When the Economy and Philanthropy Aren't Compatible A conversation with…Ray (43), Real Estate Investor, Seattle, Washington

Ray was successful, and his lifestyle reflected that. He had made a lot of money in stock investments, in real estate and by investing in startups. When the economy took a nose dive in 2008 his net worth dropped significantly. But he was committed to continuing to try to make a difference in how key issues that were important to him were handled. He just didn't have the same financial resources. He did, however, have considerable non-cash resources and creative advisors. 

“Here’s what the problem was...my investment portfolio was down around 15-18 percent. My real estate portfolio was pretty stagnant.  My investment advisors were doing the best they could but in reality...I had to reevaluate “use of capital.”

The thing is that up until now I’ve been pretty comfortable financially.  I’ve been able to do what I wanted to do and buy what I wanted...and I like art and wine so I’ve become something of a collector of both.

I’ve also been able to do something else that was really important to me... support issues I care deeply about. There are two things that I’m passionate about; protecting our environment and protecting my right to be recognized as an equal and important contributing member of society. Being gay isn’t a problem for me, but it still seems to be a problem for others. We’ve made a lot of headway, but...well you know what I’m saying. 

It’s the same with the environment.  Look at the water table in the oceans, and what’s happening to bird and animal populations in the amazon...in the arctic...that’s going to be us if we don’t do something! But I’m getting away from my point here.

I needed to figure out how to continue to support the issues that I’d been supporting for 15 years, but do it with less disposable income.  After conversations with a variety of smart professionals, I found out I had options--what a relief, really! I learned I could use some of the things I’d been collecting; art, even wine and some of the real estate I owned if I wanted to, as contributions in lieu of cash.  I could even donate stock.

"I've restructured my philanthropic portfolio just like 
I did my 
financial one."

Another option was to revisit the organizations I'd been giving money to for years and see if we were still all on the same page. Were they still focused on what was important to me?  Were they even surviving this economy?  That was the big one. I didn’t want to be giving money to organizations that would close the next day. 

I’d been given a list of questions to ask...kind of a donor’s due diligence list. I went to the five key organizations I’d been supporting. It was pretty much of an eye opener. I knew members of the board and/or people on staff at three of the organizations, but I’d never asked them the kinds of questions I needed to ask now.  I probably should have hired someone to do this evaluation for me, but I didn’t, so there I was.

What happened?  Well first my faith in a couple of the organizations was reaffirmed and  I found out about a program at one place that I wanted to specifically help fund. In the case of two of the organizations, one was on the verge of closing...a really good group...and needed to do some strategic planning to figure out how to survive. I offered a one-time gift to underwrite hiring a professional which we all agreed was more important than my just writing checks periodically. The others frankly had gone off in a direction that I wasn’t interested in. I let them know that. It wasn’t an easy conversation but they appreciated my coming there and being honest. I think they felt better than I did, I think.

So now I’ve restructured my philanthropic portfolio just like I’ve been restructuring my financial portfolio. I never really equated the two, but there’s not a lot of difference you know. You want a return on your investments, you need to know whether those investments align with your goals, or in the case of philanthropy, passions...what you care deeply about...and  at the end of the day you need to decide the best use of resources; all of  them. As I said it’s been a very interesting journey.”

Read More Stories.