GREATER METROWEST | Effective Endowments & Living Legacies

Dec 15, 2020

Spotlight on Kim Hirsh, the Executive Director of the Jewish Community Foundation of Greater MetroWest, NJ and their innovative take on planned giving and endowments and the creation of the Living LOJE Endowment.

How do endowments affect your annual campaign and other fundraising efforts?

Endowments have long been  been at the foundation of our Federation’s fundraising strategy. In fact, (then-) MetroWest was one of the first communities to create a Perpetual Annual Campaign Endowment (PACE) Fund in 1992, and the Lion of Judah Endowment fund (or LOJE) for women. Our William and Betty Lester Society—named for a couple who left our largest PACE gift-- recognizes individuals who make a $100,000 or more commitment, or $200,000 for a couple, in any planned gift for the future of the Annual Campaign, including LOJE gifts. Because we had such an early start in the 90s, we now have close to $50 million in PACE funds, and the earnings create the largest single gift to the Annual Campaign each year. Last year, that was $2.4 million, and it keeps growing. Leaving a legacy for the future of the Annual Campaign is deeply embedded in our donor culture and in everything we do.

How do you manage to keep your endowment efforts so vibrant?

In recent years, we realized that we needed a “refresh” to our Lester Society and LOJE efforts. Our upcoming Centennial—our community turns 100 in 2023—was the perfect opportunity to do that. As we started to develop a strategy for our Centennial  Campaign, we knew endowments—in particular, PACE funds-- were at the core of our fundraising. But we needed new strategies to broaden our base of legacy donors, while also building our PACE funds faster to “close the PACE gap.” Our “gap” is the difference between what an individual’s legacy gift would cover at a 5% rate, and their current Annual Gift. In other words, take a $25,000 Annual Campaign donor with a $100,000 PACE commitment—so the “gap” is $20,000 because the PACE commitment will create a $5,000 gift after the donor’s lifetime. Collectively, across major donors with a legacy and those without any legacy, that gap is millions of dollars. Our leadership has been concerned about that gap for years, and Centennial is the perfect opportunity to make progress on closing it.

.Let’s take the first problem: broadening our base. We had spent 30 years focused like a laser on $5,000 and up donors who could leave a legacy gift of $100,000 or more. Well, what about the thousands of donors who have been making Annual gifts of $360 or $1,000 for 10 or 25 years, who love our Federation and believe in the Annual Campaign? We had never asked them! .

These donors already buy into the Federation ethos, many of them have been proving that for years, and it actually makes them the perfect planned gift prospects.

So we created a new giving society—The New Century Fund—which recognizes donors leaving a legacy gift, most likely a bequest, ranging from $10,000 to $99,000 for the future of the Annual Campaign. We pulled together terrific leadership –many of them long-time Lester and LOJE members and former presidents of our Federation and JCF, who all believe deeply in building endowments for the Annual Campaign and of course love our Federation. This group, about 40-strong, are now fanning across the community, literally having hundreds of conversations with our most loyal donors. In just a few months, we have closed $500,000 worth of New Century Fund legacy gifts!

All of these donors will be recognized through our Centennial Campaign. It is the very first time our community is formally honoring and recognizing donors who make Perpetual Annual Campaign Endowment gifts up to $100,000. It is the right thing to do, these donors feel great, and I think our leadership and top donors feels great for broadening the tent in this very meaningful way.

The second group we took a closer look at was our major donors who give at a higher level. Through Centennial, we ask these donors-- many who made their first PACE commitment decades ago--,to increase their commitment in honor of Centennial. We also ask them to consider not just endowing “a” gift to the Annual Campaign, but endowing their gift to the Annual Campaign. That means the gift they are making today will live on, in their name and at that level, in perpetuity. So, for a $10,000 donor, that PACE legacy gift is $200,000, for a $25,000 donor, that’s a $500,000 PACE commitment, and so on. New endowment gifts of course receive recognition for the Centennial Campaign. Donors who increase their existing endowments receive “full credit” for both existing and increased endowment commitments in the Centennial Campaign. For example, if a family already had a $100,000 planned gift commitment and decides to increase by $150,000 in honor of the Centennial Campaign, the family is credited at the $250,000 level in the Centennial Campaign.

Where did the Living LOJE concept come from and how does it differ from the standard endowment?

While Greater MetroWest has been successful with endowment development in the past, we were still worried that we needed to raise significantly more to really secure the future of the Annual Campaign—the lifeblood of Federation. We knew we needed to somehow turbo-charge our PACE efforts, and with a large portion of our donor base aging, we had no time to waste. (In one recent year, we had 400 Annual Campaign donors pass away, most with no legacy gift.) In addition to our attempts to widen the reach of our endowments, we also wanted to have other options. The idea of a “living endowment” came from a conversation with a major donor at the 2019 International Lion of Judah Conference. The conference had a focus on legacy giving, and I had asked this donor, who is in her 50s, to become a LOJE by making a $100,000 commitment to the Federation in her will. She quickly responded, , “Why don’t I just give you $100,000 now?” Standing on one foot, so to speak, at the bar, I responded: “I bet if you do that now, that gift will be worth about $500,000 after your lifetime.” It was just a guess. So when I got back to the office, I asked our finance team to crunch some numbers. Sure enough, we realized that if we are able to invest a $100,000 gift now (then 2019), and let it be invested during the donor’s lifetime (for a donor in her 50s, we project out 30 years) ) that that gift would actually be worth about $500,000 after her lifetime.. Our Centennial PACE Chair, Dr Lynne B Harrison—long one of our leading Lion of Judah endowers—absolutely loved the idea. Lynne coined the term “Living LOJE,” and announced that she would be one of the first to do it! We started to implement this strategy and realized how much more money could be added to our PACE funds, which results in higher distributions to the Annual Campaign, now and well into the future. One year later, we have 11 Living LOJES and one “Living Lester,” with more than $4 million in new cash PACE gifts.

How has COVID affected these efforts?

When COVID first hit, we fully shut down our Centennial Campaign and only focused on crisis relief. By the time summer hit, we had donors reaching out to us to reopen the conversation we had started pre-COVID about Centennial Campaign gifts. Since many people were giving real thought to their legacy during this crisis, the realities of our world accelerated our efforts for legacy giving.

Has the Centennial Campaign and this new strategy allowed you to work well cross-departmentally?

Yes! From the very beginning, our efforts in this campaign have been interdepartmental from the get-go. We have a major partnership between our foundation, our Campaign Department, our engagement department, Impact (marketing), planning, and our finance team. And this process is iterative. We are constantly evolving our strategy and learning as we go. What we do know is that the Living LOJE strategy is highly valuable and will live on following our Centennial Campaign.

What are some key takeaways that different city sized Federations can utilize?

Look at your most loyal donors at all levels. All communities have loyal donors who have been giving for 10 or more years. It does not matter what their giving level is, they can be, and in most cases already are, an endowment and legacy prospect. Federations are blessed with one of the most loyal and consistent donor bases in the non-profit world. We need to say thank you, again and again, to all of these donors for their incredible commitment and generosity. We need to leverage the power of that dedication to building endowments that will provide increasing distributions to the Annual Campaign, the foundation of our Jewish communities today and tomorrow. 

Kim Hirsh will join us for a zoom session on MAY 11TH at 12:00 PM (ET)//9:00 AM (PT).  Register below.