WS1928 How Can I Make a Bigger Impact | Eric Most

In this episode of the  Real Estate Syndication Show, we had the pleasure of speaking with Eric Most, an expert in stewardship and impact with over 17 years of experience in the insurance and nonprofit sectors. As the president of the Rocky Mountain region of the National Christian Foundation (NCF), Eric brings a wealth of knowledge on personalized solutions for givers, business owners, and families looking to make a significant impact through generosity and stewardship.

Eric shared his personal journey, which led him to NCF, starting with a simple yet profound decision to focus on generosity during his wedding registry. This decision not only introduced him to the concept of donor-advised funds but also set him on a path to use his professional and personal experiences to encourage others to avoid common mistakes in charitable giving.

Throughout our conversation, Eric emphasized the importance of strategic giving, particularly the benefits of donating non-cash assets like stocks and real estate. He explained how using appreciated assets can lead to more tax-efficient giving, allowing donors to maximize their impact. Erik also highlighted the importance of planning ahead, especially when it comes to gifting real estate or business interests, to ensure the process aligns with IRS regulations and avoids unnecessary penalties.

Listeners were encouraged to think outside the box when it comes to stewarding their resources, whether it's capital, property, or time. Eric's insights provide valuable guidance for those looking to give more effectively and create a lasting legacy through their charitable efforts.

For more insights on real estate syndication and how to leverage your investments for greater charitable impact, don't forget to like, subscribe, and share the Real Estate Syndication Show. Visit lifebridgecapital.com for more resources on building wealth in real estate and supporting causes you care about.

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Transcript

Whitney Sewell: This is your daily real estate syndication show. I'm your host, Whitney Sewell. I have an exciting series for you over the next few days with a guest named Erik Most. He is an expert in stewardship and impact, 17 plus years experience in insurance and nonprofit sectors. He's a president for the Rocky Mountain region of the National Christian Foundation. Works with givers, business owners, leaders, and their families to provide personalized solutions, trusted education, and reliable service. He also hosts the Generosity Now podcast, interviews inspiring guests, and shares insights on generosity, stewardship, and legacy. He's on a mission to inspire and enable more generosity and more kingdom impact. in the Rocky Mountain region and beyond. I hope that you have considered, you know, how you are stewarding the capital or the property or whatever it may be, even your time, right, that the Lord has given you. Our guest today is gonna help you to think outside the box and even think about how you can give more with the same, say, piece of property or capital that you were planning to give anyway. Enjoy the show. Erik, I'm honored to have you on the show. I've enjoyed getting to know you and what you all do at NCF. I'm excited to let the listeners, our investors know about this as well. I think it can be a major value to them and their family and many other things that they care about as well. As I'm looking forward to diving into the conversation today, I think it's so neat that you and I have a few things in common. uh you know around being adoptive families and and just grateful uh you know for your family you know and and the growth you know how you all done it through adoption how the lord's blessed your family and ours through adoption so grateful for that and the uniqueness of the family property in Roanoke. I think that's so neat, you know, us living here in Roanoke, but now you all are in Colorado. So, well, Erik, again, grateful for your time. I know the listeners are going to learn a lot from you today and through a number of things that we're going to discuss. Welcome.

Eric Most: Well, thank you so much. I'm so glad to be here. It really is a joy.

Whitney Sewell: You know, Erik, why don't we get started and, you know, tell the listeners a little bit about NCF, the National Christian Foundation, and we're going to dive into a number of things in detail, but what is that at a high level? And then a little bit about yourself as well.

Eric Most: Sure. Yeah, so the National Christian Foundation, we're the largest Christian donor advised fund platform there is. And when I use that term, think about this as a charitable checking account. And so you get the taxable benefits when you make a contributions into that checking account, and then you're able to give to other organizations. A lot of people think about NCF also as like a, like a, a smaller, much easier private foundation, uh, that they do their charitable giving with. And so national Christian foundation, um, began about 43 years ago now. And, um, by three gentlemen, uh, to that, that many listeners, uh, might recognize their names, Larry Burkett, Ron blue, and the third gentleman, Terry Parker and the whole, um, uh, desire and hope of NCF was to help mobilize resources for the sake of the gospel and getting nonprofits funded in a tax efficient way. And so our founders actually worked with the IRS over 40 years ago to come up with a code that allows for donor advised funds today. And so NCF, we're the largest one of these. There are others out there that people might've heard of, you know, Fidelity and Schwab and things like that. But NCF has a Christian distinctive in the work that we do. And we do it because we long to mobilize resources, get funds deployed for the sake of the gospel. Over the years, we've actually had our givers have given over $20 billion to over 90,000 different nonprofits. Last year alone, we had givers give into NCF over $3.1 billion. And that is made up of cash and complex assets. We actually did over a billion dollars worth of business and real estate asset gifts last year alone. So we give, givers gave into NCF a little over $3.1 billion and granted out over $2.1 billion to over 34,000 different nonprofits. And that number, you're like, wow, that's awesome. And there's a gap, but there's a kind of a back gap there. Well, much of that actually came in in the last like six weeks of the year. And so folks will distribute those funds over the course of the next year and next couple of years. So the year before, givers gave into NCF a little over 2.2 billion. And so in 22, they gave 2.2. And in 23, they gave out $2.1 billion. And that's just something that we love to see. And so I got here. I didn't grow up thinking I wanted to be in this role, though, by any means whatsoever. So I was part of a small-to-large or large-to-small insurance agency in Tampa, Florida that my father had started. And my wife and I, before we actually got married, we were in the process of gift registry, and I was really demoralized by that process. We went to Crate and Barrel one night, and I got the little scanner to go around and shoot all the stuff that you wanted. And we walked in excited, and I walked out just feeling just feeling demoralized, as I said. And I said to Jackie, I said, hey, we don't need any of this stuff. Let's just get rid of it all. And so we deleted the registry. The next day, Jackie went and went to Macy's without me. And she picked out a bunch of stuff and she's like, hey, I want you to come. If there's anything you don't like, you could get rid of it. So we're going through and she's showing me this stuff and bless her heart. She, we, I, We got married a little bit older in life too. And so we came with a lot of stuff. So she already owned a townhouse and she had two crockpots. And I happen to own two crockpots. And she picked out this three burner crockpot and I'm like, no, we don't need seven crockpots. Let's get rid of it all. And well, I'm a smart enough man that we kept the, the forks, the set of the silverware setting that she picked out and a set of plates. And outside, I was mentioned to a friend of mine who worked at NCF. I just, we went to church together and I just was just kind of complaining about this process. And he says, Erik, why don't you open up a giving fund at NCF? And so we did, and we actually asked people, instead of giving us stuff that we don't need or want, would you make contributions into our giving fund so we can use it for missions? And so that's what we did. That's how I got introduced to NCF. By God's grace, over $2,000 was given to our giving fund, and we used it to train some pastors in Indonesia not too long after being married. And so that was our introduction to NCF. And then in my business world, we grew the business. Like I said, it was a family business, but I kind of was running things and it took us to a sale and an exit. And after our exit, I made a gift into my giving fund at NCF. I wanted to dedicate the proceeds from the sale, so that way they were dedicated for charitable purposes, so I wouldn't spend them. But I also knew that I couldn't give them away in a responsible manner between then and year end. Literally, we closed on, it was the week before Christmas. And so there was no way I was gonna be able to efficiently give that. We also had a real estate liquidity event after that, our commercial real estate. And I was excited thinking that we were gonna get some good numbers and that whole depreciation recapture thing really beat me up, frankly. I was not as sophisticated as you are and many of your listeners. And so we did that. I was then starting a real estate business myself and a real estate investor. And a friend of mine, a new that we love Colorado, and have a heart of generosity the gospel missions and he said, Erik, you and your wife. You would be perfect to be to join NCF and be the president of the National Christian Foundations for the Rocky Mountain regions and tell other people not to make your same mistakes. And so, so a little over six years ago now, I had the joy of joining NCF, and, and I've had the joy of telling people not to make my, my same mistakes. And by God's grace, I know that more dollars have been released for nonprofit work and kingdom work. ever would have happened from people hearing about the mistakes that I made. And that's what we're going to talk about a little bit of some of those mistakes and how to use the tax code in a way that be more efficient with our giving and more efficient with the funds that God's entrusted to us.

Whitney Sewell: Thanks for sharing that story. That's encouraging, Erik, and just the path that you have taken to get where you're at now. And even thinking back to when you were scanning this for the wedding registry and just the change of heart, right? It's so true, right? You get in there and it's like, man, we can just scan all these things. Maybe somebody will buy it. and I just love how you were convicted and and you all took action that like wait a minute we don't we don't need seven crockpots who needs seven crockpots right uh it's just a change of heart there uh and you took action I love that that you all did that and uh and introduced you to you you know, where you're working now, right? I mean, NCF, it's so incredible. So I want to introduce the, you know, the listeners, investors are listening, you know, to NCF as well, because I know they're gonna have some of these same questions, right? And, you know, we received them and And thankfully, you gave me some really good questions for this, just so listeners know. He gets these questions all the time. And I've had some of these same questions also, as the listeners know. We have a foundation, and we want to help families adopt. And this is something we've considered. I've talked to Erik about it, and we should talk about it again. But often, Erik, we get a question, or you get the question, how can I make a bigger impact, right? How can I make a bigger impact or greater charitable impact? And I think through NCF, there's probably ways that people haven't even realized that they could have a bigger impact with those dollars, right, that they're hoping to give. Why don't you get us started there?

Eric Most: Yeah, absolutely. You know, we A little piffy thing we oftentimes say here is friends don't let friends give cash. Cash is truly the most inefficient way to be generous. And there are way, way, way better ways. And that's what we really specialize at here at NCF. And so we love to, to talk about more strategic ways to get funds into the charitable pocket. And so they can make a greater impact because the root benefit to using kind of donor advised funds is that it's legal, completely legal tax. avoidance or reduction in taxes and taxable benefits. And so fewer dollars in transactions that are going to the IRS that end up being able to be transferred into a charitable checking account that you're able to advise and CFM where you want to give to. And so So yeah, so friends don't let friends give cash. And so what can this look like? So, you know, step one of, hey, I want to make a bigger impact. And we're going to get into ones that I think are specifically geared to listeners here to your show and into this webinar. But like step one, hey, I want to be more generous. If you're not using appreciated stocks and you have a stock portfolio, a taxable stock portfolio, that is the best way to get started. So if you said, Hey, I want to give away and you can add as many zeros to these numbers as you want, and you can subtract zeros. Okay. But if you said, Hey, I want to give away $10,000 away this year, um, uh, to different nonprofits, my church, it could be to, um, uh, young life. It could be American heart association. It could be to help, uh, um, children with adoption work. It could be all these different things, but say, Hey, I want to, I want to give $10,000 away, or I want to give a hundred thousand dollars away. Instead of using our cash after tax basis to make those givings, right? And to write physical checks that we've paid tax on. Instead, if you have an appreciated stock portfolio, talk with your financial advisor and say, hey, let's find winners that we've held in our account for over a year. We want to get into the long-term cap game period and get away from the short-term cap game. and gift those instead of the cash. And so simply speaking, if you had, say you had Apple or Tesla in your portfolio that you bought over a year ago and it's appreciated, instead of giving the cash, you can actually give $10,000 worth of stock. to NCF. So you get a deduction for the full $10,000 on your, and you don't realize any of that as income. So you avoid paying taxes on that, that $10,000. You also don't pay any, we, NCF, when we receive it, we don't pay any capital gains on that. Okay. So you avoided capital gains. You avoided paying any income tax on this. And so let's say you bought it for five grand a couple years ago, it's now worth 10 grand. That's over $5,000 of cap gain that you're not being taxed on. So NCF receives it, we liquidate it, we put it into a charitable checking account for you, and then you're able to direct it to those nonprofits that you want to serve. So it's just a great, easy way to get started. We can then look at other, yeah, we can look at other, go ahead, go ahead. You get me excited, Whitney.

Whitney Sewell: No, I think it's exciting that this is an option, right? And it's just a different way of thinking. We think, well, we have to sell this thing to be able to get the cash, to be able to give it away. And technically we can give it away before we've sold whatever it is.

Eric Most: That's completely right. That's completely right. Yeah. And the key, and as we think about other asset classes, a key kind of thing to keep in mind in all of them is it has to be before any type of, especially the other asset classes, stock is one thing, but if you think about business or real estate or oil and gas rights or mineral rights, these all can be great tools of generosity as well. You just have to do it before you're under any type of binding letter of intent to sell. Binding is the key. The IRS considers this right to income. And so you can't have the right or like the guarantee to income off of a sale. As long as you do it before that happens, you can actually create a great tax deductible situation and also avoid the capital gains.

Whitney Sewell: Nice. So just to put it in layman's terms, before you get a contract on something, right, or you sign a contract to sell, you'd have to have this set up.

Eric Most: You have to have it set up beforehand. That is absolutely correct. Yeah. Afterwards, if you, if you get it and like, Hey, great, I got this under contract. I'm ready to make a, make a, make a gift. Now the IRS considers that a prearranged sale or an assignment of income. And that comes with it at a 200% penalty. And now just to be clear, also, I just want to give the blanket. I'm not a CPA. I'm not giving specific tax advice. you know, work with your tax advisors on these things. But also realize that we have NCF where we have over 30 offices across the country. And so you can have a local individual who can help work alongside your CPA and your tax folks, because sometimes these professionals that you have, they're not accustomed to people wanting to give money away. And so they might say, Oh no, no, you can't do that. Or that can't be done. And I can guarantee you it can be done.

Whitney Sewell: Uh, and it happens all the time on that note, Erik, uh, what's, uh, and, and maybe we'll talk about this a little more in another segment, but while we're talking about, you know, that contract and somebody who's got something, you know, ready to their fixing to sale and you know, what, how long does it take to set something like this up?

Eric Most: Uh, so we talk about this, uh, now you were, um, um, remind me, you were, were you in the, did you fly planes ever Whitney? No, no, that wasn't me. No, no, no. I know you trained horses. Uh, so I don't have an analogy for horse training, but I've got a good one for, for flying on airplanes. And for the, for your listeners here who've maybe been, uh, maybe they were Naval aviators. Um, uh, we can get this done two ways. All of us have taken flights and you know, we land on a nice long runway on a seven 37. It's nice, comfortable landing. Um, that that's one path. And that would be the path that I would say, you know, let's get six weeks ahead of things, and let's let's let's do our due diligence and go through the process, and we'll talk about some pieces to the puzzle that have to be completed along the way. A little bit later. And so six weeks is like a comfortable kind of nice 737 landing at a nice long airport. We do have in our team of attorneys are amazing. And they can also do it like landing on an aircraft carrier with that hook down. Um, and maybe even miss the first, the first, uh, uh, cable and you're grabbing that second or third cable. And so we actually had some givers in years past, and this happens every year. No matter how many times I implore people not to that literally start the process on like December the 25th, 26, the day after Christmas and say, Hey, is there any way we can gift this asset before year end? And by God's grace, our attorneys get it done. And so it can be done, but it feels like, man, you just pulled a lot of G's landing and it was not very comfortable. So it's not the ideal gift experience.

Whitney Sewell: Yeah, so that's helpful. I just think for listeners to think through, right? You probably know there's a sale coming up pretty, I mean, well in advance, right? And so you need to think through this and maybe talk to somebody like Erik to plan that out. Anything else at a high level like this, Erik, you would leave the listeners with before we move on to a different question.

Eric Most: Well, just to punctuate that just real quick, we have a giver who's a repetitive giver. He's a real estate professional, runs a great organization called Core Real Estate, which stands for K-O-R-E, which stands for Kingdom Oriented Real Estate. And they just bought a property actually on the East Coast, It was an old manufacturing plant and their plan is to do some value add to it. And the plan is to sell either later this year or next year. And so he said, hey, we want to go ahead and get the conversation started today. So that way we can have everything prepared. And so we're already working with him and his team, his CPA and his attorney team to do the due diligence on the gift. and literally can go back and forth and create all the documents, the gift agreements for him. And it literally just sits on the shelf and it just sits on the shelf until he gets much closer to when he's getting ready to sell it. And at that point he can complete the gift agreements and be done. I really, really encourage that, especially for investors like you're talking to, and that are listening to this show, because you all know, like once you get into the deal, the details get, it gets crazy. And there's a pull for this and pull for that. And we got this and we got to produce these. It'd be much better if we separate doing the gifting of that asset with the deal itself. And so it just takes the pressure off of things. It makes it that 737. And so spread that out longer. And the IRS also appreciates that. The closer that you do a gift to the time of being under contract, that can be scrutinized. And so the more that we can spread those things out, the better.

Whitney Sewell: Yeah, that makes complete sense. I can think about, you know, we get requests from investors often, right, to transfer shares, maybe even just to another investor or another entity. And that can take our attorneys, right, a little bit of time to just get that done. Even if it's quick, it still may be a week or two, right? And so that would need to be done here. Well, this is great, Erik. Yeah, that's great. How can we make a bigger impact? We want to make greater charitable impact, right? And there's obviously tools that we need to know about. And this is definitely one of them. Thank you for being with us again today. I hope that you have learned a lot from the show. Don't forget to like and subscribe. I hope you're telling your friends about the Real Estate Syndication Show and how they can also build wealth in real estate. You can also go to lifebridgecapital.com and start investing today.