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Speaker 4: All right.
Speaker 5: So now we're going to go into the business of nonprofit.
Speaker 5: I'm setting up nonprofits because we haven't spoke about.
Speaker 4: That, we have to. We spoke a little bit about
Speaker 4: charities with.
Speaker 5: Derrick Ferguson, but not really in depth about how to
Speaker 5: start one because he's he's the head of a charity,
Speaker 5: but he didn't start that charity.
Speaker 4: Now where this is you started a charity? Right?
Speaker 6: Yeah?
Speaker 5: So okay, what are the steps? Can you walk us
Speaker 5: through the steps of how to start a nonprofit?
Speaker 4: Five to oh one ced three yep?
Speaker 6: Okay, So the first thing is you don't have to
Speaker 6: have a five on one C three.
Speaker 4: Can you just explain what a five oh one C three.
Speaker 6: So a five on one C three allows you, according
Speaker 6: to the IRS, to be tax exempt, which then allows
Speaker 6: all donors to write off anything that they contribute to
Speaker 6: your organization. It's very important if you need large amounts
Speaker 6: of funding. If you don't and what you're trying to
Speaker 6: do can get by on like a fifteen hundred dollars
Speaker 6: budget or a two thousand dollars budget, you don't need
Speaker 6: the five on one.
Speaker 4: C three that budget monthly or annually.
Speaker 6: Annually, there's you know, it just depends on what you're
Speaker 6: budgeting for. You know, some people have a plant project
Speaker 6: and they just want to plant things a couple times
Speaker 6: a year. It just depends on what you're doing.
Speaker 3: Yeah, I was told something like that. The process is
Speaker 3: very long, Like it dependent on how much you need.
Speaker 3: So like you can apply for the five one C
Speaker 3: three if you're making if you're anticipating having ten thousand
Speaker 3: dollars or less, Yeah, that's the initial one. But if
Speaker 3: you're planning more that that process takes a lot longer.
Speaker 6: It does. And I actually so we incorporated the organization
Speaker 6: and then we filed for the five on one C
Speaker 6: three at the same time and it was about three
Speaker 6: or four months later I planned our first annual fundraiser
Speaker 6: because we needed the funding to really get started on
Speaker 6: what we were trying to accomplish. And in my mind,
Speaker 6: I'm thinking, if you look online, it tells you you
Speaker 6: can get approved for a five to one S three
Speaker 6: between two to twelve months. So of course I'm always thinking,
Speaker 6: I'm always being optimistic, and I'm like, well, three to
Speaker 6: four we might make it. We didn't, so we did
Speaker 6: the first fundraiser, and of course people are going to
Speaker 6: get very minimal amounts because they can't write it off,
Speaker 6: and it's a it's a huge incentive for any donor
Speaker 6: to know that not only am I helping this cause,
Speaker 6: but I can also it'll help me with my taxes.
Speaker 6: So we didn't get it approved in time, but we
Speaker 6: ended up getting it a year later.
Speaker 4: So, all right, what's the process to get a five
Speaker 4: on one C three? Like, what do you have to do?
Speaker 6: There's a long application. There's a long application, and you
Speaker 6: have to be organized and have everything you have to
Speaker 6: You have to answer with as many details as possible
Speaker 6: if you want to get approved without questions. First from
Speaker 6: the IRS, so mission statement, you need a mission statement.
Speaker 6: You need the name everything that you would need to
Speaker 6: do to start a business. You have to be very
Speaker 6: clear about what you're doing. And when I say mission statement,
Speaker 6: it's funny I'm remembering this now. We the IRS actually
Speaker 6: came back and said that our mission statement was too
Speaker 6: broad and that's why we didn't get approved the first
Speaker 6: time around. I think the initial mission statement was to
Speaker 6: help foster and homeless youth self comfort. That could mean anything.
Speaker 6: So then we had to go in and revise the mission,
Speaker 6: apply with the state to change that and then resubmit
Speaker 6: the application for the five on one C three.
Speaker 3: Is this something that you did yourself or did you
Speaker 3: have lawyers involved?
Speaker 6: I hired help. Yeah, definitely hired help. And I would
Speaker 6: recommend if anybody doesn't already have that experience in the
Speaker 6: nonprofit sector, hire where you need, especially when it comes
Speaker 6: to accounting, get the support so that the first time
Speaker 6: around you're not making those mistakes.
Speaker 5: So when you had the narrow value mission statement, like
Speaker 5: what was your revised mission statement?
Speaker 6: So now the mission statement is helping foster and homeless
Speaker 6: youth self comfort by providing comfort items for bedtime and
Speaker 6: programs that inspires them to self.
Speaker 5: Soothe and that was okay, all right. So you have that,
Speaker 5: you have to set it up as a business like you.
Speaker 6: Have like an LLC setup, not not an LLC. But
Speaker 6: it's the same steps of like having to You don't
Speaker 6: have to trademark, but I highly recommend it because the
Speaker 6: work of a nonprofit easily inspires someone else to want
Speaker 6: to do similar work, and they can. They can take
Speaker 6: your name and do it in another state if they
Speaker 6: want to, so trademarking, I highly recommend filing for the
Speaker 6: setup for the nonprofit the same way you would with
Speaker 6: the LLC for your state, and then applying for that
Speaker 6: five on one C three early if you expect or
Speaker 6: if you want to receive large funds, Yes, there's a fee.
Speaker 6: There's a fee for every application, so you have to
Speaker 6: have some funds to get started. When I applied in
Speaker 6: twenty twelve, I think that the five on one three
Speaker 6: application was like eight hundred dollars. I'm not sure if
Speaker 6: it's increased since then, but yes, you definitely need something
Speaker 6: to get started.
Speaker 5: Okay, so you do the application, you get well as
Speaker 5: the five oh one C three is going through the process,
Speaker 5: because they could take up to a year. What what
Speaker 5: else do you need to get off the ground to
Speaker 5: start the actual charity everything.
Speaker 6: So you need a website, you need a marketing plan,
Speaker 6: you need a business plan.
Speaker 4: Marketing plan. Can can we talk about that? Yeah?
Speaker 3: Because all right, how do you now before you even
Speaker 3: go into that, Like, this is you and someone up
Speaker 3: like the co Like who.
Speaker 4: Else is doing this?
Speaker 6: So the co founder was my mother, but no she
Speaker 6: she was living her best life in Florida. So my
Speaker 6: mom was not involved in, you know, actually getting the
Speaker 6: organization started. I was doing this on my own with
Speaker 6: the help of friends who believed in me and the organization.
Speaker 6: So that's the next step in like and I'll get
Speaker 6: back to marketing. But you need you need a marketing plan,
Speaker 6: you need a business plan, you need a board of directors.
Speaker 6: You need people that are going to hold you accountable,
Speaker 6: which most people don't know. So when you're applying for
Speaker 6: this paperwork, you can't just put your name on it.
Speaker 6: If people are giving donations, the IRS wants to know
Speaker 6: who else is tracking these dollars to make sure that
Speaker 6: you're not out here spending these these funds in the
Speaker 6: wrong way. So when I first started, and I think
Speaker 6: most people when they start nonprofits, it's usually people that
Speaker 6: are very connected to you as well as the mission,
Speaker 6: and so they'll sign on to support you. And that's
Speaker 6: usually how the board starts and then eventually it grows.
Speaker 4: You have to have a boarder director. Yes, people three
Speaker 4: no negotiate, you have to.
Speaker 6: You have to.
Speaker 4: They have to have titles or just board director.
Speaker 6: Yes. And they need titles. So you need a president,
Speaker 6: you need a treasurer, you need a secretary.
Speaker 4: And that's New York State's to end it a federal
Speaker 4: New York state.
Speaker 5: Okay, so all right, you have those three people. Those
Speaker 5: people have to actually be active.
Speaker 6: They should be active. So here's the thing. It's like
Speaker 6: it kindly recommended because they're putting themselves on aligne by
Speaker 6: signing that paperwork. Right, So if you have someone signed
Speaker 6: as a secretary and it's your cousin, but they're not
Speaker 6: actually doing the work. If you get audited or there's
Speaker 6: an issue, they're going to come looking for you and
Speaker 6: your cousin. So everybody should understand how serious it is
Speaker 6: when they are signing that paperwork.
Speaker 5: Okay, can we talk about marketing? Yeah, so how do
Speaker 5: you put together marketing plan for a nonprofit or it's
Speaker 5: because it's different, right, Like we're marketing let's say we
Speaker 5: want to market our podcast, right, or you're marketing a product. Right,
Speaker 5: it's a little different than marketing for a nonprofit because
Speaker 5: it's charity. Yeah, so it's like you got it. It's
Speaker 5: kind of in my opinion, it's it's a little delicate
Speaker 5: because you don't want to make it seem like you're
Speaker 5: selling something. But obviously you need funds. We're gonna talk
Speaker 5: about fundraising, but you need funds, So how do you
Speaker 5: how do you how do you do that?
Speaker 4: Like how do you market for a charity?
Speaker 6: I think the two most important things to consider when
Speaker 6: marketing is who is your target audience? And then also
Speaker 6: what are your donors need to see and understand in
Speaker 6: order to give? So the more your donors know, the
Speaker 6: more they will give. Period. Making sure that in everything
Speaker 6: that you do, whether it's just utilizing social media, that
Speaker 6: every image, every caption, every meme, everything that you're sharing
Speaker 6: explains the mission clearly. Transparency is the number one thing.
Speaker 6: And trying to solicit donors marketing, so making sure that
Speaker 6: you are marketing towards the people that you need to
Speaker 6: do the service. Right. So when I started this organization.
Speaker 6: I wanted to market this towards people who run the
Speaker 6: foster care agencies in New York City as well as
Speaker 6: the homeless shelters, So figuring out what do they need
Speaker 6: to see in order to understand what our services are.
Speaker 6: And that's sometimes it's simply putting together a kit that
Speaker 6: explains and breaks everything down. Here's the mission, here's our values,
Speaker 6: here's our logo, here's our one year plan, here's the
Speaker 6: program that we can provide, or the curriculum, just depending
Speaker 6: on what you want to do, and ironing all of
Speaker 6: that out so that they can understand it and then
Speaker 6: they choose whether or not they want to work with you.
Speaker 3: So you're pretty much I mean, you're not selling in
Speaker 3: the sense of an item, but you're selling your vision
Speaker 3: and your passion in a sense, right yeah.
Speaker 6: And making it clear. I mean. There's another nonprofit friend
Speaker 6: of mine runs an organization called Kicks for the City.
Speaker 6: It's a very simple mission. They give shoes to the homeless.
Speaker 6: So when all of their packaging, they're showing photos, images
Speaker 6: of sneakers, images of homeless, so people can just simply
Speaker 6: connect the dots. Here's the mission, there's the value, and
Speaker 6: here's what it looks like.
Speaker 4: If you give, it's easy.
Speaker 5: So all right, So the biggest part of charity, nonprofit
Speaker 5: organization is that you have to have money, right, It's
Speaker 5: actually a business right. That's something that people need to
Speaker 5: understand too. If you think about running a nonprofit successful, yeah,
Speaker 5: is that you have to run it like a business
Speaker 5: because it is a business.
Speaker 4: Right.
Speaker 5: So we're going to talk about funding. So nonprofits get
Speaker 5: majority of their funding from donors.
Speaker 4: Right, how do you depend?
Speaker 6: Yeah, it depends. You can get a majority through individual donors,
Speaker 6: through state funding, through federal funding. Those are the three
Speaker 6: main ways.
Speaker 5: Yeah, let's let's let's talk about donors. Yeah, how does
Speaker 5: how is some what's the one on one blueprint? To
Speaker 5: attract individual donors, real the men so.
Speaker 6: That they understand the cause and make sure that you
Speaker 6: are speaking to people who care about that mission, that
Speaker 6: specific mission. So with Precious Dreams, I had to find
Speaker 6: a way how do I connect the issues of fostered
Speaker 6: homeless youth and make it relatable to someone who's never
Speaker 6: been in those shoes. So the first thing that we
Speaker 6: did was target parents because parents understand the importance of
Speaker 6: comfort items. So I remember my first year, I would
Speaker 6: have meetings, and one of the first questions I asked was,
Speaker 6: do you have kids, what's their bedtime routine? Do you
Speaker 6: read to them? What do they do? They in pajamas,
Speaker 6: And it immediately brings them to this happy place of
Speaker 6: thinking of like what that looks like for their kids
Speaker 6: and how important it is to them. And then I
Speaker 6: would help them vision what a typical night looks like
Speaker 6: in a homeless shelter, or what a night looks like
Speaker 6: for a foster kid who's sleeping in a room with
Speaker 6: five other families on a mattress that's on the floor,
Speaker 6: And immediately they feel connected, you know, and then they
Speaker 6: want to give they want to save someone because they
Speaker 6: can't understand how someone else could be lacking what their
Speaker 6: child has or what they have that they were taking
Speaker 6: for granted because they just did never thought about the
Speaker 6: person who lacks.
Speaker 3: It's a commonality, like we were all children at some point, yeah,
Speaker 3: and we probably all have gone through some experience as
Speaker 3: a child, whether it was like somebody putting you to
Speaker 3: bed or.
Speaker 4: The bed time routine.
Speaker 3: I want to go to the fact of state funded
Speaker 3: and federal funding, so like how does that work, and
Speaker 3: are their acts or initiatives that the state provides that
Speaker 3: just like you know, what I should target them or
Speaker 3: how you.
Speaker 6: Go about it. It depends on what you're doing. Again
Speaker 6: with the nonprofit, so if you're providing a service for
Speaker 6: schools or for educators, it's very easy to go after
Speaker 6: state funding. If you are providing sneakers to the homeless,
Speaker 6: it's a little harder to get those grants approved because
Speaker 6: they might not see the importance in that work. So yeah,
Speaker 6: it just depends on what you're doing. But those applications
Speaker 6: are available online. There's a full list of the state
Speaker 6: money that's available, federal money that's available, and you just
Speaker 6: have to see whether or not you fall along.
Speaker 4: So okay, so how important is grant writers?
Speaker 6: Grant writers are very important. They're very very important, especially
Speaker 6: if you don't have relationships with a lot of individual
Speaker 6: donors because you need one or the other. Grant writers
Speaker 6: and also researchers are another a whole other animal because
Speaker 6: a lot of times, and we learned this the hard way,
Speaker 6: I thought, you know, let's let's find a grant writer.
Speaker 6: You find the grant writer and they're like, okay, so
Speaker 6: who's doing the grant research? Because that's a whole nother job.
Speaker 4: Yeah, I'm not even heard of that side.
Speaker 3: What's their job to do to research everything?
Speaker 6: Yes, and it takes hours because there are so many
Speaker 6: grants available, but there could be one small thing in
Speaker 6: that grant, one requirement, and your organization just doesn't fall
Speaker 6: under it. So making sure before you waste anybody's time
Speaker 6: and they're writing this full proposal that you fall in
Speaker 6: on all of the requirements that are listed for that
Speaker 6: one specific grant.
Speaker 5: And most of these grants government or private or like
Speaker 5: a mix, sure, a.
Speaker 6: Mix, yeah, private, public, state, federal.
Speaker 4: And you could just google and probably find a lot
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Speaker 4: Different.
Speaker 6: Yeah, a lot of them are very public. Some are
Speaker 6: invite only, which are harder to apply for. But so
Speaker 6: there's a lot of private, especially like family foundations where
Speaker 6: they've set up to give finances annually to different organizations,
Speaker 6: but they don't want to have thousands of applications coming in.
Speaker 6: They're over one point five million nonprofits in the United States.
Speaker 6: So if you are a very small, like three or
Speaker 6: four person run organization where you're trying to just simply
Speaker 6: give out twenty thousand dollars a year, you don't want
Speaker 6: one point five million people applying. And so what they'll
Speaker 6: do is they'll restrict it to a certain county or
Speaker 6: a certain state, and people will have to know someone
Speaker 6: in order to get in. It's kind of like like
Speaker 6: I don't want to say mafia, but like you have
Speaker 6: to know somebody in order to even figure out what
Speaker 6: their application process is to get in the door.
Speaker 4: Sore, Where does your funding come from?
Speaker 6: Most of a majority of our funding comes from individual donors,
Speaker 6: and that is a gift that I've been able to
Speaker 6: receive because of the work that I've done, so in
Speaker 6: having that history, that job history at places like Madison
Speaker 6: Square Garden, where I've been able to develop relationships with
Speaker 6: the one percent in New York City, or you know,
Speaker 6: the athletes and artists that come through and they're invited
Speaker 6: to sit courtside at our games. The Gary vs. Of
Speaker 6: the Internet. Like all of those people I developed great
Speaker 6: relationships with by them seeing my work ethic, but then
Speaker 6: also my character, seeing that I am someone who is
Speaker 6: responsible but kind. And so when I approach those people
Speaker 6: about giving to my nonprofit, the answer is yes more
Speaker 6: than no.
Speaker 4: So do you have.
Speaker 5: Because I like, I think Ery ferguson Robin Hood dinner
Speaker 5: is like five thousand dollars minimum, It's like five thousand
Speaker 5: dollars per plate to end. Yeah, and it sold out.
Speaker 5: You can't get in, and so that's crazy. But like
Speaker 5: how do you price? How do you ask for money?
Speaker 5: And like do you do it in galas? How do
Speaker 5: you know how much to ask for?
Speaker 6: There's so many ways to fundraise, so many ways. So
Speaker 6: one thing that's very important we talk We go back
Speaker 6: and talk about boards. Right, your board of directors should
Speaker 6: be very diverse, and they should have a network far
Speaker 6: beyond your reach so that they can go out as
Speaker 6: ambassadors and promote your organization to receive funding from anyone
Speaker 6: that they're connected to. Then you can utilize social media.
Speaker 6: There's a lot of ways that you can raise money
Speaker 6: on social media. There's a lot of platforms like get smart.
Speaker 6: Dot com is a platform that you can pay for
Speaker 6: where you can set up fundraising pages. But then it
Speaker 6: also gives you text numbers, so like the Text to Give,
Speaker 6: where you can send out a number and say, if
Speaker 6: you text this number, you can donate twenty five dollars instantly.
Speaker 6: That's a platform that allows you to do it. Galas
Speaker 6: are very important. Selling a ticket to provide an experience
Speaker 6: for somebody is the easiest way to fundraise. Who doesn't
Speaker 6: want to come to an open bar experience or to
Speaker 6: see a performer, to go out to have a good time.
Speaker 6: So galas are honestly probably one of the biggest, the
Speaker 6: biggest ways that nonprofits are able to generate funds, especially
Speaker 6: for precious streams. That's definitely our go to every year.
Speaker 6: You have an yes refall.
Speaker 4: So on the business side, how do you know?
Speaker 5: All right, you run an organization, not you, but just anybody, right,
Speaker 5: and that's your job. So you have to make a living,
Speaker 5: you have to you know, provide for yourself, right, So
Speaker 5: how do you know or what's the rule of thumb?
Speaker 5: Like how much money should you be taking for your
Speaker 5: own personal It never really seems like it's right because
Speaker 5: it's like a charity. You don't want to take but
Speaker 5: it's still a job. But you're doing something you know,
Speaker 5: and you've got to get compensated for that obviously. So yeah,
Speaker 5: especially like when you're the owner of it, because it's
Speaker 5: up to you, like how do you determine, like how
Speaker 5: much money you take from that as your personal salary?
Speaker 6: So I think the most important word when it comes
Speaker 6: to thriving in the nonprofit space is transparency, and annual
Speaker 6: reports are important. An annual report is more than just
Speaker 6: the nine to ninety which you need to fill out
Speaker 6: every year so that the government knows how you're spending
Speaker 6: your money. But an annual report will break down exactly
Speaker 6: how much money went to operational costs, to programming, to
Speaker 6: office supplies, to everything. And a lot of times big
Speaker 6: donors want to see where every dollar went last year,
Speaker 6: and if you can show that, then they will give more.
Speaker 6: Like I said earlier, the more the more that a
Speaker 6: donor knows, the more they will give. So we always
Speaker 6: make sure that we're very transparent about what we give,
Speaker 6: but then also making sure that they see the numbers
Speaker 6: that they that they that they'd want to see, right, So,
Speaker 6: Like if I'm giving a dollar, I want to know
Speaker 6: that at least seventy five cents of my dollar is
Speaker 6: going to go to the wards the children and the
Speaker 6: images that you're showing me in this deck to that
Speaker 6: program and so a precious dreams. It's interesting because I
Speaker 6: kind of mimicked an idea that I saw from Usher's Foundation.
Speaker 6: So Usher has the New Look Foundation, and I don't
Speaker 6: know if they still do this, but years ago their
Speaker 6: board was covering one hundred percent of the operational cost
Speaker 6: and so they marketed on the website that one of
Speaker 6: your donation goes to the programming, and that will reel
Speaker 6: anybody in. So I went to my board. This is
Speaker 6: actually how I was able to get approved for a salary.
Speaker 6: I went to my board and said, this is what
Speaker 6: I saw, and I think that this is a great approach.
Speaker 6: And because we're only still at like the sixty thousand
Speaker 6: dollars annual level, would you guys be willing to put
Speaker 6: together a cost so that this is this is how
Speaker 6: much would go towards operational costs, and then this is
Speaker 6: how much that you give to the organization every year.
Speaker 6: And they voted, because voting is another thing that must
Speaker 6: happen on your board. They voted it was approved, and
Speaker 6: they actually cover my salary. So when people donate to
Speaker 6: Precious Dreams, none of that money goes to operational costs.
Speaker 6: My board, my boarder directors out of their pocket, out
Speaker 6: of their pocket. Yeah, which says so much. Right, So
Speaker 6: the highest level, the highest level of leadership at my
Speaker 6: organization believes in this mission so much that out of
Speaker 6: pocket they pay for my salary.
Speaker 4: So if rule it.
Speaker 3: Thumb, like if we're starting a nonprofit, what would you
Speaker 3: say that percentage would be for a nonprofit to have
Speaker 3: an operational.
Speaker 6: Course they're recommended accorded to according to like Charity Navigator,
Speaker 6: would be forty percent should go towards operational costs and
Speaker 6: anything outside of programming, everything else should go towards programming.
Speaker 6: And then if it doesn't, they would they judge you.
Speaker 6: There's a lot of like grading systems online for nonprofits,
Speaker 6: so you you will get graded on a lower scale
Speaker 6: if you are taking that money and putting it.
Speaker 5: So we have if like a million dollars comes in,
Speaker 5: four hundred thousand should go to operational cost, six hundred
Speaker 5: dollars should go to the proper to.
Speaker 3: Ya right, and that the operational cost always if you
Speaker 3: have staff, which you obviously just a Plaska fall in.
Speaker 4: That list too.
Speaker 6: Yeah. And also it's like just accountability and being smart
Speaker 6: about how you spend that money because there's no rule
Speaker 6: that says that you have to. But if you get
Speaker 6: an audit from the I R S and they look
Speaker 6: at how you're spending, they can pull that five on
Speaker 6: one C three at any time.
Speaker 4: Okay, all right, that was good. That was a lot
Speaker 4: of good information.
Speaker 3: Obviously some stuff that we're going to take advantage of
Speaker 3: us hopefully.
Speaker 4: Yeah.
Speaker 5: I mean that's that's the thing with our podcast. We
Speaker 5: try to provide information for people. It's like how to
Speaker 5: manual and then from there hopefully they'll be inspired if
Speaker 5: they want to, you know, be inspired to to you know,
Speaker 5: seek more information.
Speaker 4: But you know, it's like a it's like when your.
Speaker 5: Kid first rides a bike and you push them, then
Speaker 5: they got to start riding on their own. But sometimes
Speaker 5: what we lack, especially in our community, is the first push, Right,
Speaker 5: so we just get on a bike and try to
Speaker 5: ride it, and then we just keep falling off because
Speaker 5: we never had momentum.
Speaker 4: Right. So knowledge is momentum.
Speaker 5: Yeah, So if you have the right knowledge, then that
Speaker 5: can propel you to heights unseen.
Speaker 6: Absolutely. But even if your viewers don't want to start nonprofits, sure,
Speaker 6: a lot of people who tune in make donations, right,
Speaker 6: So there are certain things that you don't even know
Speaker 6: about giving just because it's not out there, like the FML,
Speaker 6: like the fair market no, the FMV, the fair market
Speaker 6: value of your donation. I recently produced this collaboration where
Speaker 6: Champion and Complex created this sweatshirt, this limited edition sweatshirt
Speaker 6: where one hundred percent of the proceeds went to Social works.
Speaker 6: The sweatshirt was one hundred dollars. One hundred dollars went
Speaker 6: to Social Works. However, a donor, anybody who purchased that
Speaker 6: sweatshirt could not write off a one hundred dollars donation
Speaker 6: because they received a sweatshirt that had a value of
Speaker 6: seventy five dollars. So really you can only write off
Speaker 6: the difference. Even when you go to a fundraiser, it's
Speaker 6: a ticket is two hundred dollars. Somewhere on that invitational
Speaker 6: on the website where you're purchasing the ticket, it'll say
Speaker 6: FMV and very small letters. It's always small because most
Speaker 6: people don't want the donor to know. It'll say the
Speaker 6: level of the experience. So if you're going to an
Speaker 6: open bar experience, it'll say your FMV is one hundred
Speaker 6: and twenty five dollars. So if you're buying a ticket
Speaker 6: at two hundred dollars, you're only able to write off
Speaker 6: seventy fives.
Speaker 3: Depending on who's at that event, that FMV will go
Speaker 3: up obviously.
Speaker 6: Right, No, who's in attendance doesn't matter.
Speaker 3: Yeah, I'm just thinking like, if I know, right, if
Speaker 3: I have Kanye there, right, then.
Speaker 6: If he's performing, OK, Yeah, that's what I'm saying. So
Speaker 6: if there's a performance, there's a value to that. If
Speaker 6: there's food, there's a value to that.
Speaker 3: And then go up to the sales that they're doing
Speaker 3: from their shows.
Speaker 6: Yeah, And the nonprofits job is to be transparent and
Speaker 6: let their donors know ahead of time what they're going
Speaker 6: to get out of that experience, and then what is
Speaker 6: the difference of what they can write off education.
Speaker 4: I didn't know that. I'm a financial vise. I never
Speaker 4: knew that.
Speaker 5: My understanding, I thought, whatever you get the charity, you
Speaker 5: just write off and it's.
Speaker 4: One hundred percent.
Speaker 6: A lot of people do that, and a lot of
Speaker 6: people also don't even realize that they're not right. You know,
Speaker 6: you're filling it out that you're writing off that much money.
Speaker 6: With the IRS does a lot of checks.
Speaker 5: So if you ever get ordered at the IRS, they
Speaker 5: can come back and say you.
Speaker 4: Absolutely wrote off.
Speaker 5: One hundred dollars for the dinner, but really you only
Speaker 5: get a twenty five dollars because the dinner was worth
Speaker 5: seventy five dollars. But it's up to the charity to
Speaker 5: tell you to inform you on that. If the charity
Speaker 5: doesn't inform you on that, can that fall back on them?
Speaker 6: It can, But the thing is most people don't know
Speaker 6: that they're being informed by the small print. It's the
Speaker 6: same way as you look at a website. I mean
Speaker 6: on a commercial, you see that fine print on the
Speaker 6: bottom that is not their responsibility if you don't read it.
Speaker 4: It's like the back of a ticket, like nobody ever
Speaker 4: looks at it, but nobody nobody reads well, nobody looks
Speaker 4: at the back of either.
Speaker 3: It's it's like I'm here, here's my thing.
Speaker 5: Yeah, Facebook, when you sign up, there's like a whole thing.
Speaker 5: We'll take it information will salt.
Speaker 3: Or the Apple update. It's like eleven pages wrong. Nobody
Speaker 3: is going to read it.
Speaker 4: But what are you not going to do it?
Speaker 5: Yeah, exactly. You can quit the alternative your charity. You
Speaker 5: can have Apple. What are you going to say, No,
Speaker 5: I'm not gonna have an iPhone?
Speaker 6: Yeah, and I hope I'm not discouraging people to give,
Speaker 6: but definitely pay attention.
Speaker 4: To good information.
Speaker 5: Appreciate that because, like I said, that's one of the
Speaker 5: things with the podcast is that you know, even I
Speaker 5: learned every single podcast, I learned something from the podcast.
Speaker 5: So that was something that I was not aware of
Speaker 5: and I learned something. So yeah, but any other form
Speaker 5: of like charity in the in the regular form, that's
Speaker 5: one hundred percent write off.
Speaker 6: Right, as long as there's nothing received in exchange. And
Speaker 6: that's why every receipt usually says that at the bottom
Speaker 6: of the letter.
Speaker 4: What about if you give close? If you give close,
Speaker 4: it's like the value of the close.
Speaker 6: It's not the value of when you purchase it, unless
Speaker 6: it's still brand new and it has a tag on it.
Speaker 5: It's the value of what it is now, Like Salvation Army,
Speaker 5: like they give you like a.
Speaker 4: Like what's it worth?
Speaker 3: All right, that's all self taught, right, you have to
Speaker 3: go through experience learn, yes, and that plays in attack.
Speaker 5: It's all all this stuff intertwined, so that plays into
Speaker 5: taxes as well as a tax play. And that's why
Speaker 5: a lot of balthy people, you know, start foundations also, right.
Speaker 4: Yeah, can you talk about that briefly? We wasn't. I
Speaker 4: wasn't really playing on talking about that. I just thought
Speaker 4: about that.
Speaker 5: A lot of athletes, specifically, and and entertainments and stuff,
Speaker 5: they start foundations because it's it's a way for them
Speaker 5: to lower the taxable income.
Speaker 6: It's attack shelter, right, m about that, Yeah, yeah, absolutely,
Speaker 6: it's also a way for them to it sounds terrible.
Speaker 6: It's also a way for athletes to have their name
Speaker 6: on something that someone else is funding. You know, there's
Speaker 6: a lot of there's a lot of basketball clinics that happen,
Speaker 6: and just because you see that particular celebrities name on
Speaker 6: the clinic doesn't mean that there's not ten other sponsors
Speaker 6: that are coming in and actually paying for it. So
Speaker 6: of course you're going to get more support when you
Speaker 6: have that big name. That's why a lot of smaller organizations,
Speaker 6: grassroots like like my own, will look after We'll seek
Speaker 6: ambassadors and celebrities to get behind our stuff because we
Speaker 6: know when people see that name, they give more.
Speaker 5: So how does that help them personally as far as
Speaker 5: they start a charity, how does that help them?
Speaker 6: Write offs? It's a write off for them personally. Yeah,
Speaker 6: it's a write offs. But so there's two parts to it.
Speaker 6: They get the write offs by giving financially on their own,
Speaker 6: but then also it's a great marketing tool, you know,
Speaker 6: like I not only do this, but I also care
Speaker 6: and you don't have to be there to do it.
Speaker 6: So Usher, I'm just gonna throw that one out there again,
Speaker 6: Usha's New Luck. I've worked with that organization about three
Speaker 6: times now. We've partnered on different things. I've never worked
Speaker 6: with Usher, but every time that we do anything and
Speaker 6: they post anything and it goes on the website, it
Speaker 6: says Usher's New Luck.
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Speaker 2: Mike drop backdrop.
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