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Increasing Philanthropy with Planned Giving and Opportunity Zone Funds

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Increasing Philanthropy with Planned Giving and Opportunity Zone Funds with Brion Crum

Brion CrumbBrion Crum is a Vice President, Investments, at Caliber Companies. His responsibilities include raising money for Caliber’s multiple real estate funds and helping accredited investors develop their wealth.

Prior to Caliber, Brion was a financial advisor at Merrill Lynch and Synergy Investments, advising high-net-worth clients and business owners on strategies for asset protection, tax planning, and portfolio construction. Brion has become an expert and presenter on the Opportunity Zone program and how it creates an impact on the community.

Brion has been on the founding advisory board of Eliances, an entrepreneurship community, and is a board member/advisor for a diverse group of organizations that have community impact and sustainability at their core.

Brion obtained his BSBA in Finance and Aviation Management from Ohio State University. He is a registered representative with Caliber Funds, which is affiliated with Patrick Capital Markets, LLC – Member FINRA/SIPC1.

Through fellow members of the Planned Giving Roundtable, we have enhanced the tax and investment benefits of charitable trust strategies for investors, business owners, and real estate owners by incorporating an Opportunity Zone Fund as an asset in certain charitable trusts. This can be a powerful tool for non-profit organizations to share with their donors who may be anticipating or have experienced a significant liquidity event.

 

Read the Interview

Hugh Ballou: Greetings, it’s Hugh Ballou. Welcome to The Nonprofit Exchange. We interview someone every week who has specific knowledge, gifts, experiences. Our goal is to help all of us learn some good sound business principles. Today’s show has the umbrella topic of philanthropy, but it’s a specific area of philanthropy that would come under the subset of planned giving, and there is another, but I won’t go further. I have a guest today who knows a lot more about this. We won’t tell you what to do with your money, how to invest, or any of that stuff. We don’t talk about that here. We are going to talk about leadership principles and systems to put in place. My guest today is Brion Crum. I took two weeks off, and I have to be retrained.

Brion Crum:  You’re forgiven. Happy New Year, Hugh.

Hugh: Fortunately we get a fresh start. Tell people a little about yourself and your background. Why do you do what you do? What’s your passion?

Brion: Thanks for having us on the show today. It is a great pleasure to get to know you better after we met through the C Suites Network. My name is Brion Crum, and I work for a company in Scottsdale, Arizona called Caliber. I want to talk about Caliber before I talk about myself because I think it helps put the two pieces together.

Caliber, as a Scottsdale, Arizona-based real estate investment and development company, is actively making impact investments in our community. The way we do that is on behalf of our investors, who are typically very successful businesspeople. They may have been fortunate enough to have grown and sold a business. Through the wealth they have created, they have decided they want to invest back into the community and help create solutions for what may be most needed, be it affordable housing, better health care, investing in education, or sustainability.

The reason I joined Caliber as someone who has had a background in financial services for over 25 years is I saw it as a way to help people invest directly into the community. Money made on Main Street gets reinvested on Main Street. It isn’t someone who is a hard-working entrepreneur, they send their money off to a money manager in New York, and it never comes back into their own local community. When I found out about the impact that Caliber, as one of the fastest-growing small investment companies not just in Arizona but in the country, was having on the community, I decided to leave my corporate career where I was working as a financial advisor at Merrill Lynch. We honestly didn’t have the ability to let people invest directly back into their own communities, whether it was related to businesses or real estate.

Fast forward to today. One of the things that Caliber has done recently that I am most excited about is we have created our own foundation. We are tying together the fact that we are making these impact investments in our community, but also we’re adding in what we can do through our foundation and corporate philanthropy. Part of the conversation I am looking forward to having today is how can more companies, more people look at ways to increase the good that they do in their community? We will go over some different strategies.

Hugh: Wow. I guess the first step is as a nonprofit leader or clergy, our attitude, our knowledge, and our perspective on how money works. Coming to the table to have a meaningful conversation, it’s important for nonprofit leaders and clergy to understand money and investments. We get in this habit of treating corporate leaders and high net-worth individuals like an ATM. Give me some money. It’s a withdrawal. Rather than building our system so there is a compelling reason for somebody to want to support it with their financial gifts. On our side, how do we come to the table prepared to have a conversation?

Brion: The one thing to keep in mind is there is a difference between people who purely want to donate and people who want to get more actively involved in your organization. That could include finding a way to make an actual impact investment that will support the mission of your organization. A good way to talk about this is using a couple of specific examples. Part of the Caliber corporate philanthropy and the way we utilize our foundation is when we meet with a community leader, in particular in the nonprofit space, what we want to do is understand what are your challenges? What is something we could do within our network to help you address the challenges you are having?

One solution we can bring to that is we have what is called the Encore Fellowship Program. These fellows can be dropped in almost as an executive on loan that we can support through the Caliber Foundation. Once we have a better understanding of the challenge that that organization is having, we can start looking at some very creative solutions. Sometimes those solutions are related to finding funding sources.

Also, it may be a way of helping that organization run more like a for-profit business versus a pure nonprofit where if they are looking at it not just from the standpoint of being able to put their dollars to use in their community, but also looking at it like we need to create a way to be as sustainable as possible. The more revenue we can generate, that means the more resources we have to go back into the services. That might mean that you can actually create a way for your organization to create revenue streams by providing solutions that typically might be done through a for-profit entity, but the beauty of doing it through a nonprofit is that you have a way to increase your revenue, and you don’t have the issue of needing to pay taxes on it. I want more executives in the nonprofit space to realize that if you run your business a lot more like a profit-drive enterprise, you can create more sustainability, grow the organization, and provide more resources to the community that you serve, and the benefit of it is you don’t have to worry about paying taxes on it.

Hugh: That’s a lot of stuff to think about. Let’s clarify some terms. Even though we use the term “the nonprofit exchange,” we also realize that the word “nonprofit” set a negative paradigm of scarcity thinking. Speak a minute about three terms. One is how we frame a tax-exempt business, a non-stock C corp, the paradigm of moving from nonprofit into abundance thinking. You also used the word “philanthropy.” You’ve expanded that into not just money. The third one is “planned giving.” We are in some specific areas. Talk about those terms and why those are important for nonprofit leaders to know.

Brion: Let’s use a couple of examples. If you’re a nonprofit leader and you are trying to provide affordable housing as an example, you don’t need to rely on purely getting donations. You could set up a business model where people could create affordable housing that you would then manage. Now what you have been able to do is create a way for people to make an investment into your community, and you are going to be able to continue to bring in more money that way because most investors might feel more comfortable about making an investment that will grow and produce revenue that go back into the nonprofit entity.

We need to look at a couple different things. What is the difference between pure donations and making an impact investment that supports the resources of your organization? Now you have more capital to provide those services. If one of the challenges that you’re having is bringing in people who understand how to run a business that way, this could be one of the ways that we find one of those Encore Fellows you can basically drop into your company until we get you headed in that direction.

Hugh: Love it. How do you define philanthropy?

Brion: When you think about what is someone passionate about, some people are very passionate about animal rights, some people are passionate about children and education. If you are finding a way to creatively support that organization, you are a philanthropist. Maybe you are doing it with your time. Maybe you are doing it with your donation dollars. Maybe you are truly making a social impact investment that is meaningful to you.

Hugh: Love it. The root words are philos, love, and humankind.

Brion: Yeah, love of your brother.

Hugh: I want to get sisters in there so we don’t get in trouble. Planned giving. We teach at SynerVision there are eight streams of revenue. One that is not utilized as often as it could be because many leaders don’t know how to start the conversation or present the value proposition for someone to consider leaving. In your case, it’s a cause-based investment that will create ongoing value. Thankfully, there are a lot of corporations looking at that kind of triple bottom line to make a difference with the planet and people as well as profit. Talk about planned giving and how this fits into a scenario.

Brion: This whole conversation actually became really personal for me a couple of years ago when I joined what’s called the Planned Giving Roundtable of Arizona. That is an organization where we are bringing together business leaders that are all passionate about finding ways to continue to create more philanthropic solutions through the planned giving programs.

A perfect example is if you are a business owner and in the process of selling your business, and you want to create your own foundation, what are some of the best practices you can use? How are you going to set this up? Who are the people you need to engage with, whether it’s financial services people, attorneys, advisors, nonprofit leaders so that you can go from the point of being a successful business owner and leader in your community to being a philanthropist?

Through the Planned Giving Roundtable—which is a national organization, I just happen to be on the board of the chapter we have here in Arizona—when I meet someone and they say, “I want to find a way to continue to grow in my philanthropy,” getting them tied together with the planned giving people at organizations, nonprofits, foundations that they can connect with and feel they are supporting the mission that is personal to them, is one of the ways we can do this.

Hugh: Back to why you are doing this. You left a very prosperous profession to do something that touched your heart. What is your passion for doing this? I’d like you to talk more about it.

Brion: I have several passions that lead directly into this. One of them is helping people start and grow businesses, supporting entrepreneurship.

Another one is global sustainability. Some of the problems that solutions are being created for are related to what are called United Nations Sustainable Development Goals. Some of them are eliminating poverty, reducing hunger, creating good health and wellbeing for people, creating quality education, gender equality. There are 17 goals. I identify that almost half of those, I have some level of personal or professional commitment to create solutions, whether that is helping support entrepreneurs who are also going to create jobs and build wealth for themselves and their families, looking for and implementing sustainable solutions related to water, food, energy, air. A lot of these can be done if you have collaboration between the public sector and the private sector as well as any type of organization that is really committed to solving these problems.

Another one is being able to help people have better access to healthy foods. There are a lot of what are called food deserts in America. We are one of the most prosperous countries in the world, yet the pandemic really laid bare how there are a lot of people struggling. I read recently that up to 20-30% of Americans potentially are going to bed hungry each night. Unfortunately, a lot of them are children. What are solutions we can all create together that have to start on a local basis? The local leaders are the ones who know where the problems are in their community related to all these different factors.

Hugh: Well-spoken. A lot of the tragedies are right underneath our nose. I live in Lynchburg, Virginia, named after the ferryboat captain, John Lynch. The Quakers settled this, nothing to do with lynching. People died on my property in the Civil War; I look out my window at a cannon. They were fighting against each other. We come to the table. This was the second wealthiest city in America before the Civil War; now we have the highest rate of poverty in the Commonwealth of Virginia, 24.5%. This zip code is 41%. We have 26-27 food charities feeding people, but the problem was growing before the pandemic. I don’t know what the numbers are right now.

What I am trying to do is put together some collaboration to work together. We are missing some opportunities and duplicating and leaving out. My vision is home-grown. This is a similar scenario in most every city where people are doing things. We don’t know as nonprofit leaders and even clergy how to put two and two together and make seven by collaborating. Your call to action is to think about reaching outside of our resources and collaborating.

Brion: Yes, we absolutely need to create more ways where people in the same community are connecting together. What we have seen in the last two years, one of the ways that is happening is through what is called the Opportunity Zone Fund Program. I am going to cover what an opportunity zone is, then what the fund is, and will tie it together to how we can use this to create solutions for what you specifically mentioned, whether it’s on behalf of for-profit or nonprofit entities.

The Opportunity Zone Program, originally the concept of it was started back in 2015 by a group of bipartisan Congresspeople along with business leaders, including one of the original founders of Facebook. They were looking at the fact that there were pockets of this country that had not seen the same type of success that other parts of the country had following the great recession that started around 2009 and 2010. They identified that one of the common denominators between areas that had started to recover and were doing well and areas that were behind was access to capital. The concept was what if we create a tax incentive for people to actually invest into these areas that became designated as opportunity zones? When we do that, we believe we can help create jobs, improve education, access to health care. Affordable housing is a huge issue across all of America, and what we talked about related to food.

At the end of 2017, the Opportunity Zone Program was created by an act of Congress. When you are a successful investor and sell your business, it could be real estate or stocks that have a capital gain on them, if you invest those capital gains back into these opportunity zones through an opportunity zone fund, you don’t owe any of those original capital gains to the federal and state government until 2027. You get this immediate deferral period.

The second benefit they get as an investor is they will have the amount of their original capital regain reduced by up to 10% if they invest prior to the end of 2021. Where this gets really interesting, those are two great benefits, but the big impact is after a 10-year investment period where any capital gains attributed to those investments in these opportunity zones will be distributed capital gains tax free.

I will give a couple examples of how this can be used, and I will tie it into how the nonprofit sector can benefit. Feel free to jump in with any questions along the way.

One of the ways that Caliber through our Opportunity Zone Fund has been able to make investments into the community using this program. A year and a half ago, we bought a vacant assisted living facility in central Phoenix. This was a facility that used to be owned by a nonprofit. They expanded, built a new campus, and this assisted living facility went vacant. There are homeless people living in there, doing drugs. A bit of a blight on the local community. It was in an area with a lot of medical services available. Large hospital across the street. A housing community of historic homes with a great sense of pride of ownership. We had this pocket of a vacant building.

We bought the vacant facility on behalf of our investors in the Opportunity Zone Fund. We fully renovated it and built a behavioral health care hospital. Now, the same people that may have been living there and having issues with drugs and alcohol can actually come back and through government funding get treated for whatever may have been causing them to be in that condition. It’s creating great jobs. Over 100 medical jobs were created there. People with mental health care conditions who were otherwise not getting treatment are able to get treatment, which is now more important than ever. It was able to create a solution for several problems in that particular area. It also became a great investment on behalf of the investors of the fund. That is an example of a for-profit entity.

How can a nonprofit entity potentially take advantage of the opportunity zones? Because of the way these opportunity zones are identified, they are typically in areas that have high levels of poverty, high levels of unemployment. Each of these different communities, be it urban or rural, is going to have a different solution that can be created. If the issue is related to health care, then whether it’s a for-profit or nonprofit entity, you can use the Opportunity Zone Fund Program to build a hospital. Same thing for a school. You could go and build a school for either a for-profit or nonprofit educational entity, and it becomes an investment, but it also brought capital into the community, where they can now provide higher levels of education that may have been lacking previously.

If you are a nonprofit trying to create solutions for affordable housing, you could use the Opportunity Zone Fund Program to build the housing communities. This may be on vacant land. It may be coming in and converting a mobile home park potentially into a more sustainable type of housing. There are a lot of different solutions you can create using this program.

If you are a nonprofit and realize you are providing services in an opportunity zone, one of the things you can do is reach out to the local opportunity zone developers and investors and share with them the challenges you are facing. See if there is a way some sort of collaborative effort, maybe a joint venture, could be created that would enable them to continue to serve their mission but create an investment opportunity for the people who want to take advantage of this program.

Hugh: Wow. Suppose there were a community that had a closed school. We’re facing more of those. There are communities that have closed churches or synagogues. Those are substantial facilities that could be repurposed. Some sort of community involvement program. They probably had a yard, so you could have a local gardening program that feeds people and tie in some veterans programs or unemployment programs. In taking an investment to a property like that, the property might not have high sale value because some of them are wanting to get it off their books. Is that a good scenario to pursue?

Brion: It is, absolutely. Being able to sell property that a nonprofit already owns in an opportunity zone that could be then repurposed is a great example of the program. I have definitely seen examples that are happening where old schools are being acquired and redeveloped in opportunity zones. Same with churches. Just like there is an opportunity to buy these vacant big box stores and turn them into urban farms by using vertical farming. A lot of different creative solutions that you could use. Once again, it goes back to how we have to know about the problem, know about these resources, and create that conversation that can lead to the collaboration.

Hugh: I want to talk about more about how the nonprofit needs to step up. Opportunity zones, how does a nonprofit leader find out? Is it a geographic area?

Brion: Yes. The geographic areas were designated in every single state. I’m in Arizona. There are about 180 of them here. Some of them are large tracts of tribal communities. Others are small pockets inside of urban cores. There are areas like all of downtown Phoenix as an example. All of downtown Mesa. A lot of what is in Tempe, excluding the area where the university is. There are maps in every single state. They could Google “opportunity zone” for their city or state. It is very likely a map will pop up that will show where these opportunity zones are.

Hugh: If you want to find out more, it’s CaliberCo.com. Do you want to share your email?

Brion: Yeah. My name is Brion.Crum@CaliberCo.com. Always happy to connect with people on LinkedIn as well. For a lot of 2018, myself and other members of our company traveled around the country talking about how opportunity zones can be activated in these different communities. That is when we started hearing a lot of leaders in rural areas in particular sharing with us, “This is a challenge we’re facing. Whether or not we have an opportunity zone, what are some ideas we can create together?” Maybe we can create public/private partnerships in order to solve some of these problems.

Hugh: That’s an area we need to explore a lot more. If our Congressmen, if we came to them and said, “We have a potential public/private collaboration with a funding source,” we are doing things that government probably shouldn’t be doing, but they need to help us. They need to sometimes get out of the way, but they can help streamline some different parts of this, licensing and whatnot, permits. Having them on board with it.

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Brion, if I come to you and say, I have this food project in Lynchburg. I don’t know if it’s an opportunity zone or not, but it is high levels of poverty.

Brion: Most likely it will have an opportunity zone in it then.

Hugh: We’re surrounded by pockets of small towns in poverty. I came to you to talk about it. What would you expect of me and my organization to have together so that you could have some confidence we could actually pull something off?

Brion: Let’s use the example that you are trying to create a solution to the food desert issue. You need to have a business plan or at least put one together. As an example, an Encore Fellow could help with this. This is the problem we’re facing. This is what we believe a solution could be. This is how we believe we can put something together. You have to show that the need is there. You have to show that there is a business plan in place that can be properly executed. You’re also going to have to make sure that we know how these services are going to be paid for.

If it’s selling food, is it selling food and putting contracts together with local businesses, saying, “Hey, we’re going to build an urban agricultural business and do it inside of this vacant building that is otherwise under-utilized?” Growing the food is one thing. You have to have a way to sell and distribute it. If it’s being done purely through a food bank, is there a business model where the food bank is then going to be able not to just survive based on donations that will be used to buy the food that is grown? But can we create a food incubator, a shared commercial kitchen where now entrepreneurs who want to start a food-related business can buy the fresh food from the urban farm? They will have a shared kitchen to cook it. Then you have to have a way to get people to buy it from you. How far along is your business plan for this?

What are the different challenges you may have? An example could be I would love to be able to grow this food and sell it to schools in the local area. But when you talk to the school, you find out they have a long-term contract with another food distributor that may actually be shipping food in from hundreds of miles away. You have to understand where the challenges would be with this particular type of business. That is just one example.

Look at the business plan. Is the need there? Who are your customers going to be? How will they afford it? That is one thing I would take a look at.

Hugh: The model I see in most cities is there is a food service that gets food donated from the grocery stores when it gets within a certain date. There is a lot of food distributed that is given away. People qualify so they don’t go from one food service to another and load up. There is a screening process. Basically, they give people food for a home. As you are talking, there is no collaboration except for give us money or give us food. There is no collaboration, and there is no addressing the mindset of poverty, the opportunity to build something that you can get yourself out of a situation you’re in. A lot of these people don’t want to be in this situation, but they don’t understand the alternatives. You think about how we have a lot of services giving away food. Our poverty level continues to increase. If people are hungry on a Friday afternoon and don’t have a car, there is no way for you to get food to you, and there is nothing open accessibly. There is a number of issues here.

As you’re talking, what I see that you do is you bring a greater perspective of thinking out of the box. We don’t just feed people. Is there a bigger initiative with a bigger win/win that creates a more sustainable result over time that would then build jobs for small businesses and employ some of these people who are needing food maybe? Speak to creating a bigger solution to what we’re doing right now, would you?

Brion: What you just talked about is an example of don’t just give someone a fish. Give someone the net or the tools they need to get more fish. That’s why I like the business model of the food bank can move into a business model where now they are creating that shared kitchen, they’re offering educational opportunities to teach people how to create small gardens, maybe even in their own apartment with a small vertical wall where some healthy food can be grown. You have to create educational opportunities for people to learn how they can move away from their current situation.

I have seen several business models where foundations are using land they own to partner with the community and build these co-working collaborative spaces where you have a shared kitchen. You have the community garden and the shared kitchen. You are helping people create their own jobs through entrepreneurship by creating a food-based business without a lot of capital outlay. It’s expensive to open up a restaurant. But if you did it inside one of these commercial kitchens, you are teaching them how to become a business owner.

Those are all solutions that can be implemented. But you have to get away from the traditional thinking of getting donations and distributing and finding that way based on who is in that community. What are their interests?

I have seen businesses that are specifically created where they employ people with special abilities, maybe those with autism as an example. There is an organization here in Arizona that they hire people on the autism spectrum to actually grow and then produce different types of food-related businesses. You have created jobs for more people. You are creating the solution of bringing more healthy, affordable food into a neighborhood.

Hugh: It’s a business generator. It’s not a tech business incubator; it’s a generator. You are generating businesses that employ people. There is a transportation piece to this. There is an education piece to this. How do I educate myself with a job that I want? Those businesses all need a successful business plan and some source of micro-loans to get started.

You have touched on several of the eight streams of revenue. 70% of nonprofits get the majority of their funding from donations. That is one of eight. We think we are going to get a grant. There could be a start-up grant for putting something together. Planned giving is one we don’t take advantage of on a scale. Someone who has a net worth to create a sustainable program with their name on it is creating a legacy that leaves a permanent imprint. What we didn’t touch on that you alluded to, you don’t have to have a business to have business-generated revenue. You can have earned income from your nonprofit. We shy away from that because we think we’re a nonprofit, so we’re not supposed to make money.

Brion: You’re supposed to make as much money as possible. You have the benefit of never having to pay taxes on that money if you do it the right way.

Hugh: And we’re afraid of business-generated income because unrelated business income is treated by the IRS as a taxable event. However, what you’re talking about is generating stuff that is mission-related. That doesn’t come under that. What you’re doing is putting together a bigger piece that benefits more people and ultimately becomes more sustainable. What I see over and over is we think too small. We are going to do one little thing with ourselves instead of putting all the people together. Maybe they’re not even competing. There is a transportation piece, a business advisor, someone who is representing the city, a community foundation, and a university. We put together the big brains and build this bigger initiative. Then we start it one step at a time.

Back to me. If I approach you, you would want me to have a plan that says what the results are going to be, we’re solving this problem, here’s how we show up in a unique way that nobody else does because we have looked at the competition. It’s the unique value proposition we have. Here are the intended results, the impact of what we’re doing. You have to impact people’s lives. You have added an element to this, the impact piece. There is an economic impact and a self-sufficiency impact that we are giving more people employment. This requires a lot of coordinating and planning.

One piece we didn’t touch on yet was in-kind donations. Having a person is a corporate in-kind donation. They don’t get a deduction for that, but it is one of the sources where we save money. It’s one of the eight sources of funding. We don’t spend that money for that executive because it’s an in-kind donation. In-kind donations can help in several ways. Not only does that person provide a function, but they bring in a whole network of connections with them.

Brion: Yes. That is one of the beauties of that model. I would say if you are a nonprofit leader in your community, and you don’t know what resources are available from the companies that have a corporate philanthropy piece, you need to start those conversations and share with them what challenges you’re facing.

Just ask: Do you have someone you would recommend, maybe someone within your organization that could work on a fractional basi. Instead of purely volunteering their time on the weekend, they would be able to do it as part of the company’s PTO program. That is one thing Caliber makes available. Anyone at Caliber at any point could do paid time off related to charitable causes. That could include them becoming one of these fractional executives or experts who can solve some sort of need or challenge that the nonprofit is having.

Once again, it goes back to collaboration. You have to start the conversation because as a corporate executive, you may not know what the internal challenges are of these organizations. You have to have those conversations. Maybe that means that you openly reach out when you’re at a networking event. A lot of nonprofits are members of the Chambers of Commerce. Share in those chamber meetings the challenges you’re facing. Is there someone in your organization who could help us figure out that challenge?

Hugh: I will say to you that this is a very eye-opening interview with a lot of really incredible information that is valuable. We’re at the beginning of a new year. What kind of planned giving strategies do you see your clients doing leading up to the end of this year?

Brion: The one that has changed in the last couple of years is the ability to actually incorporate an investment into an opportunity zone fund into the estate planning that is being done when someone either sells their business or another asset or is potentially looking at how am I going to pass everything on to my heirs? If you are not working with a CPA and estate planning attorney or financial advisor that understands how there are these additional tax and investment benefits of an opportunity zone fund that can be incorporated into your planned giving strategy, that is something that I’d be more than happy to have a conversation about and potentially help them identify an estate planning attorney or CPA in their community that could help them implement something like that.

Hugh: The people you work with, are they individuals or family offices or family office foundations?

Brion: All of the above, but it’s mostly individuals. A couple of examples. A family has started and grown a business that gets acquired. As part of that transaction, they decide to start a family foundation, but they will also do some estate planning and set up certain charitable trusts that they can then make impact investments through the opportunity zone program. The family office model is unique because that is typically a family that has their wealth created already. It’s not newly being created, but they have to find innovative ways to invest that money. A lot of those family offices are starting to look at or have been looking at the social impact in the ESG or environmental, sustainability, and governance aspect of the investments they make with their money. Part of that could be identifying how does an impact investment in my community not only help us take advantage of these tax benefits, produces income and growth opportunities, but also is providing a solution for the need they see in their community, whether it’s related to poverty, lack of quality education, or helping people start and create jobs that can build wealth for themselves. It can all be tied together.

Hugh: It’s a triple win. A win for the investor, the project, and the community, for humankind. Any more you want to say about how opportunity zones can be integrated into an estate plan?

Brion: The key to that goes to making sure that they have a team in place: their CPA, estate planning attorney, and financial advisor who all understand what goal that family or individual is trying to achieve. If they aren’t familiar with the Opportunity Zone Program, someone like myself is always happy to learn more about their situation and help their current financial advisors better understand how this can be implemented on their behalf. It is a brand new program, only a couple of years old. Our company is one of the first ones in the country to create an opportunity zone fund that is actively investing in entrepreneurship, education, health care, and looking for other community-based needs that fit this type of investment.

Hugh: We had record low interest rates last year. How will that impact the future of this type of strategy?

Brion: The low interest rates, because of the way the tax crediting program works, is beneficial for this program. The other benefit of the low interest rates is that it is actually creating a bigger incentive for people to invest into real estate in their community, which creates incomes from the rents that come off of it. If you have record low interest rates, you can buy and build more with cheaper interest rate loans, and you can create a higher level of income off of real estate than you can typically on money sitting in the bank or in bonds or things like that.

Hugh: We have to get to it. We have about five minutes left. Are you willing to entertain an audience question?

Brion: Sure.

Hugh: Talk about philanthropy. Here is Bob Hopkins on the line from Dallas, Texas. Do you have a question?

Bob Hopkins: I do. Unfortunately, I missed a little bit about this. Brion, there are not a lot of companies that have an arm that is of social entrepreneurship like you are talking about. Many times, you have boards of directors who say, “Why do we want to give our money away? Personally we can give our money away, but why does the company want to give our money away?” What are the advantages to a corporation besides taxes, besides feel good, to actually become a giver like you’re talking about?

Brion: That is a great question. It’s one of the reasons why Caliber started the Caliber Foundation and the way we’re approaching corporate philanthropy. One of the best reasons to do that is because your younger employees in particular, this is very common with millennials, they want to be involved in philanthropy, but they are not at the point where they can write those checks themselves. They want to be directly involved. You can help them through that by volunteership or by bringing to the executives of that company the causes that they support. Now you’re making those donations on behalf of organizations that your employees are passionate about. Greater engagement with your staff is a great reason to do it. That’s just one example.

Another one would be we have seen that people want to do business with companies that care. Now we’re talking about not just creating a program that is going to donate money and provide these other resources, but make sure you’re sharing the story. There is a PR opportunity that you’re doing so that not only do your employees know you’re doing it, but so do your customers. If you’re a company trying to compete with another business, and your competition has a corporate philanthropy program, some customers may want to do business with them because they see they’re creating solutions for problems in their own communities.

Hugh: You mentioned earlier this is an investment opportunity, too. There is a profit stream here as well.

Brion: If you make impact investments versus the pure donations, yes.

Hugh: There is more than one way to approach the conversation. Bob, did that answer your question?

Bob: Yes, it did. I do know the retention of your employees is higher when they know that they’re giving part of their money away. Getting them involved in the community is a major aspect of that program as well.

Brion: That’s great. Love that, Bob.

Hugh: Bob always has great questions. Thank you for being here. Brion, this has been a very helpful interview. We have never had anyone like Brion on the show before. People have talked about pieces of this, but you have mind-expanding strategies to think about pieces that are current. You are on top of the win-win for everybody. Is there something we haven’t covered you want to highlight?

Brion: The one thing I did want to share is that a lot of foundations actually don’t make pure true social impact investments inside of their investment pieces. They might have an investment committee made up of people used to making very traditional investments in stocks, bonds, mutual funds, but they don’t really know how to incorporate real estate and true impact investments that are profitable into their investment pieces. That is also something I love having conversations with nonprofit leaders about, true impact investments as a part of their endowment.

Hugh: It would occur to me that many local nonprofits have local business leaders. Sometimes they have branches of home offices or national corporations in their communities. Here in Lynchburg, we do have some national companies and some local employees who are on local boards. That is an education piece for both sides, I would think.

Brion: Absolutely.

Hugh: If people object to stuff, they need some information about it.

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Brion, what do you want to leave people with today?

Brion: I want people to create more conversations. Share what your challenges are. Share what your opportunities are. Create collaboration. It all starts with being open and honest. What are the challenges you’re facing? How do I connect with people that care about that? Create more conversations.

Hugh: Underneath communication is relationship. Underneath leadership is relationship. Relationships is why people invest in you, do business with you, or collaborate with you. You’ve opened up some helpful topics with great suggestions. You and I met in a group, the C Suite Network. You asked to talk to me. I said you should be on the show. Thank you for saying yes, for beaming in from Scottsdale, Arizona to be with us today. Brion Crum with Caliber at CaliberCo.com.

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