to before you were 100 years old, I understand there was an idea as the centennial was approaching to do a $100-million campaign. Tell us about how that $100-million idea turned into We Are Chicago campaign.

The community trust has promoted a culture of philanthropy within this institution that historically was lacking. Click To Tweet

As any good fundraiser will tell you, raising money because you’re having an anniversary is a terrible idea. As we turned 90 and we’re thinking about our centennial, this was 2005, our centennial was in 2015 because we turned 90. We had some people that were thinking, “As we turn 100 years old, why don’t we try to raise $100 million in discretionary resources for the community trust?” As we kicked that idea around, we worked with the council and started talking to some of our closest friends and community leaders. What we found was that the community trust was deeply respected and admired to work. It was thought of as deeply competent and long having an iconic presence in the city. Most importantly, people were having a failed connection and asking themselves, “Why would I contribute to the community trust?

Why would I give my money to another organization to give away? I either already have a private foundation or I know where I want to give,” or most importantly, they did not have a visceral emotional connection to this institution like they had to their church or to their alma mater or to organizations for which they volunteered. We were thought of as a service provider and a very good one, but not as one where they had an emotional connection to giving. One of the volunteers we recruited was Marshall Field V, who was on our board for ten years. There’s no name more iconic in Chicago than Marshall Field. Marshall came up with this brilliant approach to the campaign of, “Let’s do a campaign and let’s make it a campaign of philanthropic service such that we’re not asking people to give money to the Chicago Community Trust. We are offering a philanthropic service that only an institution like this can provide to allow individuals and families to fulfill their philanthropic intentions both while they’re alive and after they’re gone.”

There’s a lot of subtlety in that. It’s quite an elegant description. How difficult was it to convince people the difference between giving us money and joining us in philanthropic service?

It was hard even on our own campaign committee. Marshall put together the campaign committee. First of all, he had one request from our CEO and that’s it. He would have the ability to refine our philanthropic service operation here at the trust such that it would be best in class and be able to compete with other providers. What that means was accelerating our frequency of processing grants, having more philanthropic advisors on staff to work with donors, making sure our investment options were there and making sure our fees were competitive. That was his first step. The second step, he built a campaign committee of our platinum-plated campaign committee of people that were movers and shakers and were deeply respected in Chicago. When you talk about it being an elegant solution, it was hard on our campaign committee to get them to have the same vision that Marshall did.

Some of the campaign committee members understood it intuitively, some quite frankly never got there. For example, when they put together a list for certain campaign committee members to call on, they would say, “I can’t call on Jane Smith. I asked her for $1 million for the art institute.” Marshall’s whole point was when Marshall and I or Marshall and I and our CEO would go down and sit down with someone that Marshall knew, the first thing out of Marshall’s mouth was, “You can relax because I’m not here to ask you for money. I’m going to tell you why I turned my private foundation over to the community trust. I’m going to tell you why I put the community trust in my will and if this appeals to you, great. If it doesn’t, we’re done. We’ll call it a day.” That’s a much different approach than sitting across the table and saying, “You give $1 million to The Chicago Community Trust.”

DSP 29 | The Value Of Foundations
The Value Of Foundations: Community foundation can unlock incredible resources in service to donors who are committed to their community.

 

It didn’t get you that $100 million in discretionary funds, but the end result was something much greater than that, wasn’t it?

The campaign over a six-year timeframe raised a total of $1.6 billion and about $900 million of that was primarily in donor-advised fund gifts while the owners were living. Over $600 million of that was in the form of bequest intentions after donors are gone. Of the $600 million that was committed through donors of estates, 97% of that is unrestricted, which we’ll build our endowment in the future.

Back to our part of the conversation where you were talking about the connection between community trust, community foundations and other not for profits that are raising money in the community, raising $1,000,000,006, probably people likely notice that. What was the feedback from the community?

It was extremely positive. No community foundation had attempted a campaign or a campaign of this scale before. It was very groundbreaking. It revealed the value add. What truly makes a community foundation so unique is this ability to offer philanthropic services from an institution that is an anchor institution, that is place-based embedded in the community, that knows the charitable community, has been at it for a long time and can unlock incredible resources in service to donors who are committed to their community. Chicago, it’s a special city. There’s an immense amount of civic pride that exists here.

Chicago is a historical Rust Belt city that has evolved tremendously. At the same time, Chicago has tremendous challenges and tremendous opportunities for impact. You couple that with civic pride that exists here, the financial capacity that exists, there’s great wealth here. It’s a very robust and sophisticated philanthropic community that is able to absorb and deploy high levels of capital and a community foundation that is dedicated to improving the quality of life in it. It’s a nice perfect storm of opportunity that was reflected in the fundraising success.

People don't like to confront their own mortality. Click To Tweet

How important was it to have that volunteer leader that was leading the charge as you embarked on this campaign?

It’s indispensable. We would not have had the success we had without Marshall. Other campaign committee members like Shawn Donnelley, who is also an executive committee member of the community trust and a part of the family behind RR Donnelley, the paper company. She was tremendous. She went on an incredible amount of calls and did a great job of engaging a new generation of donors. There was a core group within this campaign committee that was led by Marshall on that made our success happen.

Talking about the trust to donors as that philanthropic service provider and that educator of new philanthropists, I imagine you had very different kinds of conversations with donors than you may have had previously.

It allowed donors to have conversations on their own time frame. Even though we had a campaign and we had a campaign with the limited time frame, we didn’t go to Jane Smith and put her on the gift pyramid as a $5 million donor. The conversations were open. They were wide-ranging from everything to the donor’s net worth, their personal assets and how those assets were held and how the community trust could facilitate a transition of those assets to gifts for charitable purposes. It’s a very sophisticated gift planning function all the way to what charities do you support now. What are you passionate about? Why do you love Chicago? What do you think Chicago needs, all the way to what’s going on with your family? Do you want your kids involved or your grandkids involved? Once Marshall had the initial meeting, after that staff took over the conversations and they proceeded completely on the donor’s time frame. Sometimes it took 18, 36 months, sometimes even longer than that. They weren’t pressured to go inside the context of a campaign timeline.

In a lot of campaigns, there’s a frequent conversation with the staff about how to create the urgency to get people to finally commit or they’ve said yes, getting them to sign the gift agreement. It sounds like that urgency would have worked against your purposes in this campaign.

DSP 29 | The Value Of Foundations
The Value Of Foundations: The only difference between our work and your work is the zeros; that’s it.

 

There’s no question. When you’re talking about legacy, you can’t force legacy. I’m having conversations now with prospects. We first engaged in the campaign because now they’re ready to talk about their estate. Now they’re ready to talk about their legacy. Perhaps they weren’t eight or nine years ago. This could not be forced. It had to exist in their own comfort zone.

I’m curious if you can think of one or two examples or maybe share a story about a donor that you sat down in front of who said, “Nope, this isn’t for me. I want to hold onto my own foundation.”

We had a donor, a very prominent business owner here in Chicago, who was incredibly philanthropic. He has a deep wealth. He’s a billionaire. Marshall and I went to visit him at his office and the meeting unfolded exactly like that. We talked about what we were doing. Marshall talked about why he did it, not only the cost savings and whatnot but in the investment flexibility and also the philanthropic advice. The gentleman’s response was, “I respect what you’re doing. This is great. I have a private foundation. My daughter runs it. My estate is going into it and I feel like I have my plan in place and I’m comfortable with it.” We were fine with that. Someone like that has thought through it and engaged their family. He was an extremely sophisticated philanthropist who was giving in very specific areas, especially around things like healthcare and healthcare research nationally. That’s what he was passionate about. We were thrilled about that.

There wasn’t a place for the community trust in his plans. That’s one example. The other example is primarily around why we weren’t successful with someone was because they weren’t ready. They might’ve had a foundation or maybe they did not or maybe they had a donor advisor fund with us or somewhere else. They weren’t ready at a time of their life where they wanted or were willing to think strategically about their philanthropy while they were living and after they’re gone. People don’t like to confront their own mortality. Estate planning attorneys will tell you that it’s like pulling teeth a lot of times to get people to complete their estate plans. Our other challenge was the timing of people where they were in their lives and whether or not they were ready.

In the end, roughly how many people or how many foundations came into the community trust as a result of the campaign?

Do not be shy about standing up and making a case for why your community foundation can make a difference in your community. Click To Tweet

This was a very targeted effort. There was no silent phase. There was never a retail effort of that. Over $600 million in bequest intentions came from just 97 donors. Fifty of those bequest intentions were $1 million or greater and the largest was over $150 million. On the $900 million that came from donor-advised funds, that was a result of about 5 to 600 donor-advised funds or donor-advised funds having additional gifts given to them. This was a situation where when the service that we offered was a good fit, it would pop at a very high level.

You came through the door at the perfect time.

The perfect time with a person who had the capacity to do it. They saw how easy it was or when they saw the value that it would bring, the low fees, the investment flexibility or the family meetings and whatnot. They would say, “I’m giving the entire charitable portion of my estate to do this.” It was a great success there.

With the campaigns, you’ve got roughly 700 donors, maybe a bit less. The campaign comes to a close at $1.6 billion coming to the community trust. What has been the legacy of those conversations and of those investments in the trust?

We’ve seen an explosion in our annual fundraising since the campaign. When we started the campaign, we were raising about $80 million annually. When we concluded the campaign, we were raising about $250 million annually. We concluded about a few years ago. Now we’re raising about $500 million annually. There’s no question from a fundraising and donor engagement perspective. That campaign raised the profile of the community trust in the ultra-high net worth or the people who have great wealth and are philanthropic and in the professional advisory community. What I liked about it so much is it demonstrated the capacity of this institution to absorb or engage at an extremely high financial level, number one. Two, it promoted a culture of philanthropy within this institution that historically was lacking. For so long, we were sleepy on the donor side. We just facilitated requests and most of our donors were dead donors and the bequests tumbled in over the years. This incentivized us to up our game to serve donors living at a much higher level and to continue to serve their legacies.

It’s a much faster work rate when your donors are alive and paying. Your first point there about being a place where that type of philanthropy happens to be the vessel that can absorb that very significant investment is true of organizations that are trying to go from raising $1 million to $2 million. That being able to show to donors that they are a place where that type of philanthropy happens, where that type of philanthropy can be utilized, goes a long way to building the credibility to make them successful at a higher level.

I could not agree with you more. Jamie Phillippe, who was our Chief Development Officer at the time and I have spoken at conferences and we’ve spoken to so many community foundations across the country. You can imagine most of them are smaller than us. The first thing that always comes out of our mouth is, “The only difference between our work and your work is zeros. That’s it.” The concepts are the same if you’re trying to raise a million or if you’re trying to raise a billion. I completely agree with you that donors like to engage with organizations that are extremely successful and with organizations with which their peers are engaging at a high level. If that means that you’re trying to go from $1 million to $2 million or $500 million to $1 billion. It’s zeros. The core concepts are forever the same.

I want to ask you one final question, what advice you would have for a chief development officer or a CEO of a community foundation that hears this and says, “We’re going to do a campaign?” Where would you tell them to start?

My first advice would be to be aspirational that I am such a big believer in community foundations and the vital role that they play in communities. They are truly peculiar in a good way, a peculiar, intriguing philanthropic entity that can make so much of a difference in their community. I would encourage CEOs, CDOs and board leadership to be bold and to be aspirational. Do not be shy about standing up and making a case for why your community foundation can make a difference in your community and engage donors at the highest level.

Jason, thank you so much for being a part of the Discovery Pod.

It’s my pleasure. Thank you so much for inviting me. I enjoyed it.

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About Jason Baxendale

DSP 29 | The Value Of FoundationsJason Baxendale is the chief development officer for The Chicago Community Trust. As the head of development and member of the Trust’s senior leadership team, he provides leadership in all aspects of asset development and donor engagement. He also served as co-director for the We Are Chicago Campaign, which raised over $1.6 billion in honor of the Trust’s 100th anniversary. He joined the Trust in 2004.

Baxendale serves on the Board of Directors of the Civic Federation, the PERT Foundation, the Lavin Family Supporting Foundation and the Glasser and Rosenthal Family Foundation. He is a member of The Chicago Club, The Economic Club of Chicago, the Executives’ Club of Chicago, the Chicago Estate Planning Council, the Chicago Council on Planned Giving and the Association of Fundraising Professionals.

Baxendale earned a Bachelor of Arts degree in political science from Kansas State University, an MBA degree from the University of Missouri-Kansas City and a JD degree from Washburn University School of Law.

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