OneRouge Community Check-In - Week 109

The topic will be a continuation of the origins of the Friday call - to discuss the challenges nonprofit leaders are facing while navigating and funding their programs through/post COVID with a potential economic recession looming (recommended pre-reading: Federal GDPNow tracker + World Bank) with our featured speakers:

• Marlice Sanders (JP Morgan Chase)

• Nicole Barnes (Jericho Road Episcopal Housing Initiative)

• Kevin Philips (Raymond James)

• Ed d'Hemecourt (Benefit Planning Group)

So now what? A pending recession, hurricane season upon us and the existing challenges our state is already facing - how will we get through all this?

TOGETHER! TOGETHER! TOGETHER!

That is why the Walls Project is inviting you and all the members of the OneRouge Coalitions to join us for a Community Networking Lunch Friday 6/24 at Noon at the River Center Library (see more info below). This will be a great opportunity to meet your fellow change agents and continue building relationships to do the good work in our city through the summer and years to come. No admission fee, open to all and stick around from 1-2pm to learn how to engage in OneRouge and with the Walls programs.

#OneRouge Week #109

Make Your NonProfit Recession Proof

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Notes

Marlice Sanders (JP Morgan Chase)

Marlice.d.sanders@chase.com

I’ve spent 20 years in the finance industry. Community manager is a new role for Chase. $30 billion over the next five years - commitment was birthed from the George Floyd. All of our underserved communities now have a Community Manager. There are 150 across the country. Focuses on lending and affordable housing. Two billion is for giving and gifts. Locally we gave $5 million to the Plank Road corridor. Right now when we talk about our small businesses, through my partnerships we’ve established a cohort. We have a free entrepreneur training course. From beginning to end we take our small businesses. Started June 1. Two hours a week on Wednesdays. Facilitated with a lot of partners. Helping them understand the type of business they should have. Outside of that there’s opportunity for one-on-one coaching. We’re going to start it up again in August. We’re so excited. We had some great experiences. The goal is to close the racial wealth gap. Financial health is the nucleus of it all. Three things every business should have: Business banker, CPA, and attorney. Visiting with those persons together is very important.

Ed d’Hemecourt

ed@benefitplanninggroup.net

I’m located in Metairie. We all know there’s a lot of different factors going on right now with the economy. I specialize in 501c3s and how to create a space for them. That space has to do with perpetual income. I have access to products and that have lower fees that will create income regardless of market fluctuations. Casey gets $100,000, he puts it into the product, now he can count on that income being guaranteed. Now that’s set and on cruise control. What if you have a market like we have right now. Very volatile. These products will offer a guaranteed rollup. Those folks will get a guarantee interest rate. Your income is growing. The fees are less than endowments. I specialize in that space. This cannot be a short term event. This isn’t a savings account. This should be a long term goal. The goal should be I’m looking to create an income stream no matter what happens to the market. When time goes on, you can pull the money out if you need it. But that shouldn’t be in the goal.

Kevin Phillips

Kevin.phillips@raymondjames.com

Nicole Barnes

nicolebarnes@jerichohousing.org

We are an affordable housing nonprofit. We’ve expanded our geography and impacts to all of south Louisiana. A big part is sustainability. Prior to COVID, we knew we needed to create some new funding so we could create other opportunities to continue our mission work. I was adamant about not doing strategic planning. What was most important was figuring out how to get the money we need in the door. We worked with some consultants. We talked about creating our own construction crew because that would save us some costs. All of this happened right before COVID because it helped us stay afloat at the time. When we had two extremely busy hurricane seasons and construction was stretched, we had our own crew. Another thing we’ve done is expand our financial coaching services. At a time when people are struggling, they need that education. It’s really helped people with long term goal of buying a house and then the short term of people who need help with the economy. When the pandemic started, home has never been more important than it is now. We need to figure out how to create stable homes for people.

QUESTIONS AND COMMENTS

How do I protect myself and the programming I want to provide to the community and how do I encourage my donors who are feeling the pinch of the recession?

Kevin Phillips - Your donors still have to pay taxes. There are ways you can donate to us and help with your taxes. Start the conversation with that. Start by telling them how you can help them.

Marlee Sanders - Take a closer look and restate your value as an organization to them. How can you help their mission? Set yourself apart from other organizations.

Patrick Tuck - Several years ago when we had a large sum of money, we sought out a product that would act like an endowment. We had to get the board comfortable. We had two bankers on the board at the time. We developed a policy before we sought out. Education was key. Onboarding new board members who were not knowledgeable was important. We did find a product that did what we wanted it to do. It protects the initial investment, which was a million dollar investment. After 7 years that million is ours or we can move it into another investment. We were looking at a $42,000 annual income. That’s now grown to 5.6% perpetually and that’s protected. That’s allowed us to move into traditional advisory funds that are more risky. Our performance on those is 10% higher than other areas.

David Beach - Now is a time when you have to be more entrepreneurial than ever. We’re trying to create platforms to have opportunities to raise funds in ways they haven’t before,t hat’s how 225 Gives came from. It’s important to leverage the knowledge that’s available. Now more than ever the federal government has programs to help nonprofits grow. Fundraising is what the nonprofits ask for in the survey we sent out before this.

Can you explain to us the difference of restricted and unrestricted funds and how OPEX covered by interest off of the fiscal product can further help NGO’s be more independent from donor/government constraints on what they do?

Patrick Tuck - The gifts we’ve been given are unrestricted gifts.

Pam Wall - The key to all of this is how you tell your story. If you’re a new organization you have to have your mission, your board, and strategic plan or mission plan. If you then go to a funder and there are grants for startups. In the development world we would call that a case for support. What is unique about what you do. From an old voice, in the grant world, someone who is giving you money, it is either restricted or unrestricted. A grant, especially federal money, it’s restricted. You submit a budget, so you can’t move it around without talking to your manager. Grants are almost always restricted.

Can any speaker discuss opportunities for ESG investing (environmental, social, and corporate governance) and how to reconcile these issues for a nonprofit?

Ed d’Hemecourt - The products that I’m talking about, it’s all up to the client. When I meet that Executive Director or board, the first thing I do is send out a risk tolerance assessment. Then we will do annual questionnaires. Second step, depending on the need or what they want the money to do is how we set up the account. You might have a lot of smaller gifts coming in and then when it hits a certain level, that’s where I come in. You can use me to create whatever space you want - restricted or unrestricted. You’re guaranteeing that the income balance will get these annual step ups.

Kevin Phillips - ESG investing - If you’re working with an advisory they should know about that. It’s very hot right now. If you don’t want to invest in companies and products that don’t align with your values, they won’t do it. Having the board sit down and create an investment plan. We want to invest in line with our values and have that in writing. Get some people on your board that know finance, too. If there are one or two people on the board that know finance, then the rest of the board will trust them because they are not an outsider.

One of the challenges of small and beginning organizations is that they often have a fiscal sponsorship relationship and most of their funding is primarily one or two major donors and activity driven (major fundraiser). Can any of the speakers address what if any of their programs or services can meet these organizations where they are?

Many advocacy organizations operate in both the 501(c) 3 and 4 arenas. How does being a dual organization impact their ability to utilize any of the speakers offerings?

Ed d’Hemecourt - Every client is situational. With our product, it’s very user specific. The risk tolerance is the fist step and then we look at the portfolio. Ask about fees. If they are being elusive about fees, run away as fast as you can. They should tell you right off the top. If they don’t bring it up, ask them. If they are going all over the place, it’s time to put your running shoes on and get out of there.

Marlice Sanders - There’s a lack of exposure and understanding with our consumers and businesses in our community. It’s not as simple as walking into a bank. As we do this work, being able to connect. It’s not one size fits all. Some people don’t always ask for the help. How do we figure out who they are?

Nicole Barnes - We had to bring the board on a little bit. They recognize that we have to become more entrepreneurial. We enlisted some national financial advisors to talk about this in other ways. We used that opportunity to restructure our organization. How we expanded what we were doing. It was a real educational process.

What are some of the terms you’ve been using?

Kevin Phillips - When you hear the word risk, think loss. How much can you lose? Risk adverse means you don’t want your investment to bounce as much. Aversion is more like a psychological state. You don’t want to throw good money after bad. Is your investment a good or a bad investment?

Ed d’Hemecorut - A physical hazard, for example is the city of New Orleans is below sea level, so it’s more adverse to flooding. How much money are you willing to risk to have a certain reward. You may be risk tolerant because you’re looking for a larger reward. You don’t want to have all your money in one spot, but you also want to make sure you have your money in spaces that fit your values. You don’t want to think emotionally, you want to think long term.

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