Women's Money Wisdom

Episode 213: How To Be More Strategic With Charitable Giving with Aly Sterling

• Melissa Joy, CFP ® • Season 4 • Episode 213

Share episode

Melissa Joy is joined by philanthropist Aly Sterling, President and Founder of Aly Sterling Philanthropy, to discuss the transformative power of philanthropic giving. 

Aly shares powerful insights from her experience in facilitating major gifts while offering guidance on how to make your charitable donations more strategic. In this thought-provoking conversation, you’ll discover how to maximize your philanthropic impact, whether you’re giving millions or just starting your charitable journey. 

Listen and Learn: 

  • How to make your charitable donations more strategic and impactful
  • The benefits of giving during your lifetime vs. leaving a philanthropic legacy
  • Tips for maximizing tax advantages when making charitable contributions

Resources:

Links are being provided for information purposes only. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results

The previous presentation by PEARL PLANNING was intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from PEARL PLANNING or any other investment professional of your choosing. Different types of investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy, or any non-investment related or planning services, discussion or content, will be profitable, be suitable for your portfolio or individual situation, or prove successful. Neither PEARL PLANNING’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. PEARL PLANNING is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. No portion of the video content should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. A copy of PEARL PLANNING’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://stephenPearl Planning.com/

Melissa Joy:

Welcome to the Women's Money Wisdom Podcast. I'm Melissa Joy, a Certified Financial Planner and the Founder of Pearl Planning. My goal is to help you streamline and organize your finances, navigate big money decisions with confidence and be strategic in order to grow your wealth. As a woman, you work hard for your money and I'm here to help you make the most of it. Now let's get into the show.

Melissa Joy:

Welcome back to the Women's Money Wisdom Podcast. I am thrilled to be joined today by Aly Sterling, who we're going to let her introduce herself, but we're talking about a really interesting topic talking about big gifts, charitable contributions and the lessons you can learn from those big gifts in terms of your own kind of philanthropic life. So, to get started, our guest, Aly Sterling, is the President and Founder of Aly Sterling Philanthropy. It is a national consulting firm that helps nonprofits, foundations, corporations and individuals and families meet their philanthropic goals and positively impact their communities. Most interestingly, in 2020, she published a book about her experiences transcending personal and professional barriers to become a female entrepreneur. It is titled "37: The Year I Stopped Making Excuses, Embraced My Power and Launched my Million Dollar Business. Wow, Aly, I can already tell we need a future episode all about that book. Welcome to the podcast.

Aly Sterling:

Hi, Melissa. It's so good to be part of your podcast. I'm excited to be here and to talk about things that I care about, and big gifts and little gifts alike.

Melissa Joy:

Well, I love that. Big gifts and little gifts alike. Well, I love that and I know that many people, whether they that are listeners, whether they're, you know, doing the school fundraiser I was just at a band concert last night and I was working that bake sale at the end to all the way up to significant planned gifts. You know they may feel like the world of charity and philanthropy is not about them, but I think this episode is intended to make things relatable. But before we dive into our specific topic, I'd love you to just spend a moment talking about you know kind of you and how you got into the philanthropic world and what you do. Yeah, oh, my gosh. Well, no pressure, that's like two sentences or less, you know.

Aly Sterling:

No, it's good, it's good Because it's interesting, because of my age and I wish I was 37 still, but I'm not Same same, I know. I was actually in the financial service world many years ago about 25 years ago and my father owned a mortgage banking company and I thought that that's what I was going to do for the rest of my life, and so he threw a graduate degree in sociology. I did an internship and he was like you need to go work somewhere else first and then you can come back to the company, but I need you to like, feel good about that decision. So, the joke is, did have an internship at a nonprofit and I fell in love with the nonprofit space. It was just something that I was not used to.

Aly Sterling:

I could, you know, use my business acumen in this other space, this other sector, and I didn't go back. So I, you know, I started working for some real grassroots nonprofits and then worked my way up into more strategic, large healthcare systems All along. Again, I come from a family of a lot of self employed entrepreneurs, and so I figured there'd be something that I would do at some point in time, and and 17 years ago is when I founded our firm. So I came into it, not by design necessarily, but I stayed because I fell in love not only with the sector, but with philanthropy, specifically within the sector, that notion of just improving the human condition, no matter how that plays out right, whether it's volunteering, whether it's giving of time or it's giving of capacity and money and all of that good stuff. There's so many ways to leave a legacy in a lifetime.

Melissa Joy:

Well, I love that idea. I feel like charitable giving is a great way to ground your family and their wealth and values, and it also just helps you to have kind of the benefit of gratitude and giving back. There is so much benefit when you're working with organizations or particularly with individuals, I have to imagine, given that you have a business, not just like a 501c3 that is doing little deeds. What kind of conversations are you having? What do people come to you to work on?

Aly Sterling:

Yeah, many different things, but usually there's a theme. It's usually about how to give more strategically right and be more mindful and intentional around those charitable dollars whether they are, you know, whether it's $100 or whether it's a million dollars or more of families and individuals we work with are in a quest to maximize the impact of those dollars, and I think that you know it used to be and still is. For most it's kind of a haphazard sort of thing. We say yes to lots of things At the end of the day, you know, when you look at the things that you value in your life, the causes, the issues, you know, if you took literally this is an exercise I do with my clients you know write down, kind of like, all the things that you value, all the causes and issues, and then you side by side list of where's your charitable dollars, where's it going right?

Aly Sterling:

Is there alignment between those two things? Often there's not, and it's not a bad thing, but often it's that we love these things and these issues and causes, but all these other things over here are are, you know, kind of attacking us, or you know asking for money and we're saying yes to things that we really probably should step back a little bit and reflect and figure out what kind of impact do I want to make? And if it's haphazard giving, that's fine, because some people enjoy spreading their style. Yeah right, spreading it. Yeah, spreading a lot of, you know, small gifts to a lot of organizations. But I think we're seeing our culture and our communities becoming a little more interested in more strategic, intentional giving and that takes some discipline.

Melissa Joy:

Well, I agree and I I think we can get into this, but I can give some examples of some giving that I've discussed with clients and we followed through on. But I wanted to use a specific gift that was announced this year. I was inspired by an article in the New York Times in February that was talking about a gift from a longtime professor at Albert Einstein College of Medicine, a woman named Ruth Gottesman. She's a doctor, so Dr Ruth Gottesman, and she gave $1 billion to the university, which will provide free tuition to this school for their medical doctor training for the future.

Melissa Joy:

And it is a really interesting story. It's a story of a, actually a story of both her and her husband, and and he was the one who went and was an early investor with Warren Buffett. Wouldn't we all like to be have had a time machine and go do that when he passed away at least from the stories it's not clear that she knew exactly how much he had amassed, but he told her he knew that she would be able to figure out what to do with it. And this 93 year old widow who is like that is not doing her biography justice. She is still teaching and involved at the board at Albert Einstein College of Medicine decided to really go big with her gift which, just like you know, I heard it around kind of the water cooler conversations of. Did you hear about this? I heard it on news stories and I thought it would be a great kind of deep dive into philanthropy to kind of launch from here and kind of grab some lessons.

Aly Sterling:

Well, she, I was excited that you know this was something that was important to you, because I was also really intrigued by her story and by this gift. I think it's the biggest gift any medical school and what I love about what she did was that A she was empowered by her spouse after he died to make this decision in her best interest. I love what he said about. It was like just you know, you'll know what to do with it. I love that. Her kids, I think, also echoed the same sentiment, like mom. What they said, I think also echoed the same sentiment like mom. All what they said I think is really important is they said you need to make a decision soon, right, like right. I mean she was 93. But you know some people, they, they want to, they want to wait a little bit.

Aly Sterling:

But I love that she did gave this gift into the medical school in the Bronx, right, which is not, which is uncommon, I guess, from reading that article again, comparatively to New York Metropolitan, new York City, and so she really went with where she had a strong affinity, that relationship that she had I think that's what it speaks to is we have these relationships, whether they be work-related, personal, family-oriented, and she just continued that passion and affinity that she had as a professor right into her charitable giving.

Aly Sterling:

What I also enjoy about it, too, is that she really developed a relationship, it seems like, with the director or with the gentleman who was in charge of everything, and they together sort of created this legacy, living legacy, though for her it's a brilliant gift and I hope that it really does transform the goals that she is seeking. And I hope that it really does, you know, transform the goals that she is seeking. I know, in reading about it, people there's you know everyone always has a couple naysaying things and someone's well, you know how do we know if this is going to structurally fix? You know other other issues that are systemic to why. You know why a lot of young students don't choose primary care as the medical. You know degree of choice, but I think this is going to be a movement in the absolute right direction, no matter what.

Melissa Joy:

Well, I love you know there's so much talk about billion dollar endowments and how is that actually filtering into the impact of student and community lives, and so this is a very concrete and clear, you know, kind of pathway and it would be very difficult to just, without to do a like a blind gift at a planned gift at the end of life, to know that you would have the power to do that free tuition because it would get into the hands of committees, etc. So they do talk about how the college's director really partnered with her, propose it to the board where they jointly had control and we're trying to make the most impact, which I think is is a lesson learned, and she gets to witness the joy that she's created in for so many people.

Aly Sterling:

I mean just the you know, that video, that short clip that was of her making that announcement, and those students it was just you know brought tears to my eyes. How happy they were and how many other generations will benefit from her vision right and her strategic, intentional gift.

Melissa Joy:

Yeah, we'll make sure to link to that and link to some of the articles that kind of dive deeper, because there is this, just like I think it's the example of her actually being visible. Like you, it's not just an article about somebody who, you know, kind of nobody in the community had any idea that they had money and they tucked it away and they passed away, but they're never able to be interviewed because they didn't bring attention to themselves during their lives and I guess this could be a subject of debate. I'm sure that in some of your conversations you have discussions about whether gifts should be anonymous or named. And I know, like you know, we're sitting here in the Midwest and a Midwestern sense. You know, like you don't bring attention to yourself, your wealth. I live in a community here in Dexter where we also have our office that is very much millionaire next door, but you're driving your Chevy, you know you're not in the newest, you know, sports car model.

Melissa Joy:

So what do you tell people? And I'd love to talk about this story in particular, about how you know bringing that attention to yourself can make an impact, whether it's personal impact or, you know, kind of ripple effect in the community.

Aly Sterling:

Yeah, you're so right, it is a cultural thing, it can be a geographic sort of approach or attitude, it can be a religious one. There's lots of factors that go into play related to how we feel about acknowledging something that we've done, and research shows that, even though people will answer, like in a survey, what their least motivating reason is to give a gift, they always put recognition. Yeah, we know to be true is the reality is that people do feel good about that recognition. It reinforces the decision that they made and, to your point, most importantly, it inspires other people to do similar things. And so we always tell our clients you know again, we'll respect whatever their wishes are. But if they're on the fence or they're thinking about recognition, you know we underscore the fact that when you enter a building or you even enter a website of a nonprofit, you see the names of people who are affiliated, who've associated their charity with that organization, and it brings comfort and credibility to that nonprofit. So it really increases that credibility, that sort of reputation, that sort of fiscal stability when you see someone's name that you know or a company that you've heard of, and so that's very, very helpful.

Aly Sterling:

A funny story we did a campaign for religious organization and they're very, you know, humble and, you know, don't want recognition. And we got to the end of the campaign and I said, well, let's do a donor wall right where we show everyone's gifts. And they were like, oh no, no, no, like we can't do that, that's just not, not our vibe. And I had multiple conversations, they had their own conversations and they finally decided then let's do it, just because we can't know what our future generations, what will inspire them or not. So they decided to do it. We put this wall up and we put paper around it, so it's going to be unveiled. And those donors, I mean, they rushed up to that wall to see where their names were and you know just, it became part of their story and part of their pride and part of that narrative that they leaned into and they felt really good about and they talked about it with others. So, yeah, sometimes it's not the most comfortable thing, but it can be really important for permanence and for future generations too.

Melissa Joy:

Yeah, I'd say there are small percentages of people where that name recognition is sometimes more important than the gift. Very few, yes, but in many cases it's more of, I think of Adam Grant, the social researchers kind of book give and take, and there are the people who are really interested in helping first, but also recognition is okay. Or you know kind of looking for that kind of exchange of social, you know kind of information, and for most people it isn't that it's a selfish, like give me credit, but like thinking about a community or a religious organization or other nonprofits. If you can be similar to other people and they see that you're able to make a gift, it may give them the opportunity to reevaluate their own capacity to give and their own relationship in the community, which I think is very interesting and can have a really terrific ripple effect. Oh yeah, absolutely.

Melissa Joy:

So you know, when you are working with people, how do you make sure? Do you guys have like kind of a here's what, the return on investment that we're looking at, or turn on philanthropy that we're looking at for gifts? Or how do you make gifts more strategic and more concrete? Like this one is a prime example where you can really read the power. There's even a speculation that this will improve the health of the overall community in the Bronx, a very under-resourced community relative to surrounding areas. How do you help your clients kind of understand the impact that they're able to have?

Aly Sterling:

Yeah, that's an interesting, complex sort of question and or you know just sort of environment to be in, and so you know there's a continuum, right? I think it definitely to some extent is influenced by the kind of contribution you're making. So you know, we you and I and your listeners make small gifts all the time to organizations, and we do it because usually someone asked us, right, it's a colleague or it's a friend or family member. We may not really appreciate or understand the nonprofit or the charity that we're giving to, but we're really giving to that person who made that ask because we're supporting the things that they care about. That yield or that return on investment, whatever phrase we want to use, at least for me, it's not even something I think about, right, because that wasn't the motivation. When we start to look at giving more significant, making bigger investments of our charitable dollars, the stakes go up, right, our expectations go up, and so I really work with our clients to appreciate, you know, and understand and evolve into expectations Everything from you know, metrics, do metrics matter? Some of my clients' metrics? It matters greatly. If you're making a six-figure gift, you know there's a pretty good chance that you have a gift agreement with an organization that stipulates that there are certain outcomes and those are going to be data-driven organization that stipulates that there are certain outcomes and those are going to be data-driven.

Aly Sterling:

Some of my clients are making, you know, six-figure gifts to organizations, but they don't care as much about the metrics. They're more interested in the relationship that they're having with that nonprofit, with that cause. So they're really hands-on. You know they're the ones who are spending time around the board table. They're. You know they're spending time at the C-suite level of that nonprofit or they're spending time around the board table.

Aly Sterling:

They're you know they're spending time at the C-suite level of that nonprofit or they're spending time on the ground floor of that nonprofit, right literally in the weeds or in the animal kennels or whatever the mission might be. So they're probably feeling it, seeing it, on a daily, weekly or monthly basis, and so the numbers don't matter as much. You much, it's head and heart, and it's a little bit of both, right? I think that's where sort of this notion of satisfaction comes into play, not putting all of your expectation into one basket, whether it be data-driven continuum or whether it be heart sort of knowledge based upon what you see and hear and feel really hands-on. So there's, there's a balance somewhere in between different for each individual and each family as to what they expect and why they expect what they do.

Melissa Joy:

Well, I think that there's so much power in the ability to define a gift, which not everyone's going to have that opportunity to do and it's not always appropriate. Sometimes just write a check and know that you are making a difference for the local food pantry or something like that. But in other cases, like right now, I'm working on setting up a scholarship that would be named in memory of someone's deceased spouse and it's to an organization that really was instrumental in his university life, and you know that's really powerful. And so I can have a conversation with the development officer at the school where the gift is going to be to determine, hey, what would be a minimum amount? There's some business function here.

Melissa Joy:

You can't just write a $5,000 gift and get a named scholarship. So what is the minimum? What are the parameters around how we could do this? And then in other cases it's more of a conversation of what's really working for you. Or in some cases you may be making gifts but you could do it a different way and get a better tax benefit. All of those are appropriate. To me, the really huge lesson is that recognition in this case, and also that they were collaborating with the university so that it could be a gift that really had a more immediate impact than if you just kind of threw money at them and then you know what inevitably happens. Allie, I assume you would assume, probably like me, would be committed, like bureaucratized and go through like many committees, versus having the control and the impact to say I want to make a huge difference.

Aly Sterling:

Yeah, absolutely. And Melissa, you bring up something that's, I think, so important. How we get to our final kind of relationship with philanthropy is a journey, right. We've had many clients who are asked to make a gift, a substantial gift, because there's a tax or there's a functional benefit that some of their advisors are saying that they need to achieve. They're not coming from it from an altruistic perspective in the beginning, but I can't tell you how many of those gifts become that foray and that path into the joy of giving and the joy of philanthropy.

Aly Sterling:

So I always say, however people come to making their first sort of sacrificial, charitable gift, you know that kind of hurts, right, it's not easy to give that. You had to really like talk to someone about that gift or not just use a checkbook to make that gift. Those kinds of sacrificial gifts, the motivations for them sometimes aren't always the most charitable, but then it's well-stewarded. Good relationships with that mission or that organization can transform someone's approach to their philanthropy forever for good, which is generationally so important. So, and I love that you talk to your clients about this too, melissa, I mean, sometimes there's so few wealth advisors who do that, who have these conversations around giving. So kudos to you for doing that work.

Melissa Joy:

Yeah Well, there could be selfish reasons not to right, like giving away your money isn't necessarily the most profitable for the financial advisor. But we always like to say our goal is not for you to have the most money at the end of your life, our goal is for you to live the life you want to live and have your money be a resource for that. So some people don't feel like they have the possibility to give. Some people tell me you know I would love to do more but I don't think I can, and so we can answer that question. We don't. I really feel like we are working on behalf of the client. So if you do, just do not have that.

Melissa Joy:

You know philanthropic, you know kind of gene, understandable, and there's no judgment there. But if you're like I would like to do it but I just don't know how you like to be more meaningful, then there's often a lot of room for opportunity for discussion where it can make a difference on the tax reasons or in your you know kind of overall situation and you can do the things that would really fuel some of that. You know kind of feed your soul in a way. So, and having you know professionals like you as, from a consultant perspective, working with the organizations that matter or you know, kind of contemplating, and then having the wealth advisor and or tax professional also kind of dialed in to bring their you know kind of part can be very powerful to making something that feels like it's not achievable be realistically like kind of woven into what you decide to do.

Aly Sterling:

There's so many benefits for your family and legacy too, so that can be huge, and I think you know, as females too, we've really started to lean into giving circles right and different kinds of social and pooling of funds in order to make a bigger difference, and so I'm so happy to see that those are really starting to catch on, and even in young adults, right. I mean like we have what, the most charitable generation on our hands, who've been fundraising for causes they care about since they were like five, six and seven years old, and today they're saying that they want to work in the nonprofit sector as an intentional decision, getting an intentional undergrad or graduate degree. And I fell into it, you know, by accident, and but like today, I mean my kids and their peers are all. They're starting their own nonprofits, they're doing their own, you know, gofundme pages for things that they care about. They're just so good at it. It's just, it's effortless.

Melissa Joy:

Well, allie, I can tell that we're going to be having some discussions in the future. I'd love to have you back as a guest sometime soon. There's so many interesting things that you're thinking about, and there's a lot of intersection between each of our worlds, so I think that is really helpful. As we kind of wrap up, I asked you to kind of prepare. What does money wisdom mean to you? Or give an example of money wisdom to you. What are your thoughts?

Aly Sterling:

Yeah, so that was an interesting reflective question for me. I love the topic of wisdom and money and for me it wasn't about, maybe, financial literacy or that. It was more about as I work with families. I've had to do my own introspective around my relationship with money from a family origin perspective. Oh, interesting, right, and so my family.

Aly Sterling:

I came from a family that didn't discuss money. We didn't talk about it. So therefore I didn't have a lot of money wisdom, right. So I had to figure this stuff out on my own. I feel like you know when I so I know this and as I raised my own children, I talk about money, I talk about it. It's part of our dialogue the good, the bad, the ugly, because I went from a family that did not talk about money to being an adult going oh wait, what? Yes, now I got to catch up. So when you asked that question, I thought, oh well, I feel that that money wisdom is something I owe my next generation to reverse what my loving parents sort of left out of our relationship and our family.

Melissa Joy:

I grew up in a very similar family. Well, my parents were divorced, so it was like two sides. Mine too, mom, didn't have a lot of financial literacy to begin with, hadn't had a checkbook that she controlled herself until the divorce. And, you know, dad would save money, but he actually didn't grow up with a lot of money himself. So there just weren't examples where you kind of knew how to address money and then you've got a double. You know, kind of it's doubly hidden away when you're a woman. I think that's changing quickly.

Melissa Joy:

but at least historical gender roles, stereotypical gender roles, didn't have that assumption that you'd be making the investment decisions and things like that in many cases, so hopefully episodes like this can help to reduce that. Now, Aly, if somebody's interested in knowing more, reading your book, et cetera, make sure to have links in show notes. But where could they find you?

Aly Sterling:

My name AlySterling. com, and everything was on our website, including my email address too, so yeah, Perfect and we will plan to have links.

Melissa Joy:

but I also just encourage you if you're a listener and you say, gosh, I would really like to do more when it comes to my own charitable giving. You don't need to give a billion dollars to make a difference. What I would encourage you to do is have a discussion with your key decision makers in your family and also lean on your professionals. If you think you have a financial planner and they're not willing to talk about this, then reassess. But I really think your CPAs and financial planners should be on board to really helping you over time. It doesn't have to be done in a week, but kind of enhance the impact that you're able to do with some careful thought. Allie, thank you for being on the podcast.

Aly Sterling:

Thank you, Melissa, I appreciate it, so much fun.

Melissa Joy:

Thank you for listening to the Women's Money Wisdom Podcast. If you found value in this episode, the best way you can support the podcast is to forward an episode to a friend or leave a review. Go to pearlplan. com and the podcast link to get all the resources and links mentioned.

People on this episode

Head Shot

Melissa Joy, CFP

Co-host