 Thank you for joining us. We are thrilled to have you here for another episode of The Nonprofit Show. Today, I feel like I have two of my best friends in the room having coffee with me. Karen and RJ are here with us, both from Infinite Giving and going to talk to us about inflation and nonprofit impact. So before we get started with that, we of course want to make sure that you know who brings the show to you. Julia Patrick got kicked off today so that I could have all the fun. But Julia is the CEO with the American Nonprofit Academy. I'm Jarrett Ransom, your nonprofit nerd, CEO of the Raven Group. And we want to say thank you to all of our presenting sponsors to Bloomerang, American Nonprofit Academy, Fundraising Academy, Nonprofit Nerd, Your Part-Time Controller, The Nonprofit Atlas, Nonprofit Thought Leader, as well as Staffing Boutique. These companies keep these episodes going and growing strong. We are past our 500 episodes into three years. And if you missed any of our episodes, including today, if you want to go back and listen again or share with your board, you can find this on Roku, YouTube, Fire TV, as well as Vimeo. But wait, there's more. We're now on podcast form. So wherever you queue up your podcast, make sure that you ask The Nonprofit Show to come up into your queue so that you can hear again these episodes. Without further ado, these are my besties that I've been waiting to join me for coffee. Again, Karen Houghton, and I hope I'm saying that properly, if not correct me. Karen Houghton. Houghton, thank you. Karen Houghton, Chief Executive Officer and RJ Caswell, Director of Business Development from Infinite Giving. Welcome to both of you. And Karen, would you please kick us off and tell us how Infinite Giving started and what it is that the company does? Absolutely. We're so excited to be here. My name's Karen. I'm the founder and CEO of Infinite Giving. We started Infinite Giving just over a year or so ago. And our mission is to leverage modern financial technology to help nonprofits grow their giving. And we did that by building the first automated investing platform that allows for nonprofits to invest. So we provide the automated investing, outsource CIO and fiduciary services as a registered investment advisor. We all also have nonprofit experience. So I always like to let people know, actually was the executive director and founder of a nonprofit before I got into this space. So was RJ. RJ has been an executive pastor. He was the executive director of his own nonprofit as well. And so our team understands you and we're laser focused on bringing a better investing experience to nonprofits. And the big idea is helping you to hedge against inflation, reduce endowment fees and grow your asset giving all in one easy to use platform. Wow, that is a mouthful and it sounds amazing. I'm kind of sad that the show is only 30 minutes because I know we're barely scratching the surface. RJ, tell us about your role here with Infinite Giving and how do you play a part into the big piece? Sure, thanks again. There's great to be here and I love that you're doing podcasts now because that helps me actually engage quicker and especially for past episodes. So that's been awesome for me personally but joint Infinite Giving a couple of months ago and was thrilled to do it really for two reasons. One, I'll just say it, she's on here but it's true as Karen. We just connected really well. I've always been in a nonprofit space for my entire career. Different sectors of the nonprofit space but always a nonprofit space. I worked at independent schools. I started my own nonprofit counseling and I worked at a church for 12 years as a nonprofit leader. And so I was really looking for my next season. I was ready for a next challenge and what that would look like and a friend of a friend connected to me to this CEO founder named Karen Houghton and we hit it off and it was really quickly that I fell in love with the mission with a background in nonprofit and always looking for ways, creative ways to leverage current assets. It was actually a barrier in my previous role. We had significant reserves and continued to look at ways to do something other than a money market and CDs. Not that those are bad or wrong and that they were still better than 0% for us but we had significant reserves and really did have great access to what was possible. And so when Karen laid out the vision for this it was an easy yes. Yeah, easy yes. Well, thank you both for giving us the backstory, the origin story, Karen. I love that both of you really have some deep ties into the sector previous to launching and building infinite giving. Now's the time where I like to say we're gonna get super nerdy, right? As the nonprofit nerd, I like to get nerdy. Let's start with inflation and where do nonprofits see inflation? But I feel like, Karen, we need to take a step back and tell us what is inflation? Like how do we define it? How do we see it? How do we acknowledge inflation? Absolutely and I'm happy to get nerdy with you. So if you think about inflation it's a leading economic indicator that's defined as the decline of purchasing power of a dollar over time. What that really means though is that things are more expensive, right? And so we are looking at some historical inflation rates right now. So currently it's 7.9%. So we're close to 8% over the last 12 months and that's the highest since January 1982. And I think it's important because we think about like what's at the gas pump, right? It's like, oh yes, it's so expensive and everything's expensive and it's been this way and you have to look at kind of layers to that. Cause you're like, yes, anything that we're purchasing is absolutely costing more money. There's delays. Anybody listening has felt that in some way personally. But on the other hand where it really gets dramatic sometimes for nonprofits is like RJ was talking about reserves, right? So if you're looking to be a sustainable nonprofit and you're getting out of that scarcity mindset and you're at a place where you actually have a healthy reserves which we recommend like a nine to 12 months of operational reserves, next capital reserves and we can get to the weeds on that later. But you have to look at the value of the buying power and how much it's decreasing. So a lot of people are like, well, I'm not actually losing money. My $100 is still my $100. But the reality is that $100 is buying like $92 worth of stuff. And so when you're looking at that and you're looking at kind of, oh, we think we're doing this like smart responsible thing by putting money in a savings account. What, when you take into kind of consideration inflation what it means is that banks are no longer the place to store money long-term. And that's when we're gonna get into investing and kind of what you can do with those reserves. But yes, inflation is historical right now and it has a really meaningful impact on nonprofits. You know, I'm gonna be honest this is not my daily wick. Like, you know, to talk about inflation to talk about investments, I feel like often in nonprofits we've kind of sideload these conversations to, oh, that's what our accounting team deals with or that's what our financial committee deals with but it has so many implications and one of those implications, you know is really this wage pressure. Can we talk about this? Like how are we seeing the wage pressure right now as it relates to the growing inflation? Sure, I can jump in. I think, right, there's probably multiple factors here that again in a short period we'll try to hit. When you look at wages, we already know we have the great resignation going on. So you have all these kind of pent up factors going on over the last couple of years with COVID and people changing jobs or dropping out or starting their own thing. And a lot of that is tied to wages. We have a lot of in the for-profit sector a lot of people either going significantly higher in their wages or others haven't in inflation hits. And so their purchasing power to Karen's point is less but they're making the same amount of money but everything costs more. And then when I look at nonprofits at least from my experience, when I was kind of leading a really large team and responsible for the budget and responsible for raises or not raises or bonuses and we looked at our budget each year, we always had to go through kind of what's our give and take look like for the coming year what do we expect it to be? And then are we gonna do a 2% raise, a 3% raise? First year of COVID we did nothing, right? But inflation still existed. And so I think for the nonprofit leader they're really pinched right now trying to weigh recruiting great talent because we want the best leaders and talent as part of our nonprofits. They're that important to society and impact. So we want the best. Yet if wages aren't gonna be increased to at least we used to say try to match inflation but that's not even a raise, right? If you give a 2% raise it's really a cost of living increase. It's really not a raise even though I used the word raise too and I had to go okay, maybe it's not. So I do think this wage pressure inflation on nonprofit leaders is really significant right now. Yeah, according to the Bureau of Labor Statistics average hourly earnings increased by 4.7% just last year. And I know we were also looking at a survey that was done by the National Council of Nonprofits that found that 42% of nonprofits are currently struggling with job vacancy. And of course wages as nonprofits were not always the top paying folks, right? And so if you're having this inflation and the great resignation I think wages and the ability to increase that is really important at retention. Yeah, so how do we even like broach the subject, right? Like how do we bring what seems so scary and so personal when it comes to wages into the conversations at the board table, right? And the leadership table. Karen, can you give us any advice on how we talk about this? Absolutely, every board is different. Every organization is different. And I know there's always some politics around all of that but I think the biggest way to engage in conversations like this is going data, data first. I literally just went through an entire scenario with the nonprofit board and they had money in CDs which are now getting a 0.25% average like kind of their annual return right now. So even CDs are at an all-time low and they were looking at, all right, well, inflation's just temporary. And I'm like, we've been saying that for over two years. And in fact, did we know the central bank's target inflation rate is 2% even in a really healthy economy. So you're just looking at, all right, if our goals 2%, yes, we're almost 8%, there's a lot of things we can't control going on the world but even in a healthy rates 2%, what are we doing with our finances that allows us to care for our people, to move our mission forward, to create sustainability for our business. And that's where Infinite Giving Team we get really passionate about it because we're like, we wanna help you build sustainable organizations and it starts with your finances. And often people go, and we'll talk about the ripple effect it has on advancement teams and development teams. But at the same time, I'm also like, hey, simply managing the money you have and putting it somewhere else is often the very first step to start to create more money from the money that you already have. So it's an issue of stewardship and data. And it takes a lot of money is always emotional but the more you can stick to that data and just the facts, the better it is. Yeah, I'm always one for data. I also feel like many of us in the nonprofit sector don't always go to data first, right? It's like, there's too many other fires to put out. I don't have time to research the data. I can't pull these data points, but you mentioned and hit a really good point that I want us to dive into is the inflation impact as it hits the advancement and development teams? RJ, are you able to address this? And I'd love to see how, if you can pull in some even personal experiences, how you managed it in previous years. Yeah, I mean, it definitely hits development teams. I think the challenge with inflation, it hits every factor of a nonprofit. And when we just talked about wages and if you're looking at, okay, we have inflation, we have this much money and we believe our development teams can bring in X amount of dollars to make our organization run and make the impact we wanna see and fulfill our purpose. You can reduce spending, right? You can all of a sudden go, okay, we thought we were gonna bring in this, we're bringing less or just inflation. We're gonna bring in the same amount, but to Karen's point, the purchasing power's less. So we have to reduce spending by 8%, 10%. So you can do that. You can look at development teams and go, hey guys, we thought X was our target, but we gotta revise that. You're gonna have to go raise an additional $500,000 or an additional million. Well, that's pressure on these teams and the development folks I've met with, I mean, there's just some incredibly talented, relational, skilled development folks working for organizations and consultants helping with capital campaigns and all those pieces. So I think that, again, the stress is real depending on are you gonna reduce spending or are you gonna increase giving or are you gonna do both or are you gonna do all those pieces? And I think when it comes down to it, you really need to have a great leadership team that kinda looks through all of that here and data that you have internally to your organization and really objectively go, how do we slice this? Cause there's a third option, right, that we think should be on the table, which is what do you have right now that you could use to grow? And you do think you can leverage, right? You can hedge inflation, grow that and you still might need to do all three, right? I mean, it could be two of the three. It could be one of the three and that can change. But I think being really open to the conversation about where are we, what do we have and what can we use? I was actually talking with a campaign consultant yesterday that the good news is that really through COVID, most nonprofits or a lot of nonprofits, I should say, actually saw an increase in giving, which is wonderful. And now you have this inflation. So they might actually have reserves for the first time. She was actually talking to me about the increase question she's getting from her clients on endowments, which is a whole nother thing for a whole nother conversation one day, but for the first time they go, oh gosh, we have inflation, but we have these funds. We have donors who have been very generous and they have even more means through COVID that they've never had before and they want to leave a legacy. How do we do that? And she says really in the last six months, her questions from clients on endowments has gone up 10-fold. Yeah, that's a real thing. I know here in my community, I live in Arizona, we've had several days of very large philanthropic giving because of the net and wealth assets of these holdings for so many foundations and individuals alike. Karen, would you be willing to add to this and speak a little further in regards to how it really impacts? Absolutely, I think there's always the financial story and we talk about the story of the mission and the giving and the purpose, which is so important, but internally and with our high wealth donors, you have to tell your financial story and often they're wanting to know, are you sustainable? Like I give you a large gift or you can go around in five to 10 years and endowments can see that. And to RJ's point early, looking at reducing when you're telling the story, it's like, well, where do we reduce? One of the biggest things that we see is that nonprofits are overpaying advising fees. I literally, we're in an RFP right now and I kind of ran their traditional 85 basis points at 0.85% of assets under management, very common, 1% is common, we've heard upwards of 2%. I'm like, great, when I compare us, this one organization, I was like, we're gonna save you $700,000 over a five-year period simply by reducing your fees. And they were like, we didn't know that was possible. I'm like, well, it's $700,000 meaningful to you as an organization, but that's an actual question. They have to be willing to think outside of traditional. They're like, well, I've had this person for 20 years. I'm like, great, how are you performing? And they're like, well, we did well. I'm like, everyone did well for a couple of years there. Like, are you on the market? Over 90% of active wealth advisors cannot outperform index funds over a 15-year period. And so that's where you're like, okay, like passive investing is where we believe most nonprofits should be, conservative portfolios, but if you're doing CDs and money markets, you're not getting there. So it's like, how do you reduce fees? How do you grow giving for those development teams? Are you giving them the tools to do that? Instead of just calling these donors and saying, I need another check, I need another check, this asset giving, that idea of, are you making it really easy for them to donate stocks? High wealth donors own the majority of their wealth in stocks. And that means maybe don't just have your D2C information that they have to dig on your website and find, and there's all the manual transactions. So I'm going to giving is made it really easy for a custom URL that you can plug in and make it a really easy giving experience for stocks. We help you receive cryptocurrency coming soon. And then we also into endowments, that idea of what if for small to mid-sized nonprofits, which is probably a lot of your audience, what if it wasn't just Harvard who had this huge endowment? Higher Ed has done a beautiful job of creating endowments, but a lot of us who are small to medium sized on-profits, I knew when I was running one, I was like, why is Harvard getting all this money? Like we're on the ground doing real work in our communities too. And I think what it tells us is that high wealth donors love the idea of endowments. It is a gift that they give once it's invested, right? And then it has this legacy of giving and it can live for generations. So they can pass it to their kids and their grandkids. And it has a lot of meaning and it's a beautiful story to tell. But when you go to these small to mid-sized on-profits they're like, we can't do that. Or they can't get out of the scarcity mindset of like, no, no, we need it now. And that's okay. But ideally as you're maturing, you're going to get to a point where you're like, yeah, we have a 10 year goal, a 20 year goal. We're not going to go somewhere. And then we have a gifting tool that allows people to give like a $25,000 micro endowment. And it's just that idea of like, hey, you don't have to endow your entire organization. You still have to fundraise. There's still work to be done. But can you see things in a way where maybe you're endowing a program, a scholarship, a salary. And that becomes money that you don't have to fundraise year after year. There's a lot of tools that we can provide and people can look into to be creative, especially in times like this. Yeah. Okay. I'm sold. Sign me up. And I want to know, like as a development professional and for those of you watching and listening, how do we get started with Infinite Giving? Like how do we say, okay, we're drinking your Kool-Aid. Love what you're saying. But how do we get started? And how do we bring this to our organization? Talk to us about that. I would go to infinitegiving.com. And so we have a website that shares more. And on there, you can actually schedule a free 20-minute consultation with an investment advisor representative. If you put in the notes, the nonprofit show, you will get RJ or myself. So we're happy that way. It'll be somebody that you are familiar with. But we'd love to talk to you. We join finance committee meetings, board meetings. Both RJ and I are able to speak into kind of your finances and what you're doing and then make recommendations on that. And I think we like to disrupt this really traditional financial institution. And I think we're able to do in a way that speaks to nonprofit experience. Like we've been where they are. We've been on boards. We understand kind of a lot of these problems that everyone's facing in a really personal way. And that's why we're excited about what we built because we're the only thing that does what we do the way we do it. And we have tried to make sure that it's more affordable than any other option out there. I'm amazed and kudos to you, Karen, for really like seeing this as a great opportunity and possibility. There's no doubt that you're a brilliant mind. You're very intelligent. It comes across. I love it. RJ, I don't know if you heard, but she dropped the cryptocurrency bomb and she said, coming soon. Tell us about that. What does that look like? So our software development teams are working on the infrastructure for us to be able to do that as well with our custodian who holds funds. So it's in process. Our teams are working hard to get all that to find the best way to do it. But the cool thing is once it's there, it'll work very much like our stock gifting tool, which is really an automated link that nonprofit leaders, development teams can actually send out an email. They can live on their website. And literally donors will click a link, put in their information, hit submit. We do all the backend transactions and it shows up in their infinite giving account. And we let them know, hey, so-and-so, they get the name of the person that donated so they can thank them. Really important for our development teams and our leaders to be able to thank the donor. They have a record of that, but it sits there right in their account and let them know about it. And so it's really easy. Again, using technology to make pieces easy for our teams is what we're about. And I would just add, our hope is for those things, obviously Karen spoke to any nonprofits interested in us, but those consultants, development consultants, campaign consultants, accountants, all of our outsourced accountants who are looking for other tools, we would love to be a tool for them. So reach out, hit me up on LinkedIn, get on our website. We'd love to be a resource for all those other organizations and people serving nonprofits as well. If we can help them with tools, we would love to do that. You have a great LinkedIn page, RJ. I know that you and I are very active back and forth on there, but yeah, really, really good LinkedIn page. Karen, if this is what infinite giving looks like in a year, what is to come? I mean, what is on the nexus, right? Where are you going in the next 12 months or 24? Absolutely, we currently have clients all over the US so we can serve any nonprofit entity in the United States. And that's religious organizations, charter schools, charities. So if you're at HOAs, we have some HOAs. So any nonprofit entity we are able to serve. And I think when we run the numbers, we believe that we can help put $5 billion more into the hands of US nonprofits simply by helping them to manage their finances differently. And that means lowering their fees. That means taking money out of a CD, a money marketer savings account and investing it in a conservative portfolio because that's all we offer, right? Or more of these diversified portfolios that are appropriate for nonprofits. And just by changing those practices, over $5 billion into the account. And that's just money from the money and the donations from the donations that you have. And if you think about the ripple effect of good that can do, that's what gets us really excited and that's what we wanna get up in the morning for is how do we serve nonprofits and help them grow their giving in really meaningful way because that helps create better communities for all of us. That is mind blowing, right? Mind blowing. And this is simply, as you said, it could be as simple as lowering those fees and over five years like this other case study, that is $700,000. Is that significant to your organization, right? Again, the answer of course is yes. Right. That's fantastic. All right, well, I am honored to have both of you. I knew it was gonna be fun and you delivered. You know, again, I shared, I witnessed to everyone watching and listening, this is not my bailiwick, not my will house and I really appreciate that it is yours. Both Karen and RJ, please do connect with them, infinitegiving.com, also active on LinkedIn. RJ is a hoot and a lot of fun to follow. It's just been fantastic. Julia Patrick, of course, started this lovely brain child called the Nonprofit Shows. She's the CEO of the American Nonprofit Academy and what we thought was going to be a two-year stint producing this broadcast is now three years over 500 episodes and I am honored to serve alongside Julia. We could not do this without our presenting sponsors. Those include Bloomerang, American Nonprofit Academy, fundraising academy, nonprofit nerd, your part-time controller, the nonprofit Atlas, nonprofit thought leader, as well as staffing boutique. Now's a good time to check out infinitegiving as well as these presenting sponsors because again, they are here to lean into you, your mission, your community and help you do more good in, around and throughout your neighborhoods. Thank you, Karen and RJ, man, I feel like I've received this huge booster shot. Like I can just, you know, soar in my superhero cape, it's been fantastic. Thank you, it's been awesome. Yeah, thanks for having us. And thanks to all of you who joined us live or perhaps watching one of our recordings. I hope that you'll tune in tomorrow. And until then, please stay well so you can do well. Thank you both.