“Give like a Billionaire.” Many times when you are so focused on growing our wealth, it’s easy to lose sight of your “why”. And for many, that “why” is to leave a legacy. In this episode, Bob Fraser and Ben Fraser bring on Evan Lange, President of the Midwest region at The Signatry, to discuss giving strategies used by Warren Buffet, donor-advised funds, giving assets versus cash, tax benefits, and much more. If you want to learn how to strategically create a legacy roadmap, you don’t want to miss this episode.
Evan serves as the President of the Midwest Region for The Signatry, a global Christian foundation. As President, his primary role is to assist attorneys, advisors, and business owners to develop strategies and solutions to minimize their tax liability and maximize their charitable giving. This includes charitable gifts of complex assets like real estate, closely-held business interest and intellectual property. Evan is a frequent speaker at conferences and legal/tax educational programs throughout the United States. He and his wife, Farah, have three children and reside in the Greater Kansas City area.
Read the full transcription https://aspenfunds.us/podcast/warren-buffetts-giving-strategies—feat-evan-lange
Connect with Evan – https://www.linkedin.com/in/evanlange/ Learn more about The Signatry- https://www.linkedin.com/company/the-signatry/
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Warren Buffett’s Giving Strategies feat. Evan Lange
Ben Fraser
Hello Future Billionaires. This is the Invest Like a Billionaire podcast and we’ve got a really fun show for you today. A little bit different than otherwise we’ve done, but Bob, what did you think of this one?
Bob Fraser
This is gonna be so good. Oh my gosh. And it’s how to invest like a billionaire, but it’s, but it’s investing in, in giving and investing in charities. And hey, don’t tune out because this is actually smart business strategy you’re gonna get too. So, uh, and these people we know for a long time and highly, highly endorsed. So it’s, it’s awesome
Ben Fraser
So we, we brought on Evan Lange He’s president of the Midwest region at The Signatry, which is a big donor advised fund company, and he talks about the strategies that Warren Buffett uses for giving.
Um, he talks about some of the really cool tax deductions in giving assets versus cash. Talks about why you should think about giving and lots, lots more. So be sure to listen to this episode. Tune in. It was a fun time.
Welcome back to the Invest Like a Billionaire podcast. I am your co-host Ben Fraser, joined by fellow co-host, Bob Fraser, and today we are joined by Evan Lange, who is actually in Kansas City with us we’re super excited to have you, Evan. Thanks for coming out.
Bob Fraser
I’m so pumped for this, for this. Very, very excited to have Evan with us.
Ben Fraser
Yeah, so this is gonna be a little bit different. This is some of our standard episodes, so, well, we like different, we like to mix it up and we know you don’t wanna come for the same old thing every time.
And normally the theme is invest like a billionaire. Today it’s give like a billionaire.
Bob Fraser
Well, that’s investing though, right? It’s investing. It’s just a different kind of investing. It’s investing in the future of the planet and the future of people’s lives to, to, to better people and, and truly, I mean, our theme is right.
Invest Like a Billionaire, but this is what billionaires do, right? They’re giving massively so, so
Ben Fraser
well, it, it made me reminded of today as was googling it again on the giving pledge. Which is such a cool thing. It’s, it’s four billionaires. If you haven’t heard of the Giving Pledge, Google it. It was started by Warren Buffett and Bill and Melinda Gates, and they started this, um, program to basically get billionaires to commit giving 50% or more of their wealth, uh, to philanthropy, which is just so cool cuz it’s, you know, a certain point. You know, you’re kind of these different stages of, of investing and building wealth and obviously their first stages, you know, becoming financially free.
The next is having enough to, you know, give to heirs, but then beyond that, What’s really the goal, right? Is it just to accumulate more?
Bob Fraser
And over a hundred billionaire have already done this, but Ben, we’re talking too much and we haven’t even introduced our guest, I know. So Evan, we’re too excited.
Evan Lange
Frasers. I could listen to you guys talk like, just, it’s awesome. So thank you for having me on. I really appreciate it. Excited to decided to, uh, chat with you about giving. Which is fun.
Ben Fraser
So, So Evan, talk to us a little bit about what you do. Obviously you’re a president at The Signatry, which is a, um, uh, a foundation that helps people that have wealth.
We’ll get into on the mechanics of that. But talk a little bit about your background and how you got into this space and, and what you do.
Evan Lange
Yeah, absolutely. Thanks Ben. Um, yeah, so I work at The Signatry, we’re a global Christian foundation. I tell people, I help people give money away.
And, uh, I love your podcast because I work with several billionaires, so where people that are giving tremendous amounts of money away. and, uh, my job, I, my background is I’m a lawyer, so I will help these families figure out strategic ways to give, um, to charitable causes using some tax efficient vehicles, um, and to, to talk about, you know, variety of different charitable causes to give to.
So our mission at The Signatry is literally to educate, inspire, and facilitate radical acts of Biblical generosity.
Bob Fraser
I love it.
Evan Lange
It’s a great job for a lawyer to have.
Bob Fraser
So I’ve actually know, know Evan for some time now and, and work with The Signatry, but these guys are really easy to work with. You don’t have to be a billionaire, so I don’t wanna scare anyone off.
Right. You can, you can start a donor advised fund with a thousand dollars and or, you know, and, uh, and get rolling on this. And these guys are a wealth of resources and, and stuff, but, you know, so just, just Evan. I mean, aren’t wealthy people generous? Right. This is what, this is what most people are, aren’t, aren’t they, As they, when they, when you get to certain level of wealth, you know, Doesn’t this just, isn’t this just a part of the, of what people start to think about?
Evan Lange
Uh, yeah, I think, I think generally, um, it’s interesting, Bob. I. I wrote an article several years ago and it was actually about Warren Buffett, and it was about how Warren Buffett gives, um, because, you know, people like to invest like Warren Buffett. They like to look at what does Warren Buffett do? How can I emulate those types of things?
Very few people give like Warren Buffett does and the way that he gives is he does it strategically. He uses certain assets that he gives away because there’s tremendous tax benefits by doing that. And there’s some great charitable benefits. You’re actually multiplying the amounts that you’re giving away, um, by just using strategic assets.
And I know you guys love
alternative.
Bob Fraser
Okay. We wanna hear all about this. We wanna hear all about this.
Evan Lange
Yeah. And i, I know you all love alternative, uh, asset classes and those types of things. Well, there’s also tremendous benefit by using those for philanthropic purposes too. Uh, just most people don’t think about it.
And so I tell people one of the most inefficient gifts that you can make is using cash. Um, go take your cash and go invest it. Go give it to Aspen. Go, You know, you guys figure out ways to, to grow that. And once it’s grown, those are your opportunities to give.
Bob Fraser
So we’re gonna dive into, into, into that in, in just a second.
But, but you know, I, I find, you know, I’m 62 years old right now, and the older I get the more I’m really thinking about the impact I wanna make and not just the multiplication I want to experience. Right. And, and, and, and I, I think that’s kind of normal, right? I mean, you know, and so it’s really, it’s really, you know, as we start to achieve some goals and we start to kind of experience what we hoped for throughout our lives, it is time to start to think about.
Really, what do we wanna do with it? Right? And at the end of the day, just, you know, we can’t take it all with us, right? Someday the clock is gonna stop ticking and at that point you, you wanna make sure it isn’t just a train wreck you left behind. And so really being able to take a portion of this wealth and and be strategic about what you want to do with it and the change you want to do with it as a steward of this wealth. Right?
Evan Lange
Yeah that’s a great point. Bob, I’ll give you a quick example, Um, with the family that I worked with out, um, in the Seattle area, and they had an extremely profitable business and this person was actually pretty similar to your age, Bob, and they got to this point where they had all the houses.
They had all the cars. They had all the planes. This guy was a pilot, so he had, you know, instrument rated. So we had all the jets and everything else. And he got to a point and said, “When is it enough?” And, um, for him, he, he ended up selling almost everything. And got down to his house and just started giving at tremendous levels and for him and his wife, what they would say, it was so much more fun, almost lowering their net worth by giving than it was achieving all of these other aspects in their life.
You know, getting to that next house or getting to that next, you know, the newest jet. Um, Which is just so cool to hear about. And I, I mean, Bob, you know, some of the people then, you know, some of the people I get to work with. They’re the most content happiest, joyful people in the world. And I think it’s because they’re also the most generous.
And so when you add those two elements together, it’s kind of like you said, Bob, like not only are you creating a legacy for yourself, you know, making an impact on this world, making an impact on other people’s lives. You are going to be so filled up yourself, right? It’s almost infectious. So that’s what’s, uh, really fun to see.
Bob Fraser
That’s awesome. So, so, uh, let’s talk about these strategies. I want to hear about Warren Buffett’s strategies and assets and why give assets. So what are you talking about?
Evan Lange
This is how you do this. If you give cash away, You get a tax deduction for whatever cash you’re giving to any 501(c)3 public charity.
We all know about this, but when you give an appreciated asset, and I’m talking about a long term capital asset, so this is an asset that you’ve owned as an investment for over a year, at least a year. If you give that away to charity, then you are able to take a fair market value tax deduction for it. Um, and then when that asset is sold, uh, by the charity, the charity’s tax exempt, so they don’t have to pay capital gains on it.
So, an easy example and you guys are gonna cringe cause I’m gonna use a, uh, a publicly traded asset. As the example said, . Let’s say you bought, uh, Tesla stock, uh, three years ago for a hundred bucks a share, I think is what it was trading at. And today it’s trading at a thousand dollars a share.
Well, you donate that one share of Tesla stock today. You take a thousand dollars tax deduction, the fair market value of what it’s trading for today
Bob Fraser
Without having to pay taxes on the gain.
Evan Lange
No. Yeah, and that’s the best part. So when that asset is sold.
Bob Fraser
So if I were to sell that share of Tesla stock, I’d pay taxes on the gain and then the cash I would give.
Um, but it, so it’s ba basically a way for me to, to, I would give less. So it’s a way to give more and I don’t pay as much taxes.
Evan Lange
Absolutely. And for people that are charitably minded, think about this. You are giving a thousand dollars away and it only costs you a hundred bucks. What a great investment just from a charitable standpoint.
But yeah, you get the double tax benefit of a large tax deduction and avoiding the capital gains.
Bob Fraser
So, So what’s Warren doing?
Evan Lange
That’s exactly what he’s doing.
Bob Fraser
So what appreciated assets is he selling. It ain’t Tesla stock. Come on.
Evan Lange
Yeah. No, but it’s other appreciated assets that he has. Uh, I don’t know if you’ve all have seen Berkshire Hathaway’s, uh, stock price every once in a while. He gives a lot of that stock away.
Bob Fraser
He gives his own stock in his own company.
Evan Lange
Mm-hmm. Yeah. And he’s doing that actually through a donor advised fund. He also does that through private foundations, as well. And there’s limits to each one he does, but he maxs out his limits.
So he takes full advantage of these tax advan of, of this tax deductions. And here’s the best part, Bob, is that when he does that, say you donated that Tesla stock for a thousand dollars. You go take your thousand dollars cash, you can go buy that stock back. You can reinvest it in the same stock the same day, uh, and basically step up in basis.
It’s a great way to rebalance a portfolio. Um, you could go and take that cash and go invest it in some alts instead of, uh, publicly traded markets.
Bob Fraser
There you’re talking. All right. There we go. Finally here. Come on. We’re finally. Finally getting Evan on board here. Yeah.
Evan Lange
Yeah. I like to throw those carrots out there every once in a while.
Bob Fraser
So let’s say you’re not invested in public markets, you’re just, you know, and you’re not a Warren Buffett, but you’ve got a factory or a, you know, you’ve got a car dealership or a business or something. You know, what, what other, what other strategies that you, that you can use, you know, manufacturing company.
Evan Lange
Yeah, the, the operating companies become a little bit more complex, but there’s very similar things that you can do if you have an income producing asset. Um, you can donate that and say it’s a, it’s an asset that’s gonna be illiquid. Say it’s like an apartment complex that you own. You can donate a undivided interest in that asset, say 5 – 10%, whatever it is, into a donor advised fund or another charitable vehicle, and then that charitable vehicle can hold that asset and just basically be another partner in in the transaction.
The difference is when you receive passive income to a donor advised fund it’s tax exempt, so it’s another way to almost front end your giving versus receive the cash, pay taxes, turn around, and give it away. This is a way that it goes directly to charity and you still get a tax deduction whenever you donated that 5 – 10% whatever, undivided interest in the asset too, which is really, really a powerful strategy.
Bob Fraser
What do you mean an undivided interest?
Yeah, so when I was in law school, uh, my property professor would always talk about, uh, real estate as a bundle, bundle of sticks. And basically tho that represents all of the interest or the ownership interest of that real estate.
If you, uh, lease that building or real estate to somebody, that’s kind of like one of the sticks. Uh, there’s also, you know, if you have a, um, uh, an easement, that’s kind of another stick. But if you, but other people can also own that real estate, you can have a partner. That partner doesn’t have to be 50 50.
That can be, you don’t have to split the real estate in half or something. That’s what, that’s the point. Is it, That’s the point. It’s an undivided, You can donate an ownership percentage to this donor advised fund, Absolut. And one of the things I’m actually look looking at and is, is forming a corporation and putting some assets in there and then getting.
You know, get a share price for this, getting it, uh, appraised and then donating those shares to a donor advised fund. Right. And these are non-voting shares, so, So talk about how that a process like that might work for different folks and, and non-voting interests and how that all works and why it’s cool.
Ben Fraser
Yeah. And, and before we do that, can we talk a little bit about what a donor advised fund is? Because I think that is kind of a newer concept. The idea of, you know, charitable giving is generally I’m gonna go give to this certain nonprofit that I believe in their vision for, but there’s a whole other option here that is something that you can have some level of input into what is being used for.
Right. So can you talk a little bit about that before we get into the
Evan Lange
mechanics? Yeah. Yeah. Ben, uh, public speaking, one on one. Define your terms. Uh, Right. Uh, so, um, yeah, a donor advised fund. Is basically an account that a, anybody can set up at a nonprofit, uh, that, that has donor advised funds, and it basically is like a little family foundation.
And so at the RY we have donor advised funds that we set up for people. So anybody. You don’t have to be a billionaire, you don’t have to be a millionaire. Um, can set up a donor advised fund and it basically operates like your family foundation. Uh, you put money or assets into that foundation and when assets go in, you get a tax deduction.
It’s a charitable contribution. And then once assets are in that fund, the donor, the person that put ’em in, tells the charity where they want those assets to go. Foundation. Yeah. Yep. The foundation. So you put a thousand dollars in a donor advised fund, and then you turn and tell the, tell the foundation, Send a thousand dollars to my church, or then send a thousand dollars to United Way, or whatever charity that you want.
Um, the, the IRS requirement is that it has to go to another tax exempt organization or a 5 0 1 C three or church or a school. You can’t take that money back. It’s given away. It is a charitable gift. And so that’s kind of the key component of it, is that that’s how,
Bob Fraser
So anyone today could go on the signature, right?
And just sign up for this? Yeah.
Evan Lange
Yeah. I mean, you can go on
Bob Fraser
the, and online, you can
Evan Lange
just do this. You can go online, Yep. ry.com and
Bob Fraser
hit start and sign up. And then you pretty much have your own family foundation. How much does it.
Evan Lange
Uh, nothing. So anybody, You don’t have minimums, . Yeah. Yeah. And that’s like a billionaire, but doesn’t cost you anything.
Uh,
Bob Fraser
yeah. We need to work on your business since Evan . Yeah. Good thing
Evan Lange
we’re a nonprofit. Right? Um, okay, so,
Bob Fraser
so I can go set this up and, and then what I can do, if I want to give a thousand dollars a month, I don’t have to decide who I give it to. I can just give it to the found. And then as soon as I do that, I get a tax deduction that year.
But I still, then I can still go figure out, well, who do I actually want to give it to? And again, that’s just online, right? Click, click, tap, tap. And I can go send to United Way to my church to whatever, 5 0 1 c three s out there. And that’s a separate kind of thought, which, which I love, right? As, as the earner, I wanna think about, here’s my giving goal and I wanna be putting that in.
But I’m, I don’t know exactly where I want that money to go, necessarily. I just know that’s my, that’s my goal for, for, for charity, right. So it lets me separate those things and get a tax deduction in the moment I, you know, I, I donate. Right?
Evan Lange
Absolutely. So what we have a lot is, December 31st rolls around and it’s the end of the year and people know, Oh wow, I’m gonna pay a lot in taxes this year.
And so I wanna give something away, but I don’t know where to give it to. And maybe it’s a large sum of money so people can put, Yeah, you can put a thousand dollars in your donor advised fund on December 1st, get a tax and you got a tax deduction that year, and then you can,
Bob Fraser
and then figure out what you want to do.
Absolutely. And wow, that is so cool. And, and you know, and I just wanna say, I wanna vouch for these guys. You know, I’ve known them for 20 years, uh, and they’re the real deal and they’re a hundred percent up and up and I just can’t recommend these guys highly enough. Everyone should get a donor advised fund and use it for whatever is in your heart, you know?
But this is awesome. All right, so Ben, can I ask my question? Yes, please. Sorry. Thank you. Thank you. Okay, so Evan, back to more complex strategies. So I’ve got I, I give, you know, non-voting shares of my corporation. Why is that cool? How does it work? Yeah. You know, what are the advantages?
Evan Lange
So this is the secret sauce of the donor advised fund.
If you’re just giving cash into a donor advised fund, I hear people tell me all the time, What’s the benefit over just giving to charity? There’s some convenience. There’s those types of things, which is great, but the real benefit is when you wanna give assets like what you’re talking about, Bob, You’ve created a C corporation, you have this appreciated asset that you can’t just say to your church, Hey, I’m gonna give you some C Corp shares to hold onto.
The church is gonna say, I don’t know what to do with these things.
Bob Fraser
They’re not gonna want it. Don’t list, You’re giving me shares in your family corporation. Yeah,
Evan Lange
that’s right. I mean, this is, uh, I, I mean, you got. You guys talk about alternative assets all the time. It’s like people raise their hands cause they don’t understand what this is.
So at the signature, this is what we do all the time. People say, Hey, I want to donate a portion of my business. So yeah, you’re able to donate. A portion of your business into the donor advised fund. And you’re right, you have to have an appraisal of that asset because it’s non-publicly traded. And so in order to get a tax deduction, an appra, uh, somebody has to do a business valuation to say this 10% is worth a million dollars,
Bob Fraser
which costs like, If eight to 10 grand maybe or more.
I mean
Evan Lange
yeah. Just depends on the, the complexity of the business. Yeah, absolutely. And so you put that in and you still run and control your business just like you were before. Uh, it’s a non voted interest. We the signature or your donor advised fund is a shareholder of the company now, but as the company, you run it the same way when you issue a dividend.
Whatever percentage comes to the signature and that that percentage for a dividend is tax free. Now, there’s some business interests like s corporations, you know, partnership interests, those things that we actually have to pay some taxes on, but it really is a, it’s pretty minimal comparatively, and so the strategy still works out.
And so when people. Um, have an asset. Again, they’re illiquid. Um, then I think I heard a podcast that you gave, uh, several, I don’t know, several times back ago, uh, about like growing your, your, your, not your income, but your your balance sheet. Your balance sheet. That’s right. Most business owners have a massive balance sheet, but they actually have very little income and so, Giving is the same way.
Let’s give off of the balance sheet. There’s so much more benefit by doing that versus just giving out of your income because your income’s probably not that great anyway. You don’t have that much cash. And so that’s what we’re really trying to help people see. Is when you give off the balance sheet again, you’re creating more charitable giving.
You’re creating actually some liquidity from a tax deduction standpoint. It’s a great way, uh, that people just, they don’t think about. Uh, so I’m, I’m glad you had the on to share.
Bob Fraser
And so, so just, just to connect the dots here for people. So let’s say I give this, I have iVOS Corporation and I give my shares.
Well, so let’s say this corporation theoretically is earning a million dollars a year in profit. Well, it’s gonna be worth how much, a whole lot more than a million dollars. So it’s an appreciated asset, right? So maybe that’s worth $5 million or $7 million or $10 million if it’s off, you know, that’s what the appraiser says.
Well, so I’m giving the shares, I’m on a million dollar income. If I’m giving 10% of those shares away, you know, the value may, maybe it’s valued at at at 10 million bucks. So I’m literally giving this, I’m getting this enormous deduction. Um, because I’m giving away kind of the future earning potential of this company.
But, but that’s awesome because that’s continuing to give, so there it is.
Evan Lange
Yeah. And it’s, and and there’s limits to how much you can give The IRS caps it a certain amount, and you’re able to carry over deductions and all those things. This isn’t a, a tax class, but you’re right, Bob. I mean, that’s the, you’re able to give off of the balance sheet.
And in essence, I mean, you can almost like prefund your giving. Um, as you’re thinking through things, you say, Hey, I don’t wanna mess up my cash flow. We’ll give an asset that’s income producing so you don’t have to mess up your cash flow. You can keep it the same, but you’re able to get larger deductions.
and fund all of your giving. So you’re supporting all the causes that you like anyway. You’re just doing it in a much efficient,
Bob Fraser
Oh, okay. So let’s talk about balance sheet giving, cuz this is, this is interesting and, and you’re gonna educate me on this too. So I, I know some of this stuff, but I don’t know a lot here.
And so I’ve heard, right, So let’s say you, you gotta, you gotta manufacturing business and you actually own your building or you own your equipment. Does it make sense to give those assets and you know you’re not paying any rent? So now, You donate those assets to the nonprofit and then you get a deduction for those and then you would be paying rent to the nonprofit.
How does it,
Evan Lange
How does it work? Yeah. Yeah. Thank you, Bob. Because you give me the an the, I get to give my lawyer answer. It depends.
Bob Fraser
. Okay. You’re fired.
Evan Lange
, go ahead. No, it really does. So like, equip. It’s one of the worst things to give charitably. Gotcha. Yeah. So I mean, if you depreciated equipment down to nothing, ah, your, your equipment does not get your that fair market value tax deduction.
Not a good gift. A building is a great gift. You depreciate it down, especially if, if you have a business that’s an operating business that rents the building, maybe from the owner, um, of the business,
Bob Fraser
that’s a great way to do it because you appreciated this down. You donate it at the fair market value.
You don’t have to pay taxes on the appreciation.
Evan Lange
Ooh, yeah. Yeah. So, and we have, and we have business owners do. They, they think it’s fantastic because as the business, the business is paying rent to them for the building that they’re using. Instead, now they’re paying rent to the donor advised fund, which is now tax free that they’re able to give away.
And they got a big deduction when they donated the building or a portion of the building. Um, and they’re still writing off the business expense for paying rent. I mean, you can just see the layers upon layers of benefit of doing. And to your
Bob Fraser
point, it doesn’t hurt the cash flow of the business. It’s not you sacrificing this income to give to charity.
It’s, it’s not taking anything away from the cash flow view operating successfully your business. Yeah. And
Ben Fraser
then you’re not, To your point earlier, you’re not giving a, a nonprofit who maybe doesn’t have a whole lot of real estate background. What, what do they do with this building? How do I manage this?
How do I hire the right accountants for it? They just now have an income stream that’s associated with this asset that’s gonna provide long term cash flow, while you can still have some input on how that, that’s managed and, and
Evan Lange
those kind of. Yeah, it’s, it’s in a donor advised fund too. So that cash flow is going into your donor advised fund, where you’re directing, where those control what happens
Bob Fraser
as well.
Yeah, so, So once what happens to these assets, once they go into the donor advised fund, they can never come back out. Right.
Evan Lange
Uh, yes and no
Bob Fraser
. So like the hotel California
Evan Lange
. Yeah. Check in, but you can’t check out. But the good one. Yeah. , Uh, no, you, once it’s given, it is given away, but sometimes we have this as part of a succession plan.
So say you have a, a bill, a business and it’s a generational owned business, and so the, the owner says, I want to transfer this business to maybe. Son or a key employee or another family member, um, they don’t wanna just sell it all the way outright cuz that’s a massive tax burden for the owner. Um, but what they can do is sell part of it to the next person, then they can donate a portion of it to their donor advised fund and then as the donor advised fund the signature, we can turn around and sell it to that PORs, to that person as well.
And, They’re able to basically do a transfer to the next generation or to the next success of owners. Wow. Next free. It’s a great way to do
Bob Fraser
that. And this is all kosher. You’re a lawyer, right? So this is all up and up.
Evan Lange
Uh, let me give the disclaimer real quick. I am not , This is not, We would do the disclaimer at the end if you would.
That’d be great. So
Ben Fraser
. No, that, that, that’s incredible though, because, I mean, I’m not a tax person, but my understanding of the, the, the quote unquote death tax and transferring assets upon death, you know, without any kind of trust or any kind of um, transition plan is extremely costly. If, I mean, upwards of 40 to 50%, Right.
I mean, Well, you can lose the asset, you
Bob Fraser
lose the business. Right. Just cuz you can’t pay the taxes on it. Yeah. Yeah, absolutely.
Evan Lange
Which also, Why wait until you’re dead? Um, you know, for some of these people, if you can, you can’t enjoy it, then you
Bob Fraser
know,
Evan Lange
transfer it during your lifetime so you can enjoy the benefits of it.
You can see how the next generation is doing with it. And you can give money away. I mean, giving is so much fun. Like, don’t waste it. Don’t, don’t save that for the end. Oh, don’t waste it on the dad . Yeah. If, if there’s one thing, and you guys brought up the giving pledge, If there’s one thing about the giving pledge, it kind of like gets me, is that these people are.
They give a lot in their lifetime, but they’re holding a lot back until they die. Do it in their lifetime. Enjoy the benefits of seeing the gifts right now. I mean, if you can change the world right now, why wouldn’t you go do it?
Bob Fraser
It’s so, so true. And, and well, literally you can use doer donor advice funds to make, to make giving not something that happens at the very end of your life, at your point, but make it a part of your lifestyle.
And, and where it, it’s not just a train wreck when, when, when you, when you pass, but you’re, you’re actually creating something wonderful, beautiful, that that is well thought out and makes the impact that you wanna make. And, uh, it’s just so exciting. Yeah,
Ben Fraser
absolutely. So when you’re doing kind of a se succession plan or a wealth transition between you know, generations, is that something you have to kind of know front and plan out?
Or is it from an IRS standpoint or whatever, is that have to kind of be blind and you kind of do it after the fact? It seems like it’s like a loophole, like what you just shared, that you have to do a certain way, but maybe.
Evan Lange
Yeah, there, there is some restrictions to this. Um, you can’t have it all the way mapped out.
You can’t say, Okay, we’re donated. We’re, you know, there, Like for example, you cannot have a binding obligation to sell your company before you make the gift. So if you’ve already said, Hey, we’ve already worked out the terms, this is how you’re gonna sell it, and then you make a gift, the IRS says, No, they can’t do.
Yeah. So you have to make the gift. Then after the gift is made, you know, you can have some of these things kind of already in place at least, but but not down in paper. Not, Hey, this is how it’s going to be. Charity. You have to follow this because to get an tax deduction, you have to make an irrevocable.
Unconditional gift to charity, no strings attached. And so that’s why we always say, say it’s really important that you know your charitable giving partner. Uh, you need to be comfortable with them, that they will follow through with this. Because if you donated and ask to a charity and they say, I don’t know what to do with it, and they fire sail it.
That’s not good. Um, you wanna make sure that you under have an understanding and a good working relationship with that charitable partner. So,
Ben Fraser
so talk about that angle a little bit, because that’s what’s unique about a donor advised fund is you’re basically giving the authority to, in this case, the signature to make decisions in the best interest of the constituents.
But, You’ll also work with the donors, right? So talk a little bit about that relationship and how that, How that works.
Evan Lange
Yeah, so I’ll give you the legal first. So legally, I mean, it is a donor advised fund, so that language is very key. Yeah. The donor has advisement rights of where they can recommend for the signature to send assets, where to invest assets, those types of things.
It’s an advisement, right. But what we look at as the signature is really that relationship. If we’re working with Ben Frazier, it’s the, Hey, we, you’ve set up a donor advised fund, You’ve donated assets into that fund, and maybe you want us to hold those assets for a long period of time. We want to continue to have that relationship with you to make sure that we are fulfilling what you want.
Um, we’re not going to sell an asset. You know, unless, unless you’re telling us that you want us to sell that asset. And so it’s really that kind of ongoing relationship, um, going forward. And we have donors where they, we’ve had long, long term relationships with them and now they have passed away and we have a long term relationship with their kids cuz now their kids are involved in the donor advised fund.
And so that’s just, again, it’s that importance of relat. And understanding, knowing who you’re dealing with. Right.
Bob Fraser
So, so just to make this point, I mean, as a donor advised fund, so if I put a thousand dollars in your donor advised fund, I advise you on where I want you to put this money. But the bottom line is you can do whatever you want to do with this.
Right. It’s, it’s, that’s the point of, of why I get the tax deduction. I don’t control that money now, but I advise and so it, I have to trust that you’re gonna do. What I want you to do with it.
Evan Lange
Yeah, absolutely. And there’s lots of donor advised fund groups out there, so this is, That’s an irs that’s, that’s across the board.
That’s not just a. That’s, every donor advised fund has that same requirement, and so again, know who you’re dealing with, right?
Bob Fraser
The but the, the advantage of of this is that literally I don’t have, I mean, what does it cost? If I were gonna set up a family foundation, what does it cost and what does the brain damage I’m gonna go through cuz I know, I mean, isn’t it hundreds of thousands of dollars per year and, and then you’re being audited and it’s this endless kind.
Evan Lange
What I, Yeah, if you’re setting up a private family foundation, a private foundation, the cost can be significant. Um, what I tell people is, you, you don’t plan to fund the private foundation with at least 20 million then, Just use a donor advice fund. It’s not worth the brain damage. Um, but if you’re gonna put in 20 million plus and there’s certain things that you want to do, then maybe a private foundation makes sense.
But yeah, you’re right, Bob. It costs a lot of money to set it up and
Bob Fraser
it’s the brain damage factor. It’s just, yeah. I mean, really you’re gonna be audited, You’re gonna, I mean, it could be audited every year and they’re pushing you in this and that, and they want governance things and, and with a donor advice fund, I don’t have to deal with any of that.
It literally, it’s just you guys handle that. I mean, you have a staff of attorneys, you know, and. And, you know, so talk about the signature. I mean, you guys are, you guys are big deals, right? You, you, you’ve take over, you know, haven’t you taken over a billion dollars and, and, and you’re dealing with billionaires and you have a staff of, you know, tens and uh, and of super highly trained, skilled people who are experts at this stuff.
And. You’re nice. Good
Evan Lange
guys. Well, thanks Bob. I appreciate that. Yeah, it’s, we, we do as the signature, we have taken in almost over 5 billion. Um, and about four of that has happened in the last three or four years. Um, we’ve granted out. Over, uh, at least three and a half billion of those dollars. Um, and so last year alone, we had nearly a billion dollars of contributions and over almost 700 million grants out the door.
And so, uh, we have people all across the country. Uh, yes, I’m here in the Midwest, uh, with you all, but. We literally have people coast to coast. Uh, our team is about 70 people on staff and uh, yeah, we’re here to help facilitate these crazy generous people. So we have people that give, yeah, a thousand dollars away every year.
We have families that give. Over a hundred million through the signature every year. And so there’s a variety of people that we get to work with and help. Um, and it’s a, it’s just, again, it’s a lot of fun to, to do what we do.
Bob Fraser
Yeah. And, and you guys, you guys, like I said, are experts, but you’re available, right?
People want to talk to you, Hey, I’m trying to do this or trying to do that. You’re really ready to. Show ’em what the strategies are and show ’em best practices and, and help ’em achieve with their goals.
Evan Lange
Yeah, absolutely. That’s, that’s what we’re, we’re here to do.
Bob Fraser
My goodness. That’s, that’s how
Ben Fraser
exciting.
What, what’s the best way for folks to wanna learn more about what you guys do at the Signature to, uh, learn about
Evan Lange
it? Yeah, I mean, I would say visit our website, um, www the sry.com. Um, if somebody wants to reach out to me, um, I’m, My name is Evan eLange@thesignature.com, so E L A N G e, the signature.com.
Shoot me an email. I’d love to engage in a conversation with you about these strategies and yeah, I mean, this is what I get to do on a daily basis, and I don’t have to bill hours. I don’t have to charge anybody, uh, . So I’m a happy, you know, people, I, I tell people I’m a great lawyer to call. Just don’t call me if you’re in jail.
I’m not that kind.
Bob Fraser
You’re not that kinda kinda attorney.
Ben Fraser
You’re not the one on the billboards as you drive by
Evan Lange
That’s not what I do.
Ben Fraser
Oh man. Awesome. Well, Evan, this has been so fun and just really, really cool fun to kind of add, add this into the mix and I really hope our listeners, you know, got, got some value from this and, and reach out to Evan and the team.
Evan Lange
Well, I gotta say one more thing. Thank you, Ben. Thank you Bob for having me on. I know this is the invest like a billionaire podcast, so can I give some investment advice? Is that all right? Can I do that?
Bob Fraser
Well, as an attorney, I don’t, I’m not sure you should disclaimers or
Ben Fraser
I’m gonna jump across. Okay. Just, just do it, do it.
Evan Lange
Jumping across the line. So if you have, if, if your listeners are saying, Hey, why would I want to give, and Bob, you already mentioned this. Giving is one of the best investments you can make and a verse that I like to share. It comes from Matthew 6:19-20, and this is what Jesus said. He said, “Do not lay up for yourself treasures on earth where moth and rust destroy and where thieves break in and steal.
But lay up for yourselves treasures in Heaven. Where neither mo nor rust destroy. And where thieves do not break it in steal for where your treasure is there, your heart will also be.” And so, uh, it is the best investment you can make here on earth, , uh, by giving. And so give generously people, it’s awesome.
Bob Fraser
That’s, that’s perfect. I, I think doesn’t the Greek actually say, you know, heaven is actually meant donor advised fund. I mean, you know ration.
Evan Lange
That’s right. I’m not, I’m not, I dunno, I’m a lawyer so if this was in Latin I could help you, but I don’t know.
Bob Fraser
So
Ben Fraser
good, so good. Well thanks so much Evan and uh, probably have you back on down the road on, on the, the part two.
This is so, so cool. So thanks so much for coming on.
Evan Lange
Thanks guys. God bless.
Ben Fraser
Awesome. That was, that was a fun episode. I really enjoyed that. That was so good. It’s, it’s so cool. It’s refreshing to talk to somebody that is kind of in that space, is talking with people that are billionaires and this is a big part of what they’re doing and wanting to leave a legacy and, and leave an impact.
And it’s, I feel like we can spend so much time thinking about the multiplication side of things, like you were saying, but at a certain point it really shifts to. That, that’s really fun and all, but what’s the whole point? What’s the purpose? I wanna do Exactly though we
Bob Fraser
wanna make change the world a little bit too.
And, and there’s always, everyone has something in their hearts and this is how do you actually do that? And uh, you know, and so I think it was so good. And, you know, and I just, of course, I’ve known Evan for a long time and his partner Bill High for even longer. And these guys are the real deal. They’re, yeah, they’re amazing.
They’re, they’re. Just the highest levels of integrity and honesty and uh, that’s really what you want with your donor-advised fund. But boy, that was so exciting and, uh, there’s so many great strategies available to us and, uh, what a great interview.
Ben Fraser
Yeah, that was awesome. Well, hopefully you all listeners enjoyed this episode and if you are, you know, enjoying this show, please leave a review.
It really helps us get this out to more people, share it with a friend to a family member, and we always love the feedback. And as we said in the last episode, we got a lot more exciting things coming down the pike for this show, um, including some swag and some fun stuff. So stay tuned and we really appreciate you being part of this community and listening to the show.
Thanks so much!
