Discussing innovative and responsive uses of DAFs on the EPCNYC webinar: Mark Cohen (FJC), Sam Marks (FJC), Dolores Kordon (Brighter Tomorrows), Hank Snyder (JP Morgan, moderator), and Annie Polland (The Tenement Museum)

Innovative, Revolving Uses of DAFs Featured in Webinar

Leaders of two nonprofit organizations whose urgent financial needs were met by innovative FJC donors were featured on a webinar hosted by the Estate Planning Council of NYC (EPCNYC), titled “Multiplying your Impact: Innovative Approaches to Revolving Philanthropic Dollars”.  The nonprofit Executive Directors, Annie Polland of The Tenement Museum and Dolores Kordon of Brighter Tomorrows, were joined by members of FJC’s leadership, CEO Sam Marks and Chief Legal Officer Mark Cohen, who described the foundation’s role executing the transactions.  The event was moderated by Henry Snyder, Executive Director of JP Morgan’s Private Bank, and a member of EPCNYC.

While most holders of Donor Advised Fund (DAF) accounts use their philanthropic funds for grants, the webinar highlighted cases where donors identified financing gaps in the organizations that could be addressed with solutions that combined philanthropic intent with investment strategies.

“We’re trying to inspire more of our donors to approach philanthropy in this way, and bring new donors that are inspired by examples like these.”

Sam Marks, Chief Executive Officer, FJC

In the case of Brighter Tomorrows, a domestic violence nonprofit serving women and families on Long Island, the donor was solving for a cash flow problem.  As Ms. Kordon explained, the majority of the organization’s work is funded with government contracts.  These contracts, typically administered through the state or county, are notoriously slow to pay even during normal times and are typically paid on a reimbursement basis.  During the pandemic, when the needs of clients for shelter, food, and emergency assistance were at an all-time high, the public agency offices administering payments on the contracts were also facing major capacity issues.  “Payments slowed to a snail’s pace,” Ms. Kordon lamented. “With the pandemic came all sorts of additional emergency costs, and we had to still keep the lights on and pay rent.”

Enter Sandy Wheeler, one of Brighter Tomorrows’ most steadfast donors.  Ms. Wheeler worked with FJC to deploy $100,000 in her DAF account as a 0% interest revolving line of credit.  This cash resource allowed Brighter Tomorrows to continue meeting the urgent needs of clients, even in the face of slower contract payments.  In the year since the loan was closed, the funds have been fully drawn, repaid, and drawn again. “I can’t say enough about the importance of having a donor provide this resource,” says Ms. Kordon. “It was a godsend for us.” 

“I can’t say enough about the importance of having a donor provide this resource. It was a godsend for us.”

Dolores Kordon, Executive Director, Brighter Tomorrows

FJC facilitated a more complex transaction with The Tenement Museum, a vital organization that has been researching and telling the stories of immigrant New Yorkers for the past 25 years. In the early days of the pandemic, the organization faced significant financial distress, as documented in an New York Times article, “A Museum Devoted to Survivors Faces Its Own Fight for Survival” (April 24, 2020). The article noted that 75% of the museum’s revenue came from earned income, reflecting admissions and gift shop revenue of its 285,000 annual visitors.  As a result of the pandemic their visitors (and attendant revenue) had dried up, but the museum carried significant fixed costs due to its mortgage, which cost the museum $585,000 per year.

One of FJC’s donors read the New York Times article and reached out to inquire whether he could refinance the museum’s mortgage with funds in his DAF account.  Upon further conversation with the Museum’s leadership, it was revealed that the mortgage was in the form of a tax-exempt bond, issued by the City of New York through its Build NYC Resource Corporation, a division of the NYC Economic Development Corporation.  In coordination with the donor, FJC purchased the bond from the bondholder, and amended the terms to interest-only at 1% per year, reducing the museum’s annual debt service payment from $585,000 per year to $80,000.  “We are paying $2.5 million less out of pocket for debt service over these five years,” explains Ms. Polland. “This has bought us time to figure out how we manage through this pandemic year, but it also freed us up to think of creative ways to operate.” Ms. Polland noted that the museum has been able to develop distance learning modules that have engaged students virtually from as far away as California.  She also noted its new exhibit focusing on a Black family and a walking tour called “Reclaiming Black Spaces,” which explores sites connected with nearly 400 years of African-American presence on the Lower East Side.  “The Museum is not just pausing,” she said. “We’re taking on new and addressing the questions important to this country.  How does learning our history help us move forward?”  The Museum’s new programs and strong emergence from the pandemic were featured again in the New York Times this month, a story that Ms. Polland describes as a “bookend” to the previous year’s story on the organization’s distressed financial picture.

“We are paying $2.5 million less out of pocket for debt service over these five years. This has bought us time to figure out how we manage through this pandemic year, but it also freed us up to think of creative ways to operate.”

Annie Polland, Executive Director, The Tenement Museum

Mr. Cohen explained that after five years, FJC intends to sell the bond back to the bond market, and will aim to recoup the $9.5 million face value of the bond for the donor’s account.  These funds can then be recycled as grants or additional loans or impact investments.

The moderator Mr. Snyder noted that customized transactions like these do not appear to be standard offerings at most DAF sponsors.  Mr. Marks noted that philanthropic lending and impact investing are more common at the more sophisticated, professionalized foundations and that FJC had a long history of applying best practices from philanthropy more broadly to their DAF account holders.  “We’re trying to inspire more of our donors to approach philanthropy in this way,” says Mr. Marks, “and work with new donors that are inspired by examples like these.”
 

Photo courtesy of New York Lawyers for the Public Interest

Donor Legacy Supports Transformation of NYC’s Response to Mental Health Crises

In life, Helen Rehr led a distinguished, trailblazing career in social work.  She was known for revolutionizing and standardizing the field of social work, and her long career at Mt Sinai, where she retired in her role as Chair of the Division of Social Work in 1986.  Ms. Rehr was also a longtime donor at FJC.  Since her death in 2013, FJC has honored her philanthropic legacy by honoring her wishes through a Board-advised Fund, “to identify worthwhile projects determined by FJC to be used for social services, research or training projects all to enhance health and mental health care for vulnerable populations within the State of Israel and the City of New York.”

This year FJC issued a Request for Proposals that put a timely focus on her programmatic wishes: “organizations engaged in social work research and/or training projects focused on developing alternatives to the current police response when encountering the mentally ill in NY.” Each year, the New York Police Department (NYPD) responds to nearly 200,000 calls regarding individuals experiencing mental health crises.  In the past five years alone, notwithstanding Mayor Bill de Blasio’s implementation of crisis intervention training for police officers, 18 individuals were fatally shot by police when experiencing a mental health crisis, and 15 of those 18 individuals were Black or Brown.

“It is high time to transform the way New York responds to mental health crises an ensure that all New Yorkers are provided the services they need and are treated with the dignity they deserve.”

Ruth Lowenkron, Director, Disability Justice Program, NYLPI

The winning response to the RFP came from New York Lawyers for the Public Interest (NYLPI), working in coordination with program partner Community Access.  The $100,000 grant will fund the two organizations to advocate for New York City to establish a non-police response to mental health crises, which will consist of trained peers (those with lived mental health experience) and independent emergency medical technicians whose aim is to de-escalate violence and administer proper assistance through a non-police mental healthcare response. 

Recognizing that creating an alternate response to mental health crises means doing as much as possible to ensure crises never happen in the first place, NYLPI will also develop a training geared to such frontline workers as social workers to de-escalate crises, building on a Community Access training module that seeks to equip workers with the knowledge and de-escalation skills to make compassionate connections with people in crisis.

“We could not be more grateful for the FJC’s generous support of this critical work,” said Ruth Lowenkron, Director of NYLPI’s Disability Justice Program who spearheads NYLPI’s work in this area.  “For far too long, our citizens who experience mental health crises have been neglected and worse.  It is high time to transform the way New York responds to mental health crises an ensure that all New Yorkers are provided the services they need and are treated with the dignity they deserve.”

NYLPI will leverage the grant from the Helen Rehr fund as a match for their #MentalHealthCareNotPolice campaign, which NYLPI and its coalition partners will be highlighting throughout the year in a series of events in public parks.  Visit NYLPI’s website for more information.

Image courtesy of Center for Effective Philanthropy

Center for Effective Philanthropy Highlights FJC Revolving Funds

The Center for Effective Philanthropy has published a blog by FJC’s CEO Sam Marks titled, “Stretching Dollars without Straining Donors: The Case for Revolving Funds.”  The blog post features a donor’s innovative use of a DAF-like account at FJC to support the nonprofit Southern Environmental Law Center’s pioneering anti-pollution litigation work, as well as additional applications of revolving funds.  An excerpt is below.

At FJC – A Foundation of Philanthropic Funds, we have worked with imaginative donors to structure revolving accounts (essentially, variations on Donor Advised Fund accounts) with a goal of empowering nonprofits to take on significant campaigns and projects. Such arrangements can be incredibly catalytic, giving nonprofits the confidence to move forward on complex projects while mitigating financial risk. Also, by prioritizing activities with a high likelihood of recovery, these structures create the potential for donors to amplify their impact, revolving their funds so that the same philanthropic dollar can have multiple impacts on multiple projects. 

A case in point is our work with the Southern Environmental Law Center (SELC), a 35-year-old nonprofit organization active across six states.

As impact investing becomes further mainstreamed among foundations and holders of Donor Advised Funds, imaginative donors should consider recoverable grants and revolving fund structures as an additional tool in their continuing philanthropy.

To achieve their mission, SELC uses a broad array of law and policy approaches including strategic litigation which can be expensive and resource intensive.  Enter an anonymous donor at FJC. The donor worked with FJC to create an account where charitable grants to SELC are deposited and from which SELC can draw funds specifically to pay for direct litigation expenses (like expert fees) in potential fee-recovery cases. Periodically, when SELC wins a case and recovers attorney fees, they make a deposit back into the FJC fund to replenish it in the event of future need. To date, SELC has drawn approximately $1 million from the revolving fund to pay for professional experts and other direct litigation expenses. With an incoming payment of fees recovered from SELC’s landmark Atlantic Coast Pipeline litigation, SELC will have redeposited some $270,000 back into the fund. 

As impact investing becomes further mainstreamed among foundations and holders of Donor Advised Funds, imaginative donors should consider recoverable grants and revolving fund structures as an additional tool in their continuing philanthropy. A fundraising campaign around this type of fund may engage donors that wish to invest in the organization’s growth and capacity while simultaneously compelling donors who would find value in seeing significant, multiple impacts over a long period of time as a result of a one-time gift.

For more information about revolving funds and how SELC put this unique resource to work, read the full blog post at Center for Effective Philanthropy.

Photo courtesy of Chapin Hall at the University of Chicago

FJC Hosts Funding Collaborative to Fight Homelessness

Earlier this year, FJC began hosting a funding collaborative of corporate, family, and private foundations that have aligned their funding in an effort to transform New York City’s homelessness systems.   FJC has disbursed over $525,000 in grants on behalf of The NYC Fund to End Youth and Family Homelessness, which expects to make a total of $3 million over the next two years.

The vision of the collaborative goes beyond funding social services.  The Fund seeks to “transform major systems so that they operate to promote housing stability as part of their core function” by influencing a constellation of interlocking systems: housing and shelter; education; foster care; child and family welfare; health, including mental and behavioral health; law enforcement and justice.

The Fund’s governance structure ensures that the philanthropic strategy is being shaped by people with the lived experience of homelessness.

“We’re looking to make strategic grants where if you can just push in the right spot, you can have a compounding effect on impact,” explains Lisa Talma VP of Philanthropic Initiatives at Deutsche Bank, one of the funders.  Among the grants the Fund has made include the development of technology applications that enable homeless individuals to access public resources and programs more quickly, and initiatives that provide direct cash transfers to homeless individuals and families. 

The Fund’s governance structure ensures that the philanthropic strategy is being shaped by people with the lived experience of homelessness.  The Fund currently reserves four seats on its Steering Committee for the two Co-Coordinators of New York City’s Youth Action Board and the two Housing Policy Fellows of New York City’s Family Homelessness Coalition.  By explicitly advancing equity and lived expertise as core values, the collaborative has attracted both national and local funders looking to support cutting-edge programs and interventions.  UPDATED 6/17/21: One of the projects supported by the Fund to research the impact of direct cash transfer payments to homeless youth has attracted follow-on investment from the City of New York.  Read the press release about the Trust Youth Initiative, a program of Chapin Hall at the University of Chicago and Point Source Youth.

“We considered fiscal sponsorship as an option, but the [Collective Giving Account]’s ease of use and efficient fee structure made it the right vehicle,”

Bea De La Torre, Co-Chair, Managing Director of Housing & Homelessness, Trinity Church Wall Street

To assist the Fund in achieving its goals, FJC arranged a Collective Giving Account (CGA), a variation on a Donor Advised Fund that allows for incoming contributions from multiple philanthropic actors.  “We considered fiscal sponsorship as an option, but the CGA account’s ease of use and efficient fee structure made it the right vehicle,” explains Bea De La Torre, Co-Chair of the Fund, and Managing Director of Housing and Homelessness at Trinity Church Wall Street. 

“Very often our CGA accounts are used by individuals to mark life occasions,” says FJC Chief Operating Officer Meghan Hudson, “Weddings, bar mitzvahs, and the like.  It was easy enough to apply this vehicle to the needs of these more institutional foundations, and we hope to do more in the future.”

List of funders

  • Block-Leavitt Foundation
  • Deutsche Bank Americas Foundation
  • Helmsley Charitable Trust
  • Melville Charitable Trust
  • Pinkerton Foundation
  • Stavros Niarchos Foundation
  • Trinity Church Wall Street

Grants to date

  • Settlement Housing Fund – supporting the NYC Family Homelessness Coalition’s Housing Policy Fellows program, which hires and trains advocates with lived expertise of family homelessness in NYC to help the Coalition’s policy, advocacy, and communications initiatives.
  • Empire State Coalition of Youth and Family Service – supporting the Coalition for Homeless Youth in launching a first-of-its kinds Peer Navigator Program, which will train a corps of young people with lived expertise of homelessness to work at youth homelessness service organizations throughout NYC as part of their client service teams, helping their peers find permanent housing and access other benefits programs and support.
  • Rethink Food NYC – as fiscal sponsor for Streetlives, an initiative to co-design, build, and operate a technology platform with youth with lived expertise to better connect young people facing housing instability with the information, services, and support they’re seeking to improve their lives.
  • Funders Together to End Homelessness – to join this national organization and benefit from its learning on national best practices in grantmaking and its public policy advocacy, and to join its cohort of Foundations for Racial Equity.
  • Chapin Hall at University of Chicago – to support a groundbreaking pilot and rigorous evaluation of a Direct Cash Transfer Program, which will study the impact of providing monthly flexible cash support for two years to young people experiencing homelessness in NYC and compare their outcomes with control groups who receive significantly more costly, non-fungible supports like shelter.

For more information, visit the Fund’s home page.

Donor’s Revolving Fund Finances Energy Efficient Shelter For the Homeless

Through a revolving account at FJC, a donor passionate about the environment has provided financing to create a state-of-the-art transitional shelter for New York City homeless families, through an innovative philanthropic partnership with the New York City Energy Efficiency Corporation (NYCEEC). 

The donor has created a revolving account at FJC that NYCEEC can use to cover critical project activities like energy modeling, feasibility analysis, design drawings, and land-use approvals.  These costs are reimbursable when construction financing closes, allowing funds in the FJC account to be redeployed for NYCEEC’s future worthy projects. 

NYCEEC will use the capital to fund early-stage predevelopment work on the adaptive reuse of a former nurses’ residence on the Greenpoint Hospital campus in Brooklyn. The renovated building will provide state of the art temporary accommodation to 200 of New York City’s most vulnerable residents.  The shelter is expected to achieve LEED Gold certification.  Savings in greenhouse gas emissions compared to conventional construction are projected to be 384 metric tonnes of carbon dioxide equivalent per year.

The shelter is a component of the $212.7 million redevelopment of the Greenpoint Hospital campus, in East Williamsburg, Brooklyn.  The redevelopment project is the culmination of years of advocacy by a consortium of neighborhood-based organizations, led by the nonprofit St. Nick’s Alliance.  The development will also include apartments for extremely low-income and very low-income residents and seniors, a community facility, and a network of new open spaces to connect the campus to the surrounding neighborhood. A partnership between St. Nick’s Alliance, Project Renewal, and Hudson Companies was designated by New York City to redevelop the site, which has been primarily vacant since 1982 when the Greenpoint Hospital was closed.

Philanthropic capital from FJC will fund over one-third of NYCEEC’s $1.3 million predevelopment loan. “We allocate capital from a range of public and private sources for projects like this,” explains Jay Merves, NYCEEC’s Director of Business Development. “Many of our capital providers put geographic or other restrictions on the use of their capital, so the flexibility of funds from the FJC donor is vital in allowing NYCEEC to provide financing for clean energy projects in underserved communities.”

Photo courtesy of Queens College.

FJC Donor Expands Opportunity at Queens College

A Korean-American woman majors in History, Political Science, and Anthropology and spends her summer volunteering to rebuild Puerto Rico after Hurricane Maria.  A Colombian man lives with his grandmother, following his mother’s deportation, while studying to become a journalist.  A first generation Chinese-American college student serves as President of the Chemistry Honor Society, where he tutors other students who struggle with chemistry.

What do these students have in common?  They are among the seven Queens College students that received financial support from Queens College alumni, as part of the Phi Epsilon Pi Endowed Fund.  One of this group of Queens College alumni is Robert Jacobs who actively uses FJC to support his philanthropic efforts.

In November 2018, Mr. Jacobs had an epiphany. By chance, he read a newspaper article about former Mayor Michael Bloomberg’s generous donation to Johns Hopkins University—a gift ensuring that no accepted student would be unable to attend because of financial circumstances. In that moment, Jacobs knew that his time had come to make a difference at his alma mater, Queens College. Within a month, he established a scholarship to benefit students of academic merit who need financial assistance. 

Jacobs knew that his time had come to make a difference at his alma mater, Queens College. Within a month, he established a scholarship to benefit students of academic merit who need financial assistance. 

But that was just the beginning. After receiving touching letters of appreciation from his scholarship recipients, Jacobs shared the notes with his fraternity brothers and planted the idea of doing something greater. During a biannual Phi Epsilon Pi dinner, he proposed starting an endowment at the college. This was a chance for this group of friends to leave a legacy and to assist students for many years to come.

“All of us have forgotten whatever we learned in Contemporary Civilization, but we have not forgotten the opportunity that Queens College provided a bunch of poor, hardworking, smart kids from the five boroughs and Nassau and Suffolk Counties,” Jacobs says. “Queens College gave us a chance to succeed in ways that our parents, as products of the Depression and as second-generation Americans, could have only dreamt about.”

“Queens College gave us a chance to succeed in ways that our parents, as products of the Depression and as second-generation Americans, could have only dreamt about.”

With the help of 26 fraternity brothers and more participating each month, the Phi Epsilon Pi Endowed Fund has raised over $176,000 and continues to grow with consistent gifts from the fraternity brothers.  It has given them the opportunity to further the bond that was initiated so many years ago.. To date, the endowment has funded seven student scholarships over the past two years and it is expected that it will fund another two this year , and the funders are adding a mentoring component to the program.  Further, it has inspired a fellow fraternity to establish its own fund in support of student scholarships.

The demographics of Queens College are quite different from the institution they attended fifty years ago.  When Mr. Jacobs graduated in 1970, white students made up the vast majority of students at the school. Today, students of color represent nearly three-quarters of the student population, and nearly one-third are foreign born.  Another major change is tuition.  As part of the City University of New York system, Queens College began charging tuition since the mid- 1970’s.  While tuition of approximately $7,000 a year for a full-time undergraduate degree is quite modest compared with private colleges, it is still a hardship for many students.  Almost half of Queens College students come from households earning less than $30,000 per year. 

While the demographics are different, Jacobs and his fraternity brothers would rather focus on their similarities.  “They’re just like we were.  They’re strivers,” Jacobs states.  “None of my college friends were born with a silver spoon.” He also notes that public education was the foundation for his successful career, which included being a partner at Ernst & Young and now managing his own healthcare consulting practice.  “How can we not give back when we paid $46 a term?”

With their philanthropy, Jacobs and his peers are having a major impact on today’s Queens College students like Joss Montano.  The scholarship, Montano writes, “…guarantees that I will continue my education, a possibility I would be unsure of without the assistance it provides me. It is a nod at what I have been working toward, and an affirmation that the sacrifices my family has made for me to get an education, have been worth it.”

Portions of this article appeared in the Fall 2020 issue of Queens College magazine and appear courtesy of Jennifer Beiner and the Queens College Office of Institutional Advancement.

Adhikaar is one of eight outstanding immigrant-serving organizations in NYC selected through an RFP process. Photo courtesy of www.facebook.com/adhikaar

FJC Donor Selects Outstanding Immigrant-Serving Nonprofits Through RFP

Last year, a donor at FJC decided she wanted to focus on a new program area: immigrant-serving nonprofits in New York City.  But where to start?  In consultation with the donor, FJC issued a Request for Proposals (RFP) to several community-based organizations throughout the five boroughs.  The result: eight outstanding nonprofit organizations received grants of approximately $20,000. 

The process began with the donor’s clear commitment to addressing urgent issues facing immigrant communities during these unprecedented pandemic times.  The donor also decided that while New York City is home to robust citywide membership organizations and coalitions, the donor’s preference was to provide grants directly to organizations doing work “on the ground” in neighborhoods.  Following a consultation with staff at the NYC Mayor’s Office for Immigrant Affairs, the RFP was written to solicit proposals about a broad range social services, including food security and legal services. 

Within weeks, FJC received the responses to the RFP and the donor was able to evaluate the proposals and recommend eight grants.  As with any donor recommendation, FJC’s board approved the grants and staff facilitated the grant disbursements from the donor’s DAF account.

The eight organizations funded are: Adhikaar, African Communities Together, La Colmena, COPO, MASA, New Immigrant Community Empowerment, Project Hospitality, and Sauti Yetu.

FJC was able to offer the donor expertise about designing and distributing the opportunity to a targeted subset of nonprofits that aligned with her commitment.    Furthermore, reviewing the RFP responses provided the donor nuanced insights to a range of issues facing immigrant communities across New York City, including food security, mental health, and the importance of targeted cash assistance.  “There was a mix of very particular concerns and issues that were cross-cutting across the various organizations,” said a representative of the donor, who wishes to remain anonymous.

The RFP process was also designed not to overburden the applicant organizations.  “So many organizations are struggling right now,” said the donor. “We wanted to make the process of applying as easy as possible.”  The RFP requested materials that nonprofit organizations typically have readily prepared: a budget and a two-page narrative about communities being served, the organization’s goals for the grant resources, and how they measure impact. 

“The RFP was very timely,” said Aakriti Khanal, Development and Research Coordinator for Adhikaar, a Queens-based social justice organization serving the Nepali-speaking community.  “We appreciated how straightforward the process was and how flexible these grant resources are, so we can be creative in responding to the urgent needs of our members during the pandemic,” citing the need to shift services and English empowerment classes online.  She also noted that immigrant-serving organizations like Adhikaar anticipate a more favorable policy environment on issues facing immigrant communities in the years to come.  “Now is the time that real change can happen,” she said.

FJC welcomes donors that are interested, individually or jointly, in selecting multiple organizations for grant support of $15,000 or more through RFPs.  FJC can work with interested donors to design and distribute the RFP, collect the responses, and process the grant recommendations once the donor selects the organizations.  Please contact CEO Sam Marks to get started

Photo by André François McKenzie on Unsplash

FJC Accepts Its First Donation of Cryptocurrency

In December, 2020 FJC accepted its first ever donation of Bitcoin, liquidating the asset through a leading Bitcoin exchange to generate over $56,000 in philanthropic resources for a Donor Advised Fund (DAF) account. 

The donor, who wishes to remain anonymous, was an early adopter of Bitcoin, having invested in the cryptocurrency in 2017.  A sophisticated investor who works in financial services, the donor was inspired to purchase his first Bitcoin for his family’s own investment portfolio after attending an industry conference. “At that early stage of the currency’s life cycle, I had to send a check to a post office box in California,” he recalls.  “It was a leap of faith.”  As the currency has matured and gained wider acceptance with institutional investors, including insurance companies, endowments and family offices, the donor has continued to maintain Bitcoin as part of his family’s overall investment portfolio.    

For Bitcoin enthusiasts who have benefitted from the increase in the currency’s value in recent years, the tax benefits for donating Bitcoins and other cryptocurrencies held for a year may be similar to appreciated stock.  (FJC does not give tax advice, so please consult your tax advisor).  This particular donor noted that following his year-end donation of Bitcoin to FJC in anticipation of the tax deduction, he purchased Bitcoin again in the new year in order to maintain the Bitcoin position in his portfolio.    

Upon donation, FJC worked with NYDIG, a leading financial services firm dedicated to Bitcoin, to exchange the currency for US dollars.  The donor expects to increase grantmaking from his family’s DAF to a variety of entrepreneurial organizations, with a focus on strengthening Jewish communal life and promoting deeper civic engagement in the United States.

“We hope this donation will be the first of many,” said Regina Rodriguez, FJC’s Chief Finance & Investment Officer. “We appreciate donors that come to us with ideas that push us into new territory.”

Stock IPO Pays Philanthropic Dividends

On August 26, 2020, at 9:30 AM, the Nasdaq opening bell rang out in traditional fashion to announce the start of trading for the day. For FJC donor John Herzog, however, the ringing of the bells indicated something particularly meaningful: a more robust and active phase of his philanthropy with FJC.

On this morning, the ceremonial bell-ringing duties were being performed by Mr. Herzog’s colleague and friend Mr. Ronny Yakov to commemorate the public offering of The OLB Group, Inc., an e-commerce company for which Mr. Yakov acts as Chief Executive Officer. OLB operates in the FinTech space specializing in payment processing solutions. The firm, based in New York City and founded in 1993 initially to provide creative and marketing services to larger companies, has pivoted over time towards e-commerce, and now offers a suite of private-label services that includes business management and crowdfunding platforms, along with their proprietary payment gateway. In addition to being a longtime investor in the company, Mr. Herzog also sits on the firm’s advisory board, and he witnessed first-hand the growth and maturation of The OLB Group in recent years.

Mr. Herzog had generously donated shares in The OLB Group to his account at FJC in 2019, in anticipation of this public offering. He had experienced success working with FJC in the past on similar transactions, and he reached out to see how FJC’s services could be leveraged to help convert this financial opportunity into philanthropy. By first donating the shares to FJC and then selling them, the capital gains taxes that would normally be applicable to an individual selling the stock would be foregone (due to FJC’s tax-exempt status), meaning the money saved in taxes could be utilized for philanthropic purposes. At the time of the donation, The OLB Group’s stock was still traded on the OTC markets, and the thinness of trading volume meant that it would be incumbent upon FJC to hold the stock until such a time when liquidating the shares would be feasible. This customized transaction required approval of FJC’s Investment Committee, which also considered the appropriate pace at which FJC would liquidate the stock.

Mr. Herzog has a long and active history supporting the nonprofit sector with his philanthropy. In 1988 he founded the Museum of American Finance, a 501(c)(3) organization in downtown NYC dedicated to educating the public about the history and impact of finance through exhibits and public events. The Museum, established as a response to the market crash of 1987, houses collections that span from U.S. Treasury bonds issued in the 18th century, to Depression-era scrip, to personal correspondence of influential persons such as Benjamin Graham (author of the seminal The Intelligent Investor). Virtual events featuring expert panelists on finance and financial history have also been added to the programming. Mr. Herzog himself has long been involved in the finance industry, and was formerly CEO of Herzog Heine Geduld, Inc., a leading market maker which was purchased by Merrill Lynch in 2000. By coupling his own charitable instincts with FJC’s expertise, Mr. Herzog will be able to roll a portion of his interest in The OLB Group into material financial support for both the Museum and other non-profit organizations.

“It has been a great experience working with FJC on this stock donation,” says Mr. Herzog. “FJC was patient while we sorted through the IPO process and the subsequent lock up period, and their flexibility is allowing me to be especially charitable from my account now that the stock is liquid.”

Photo courtesy of Brighter Tomorrows

FJC Facilitates Donor Loan to Support Families Facing Domestic Violence

It took the collective efforts of a number of people to get it done: a committed donor, a philanthropic advisor, and the staff at FJC. All parties worked together this spring to close a $100,000 cash flow loan to Brighter Tomorrows, a nonprofit working with victims of domestic violence to provide shelter, counseling and legal advocacy to New York’s Suffolk and Nassau counties as well as New York City and the Tri-State area.

The process began with Sandy Wheeler, a longtime donor to Brighter Tomorrows. Over time, Ms. Wheeler developed a trusted relationship with Dolores Kordon, the organization’s Executive Director, who often lamented the difficulties she faced running an organization that relied heavily on state contracts that were typically slow to pay. “It seemed like the chronic cash flow challenges of Brighter Tomorrow could be creatively addressed with philanthropy,” said Ms. Wheeler.

The Wheelers spoke to their philanthropic advisor at a large financial institution, who made the introduction to FJC. “The Wheelers already had a Donor Advised Fund account, but the sponsor wasn’t really set up to originate loans,” their advisor explained. “We appreciated that FJC had the track record and infrastructure to make this proposed loan happen, and quickly.”

Within a few weeks, staff at FJC worked with the Wheelers to open and fund a new DAF account, review Brighter Tomorrow’s financials, and prepare the legal documents with terms customized according to the Wheelers’ wishes. Among other features, the loan carries no interest.

“Brighter Tomorrows is so grateful for this intervention by FJC and the Wheelers,” says Ms. Kordon. “Particularly during the COVID-19 pandemic, when cash was tight due to many competing programmatic demands, having the Wheeler’s loan to bridge our day-to-day expenses provided us the flexibility to be responsive to the families we were serving, like distributing food cards and helping clients pay rent.”