Tim Sarrantonio  0:05  
Everyone, welcome. Good afternoon or late morning, depending on where you are. This is Tim Sarrantonio, head of partnerships and business development at neon one. Very excited for today's presentation. I am seeing the chats, by the way in terms of the handout. And I don't know, I don't know what's happening with the GoToWebinar in terms of why it's not letting you download that. But guess what, if you go to neon one.com, by tomorrow, if not ended today, that handout will be available to download. In terms of sound, by the way, if there's an issue with the sound, and for some reason, you're not hearing me or Dan, Dan wants to say hello, by the way, morning, afternoon, wherever you are. Try shifting from your audio over to sometimes the phone isn't what's working, so use your computer and vice versa. So that's the best. So now where it's going to be Beth, by the way is under the events and webinars section where you put the recording there, and we put the slides there. So that's that's where you can go on that one. Awesome. So Dan, once you go ahead and share your screen. And we'll kind of get some base housekeeping items done and then I'll hand it on over. I am totally great question best suit. So very happy to address that. So today. Yep, there you go. So today, we are going to be going over stocks crypto art, oh my oh my not on my I am typo driven. Today, I'm managing non liquid assets in your CRM. I'm very excited about this one, we have an amazing presenter, if we go into the next screen, you know, we're going to get off of me and into Dan, in terms of our subject matter experts, but a few housekeeping items. So we did address this that this is being recorded right now the deck will be available, as well as some other supporting resources that will point to and if you go to neon one calm under events and webinars, you'll be able to find this. And and this should go up no later than tomorrow. And you're all going to get a recording as well emailed to you. This is going to be interactive to this is a weird topic, if we're going to be honest, like this is this is like weird assets when you get down to it. And this is all the weird stuff that your organization might be managing. And we want to be here as a resource. Neon one has an extensive partner network. And and we we choose and curate people that we work with, to get you the answers that you need. And I've been working with Dan for years, and there was no one else that I can think of that I wanted to do this weird webinar with. And we're gonna get nerdy, like that's the thing so so get ready to nerd out, like ask us weird questions, we'll be able to answer weird things. And then what's also fun is that me and Dan have been working on this for for a while now. And there's a lot of practical elements here. But we're also going to show how to manage this in your CRM to so so I'm going to hand it over to Dan in just a moment. But by the end, I'm also going to talk about how you manage these types of things in your CRM and how to think about that. So So Dan, welcome to, to the neon one webinar on crypto and art and cars and all that other stuff. Where's yours?

Unknown Speaker  4:06  
Okay, well, thanks. And Tim wasn't kidding when whenever Tim and I get on a call, it's always a nerd alert. we dive into debt architecture and all sorts of fun things. So a little background on me. I spent 20 years in the accounting industry across public and private practice. Eb CFO has been around eight years we primarily focus on outsourced accounting controllership CFO functions primarily in the nonprofit sector, which is obviously why we love neon one and Tim. We're really heavy on on automation and cloud tools integration. So we're certified and trained in multiple accounting and CRM, workflow management tools add ons. Again, big nerd alert. I am a member of the accounting salon which is an industry think tank with about 50 other kind of leading cloud focused accountants and then on the on the personal side. My wife will tell you that Never met a hobby that I didn't like. The current project is that I'm starting the restoration of my great grandfather's 1937 Plymouth sedan, and I have the original bill of sale in the safe from 1937 $725. Brand new back then.

Tim Sarrantonio  5:18  
It's amazing. So I get does that count as nerds in other areas too? I mean, that that that's pretty, that's pretty nerdy. I gotta say. Yeah, go ahead. No. So what are we going to learn about today? Yeah, we always try to kind of say like, What is this for? What are we going to focus in on and also carving out items that we're not going to touch on? So kind of what what's our our lessons that we're going to go to?

Unknown Speaker  5:48  
So big picture is we really just want to kind of give a high level exposure to what these non cash and non liquid assets look like, how to interact with them, how to track them, some of the reasons why people could give them, I will give the normal disclaimer, which is that this is for informational purposes only. And if you have specific questions, you need to consult with your tax CPA or you're an attorney or somebody like that, you know, this is informational purposes only. So we'll get that out of the way up front. I probably should have had a whole slide about that. But I doesn't know me, so I didn't do it.

Tim Sarrantonio  6:23  
Yeah. And I'm just like killing. I'm killing the handout. thing, by the way, folks, because like I know it keeps giving you like weird Amazon errors. Thank you, Steve deal, by the way, but I'm just like, gonna get rid of that. So you don't worry about it. We will get you the handout. Don't worry. Also, Kim says that gearheads are not nerdy. By the way, your hands are not hurting. Fantastic. I love it. I got to tell when I'm on the call. And we're just getting rid of the handout. Folks. Don't worry about the handout, you're going to get the handout after this. So it's all good. take good notes, get your yellow pad out if you're going to count. There you go. Okay, so what are we going to get into

Unknown Speaker  7:05  
further? So big picture, we're going to talk about just what is the definition of a non liquid asset? why certain donors would want to get these kinds of assets or only these assets. In reality, as we've seen this increase during COVID. for a lot of reasons, there's some governance and management issues that you really need to look at. And then when when we get through kind of the theory and kind of the overview we're going to take the deep dive into that's great. How do we apply neon to solve this exact this particular problem? So I think I already mentioned this specifically, legal advice, this is informational. We're not going to give you a comprehensive list of every single asset that might happen. These are more principles based than rules based, we'll talk about like, in general, here's how you can handle these things. And here's some of the things there are commonalities across these asset classes. And, but there will be specific things depending on what they are, and we're probably not going to get into every single one of those. But Google's a great resource. Well, Tim threw this in there, you've always had the power, my dear, you just had to learn that for yourself. You want to expand expand on that, Tim?

Tim Sarrantonio  8:13  
Yeah, I mean, you know, I, lions, and tigers and bears, oh, my is is kind of the connection to this one. And so I was like, I have to get a Wizard of Oz quote in here. And I think that, especially given the topic today. I remember when I was at my last job before neon and was scared, like, stock donation scared the daylights out of me. And and I think that's the thing is that once you get comfortable understanding what these things are, because people want to give to you and people want to give to you, in many different ways. And that's what the pandemic is also opening up is that there's so many different asset classes, in fact, major donor cultivation, when we analyzed it both with the Fundraising Effectiveness Project, as well as internally, the vast majority of assets are non cash gifts for high net worth individuals, especially. So if you feel comfortable with this, you're going to unlock an amazing set of resources for your organization. So you need to know what yourself though, and that's what we're going to help with today. So Dan, let's let's start that yellow brick road journey.

Unknown Speaker  9:33  
Okay. So what are non liquid assets? I mean, the short definition is these are things that you can't go stick in a bank account, if you show up to your local bank with a car or a framed piece of artwork, they're going to look at you funny, so things that you may either have to liquidate, or in some cases you may retain depending on your particular nonprofit, but they can't go into your bank account. So Tim's definition for love It's weird that we need to have a conversation about it. So stock real estate cryptocurrency our cars. You know, there's a there's a schedule on the 990 schedule m that you have to disclose these things on and they've got 24 categories. And then for others that you can just write in, like if there's something weird that the IRS didn't think about, you can even add to their classifications.

Tim Sarrantonio  10:24  
And I you know what I eat? I told you I wouldn't interrupt a lot. But I think I'm going to just do folks put in the chat, the q&a, like the q&a, because you've already told me that the handout doesn't work. So I know that the q&a works. Put the weirdest thing you've ever gotten as a as a donation. If you wanted to share that, well, we'll kind of socialize that we'll put that out there. But like, What's the weirdest thing that you've actually had? antique t service? Yes. Yes, Kim. That is exactly a painting from an auction. Okay. Love it. Okay, so keep going. Keep on Dan, but we're gonna have people silver communion set. Oh, my goodness, that's a good one. Basically, if it would have shown up on was Antiques Roadshow, then yeah, yeah. Love it. Thank you, folks for sharing that. Thank you. So why don't donors give silver communion sets to nonprofits? By the way?

Unknown Speaker  11:24  
Oh, no, we may not want to touch. So so why would they do this? I mean, it is kind of seems like a pain. Reality is a lot of major donor. So people who give you 1000 50,000, a couple 100,000. In some cases, they in many cases have more assets, and they have cash. So they may have stock, they may have a car that they're not using, they may have the antiques and the artwork. And when they want to support an organization, you know, traditionally, if they don't want to go down the road of giving this and they have to liquidate it themselves. And that can give rise to all sorts of tax consequences. And it may restrict them from being able to give effectively so we want to be able to give them the option to take these but it does mean that the organizations then have to pick up the leg legwork to figure out what to do with them. And that's what we're going to help with a little bit.

Tim Sarrantonio  12:16  
So we got a few more by the way, in terms of people Okay, so a house and all contents within the house. from Melissa, a painting gold coins, gold coins. Okay, can somebody like got a donation from a pirate, antique doll set an entire collection of art from the artist, all the drafts or notes like everything, final pieces. And then Lindsey says, who was actually texting earlier today cuz I went to college with Lindsay. But she said donors be donors. And that's why that's why donors, because donors be donors. Thank you folks for sharing again. So Dan, where do we go from here in terms of that, like, like, Why do people do this?

Unknown Speaker  13:03  
Yep. So why do they do this, in many cases, there, there's the tag current tax law incentivizes them to gift donated or appreciate or donate appreciated assets. So one, in a lot of cases, if you have stock that's appreciated and valued when you sell it, you have to pay capital gains. And a lot of cases, if you've held it for more than a year, and you donate stock, you don't have to pay the capital gains tax, and you get the deduction of the full amount of the appreciated assets. So you get kind of both sides, you likely get the charitable donation, and you don't have to pay the capital gains tax. So there is certainly incentivized to, by the tax code to not convert things to cash before giving them. Again, like I said, a lot of people who are high net worth individuals, they're not they don't have $50 million in cash sitting around, they have 50,000,040 9 million in assets and a million in cash. And so, you know, there's also some, you know, in many cases, there's, there's more of an emotional attachment to cash sometimes, and there could be with an asset Now, obviously, a silver communion set probably does have some, some emotional context there for whoever gave that. But it still is often easier to part with assets. I mean, goodwill and the thrift stores during pandemic, when everybody cleaned their house, of course, they were just overwhelmed by the amount of donations coming in. And I think they're still trying to get out from under that.

Tim Sarrantonio  14:33  
And I think that's what we're gonna touch on management's pretty deeply in this today, too, because a lot of times we just don't know what to do. And and we're going to give you a little bit of advice on that today. Somebody even said that their mission is that they provide medical services and people were giving them expired medicine, which they set their hearts in the right place, Linda, I think it's a really nice point, but at the same time, it's like, Yeah, but like, That's not good.

Unknown Speaker  15:05  
Yeah, for used medical equipment, I've seen that like, yeah, hey, this is a $5,000 unit for, you know, a breathing support or something. But can you effectively reuse that? Maybe it's clean enough. But there's a lot of laws around that.

Tim Sarrantonio  15:20  
So so people have these assets? One, should we just take them all? Like, maybe we can shift into our next section, which is, which is around like policies and procedures and governance? What do we do? How do we manage? This is like, I my, our CFO at neon said something recently, to me, which is like not all revenues, good revenue. And and I think that's a very powerful statement. So So what do we think about when it comes to like management of this?

Unknown Speaker  15:55  
So first step, and this is where you should? For sure, you need to get your boards involved, because this is part of their governance function. board should be having these discussions and should help management write a gift acceptance policy, you should have this be a board approved policy of do we take non cash donations? If we do? What kinds will we take? And if we take those kinds of what do we do with them after we receive them? Those are all part of the governance function that the board should be exercising. And Tim, in the handout, did you have a sample board policy? We had like a one paragraph blurb, I think that we kicked back and forth.

Tim Sarrantonio  16:32  
Yeah, that is this the AI CPA guide? Yes or no? That's Yes, that one, okay. Yes, for the basics. So we will ensure that the handout in the follow up resources, I'm actually going to kind of reconfigure this a little bit to expand even further. Now that people are pointing out the handout doesn't work, I can make it perfect for you. And we're actually going to have a sample language in there for you. So so that's one of the biggest things that like, like realistically, folks, use, these are one of the things that you should be using templates for. If somebody's already done the work, we're going to make sure that you have something here and a policies and like actually put in the chat, the q&a. Do you actually have a gift acceptance policy, even if it's non cash or cash or anything? Do you have a gift acceptance policy? I would love to hear a yes or no. From Yeah. Awesome. Yes. Now currently being reviewed by our lawyer? No, yes. They toss up, toss up. So for you know, folks, we're going to help you out for you. Yes, folks. Check it out, too, because we might be able to layer in some really weird things for you, too.

Unknown Speaker  17:49  
For the people who said being reviewed by our lawyer right now, I love hearing that because these are not static. If you had a gift acceptance policy that was approved by the Board 30 years ago, before crypto and any of the rest of this came through, then it's time to redo it. So that's this is something that should be in a regular cycle of being updated and re approved by the board. Well, and let's kind

Tim Sarrantonio  18:09  
of dive in at some Lindsay even said that they have somebody who is the board VP of development, their board VP of development is gift planning officer a two lane was a j. d. So that's a good one. Why is this really important, though, especially now in a post pandemic world?

Unknown Speaker  18:30  
Yep. Well, one, again, we expect the volume of these kinds of things to go up, too, especially if you're raising support for the organization. And it comes in the form of a non cash or non liquid donation. And it's first and as a donor restricted to a particular fund or a particular purpose. You know, there needs to be some discussions with the donor, because there are costs that are associated with liquidating these and making those resources available to the organization. What you don't want to happen is a high level of this stuff come in, but then you spend a significant outlay from your unrestricted or operating funds. To convert these, you need to make sure you have the discussions with the donors like hey, when you get this, we want to be able to use some of the proceeds for the conversion into cash that we can then use for the organizational support. But you don't want to get into a place where you're suddenly you know, your your DNA or your admin and fundraising percentage jumps from 18% to 25%. Because you had to convert a whole bunch of restricted non cash donations. So that's why

Tim Sarrantonio  19:41  
that syncs really well into what Shanley wrote, which is gift acceptance needs to cover if the piece can be liquidated. We've had to turn down gifts because the expense of preserving the gift which was the expectation wasn't feasible.

Unknown Speaker  19:57  
Now you know sometimes that's okay like if you're a Botanical Garden, for example, or you know, you're another kind of organization that works with outdoor stuff or outdoor education as somebody gifts you land. In most organizations, you would try to liquidate the land and convert it into cash. If you're that type of organization, you would want to retain that and use that for your operation. So, you know, it does vary organization by organization,

Tim Sarrantonio  20:19  
that and someone wrote, that's also especially true with donated vehicles.

Unknown Speaker  20:23  
Yeah, I have one organization that I work with who will take donated vehicles for because they're in veteran support. So they'll take donated vehicles, and then give them to a veteran who is in need of transportation. But again, that's not normal. Most organizations, if you get a vehicle, you're trying to figure out how to what the blue book is and how to liquidate that as fast as you can.

Tim Sarrantonio  20:45  
So any any other advice around just overall acceptance, before we get into some of the challenges per se

Unknown Speaker  20:52  
that valuation is always a sticking point. And both the donor and the organization should value this independently. If you get a non cash donation, you really don't want to be providing valuation for that to the donor, whether that's crypto, whether that stock, whether that's a car or a house with all of the furnishings intact. You don't want to miss the

Tim Sarrantonio  21:19  
fun one, Linda, Linda gave something pretty, pretty, pretty wild. They have a our silver classic owned by Roger Moore. But I know a very impressive, but then she wrote, but we found it not to be as valuable as you might think. Oh, fascinating. This is an interesting question. These are essentially in kind donations.

Unknown Speaker  21:44  
In kind is another way, although generally when I talked about in kind, I'm more talking about exchanges, donated services. So yeah, that term in kind can be loot used loosely. And it can kind of go both ways, I tend to try to restrict that to services, you know, you had some programmatic support from a professional that you would have normally paid for. But they donated that instead, I try to use illiquid or, you know, non cash to talk about these types of donations.

Tim Sarrantonio  22:15  
I just think Patricia is was in in kind of Acknowledgement Form. Actually, Patricia, we'll get into how you do have the current option to create a proper inkind Acknowledgement Form. I've been using it for instance, for comic book donations for my nonprofit for a while. So I'm going to flag that as something to show you in the system. Later in our presentation today. You can you can implement it right now. Great softball right there to get logged over. I mean, this is why we do the webinars because people need to learn and so cool. And then yes. Like somebody gives a stock gift. This is the thing that always freaked me out was like, when do you sell it?

Unknown Speaker  23:06  
Yeah. So one stock is at least relatively easy to transfer ownership, you can set up a, you know, a brokerage account and receive stuff and other somebody can transfer it to you, if you need to do title work on a house. I'm in the middle of buying a house right now. And so I know all about the title work process right now, way more than I want to know. And, you know, that takes a lot more effort. You know, vehicles are relatively easy crypto, especially with with blockchain and having a wallet. And you know, can you title that in the organization's name? Can you have that house under an individual? How does that work? Those things, you know, you often get into the need for legal counsel there. So in terms of a holding period, oh, yeah. volatility. Good one. So, Tim, getting that queued up. So how long should you hold it, then this should be part of your gift acceptance policy, I mean, I would usually expect to see something in the words of, you know, along the lines of non cash donations should be converted into cash, as soon as reasonably possible by the organization. And that's because you just don't want one it creates a ton of accounting nightmares. If you sit on a highly volatile asset for a period of time. I mean, by a period of time, it depends on what we're talking about. I mean, if you looked at a crypto graph from last year, it was trading Bitcoin was trading at 9000. And if you looked at, you know, something a few months ago, it was at 60. And now it's back down to 33. Yeah, it's all blue. If you had taken that, you know, you really want to convert some of that, you know, but if you talk to a Bitcoin person, they'll say, Oh, you want to hold it because it'll go up someday? Well, maybe but you don't want to one you don't want to take the risk of it going down because then you're not really honoring the intent of the donor to support the organization with the amount of the value of that asset when they donated it to your accounts will not be happy with you. Because trying to constantly post game loss transactions through on Bitcoin is just everybody's nightmare.

Tim Sarrantonio  25:06  
So we got some really good questions, by the way that I think touch on a lot of this element. And yeah, and dogecoins easy to make fun of, by the way, but like, you know, maybe this is more on stock and houses and stuff like that. So a few questions, not clear who makes the final valuation the donor or the organization?

Unknown Speaker  25:28  
Well, the donor, the donor has to make the valuation for the purpose of their individual tax filings and write offs, the organization has to have their own support for the valuation for what they recorded that into their books and on their tax filings.

Tim Sarrantonio  25:45  
And there's certain assets, folks that like one of the reasons that we're excited about this webinar in particular is that there's a few integrations that have come out or are coming out into our ecosystem that really kind of take this off your plate. So for instance, we have an existing cryptocurrency integration with the giving block that it just like does all the work around crypto for you overflow, same thing with stock, and they're handling the donor communication as well. it properly, like you can customize it, but it's going to like address some of these items. So um, so that's, that's one other item to just point out here if you're interested. And then somebody wrote, like, I never thought there was a difference between inkind and non cash.

Unknown Speaker  26:36  
It's terminology, but I like things to be specific when I'm talking to people. So at least for me, I try to differentiate them. Cool. I guess one thing I'll say is like if you get an in kind donation, generally you are going to book in kind of revenue in an offset and then kind of expense, if you get a non cash donation, it's only going to be on the revenue side. So there are there are implications that too, on the accounting side,

Tim Sarrantonio  27:00  
there we go nerdy would we pay higher capital gains taxes if it's converted in less than a year.

Unknown Speaker  27:10  
So I guess this would be from the donor side. If somebody donates an asset, and again, you need to talk to tax professionals on this, but big picture of somebody convert some donate something that they have held less than a year, then that's no longer a long term capital gain. It's short term capital gains, generally. And there's a whole set of other rules. So really, you want to donate appreciated assets that you've held more than a year.

Tim Sarrantonio  27:40  
Awesome. Any other folks keep these questions coming, because we're actually nearing the formal part of our presentation per se. You know, there's a lot of different assets, maybe we can shift into to the final few slides before we shift into the CRM side. Like, how many did you say the the IRS actually outlines?

Unknown Speaker  28:06  
There's 24 on schedule M for the 990?

Tim Sarrantonio  28:11  
Yeah. So what should people actually care about?

Unknown Speaker  28:14  
Generally, the ones that you see most commonly I mean, we get all get, I'll get the weird stuff. But historically, it's been art, or items with historical or value stocks has been a main one. We do have the weirdness now from from gifts from Donor Advised funds, but that's kind of outside the scope of this, but that's another one that gets weird. It's cash. But there's 920.

Tim Sarrantonio  28:38  
I almost want to just do a whole webinar on two apps

Unknown Speaker  28:41  
when you fill one up for sure. And vehicles has been one that's pretty common historically, houses somewhat you know, the new entrant obviously is cryptocurrency. But those have been the major asset classes that we've seen historically, stock being the primary one because the appreciation and you know, avoiding the capital gains and all of that. It's been really incentivized vehicles, artwork and in artwork and be weird because it can depend, you know, what type of organization you are, if you're a cultural institution, and you have donated artwork that was donated for display, then you're going to handle that completely differently than if somebody just gave you artwork as you know, as a non cash donation and expected that it would be liquidated to support the organization. So

Tim Sarrantonio  29:29  
Alright, we got it. I not not unexpected we have a lot of comments and questions. So um, I'm gonna go with Tiffany's first but Kim and Patricia I see you as well, by the way, so Tiffany wrote let me get to her first item. We've had stock donations donated directly to our endowment fund and haven't had to deal too much with it. Should we consider ourselves lucky or should we be doing more besides recognition with the donor And she also wrote, I'm not the accountant if in case you couldn't tell, so maybe Actually, we are doing something with it.

Unknown Speaker  30:06  
Yeah. Well, let me let me make one comment on this. And this is just when he on the issue of the thank you letters and how you get the documentation, it is really important, the wording on the documentation that comes in on these non cash gifts or the campaign literature that you're putting together, because what you don't want to do in most cases, is end up in a situation where somebody gives this and you convert it. But the way that the wording came in means that you can't ever touch the principal of the asset or the corpus of the trust or you know, the donated value, you can only touch earnings. And I've had it happen several times with organizations that I've worked with, where in the past, they had a fundraising campaign, and the wording was off slightly. And the auditors came and looked at it said, according to the donor documentation that you have, you can't ever touch the principal balance of this donation. So you know, they'll have several $100,000 sitting out there that throws off a little bit of earnings every year, but they can't touch the principal. So especially with these and again, that's a reason to get an attorney involved, who's familiar with these kinds of issues so that when you do your campaign manager, when you do your acceptance policies, you don't accidentally put yourself in that kind of situation. So I do want to throw that out there because I have seen it happen. It's it's, it's not normal, but it's not uncommon either to have situations like that. So.

Tim Sarrantonio  31:27  
Okay, Patricia asked. Well, first I'll I'll, I'll say Kim is going to email me how she manages her DAF items, Kim's great Kim, and I've chatted before and in an email, and so she's going to email how she manages daps. I have a theory on how to best manage daps too, by the way, everybody does weirdly, in the nonprofit tech space. I don't think anybody's properly figured this out. We've talked a lot about it, by the way. So really interested to hear what Kim is going to share, too, and we'll get that out there. But Patricia asked, Would the Dhoni need to hold for a certain time period after accepting it to avoid the higher tax? No. Okay. Oh, that was the Okay, that was easy. Yeah.

Unknown Speaker  32:19  
I mean, when you when something comes over to you, it comes over at the current value. That's how you value it on your books. And from that point, if you hold it, then you'll either have a gain or a loss. Fortunately, nonprofits are exempt from capital gains taxes in most cases. So

Tim Sarrantonio  32:38  
stop. Go ahead. Go ahead.

Unknown Speaker  32:40  
I will say schedule M which is the the non cash contribution schedule from the IRS. I will point out two things that I find honestly hilarious. There is a specific line item for scientific specimens. And there is a specific line item for taxidermy. Oh, don't know what happened in the point that the legislature Why

Tim Sarrantonio  33:05  
did they have to put them

Unknown Speaker  33:08  
how much taxidermy was given some year in the past, but that's out there.

Tim Sarrantonio  33:14  
Chris asked, What's a DAF Donor Advised fund Donor Advised fund is basically a fancy savings account, when you get down to it that has some special tax benefits for for people to contribute to we are seeing an increase in the number of deaths, you may get a check from fidelity charitable or Charles Schwab or things like that. And that is Donor Advised one, it actually came out of the Community Foundation space, interestingly enough. And, and and and you can even trace, you know, when you play Monopoly folks, and it has like the Community Chest like there's a Genesis between like the modern DAF and the Community Chest in many ways. So that's a death. It's just it's just a fancy way that people can give you money. Okay, Cole has a good question. Let me get to that. Does the conversion time period This is pretty I think this is getting us into a little nerd zone. Does the conversion time period carry over between the original donor versus the organization? they donate to example, if they hold it for a year, would that year carry over to us when it's time to liquidate? Or would we have to wait a year as well to avoid the tax penalty?

Unknown Speaker  34:42  
Again, I mean, if if they're giving to a nonprofit or tax exempt organization, then that becomes a moot point once it's been given. The tax implications are almost always exclusively on the donor side. Not the

Tim Sarrantonio  34:58  
Tiffany's Nature Center. has received some pricey taxidermy. Okay, well, there we go. All right. Love it. And yes, people are actually jazzed about hearing. I knew I knew it that we should have a deaf webinar. Okay. This is like, like somebody asked for workflows webinar. And we're gonna do that in July. And I think now it's like, I totally had to do it to Africa.

Unknown Speaker  35:24  
And I'm glad to be part of that, because now there's some accounting applications for deaths too. So

Tim Sarrantonio  35:29  
Love it. Love it. Um, did you have anything else that you wanted to share? Before we kind of get into some of the practical, like, I'm not gonna go too deep, folks. So this is like, we're not even gonna be full, probably a full hour unless we like nerd out in questions. But like, Dan, is there anything else that you wanted to share? further?

Unknown Speaker  35:52  
No, I think I think it's as an accountant as I'm because are so our I will say this about workflows briefly, which is, our best practice when we work with organizations is everything goes into your CRM first. And then we go on the accounting side, take extracts out of your CRM, and we want to be able to tell like, was this paid by credit card, cash check, in kind, donation, stock vehicle, all these kind of things, because we're going to take those in best practice for us is to use those downloads for me on an import them to the accounting software minimizes human error, that gets us a better connection on how things are tagged that we were not missing anything, and it'll better Alliance, the finance and fundraising functions. So with that, I'm going to turn that over to Tim so he can show us some of the magic there.

Tim Sarrantonio  36:40  
Awesome, awesome. And Julie asked. Can you talk about cryptocurrency and what we need to know when a donation comes across? This has not happened yet. So one, folks, this new book has come out Bitcoin in the future of fundraising by Shane Connelly and Jason shim. It heavily talks about our partners, the giving block, the giving block is the like experts in cryptocurrency donations, and it is a new way that people are starting to think about giving, we did a webinar with the giving block back in December. So check that out, go to neon one.com. And then you can find it under the eye there is a blog that we wrote, as well as the webinar, so blog or webinar under the resources section. And, and cryptocurrency is a type of, of alternative currency to what's called Fiat Fiat is is you know, gold, basically, you know, cash things like that the US dollar is a fiat currency. But what's fascinating is that it's it's it's a new way that people are starting to manage finances and and it doesn't have a country that it's tied to that's the big difference is that it's, it's on what's called the blockchain. And there's basically a ledger that tells you every single step that's been taken with that, that currency. Um, so Okay, obviously, we need to talk about other stuff, but like, I can nerd out about this. I have an I sent this to Dan. I will say, though, that people who talk about Bitcoin, like they're the they're like the CrossFit of the fin financial technology, like the only talk about that, and if anybody actually attended generosity exchange, our social event last year, we actually had one of the biggest Bitcoin guys pump on and I'm never doing that type of event again, because like, it was not helpful for anybody. Um, should we be recording non cash donations as goods in the neon software? There's your lead in that is my lead. Yeah, I'm gonna I'm gonna I'm gonna go ahead and share my screen. Let me go ahead and or am I sharing right now? You see mine? Yes. Awesome. Okay, let's talk about a few things, folks. Awesome. Thank you, Linda. Thank you for confirming. Okay, so there's a few things that we need to take into account when we're thinking about our CRM management. Now, I do a lot of data analysis on how all of you give and it's and it's not just or manage your gifts rather, and and I want to point out something that is important but abused, going to beyond Next, under payments and transactions, you'll see this tender types. And so these are the standard tender types in the system with a few added one like Pay Pal for instances is not a standard, but like we added it. So cash credit check, credit card online versus offline, this means that you received it from square, and you put it into the system. Notice in kind inkind has its own configuration, its own setting, we're going to get into that during the entry period. Stock and security is a standard one, art and art and antiques is actually a standard one, but you can add your own. Okay, this is terrifying. In many ways, the fact that we allow this, I look at gifts on a monthly basis in terms of what everybody's managing in the CRM. And it's really easy to understand if you ever see like a blog post or something like us, it's easy for me to say with confidence, online giving, like that's not hard, because it's verifiable. The other tab is where things get scary. It's, it's it's like I've seen people put weird stuff in their database, they would put like, if they got a gift from

like q give, they would put q give as something here, don't do that. That's what I'm trying to say. Q give is an online donation platform and the tender is a credit card. You got a credit card donation, you just got it from another source. But people enter their own weird stuff in here. They do this with fidelity checks, they do this with benevity donations, they do this with a lot of different stuff. So So this is one that like you need to be vigilant in your management of tender types. Almost one,

Unknown Speaker  42:13  
yeah, yeah, I'll make two comments here. So this is really similar to what we see on the accounting side with people adding accounts to the chart of accounts. It needs to be large enough that you can have more than one item qualify for it. So you don't want to create a tender type or an account in your chart of accounts that will only ever contain one item. And two, it needs to be something that is going to recur regularly enough that you need to know how it's impacting your overall giving structure. If you get five weird things during the year, those go into other if you get 50 weird things that are all the same kind of weird things during the year, you might want to consider having that

Tim Sarrantonio  42:55  
you have you have a new proper tender type that you can receive. So when we program are integrations into the platform, what we try to do is look at how it will be implemented for everyone over and over and over. So I'm actually in the testing system that we use for certifying our integrations. And the reason I wanted to show this is because we have a new integration for overflow our stock partner that somebody makes a donation. And what we did was we decided so in us, the other important item is that there's tender types, and then there's metadata that may be attached to it. So check this out, overflow stock metadata. You can create donation custom fields on your own. But what we did was for the integration, we decided those for you. What are things like I did this all the time at my job when we would get you know, I would be at you know entering things into my Razor's Edge system. And and the stock would come in and I didn't know what to do with any of the metadata, right, like, well, what like, what's the ticker? You know, like, what is like, what's the symbol like, What am I supposed to put there? So we just made that decision for you during the integration piece based off of replicatable reportable insights. So things like number of shares, stock, close price, the name the ticker, that just goes into the system, same with cryptocurrency. In fact, we decide that we design both of these in concert with each other. When we were when we were working with overflow on the integration. I actually sent them the cryptocurrency integration documentation and said do that. Do your version of that, basically, and that means that you have confidence in what goes in. Now if you're not using the integration these You're still good things that you can standardize, because you're going to report on this. So so during this you might put in so notice there's this inkind flag versus not in kind. So So, Dan, I'd be interested in, in your opinions on this, like, we've had a lot of discussions on non liquid versus inkind. For me, I've always thought inclined is like, that's a physical good, like, I wouldn't put stock as an incline, for instance. So what's your thoughts in terms of when to use this flag?

Unknown Speaker  45:33  
Well, some of that, I would say will always default back to how is the system designed. But yes, and inkind for if you're going to track donated professional services, to me, that's an in kind. And goods can be in kind also in if you look, there's a unified chart of accounts for nonprofits. So we use kind of as the baseline structure for everything we do on the accounting side. And it does give recognition to the fact that there are in kinds for goods and in kinds for donated services. And there may be in kinds for non professional services that you can't record on your books for gap. But so those both would, that's a separate thing. But yeah, those two things would fall into it, I would not record something as an income that is easily convertible to cash.

Tim Sarrantonio  46:19  
There you go. Okay, that's a good, that's a good rule. And, and, and the source field, by the way, is another good one, where it's like, you got $1,000, from, you know, benevity, or something like that don't put benevity as the tender type, which we'll see on the next screen, you can put that as the source. I think that's another good, good usage of that field. And you can do that even on the fly as well. So then, this is the other important point from an entry standpoint. One, the email acknowledgement can be kicked off based off of a different trigger. So this goes back to one of the earlier questions that was brought up around, like, there's not a built in email for inkind, I'm going to show you how you can do that right after this. And there's different elements of the database that can trigger things to happen. Tender is one of those. And so if it's an incline gift, for instance, that's going to be a slightly different process. This is, but but when it comes to stock and security, for instance, it just like it is standard. And that's how we programmed the integration with overflow, you'll see that next month when we do that. But But notice, like, the data is different. I don't have to enter as much stuff when it comes to that versus like, it's an offline check. And it might like have a few different items. So So tenders an important field in the system when it comes to managing this, this type of stuff. Let's see, does your software have any separation specifically related to the new accounting standards for inkind footnotes on financial statements? Dan, what do you what do you think when you hear that?

Unknown Speaker  47:58  
No. Generally, that's something your accountant is going to have to look at. Yeah, that's probably outside the scope of what we can get to today.

Tim Sarrantonio  48:08  
If that's it, that's a game. That's a deep question. So more to come. But I think that there's a lot of that's, that's like, one of the most important conversations that I think that you can have is literally having the conversation that Dan and I had in order to plan this webinar, which is the finance and the fundraising nerds need to get together. That's it. Like too often siloed they're too often siloed. So it's absolutely we use, we use laborers in kind goods or non cash art. That's a good one. And then you're a longtime user. Good to see you here. Let's see. Okay, so I want to make sure we cover the receding side, because I think that's also an important point of like, what do you actually load into your receipts? Dan, I think that's, you know, I'm gonna lean into you for that one in terms of what you should and should not put in. But here's the thing that you should totally be geeking out about, in my opinion. And it's, it's one of the most underutilized features of neon CRM, the donation appreciation version, the condition, you can make a condition and we're going to get to the fancy upgrades on the email that we did for the mass email, it's going to come to this too, by the way more to come there. But it's still pretty solid. And what you can do is create a different condition that automatically gets triggered the moment the system sees this thing happen. And so check out tender type. You can say if it equals, in kind, there's your email. That's it. You can write whatever version that you want. You can have as many different versions, you can have many different conditions, you can create a can addition, based off of the fact that it was also donated to a specific campaign that you may be soliciting people for, you can have as many of these as you want. So tender is one that I've used for a long time I've around in kind donations and other types of donations, because you can personalize the language, everything. If you're if you're practicing connected fundraising in many different ways, it's when you're merging that personalization with the technology. And this is one way that you can do it, I highly suggest you go ahead and take a look at the defaults that you have in the system, and see how you can slightly tweak things to lean into why somebody is given to you, and talk to them in their language in their way around that. So that's one way that you can do with inkind. But you can you can say every time I get a stock donation, you can reference that in your language. Now, Dan, what should we not put in our receipts.

Unknown Speaker  51:05  
So biggest, biggest thing to think about on receipts, if somebody gives you something that is denominated in US dollars, put that on there, if somebody gives you anything that did not have $1 sign in front of it, tell them what they gave you and tell them thank you. But don't put $1 value with it. So if they gave you 527 shares of stock, tell them in the letter that they gave you 527 shares of this stock. And you can even put the ticker symbol if you want, what you don't do is tell them that was valued at $13,000 at the date of donation. Thank you for the other car, thank you for the gift of the silver communion set. Yep, any of those kinds of things, but don't put it all about you with it. And and and those things like

Tim Sarrantonio  51:48  
that's another important note, because actually, let's even go back to if I'm building a new version, for instance, a lot of times what people don't realize is that within the tokens, you can put payment note as an item that is included. And that means that if you are getting a silver communion set, and you're adding that as an in kind donation in the system, you could put that into the payment note, in terms of the specifics. This is why you don't need to create a new tender type. You can say it's another person in kind or whatever. But payment note is where you get the metadata that is replicable without having to create a new even custom field. For things like stock. We think it's a good idea that you create some dedicated fields for that. But for other items, payment notes is going to actually cover you in a lot of different ways. And you could put that in your receipt, and it populates whatever you write in those notes there. So that's that's just another important point. Why not have $1? value? Don't we have to have it appraised and recognized is that amount as revenue, okay?

Unknown Speaker  53:05  
Yes, you do what you why you don't want to give that value to the donor is that that you take on the responsibility for that being valued appropriately. And you may not have a full back pattern on the donor side, you don't know cost basis, you don't know some of those things. So yes, your valuation should be done, but that's recorded onto your books. And that donor should have their own done, because they may have their own unique fact patterns.

Tim Sarrantonio  53:32  
There you go. There you go. Boy, it did take us an hour for this. So folks, any other final questions for Dan here from EBC? fo we use payment notes. But we also have a custom field and donations that we like to use as tokens. And that be asked by the developers? Yes, you just did. I will ask. There's a further Linda, there's further developments that were making on more inclusion of custom fields in communications, that started happening in mass emails. And I totally expect that and actually workflows is one of the most that's why we're having a webinar in July about workflows, because there's some really awesome stuff that you can get in custom with workflow. Really cool stuff. Let

Unknown Speaker  54:29  
me say this real quick. And Tim didn't ask me to but I will I will just say this to everybody on the call, like the reason that EDC fo works with neon, as our recommended and it is it's our recommended CRM for nonprofits is because of the the structure and the data architecture that neon puts into their work like these things with, you know, having payment notes and these custom fields that you can then put into this like it's just great data structures. And we don't always find that in the technology companies that we work with when we find a technology company that really takes A strategic and very detailed approach to their data architecture. We love working with them. And that's why we work with me on.

Tim Sarrantonio  55:06  
Well, and that's and Dan, I love we it's because we also like understand the importance of your work. And I think that the financial, the financial folks like you don't get enough love in our industry, in my opinion. And so I do want to address Kurt, how to acknowledge Donor Advised fund gifts, do we have to wait to the next webinar? I don't want to wait till the next webinar. I want to talk about real quick, Dan, how do you how do you acknowledge daffs because that's a confusing one

Unknown Speaker  55:35  
for you, you it's basically, at least the way that we do it, we use the soft credit functionality, because the thank you should really be to the donor advised fund soft, credited to the individual. And the reason for that is that the individual already got their tax deduction, the moment that they made the contribution to the donor advised fund. So the donor advised fund is just basically a nonprofit giving to another nonprofit. So no tax implications. But you still want to recognize the donor. And that's the point of the soft credit function.

Tim Sarrantonio  56:08  
Right, let's see. What would What should we commit? What should we communicate to a donor who pays a pledge with stock? So let's go back to again to the communications piece, like what should we be at, besides thanking them? Yep, profusely. What financial information actually needs to be in there from a stock gift?

Unknown Speaker  56:32  
Yep. So you'll record the initial pledge, and then you'll record a payment against the pledge in neon, and you'll just change the payment type. Yep, the tender type? Yep. So they're involving cash that paid it in stock. And then when you thank them, you'll just again, thank them with thank you for the gift of 520 shares Microsoft versus valued at 30,000. So

Tim Sarrantonio  56:58  
Melissa, hear you loud and clear about better email functionality on soft credits. By the way, we hear you. Okay, okay, everybody wants to DAF webinar. Now, let's, let's shove some more depth stuff into this, by the way, so you don't have to wait. Look, folks, I love hanging out with you. But I don't want to waste your time. So I do want to get to this. I usually have the donor list is as a contact for the daffs company is that bad?

Unknown Speaker  57:31  
habit as a contact or like an associated contact? I think I would not I would use credit.

Tim Sarrantonio  57:39  
Yeah, I would I would soft credit. No, I and and the thing is, is that the DAF is the one who's giving you the money? Look, there was a whole Twitter raging debate about this, folks. So like that, there's work I'm gonna have to like, sit down and think about a DAF webinar basically. Okay, I, I will say, Tiffany, I wouldn't do it that way. But um, have them. Okay, hold it. Sorry, art. Oh, god, there's so much. You had to tell them the value? How will they know the balance of their pledge?

Unknown Speaker  58:21  
Yeah, well, they can back into how you value the donation at that point, if it's a payment on a pledge. That's just how it's gonna work. But when you think them, you thank them for what they actually gave not the value of it. But you're right, they can get into the value of that they can see I had $100,000 pledge and now I have at most again, the 20,000 stock.

Tim Sarrantonio  58:41  
And and Kim, by the way, Kim flag the issue on why I don't think the contact is a good move as opposed to a soft credit is because some, like fidelity is going to have so many people using it that like if you just put one donor under fidelity like that's not then the second fidelity gift you get for instance is going to throw that off. You know, so so the contact at the death is is the the bureaucratic administrator, you need to like, like, I have a problem understanding who actually made this donation Who am I bothering at fidelity and what we've talked to fidelity. And they like, this is a big thing that's going to get addressed pretty pretty well. Okay, I obviously, Dan, we're going to do another one. We're going to do it on dafs. Can only dafs It seems so we'll we'll save you for something else in generosity exchange, but we'll we'll we'll do this again. Folks. I want to thank you. Don't put one donor. Yep, yep, yep, yep. Awesome. Yeah. Thank you so much, folks. I know we're at time I just went so quick. I actually did not realize it was going to be this this fun. So yeah, Tiffany. Let's talk about Email me at Tim at neon one.com. We'll figure it out. Dan, any final thoughts? I knew it was gonna be fun. But like, this is like realize why. Yeah. Any other any final thoughts for the crowd today?

Unknown Speaker  1:00:15  
Before we left? I think it's, it's, you know, it goes back to my normal systems, one, you know, make sure you read systems documentation, don't just push buttons, like have an idea have a structure as you're doing stuff. You know, workflows are keying on accounting, operations, fundraising and getting stuff, like the better data you can get. The whole point of this is getting, you know, the big picture, the 30,000 foot view, the Why is the better data you have about getting transfer your organization allows you to make better decisions to allocate and everybody has limited fundraising resources that better allocate those, you know, you're looking at the end of the day, you know, if I'm looking at it from a CFO mentality, I'm wanting to know like, what's our average gift cipher cash, credit, crypto stock, something like that the people support this program, primarily the stock in this program, primarily with cash. What if we shifted the mix of these What if we made a campaign specifically to asking people to gift appreciated assets? What would be the likely result of that? You know, this is not just a put it into the system and walk away and forget about the whole point of doing things like this is to be able to better operate the nonprofit and be able to execute on mission more effectively.

Tim Sarrantonio  1:01:26  
Couldn't have said better in myself. Love it. Thank you, folks. Thanks for joining us today. Dan. This is an absolute pleasure. We're going to get the handout and we're going to get the recording up. ASAP. So you'll get an email with all this stuff tomorrow at the very latest. Have a good day. Thank you. All right.

Transcribed by https://otter.ai