 episode of the nonprofit show thrilled to have you here. Julie and I are excited to have this disruptive conversation with none other than Kami Baker. So Kami, glad to have you here. The real estate agents of change, R-A-O-C, and Kami's going to talk to us about the power of real estate gifts. So before we jump into this conversation with her, we want to remind you who we are, who you're looking at or possibly listening to. So hey there, Julia, a CEO of the American Nonprofit Academy. I'm Jarrett Ransom, your nonprofit nerd. Yesterday I had a wonderful coaching call and I asked this woman, where is your beautiful accent from? And she said, Georgia in South Carolina. And I'm like, me too. So I can, I can hear it that my accent's a little bit stronger of the southern drawl. So anyway, really glad to be here in honor of all of you and the great work that you do. 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Again, Kami Baker, CEO, real agents of change. Welcome, my friend. Thank you for having me. I got that southern draw two. In the minute we met, I thought, yay, a fun conversation about non-profit that's not dry. So let's do it. I know I heard it when we met as well. We've had a couple of conversations off air, of course, really learning more about random, sorry, not random acts of kindness, but the real agents of change. But you really do provide a lot of random acts of kindness as well, Kami. So tell us a little bit about yourself, how you got into this. I mean, tell us who you are. Well, I'm an author. I'm a recovering alcoholic single mother who was in real estate and was so hungry and determined and gorilla marketing in real estate that I did a lot of fundraisers, not just because it was the right thing to do, but because it was a great way to meet people. Social responsibility, 87% of people want to do business with those that are socially responsible. So I started doing antique car shows and giving the money to nonprofits. And that went on for many years. I worked with Ronald McDonald's and Make-A-Wish and all these nonprofits while I was a real estate agent. And three years ago, I was at a conference December 2019. And I heard the speakers say charitable gifting of real estate. And I thought, I've been in real estate 15 years. I've been doing all this nonprofit work. How in the heck have I never heard of this? So here we are today. I delved into it. The pandemic had me completely unemployed. You can't speak and do fundraisers with pandemic. And so I learned all about this and become one of the experts and wrote a book about it. Love it. I think this is so fascinating because we've talked about this a lot, Kami, in the relationship of demographics and the aging of our population and how we are in one of the most significant times of transition of wealth in our country. We are in it right now. And a lot of that has to swirl around real estate. And so I think this is such an important topic and time, topic and time meeting together. So let's kick in and start the conversation with a really kind of cursory look at how this works. And can you donate real estate? Maybe that's the first question. Well, this has been happening since 1917. U.S. government created the tax deduction. And real estate is just one of many. And the thing is the reason that people have never really heard of this before is because of the 1.8 million nonprofits in this country, the fact is 99.9 percent do not cannot, will not. Frankly, they shouldn't accept real estate because it's so risky and time consuming and expensive. Even if all three of us sit on their board to advise them, somebody's got to pay off mortgages. Somebody's got to put on a roof. Somebody's got to pay HOA fees, etc. So that's why we haven't heard of it. If 99.9 percent of nonprofits won't take real estate, what's the point of teaching it? But the fact is, we've simply come up with a really simple system that makes it risk free, no money out of pocket for the nonprofit world. And for the donors themselves, the tax benefits are so important, no capital gains tax, right off the full appraised value is the basis of your tax deduction off your adjusted gross income. And 80 percent of people who donate real estate are doing it because it's the right thing to do. They're a veteran and they want to help veterans. They have a house full of animals. They want to help the animals. So this is a win-win-win. The nonprofit's $9 billion a year is already being donated to nonprofits through gifts of real estate. And that's with 99 percent of them not even asking for it and even turning it down. That's why we can go from $9 billion to $29 billion a year with good conversations like this that people learn. Yes, you can donate real estate. No, it doesn't have to be risky. No, your nonprofit doesn't have to take title. We can make this super easy and beneficial for everyone. There is no downside. That is just mind blowing. And you keep blowing my wine, Cammy, because I know we've talked before. But you were saying to me that on average, this charitable real estate giving is about $500 to $600,000, right? A transaction. Her transaction equity from the real estate. So it could be a one mil equity that goes to the nonprofit world. Right. That is amazing. And then again, if you think of this nonprofits, like what would you do with $500,000? What would you do with $550,000 or $600,000? I know that there is so much out there that our organizations are thirsting for, whether it's infrastructure, building their staff, remodeling their current spaces, doing more with the money that they have. So I just wanted to put that into perspective, $500,000 to $600,000 per transaction. So let's talk about the impact of that, perhaps. Like as we share on average transaction, what are some of the other impacts of charitable real estate donations? Well, the fact is, when we look at cash versus real estate as a nation, we only have 3% of our wealth in cash. 43% of our wealth is in real estate. So when the nonprofit world can start opening up to accepting non-cash assets, in our case real estate, Dr. Russell James, who has been a professor at Texas Tech and teaching plan giving for 20 years, has done the research. It is proven that when a nonprofit takes non-cash assets, they six times the growth of those who only take cash. So we're talking about saving lives. We're talking about doubling, tripling, six-timesing what you bring in as a nonprofit, and it's from the donors you already have. What? You're saying the donors on my list, they give me $20 a month? Yes. We have stories of people who are giving $20, $25 a month or even a year to their nonprofit, and when they learn they can give real estate, they did. They had a second home. They had that investment property or even their primary residence. People want to give. We don't sell them on it. We don't convince them of it. We educate and let them know what their options are so that they can make a decision. So it's really an interesting thing that you brought up, and that is what types of real estate are these things that I didn't even think about like the second home or I always thinking, oh, it's the full city block in the center of town or, you know, but it can be a residence? Well, not only can it be a residence, a single family, a condo, commercial, it could be a restaurant, a strip mall, vacant land. It can be anything that's not a timeshare. And the other thing about it, Julia, is this. It doesn't have to be in the same town as your nonprofit. It can be anywhere in the country, in some cases, anywhere in the world. It can be of any size. It doesn't have to be mortgage free. We have a partner who pays off mortgages, who takes on the responsibility. You as a nonprofit never take title. You never take title. There is no risk. There is no money out of pocket. This is real estate anywhere in the country that is liquidated and you get the proceeds. It's just like credit card processing. Every nonprofit, you can click a button on their website and donate. You put in your visa card number and three days later, they get 97% of the proceeds in their bank account. It's the same thing here. The nonprofit doesn't know how to process credit card. They don't know what your bank statement looks like. They've just got a button and you give them money. It's the same thing. You don't have to understand all the idiosyncrasies, but we do have a lot of videos to help people understand how it works. So walk through the process. Let's say I am the CEO of a nonprofit, let's say in Des Moines, Iowa, and I want to get into this process. What would that look like for my organization? Do I have to be of a certain size, certain age? What does that look like to start with? And then let's go from there. So any nonprofit, you could have just got your 501c3 designation today. You could be Fidelity Charitables, the largest nonprofit in this country. They don't even do their own donations of real estate. Even they use the same team that we do. So let's say it's a nonprofit in Des Moines, and I'm going to share with you three ways that a piece of property can go to benefit them. So let's say there's a condo in Florida. One of their donors says, you know what? I got this condo in Florida. It's a million dollar condo. It's got $200,000 mortgage on it. I want to give it to you, Des Moines nonprofit. The first way is for that donor to go sell their property, pay all the taxes, and then give that nonprofit the proceeds. The problem with that is it is the worst way. It is frankly the lazy way. It's the old way of doing it. Uncle Sam gets a big piece. The donor gets the least tax advantages, and the nonprofit gets the least amount of money. So what if that donor with that condo in Florida tries to give it directly to the nonprofit in Des Moines? Here's the problem. That nonprofit's got to pay off that $200,000 mortgage. They got to take title to give the donor the tax deduction, and by taking title, they have to pay off any liens. They have to take on the responsibility, and 99.9% won't do it. It's too risky. It takes too much time, too much money, mission shift, all that stuff. So the third way, the when, when, when way, the way that we suggest that they do it, Des Moines nonprofits working with the real agents of change. We have a team. That donor comes to us, explains their circumstances. We show them on a net sheet. Here's what it looks like to pay Uncle Sam, or here's what it looks like to do it this way. When they decide to do it, the team we have pays off that mortgage, $200,000 to the donor, gets them off the title. So now you got a million dollar piece of property, $200,000 came out, but you got $800,000 in equity. So the team hires a realtor in Florida at a full commission. We want our realtor friends to know you get paid, liquidate these donations of real estate, and when it's sold and all the expenses are recouped, 98% of the proceeds goes to the nonprofit in Des Moines. Is that simple? What does that look like in terms of time? I know that's like a huge, it's a fabulous question. Things can, can sell in 24 hours and in 24 years. I mean, what does that, what does it look like in your perspective? Well, well, first of all, keep in mind that the property, it can't be a time share. It needs to have equity because it's the equity that's going to the nonprofit world and it needs to be marketable. So in other words, if it's some contaminated gas station out in the middle of nowhere with tumbleweeds, that's never going to sell anyway. And, and we don't want that and you don't want that either. So typically if the property is donated, if this team is willing to take title, they know what's going to sell. Now, if from a time perspective, in less than 30 days, the donor has their tax benefit, mortgages pay it off, they get cash in their pocket, you don't have to donate the full amount. Let's say they want to get $200,000 cash in their pocket, mortgages pay it off, donor gets cash, donor is done in less than 30 days. Now that specialized nonprofit we work with has the title, it depends on the market. It could be under contract in a week, it could take it a month. But the point is, is that the nonprofits themselves don't have to worry about having months and months of board meetings trying to figure this out. The minute it goes on the market, it could take, you know, two to three months right now at the time of this recording, or to go under contract, get sold, all the cash goes in a grant to the nonprofit that the donor wants to have it. So it's a quick process, and it's a heck of a lot quicker than trying to figure it out on your own. I love this, Kami, and you're like, it's a win, win, win. And it just makes me want to, for those of you listening, like I put up the big W, like that's definitely a win, win, win. And I'm thinking like, why are more of us not doing it? Does it fall on the communication on us, like the nonprofits to communicate this with donors? You know, I think that the problem is, people think it sounds too good to be true. What's the catch? People are so cynical and jaded. And I would say to you, well, how bad does something have to be for it to be true for you, right? But yes, it requires a lot of education. And what people need to know is, this has been happening for 100 years. There's nothing new about it. What is new is the fact that there are nonprofits that have been created to simply facilitate these transactions for your nonprofit. They are a third-party entity that this is all they do. If your nonprofit saves puppies or feeds veterans or stops human trafficking, that's your mission. The mission of this nonprofit is to do nothing but accept gifts of real estate on your behalf, pay off mortgages, take title and responsibility. And when it's all said and done, grant the money to the nonprofits that the donor wants to have it. It doesn't have to be one nonprofit. Could be three or 10. Could go into a donor advice fund. But friends, it's happening. It's happening with or without you. So all you have to do is tell your donors. Just tell the donors. Kamie, you and I have talked about how it seems that the nonprofit sector, and Julia, we've talked about this too, is like the last one to the party, right? We're the last one to adopt new trends, the last one to adopt technology, the last one to adopt innovation. So I mean, on our show, we've talked about gifts of cryptocurrency. We've talked about the, you know, donate now, pay later concept from our donors and supporters, be generous. We've talked about gifts of stock, right? Like a little bit of everything. Now we're talking about the gift of charitable real estate. And when we think of nonprofits, like I think we can all agree, we're not always the most innovative. We're not always the most creative, right? But I feel like we're leaving money on the table. Leaving money on the table is an understatement. The donors that are on the donor list, it is proven they will give three to seven times more of what they already give when you stop asking for cash. There's so much psychology that goes behind it. When a nonprofit asked a donor for cash, and they're mine, that donor has to say, well, do I want to go to another boring golf tournament, or do I want to buy my kid's Christmas presents? Do I want to buy more stale cookies at the bake sale, or do I want to take my wife out to dinner tonight? In other words, cash is competing with other cash items. When we can help that donor shift to their wealth bucket of real estate, now that's a whole different conversation. The tax benefits to them are impressive. They're going to liquidate that real estate one way or another. It might as well be to your nonprofit, and your donors are on other donor lists. Don't be fooled into thinking your donor list, nobody else has your donors. They do in the first ones to start educating those donors. If you keep sitting on this and thinking about it, and praying about it, and studying it, and be stuck in analysis paralysis, in six months, when you finally talk to your donors, they're going to say, oh yeah, I had a strip on California. You already gave it to the animal rescue league. I didn't know you could take it. Let me ask you this. Are you seeing that this is more of an estate issue and planned giving issue, or is this ongoing transactions with just regular donors, and you're not just waiting for that planned giving event? We've got stories of people in their 30s and 40s that have donated real estate. We've got stories of people who donated just a second house that were not high net worth, but when you think about just the numbers of this, people typically that donate are 60 and older. They're usually a higher education, a higher income. They've acquired several properties, and now they need to simplify their estate. Little Billy and Little Alice don't want the factory and the high rise in New York. All they want is money. Sometimes people can take that piece of real estate, get a couple hundred thousand cash, go by life insurance policies, Little Billy and Alice are fine, and now they can donate the rest of the money from the real estate. It isn't a state thing, but this isn't about waiting until you die. There's so many ways that the real estate can actually be liquidated now so that you can see, you the donor, can see what's happening with your legacy. This is about leaving legacy and not waiting until you croak, but doing it now, so you can see that church build that new building, so you can see the children being fed, so you can put people in college now while you can see it. Broke is a southern word too. I said to someone the other day, there's one more swig in this, you know, in this bottle, and I'm like, that's another southern word. Okay, so one of the things I want to say or ask rather, Cammie, is do we need to be in partnership with the real agents of change before we receive this house or charitable gift, or can we do it like where do you come into the mix? Yeah, great question. Well, you need to know about it before, so in other words, the real estate is donated to our partners, the specialized nonprofit, and then it gets liquidated. That's how the donor can get their tax deduction. They're donating it to a 501c3, but not the Boys and Girls Club and not the Veterans Center. In other words, whoever the nonprofit is that the donor wants to benefit, they're not taking title, but if something's already happened with the property before we are brought in, well, it's kind of too late, right? So this is about just having the nonprofits take a deep breath and say, there's other ways we can bring in money. Real estate used to be scary, but people also used to ride horses to work. Like, you know, the outhouse was brought in-house. It's called indoor plumbing. Things change. So for those of you who think, oh, we already tried real estate, that's scary. I already know a nonprofit that went bankrupt from doing that, or whatever those old fashioned statements are, here's what we want you to know. Things change. You can benefit from real estate. You just have to plan it out. You got to let your donors know so that we can tell them, here's what it looks like if you sell it and pay all those taxes. Here's what it looks like if you do it this way, and just let them decide. Yeah. So besides this episode, is there anything else you have, Kami, in your toolbox or resources where we as the nonprofit leaders can lean in and say, here's additional education. We one need to educate our board, our executive team, and at the same time simultaneously, we need to educate our constituents. So I know you have a book, and I see that on your background there. And I have one in my hands here too. And then also you have a podcast. So how do we start this communication with donors of that education? Well, we've created quite a few videos. If you go to therock.com, the way we have it spelled, which stands for real agent of change, therock.com, we've got information for nonprofits, information for donors, and information for real estate agents. You as a nonprofit need to educate the realtors and the financial advisors, you know, because 65% of these donations happen because a financial advisor took the initiative. They've already got clients that want to be philanthropic. They've got clients that need tax deductions. What they don't have is a way to facilitate these donations because the church and the veterans group won't take it. Well, what are we going to do? So we want to let all of them know we've got individual videos speak directly to each of those individuals. We have charitable real estate certification. And the reason a nonprofit would want to get certified and be on our map is because when you understand how this works and you can position and partner and promote with the realtor, with the financial advisory community, with your chamber of commerce like nonprofit and for profit coming together, make money making a difference, help each other to do more of that, which you are doing. So going to the website and also in Florida, we have the first CE course for real estate agents. Florida has given us the accreditation here, so soon we'll have it in every state, but we don't want people all over the country thinking, well, if I'm not going to get my three hours credit, I'm not going to do it. It's not about getting credit. That's why I didn't do this for three years now. I didn't get the CE thing done because I didn't want people coming to learn about this just so they can get three hours toward their license. I want people learning about this who will do something. And that's why when we teach the masterclass, we teach people how to be charitable real estate champions, take action, take a stand, be proactive. When people say to me, well, I've never had anybody try to donate real estate. If I ever do, I'll give you a call. I think, why aren't you so ignorant? Stop waiting to react. Don't wait to react if anyone ever maybe asks you in the next 10 years. Be proactive. Teach them that it's an option. Let them make their own decisions. It's like planned giving. You see nonprofits that have a planned giving program or not, and it's something that you have to make a commitment to educate yourself up on and then I think you have more opportunities. This has been fascinating. I've really been interested Kami in having you share with us your approach, your knowledge, and certainly your passion. Kami Baker, CEO, the real agents of change, and you can find them at theraoc.com. Talk with Kami and her team. Learn more. I can't wait to watch some of those videos and learn and delve into this even more, Kami, because I know that this is a part of what's going on with the American economy right now. It's a big part. It's a transitory time for us, and so why not learn more about it and understand what some of the options are? Really, really interesting Kami for a great conversation today. Again, I'm Julia Patrick. I've been joined today by the nonprofit nerd herself, Jared Ransom, CEO of the Raven Group. And again, we want to thank all of our sponsors from Blumerang, American Nonprofit Academy, your part-time controller, Be Generous, Fundraising Academy at National University, Staffing Boutique, Nonprofit Thought Later, and the Nonprofit Nerd. These are the folks that join with us day in and day out to get really interesting conversations like we've had today with Kami Baker. Wow, Jared. Okay, great way to start the week, huh? I know I'm thinking of this already really looking at our gift acceptance policy for nonprofits and how this needs to be a component of that gift acceptance. We've talked about crypto on our show before. We've talked about automobiles on our show before. And so talking about this charitable real estate giving has got to surface to the top as well. So so much to think about. I feel if I have this crystal ball, Julia, we talk about all the time for our shows this year, it's really about innovation and it's how we can innovate our sector instead of sitting back and waiting, you know, and let's be reactive to every possible opportunity. No, let's be proactive. Let's see what else is out there. Let's see other ways to diversify our revenue streams. I love your story, Kami. And I know it was brief, but about the $20 donor, you know, the $20 a month donor that that also had, you know, an additional home or property somewhere. So this speaks to the opportunity that it's not just those that you might think have charitable real estate gifts. It's really you this donor, they're already in your database. And I love that. I love that too. I thought that was really powerful because I think when you marry that to the idea of the value of cash and how 3% is being held, you know, of wealth is held in cash and the rest and other assets, it makes it a lot more real, you know. And so it's been really a lot of fun. Kami, thank you so much for joining us today. Well, ladies, we can't bring it from $9 billion to $29 billion a year without visionaries like you giving us the platform to speak and to educate. So thank you. You have just brought probably quite literally billions of dollars to the nonprofit world by having this show today. Thank you. Yes, let's hope for that. And absolutely your passion just oozes on the subject. So thank you for bringing your passion. For all of you that have joined us today, we are so glad you're here. Please come back and join us tomorrow. Until then, as we end every episode, we invite you, encourage you, and remind you to stay well so you can do well. Thanks, everyone.