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AMPLIFY THE BUTTERFLY: THE LOGIC OF THE CHARITABLE BEQUEST

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Mary Koulogeorge (OCL organizational meeting was in her home), daughter Pattie Damisch and George Matsoukas.

A highlight of the Orthodox Christian Laity 30th Anniversary Meeting was the presentation of a gift from the estate of Emilie Koulogeorge.

Why not consider leaving a legacy donation in your will to OCL?  Such a  gift will insure that a permanent independent  advocate exists to maintain the role of the laity in the life of the Church.

 

 


Source: Oinos Consulting

by Frank Marangos, D.Min., Ed.D.

“Some believe it is only great power that can hold evil in check, but that is not what I have found.  It is the small everyday deeds of ordinary folk that keep the darkness at bay. Small acts of kindness and love.”
Gandalf the Grey – The Hobbit

The “butterfly effect” is a whimsical phrase that illustrates how a small change in one region of a complex system may contribute a dramatic difference somewhere else. The noted scientist Edward Lorenz coined the expression in 1972 after his interrelated weather computations resembled the shape of a butterfly.  The “butterfly effect” suggests that the rapid flapping of a butterfly’s tiny wings has the power to set off a cascade of atmospheric events that, weeks later, can spur the formation of a tornado. In spite of the notion’s popular appeal, a fluttering polymorph cannot create a dangerous windstorm. Nonetheless, while some actions may at first appear inconsequential, the small can, in fact, subsidize and/or amplify significant consequences.

Numerous illustrations can be cited to demonstrate the “butterfly effect.” The recent impact of Hurricane Irma, for example, could have been much worse had it not weakened before its Florida landfall. Due to small yet enormously consequential incremental shifts and wobbles, Key West, Miami and Tampa, all perilously exposed due to their geography, population and infrastructure, dodged what many trusted forecasters had warned would be one of the more infamous storms in American history.

Apart from fluctuating weather patterns, Holy Scripture provides a number of illustrations that support the concept of the “butterfly effect.” According to biblical authors, a small wooden peg in the hand of a woman can defeat a nation’s enemy (Judges 4), one small stone in the hand of a young man can kill a giant (2 Kings 3), and a handful of meal and a jar of oil can feed a widow, her son, and a prophet during a famine (1 Kings 17).  In addition, a small bit can control a mighty stallion (James 3), a small helm guides a great ship (James 3), a tongue can accomplish great things or cause massive destruction (James 3), and five barley loaves and two small fish can satisfy a multitude (John 6).

This biblical theology of the “small” inspired the nation of Israel to successfully reconstruct the famed Temple of Solomon (Zech. 4:1-10). The project was initially so great and the opposition from within and without the nation so unrelenting, that the assignment was referred to as a “great mountain” (Zech. 4:7). “How could an insignificant number of displaced exiles with limited resources rebuild such an edifice,” they thought? Fortunately, the Old Testament prophet Zechariah encouraged his fellow Israelites to remain faithful to their covenantal relationship with God by asking a significant question: “Who dares despise the day of small things” (Zech. 4:10)? In so doing, the prophet illustrated the spiritual underpinning of the “small” – and the value of eleemosynary incremental action.

First developed in 1959 by Charles Lindblom, a Sterling Professor Emeritus of Political Science and Economics at Yale University, the Incremental Model (also known as Gradualism) subdivides the decision-making process into a small number of modest actions. As a result, apart from supporting flexibility, ease, and low cost, the immediate effect of initiating gradual changes is minimal and usually not disruptive. Because the difference between the status quo and proposed solution appears minor at every phase, potential conflicts are avoided.

Noted organizational scholar Peter Drucker once said that while people often overestimate what they can accomplish in one year, they “greatly underestimate what they could accomplish in five years.” In his book, A Generous Orthodoxy (2006), author Malcolm Gladwell supports Drucker’s notion of incrementalism for bringing about lasting change. When advanced in an intentional direction over a long period of time, “small steps produce huge results.”

Like Drucker and Gladwell, author, consultant, and leadership expert Paul DePalma advocates that “small things done well impact the culture of an organization . . . and lead to results, performance outcomes, and ultimately, high levels of success.”   Studies indicate that more money is spent on leadership development than any other area of corporate learning, yet 71% of companies feel their leaders do not know how to implement the information learned. In his book Becoming Adept: Applying Leadership Strategies for Lasting Change (2017), DePalma, delivers strategies and tactics to address this challenge by outlining five primary benefits of personal as well as organizational incremental improvement:

  1. Small actions can be taken slowly and accumulate over time.
  2. A small change conducted incrementally can make a huge difference.
  3. Incremental improvement is powerful and sustainable.
  4. Incremental improvement impacts the outcome and the individual involved in the process.
  5. Real personal growth and organizational leadership are about making changes in action and behavior to produce better results.
Finally, in his book entitled The Compound Effect: Jumpstart Your Income, Your Life, Your Success(2015), the author and publisher of Success Magazine, Darren Hardy argues that it is not the big things that add up “but in the end, the hundreds, thousands, or millions of little things that separate the ordinary from the extraordinary.” Like Lindblom, Drucker, Gladwell, and DePalma, Hardy contends that “small, smart choices + consistency + time = radical difference.”

Patterns of small incremental amplification abound. In addition to climate change, biblical theology, and organizational strategies, numerous financial circumstances can be cited that exhibit the logic of the “butterfly effect.” For example, while most employees would quickly accept an immediate salary of $1 million rather than a penny that doubled in value every day for a month, the latter choice actually provides higher earning ($5 million). As a result of the powerful computational concept known as compounding, the simple “butterfly effect” of doubling a previous day’s investment can rapidly reap huge doles.

When linked to an incremental strategy that leverages the calculus of compounding interest, the small charitable bequest can significantly butterfly the impact of altruistic values. As the eau de vie of philanthropic legacy building, the small bequest, set up through an effectively prepared will and/or estate plan can provide a stout financial wind for advancing select aspirations of nonprofit institutions.

The United States is presently in the midst of the largest wealth transfer in history. It has been predicted that before 2052, approximately $41 trillion will transfer from Baby Boomers (1943-1960) to their children. In order to take advantage of this historic transfer of wealth, development experts like Eileen Heisman, CEO of the National Philanthropic Trust, encourage nonprofit entities to institute planned giving programs, and, in particular, strategies that nurture the creation of small charitable bequests.

As the staple of every successful planned giving program, a charitable bequest is a written statement in a will which directs that a gift be made to a charitable organization upon the death of a donor (the testator). Bequests are crafted in five basic forms:

  1. Pecuniary Bequest: A gift of a fixed or stated sum of money designated in a donor’s will.
  2. Specific Bequest: A gift of a designated or specific item in the will. Proceeds frequently benefit a nonprofit once the item(s) is sold.
  3. Percentage Bequest: A gift of a set percentage (i.e., 5%) of the value of the estate and any estate growth during the donor’s lifetime.
  4. Residual Bequest: A gift of all or a portion of the remainder of the donor’s assets after all other bequests have been made, debts and taxes paid, and/or administrative costs have been satisfied.
  5. Contingent Bequest: A gift in a will made on the condition of a specific event or circumstance that might or might not happen.
Charitable bequests are flexible, versatile, and may be structured in ways that provide access to assets throughout a donor’s lifetime. While the method used to create a bequest will depend on the type of gift intended, donations of real estate, personal property, business interests, and cash are typically made by way of a will, revocable trust, or simple codicil to an existing estate plan. Other bequests, such as those involving retirement assets, insurance policies, bank accounts, and stocks and bonds may be easily pledged by merely completing appropriate beneficiary designation forms.

By applying the law of incremental improvement to fundraising, small charitable bequests can have an enormous positive impact on the financial condition of a nonprofit organization. Over time, the accruing currency of small bequests can advance mission, lead to organizational efficiencies, and high levels of philanthropic impact. Planned giving in the U.S. provides a good range of financial vehicles. Bequest giving represents a seriously underappreciated and untapped opportunity for nonprofit fundraising. Since a bequest can be given by anyone, not just the wealthy, wills represent the easiest and most common strategy for such pledges to be made. Nonprofit entities should, therefore, ask all their supporters to consider making a bequest.

Unfortunately, while over 80% of individuals make a charitable donation during their lifetime less than 8% leave a bequest to charity. In their research paper entitled, “Identification, Death and Bequest Giving” (2008), Adrian Sargeant and Jen Shang examine the status of charitable bequests in American. According to the professors of fundraising at the Center on Philanthropy at Indiana University “most nonprofits do a dismal job developing bequest pledges.” Sargeant, and Shang suggest that this unfortunate situation is partly the result of treating bequest pledging as part of a planned giving program that traditionally focuses on the wealthy.

According to Sargeant and Shang, nonprofits should be regularly communicating to constituents about including charitable bequests in their wills. In addition, development officers should avoid emphasizing estate planning devices and focus on more personalized reasons for giving, such as values and life-legacy principles. “Donors are interested in solving problems and making a difference,” insist Sargeant and Shang. Consequently, as important as they are to the financial stability of an organization, rather than talk to donors about annual funds, capital campaigns, and tax-avoiding tools, the authors recommend that nonprofits would be better served “to organize fundraising programs around the things that matter to donors.” The following is a list of recommendations for doing so.

Recommendations

  • Charities will have better results asking for bequest gifts for a specific purpose because of their self-esteem and the real and tangible difference a donor can make.
  • Charities should emphasize that every bequest they receive will have a real impact on the nature of their work.
  • Messages promoting bequest gifts should focus on the continuing impact of the gift on the charitable cause.
  • Bequest appeals should be inspirational and focus on the charity’s realistic future needs.
  • Bequest messages that identify donors with the organization’s enduring mission rather than with a stakeholder or social group will be more effective in securing a bequest gift or pledge.
  • While many donors may feel that they cannot give as much as they have in the past, a bequest offers them the opportunity to feel that they are still helping without hurting themselves in financially challenging times.
  • Since charitable bequests are often provoked by major changes in life, such as ill health, the birth of a child, or a death in the family, charities need to steadily remind and inform donors about bequest giving to increase the likelihood they will remember the organization in their will.
  • Nonprofits should celebrate small as well as large bequests from donors who exhibit a passion for their organization.
During a budget meeting, a new board member asked how much money the organization had received the previous year from bequests and other forms of planned giving. The question generated a lively discussion. Since the general consensus of the committee was that planned giving was “too complicated and costly for their small nonprofit to effectively advance,” the expenditure was deleted from the upcoming year’s operating budget.

Contrary to what many nonprofit leaders believe, charities receive enormous sums of money as income from bequests and other planned giving strategies. According to the most recent USA Giving Report, Americans gave $389.05 billion in 2016. The majority of charitable dollars went to religion (32%), education (16%), human services (12%), grant-making foundations (11%), and health (9%). While the largest source of charitable giving was donated by individuals at $281.86 billion, or 72% of total giving, bequests accounted for nearly $31 billion (8%) of the total amount. This fact looks even more impressive when compared to the fact that only $14.5 billion was given to charities from the corporate sector!

Opportunities to cultivate bequests – especially small ones – are unlimited. According to Russell James, author, and Director of Graduate Studies in Charitable Financial Planning at Texas Tech University, the number of people aged 55+ with a charitable estate beneficiary hovers between 5% an 6%. The nonprofit watchdog organization Guidestar, reports that the average bequest size in the United States is approximately $32,000. Blackbaud, the world’s leading fundraising software company, on the other hand, reports the average range between $35,000 and $70,000. While most types of contributions are slow in tough economic times, both organizations agree that, since charitable bequests usually increase during difficult financial times – no matter their size, – nonprofit organizations should not fail to advance robust planned giving strategies within their larger strategic development plan.

In his timeless classic, The Hobbit (1937), J.R. Tolkien celebrates the playful innocence of hobbits (“halflings”) and the different ways that evil is confronted. While many of his contemporaries ignored the very existence of evil in their time, others contended that the malicious are best confronted with strength and power. Tolkien, on the other hand, underscored the logic of the small by insisting that evil could only be defeated by the willingness to do what is right.

“This quest (to defeat evil) may be attempted by the weak with as much hope as the strong” suggests the wizard, Gandolff the Grey.  “Such is oft’ the course of deeds that move the wheels of the world. Small hands do them because they must, while the eyes of the great are elsewhere.”

The world is transformed through the “butterfly effect” of love and kindness.  While obstacles, like mountains, will surely appear to dissuade them from doing so, nonprofits leaders should endeavor to “move the wheels of philanthropy” by cultivating small charitable bequests from the nation’s large untapped cadre of potential planned giving donors. They should not be discouraged by internal criticism and lack of understanding, but recognize that small steps, advanced incrementally, can significantly amplify the wings of the eleemosynary butterfly and inevitably change the world!

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