Do you want a wealthy retirement without worrying about money? Welcome to “Retire in Texas”, where you will discover how to enjoy your faith, your family, and your freedom in the State of Texas—and, now, here's your host, financial advisor, author, and all-around good Texan, Darryl Lyons.
Darryl: Hey, this is Darryl Lyons, CEO and co-founder of PAX Financial Group, and you’re listening to Retire in Texas—and I always have to tell you that this information is general in nature only. It's not intended to provide specific tax or legal advice. Be sure to visit PAXFinancialGroup.com for more information.
Also, when you want to spend some time with a financial advisor, maybe about 15 minutes, text the number 74868 and just put in “Texas”. That's 74868 and put in “Texas”, and we'll have somebody reach out and connect with you with the heart of a teacher. [00:59.4]
Today I'm excited to have Ryan Assunto. He's just north of San Antonio out of—is it Austin or are you in one of the suburbs?
Ryan: Yeah, I know. I'm in Austin, Texas.
Darryl: Yeah, great. Sometimes I think of Pflugerville or … but you're in the inner. Yeah, you're in Austin.
Ryan: Austin, specifically, yeah.
Darryl: Yeah, thanks for joining me today. I appreciate it.
Ryan: Thanks for having me, Darryl. Looking forward to the conversation.
Darryl: So, you're not retired.
Ryan: I am far from retired, no. Actively working and actively ministering, really, is what we think of it at NCF, and having a blast.
Darryl: Yeah, a lot of the guests we've had on the show have retired or are thinking about retiring, but I had you come on for a specific reason because I want to talk about some of the things that are happening in the charitable marketplace. Specifically, I'm going to talk about donor-advised funds. It's going to really only scratch the surface.
For those that have tuned in, let me mention this. You’re going to want to listen to this program if, one, you're charitably inclined, and, two, you don't like the IRS. If that fits your profile, then please listen to this show. But before we get started, Ryan, where are you from originally? [02:08.8]
Ryan: Yeah, so I am a Texas native. I'm originally from Beaumont, so southeast Texas is home for me, born and raised there. In fact, a lot of my family still lives there, but I have lived kind of all around Texas. I went to Texas A&M University. I went to Dallas Theological Seminary. I lived in the Greater Houston area for a while and have been in Austin for about 18 years now.
Darryl: What I love about Austin is it's really close to Texas.
Ryan: That’s right.
Darryl: Sorry, sorry.
Ryan: That's right. I think it was one of our former governors who said that Austin is a little blueberry and a big bowl of tomato soup.
Darryl: That’s so true.
Ryan: We've always had a way of sticking out, but also always had a way of being creative and fun and innovative in this town, so I love it here.
Darryl: How do you handle it with all the burnt orange? Do you still wear your maroon?
Ryan: I do wear my maroon. I try to wear my ring, my Aggie ring, wherever I can and we have a lot of fun. My wife and I are both Aggies and, clearly, we run around with a lot of Longhorns, but we have a lot of fun with the rivalry, so I look forward to when we're playing football against each other again. [03:12.8]
Darryl: One day. Growing up in your family, how many siblings did you have?
Ryan: I just have one older brother, but the unique part about my family is my mother was one of nine and my father was one of five, and so I have 45 first cousins and we're all close.
Darryl: Oh, that's really cool.
Ryan: We're all super close and we have great relationships. Yeah, I have a very blessed and fun extended family.
Darryl: Did they live in the Beaumont area?
Ryan: They lived along the Gulf Coast, I’ll say that, so pretty much between Baton Rouge and Austin you can find 90 percent of my family.
Darryl: A lot of them have the same last name or does it vary?
Ryan: No, actually, my dad was the only son, and, of course, my mom had a different maiden name. There's very few Assuntos around. But lots and lots of family. [04:01.6]
Darryl: You’ve got to make sure that your kids don't marry their cousin, right?
Ryan: That's right, exactly.
Darryl: What did your parents do growing up?
Ryan: Yeah, so my dad was a small business owner, so he had literally a mom and pop, big and tall men's clothing store called Men’s Discount Shop and my grandfather had one in Lake Charles, Louisiana. My uncle had one in Tyler, Texas, and my dad had one in Beaumont. It was a family business in every sense of the word. My brother and I grew up helping stock the shelves and count inventory, and do all kinds of things, but he was a small business owner in Beaumont, Texas.
Darryl: That explains a few things to me, which we’ll touch on later, but when you graduated high school going to A&M, you decided to go into ministry versus-- and I will talk about how you're still in ministry and very much so.
Darryl: But in the traditional sense, pastoral care and those type of ministry vocations. When you graduated from A&M, was that your intent originally?
Ryan: Yeah, my intent was vocational ministry and I was in that field for a while. I have a communications degree from Texas A&M and I have a biblical counseling degree from Dallas Seminary, and I will say my journey at Texas A&M was a huge part of-- it was a big faith journey for me. It was a huge time of growth in my Christian faith at that time.
When I got out of seminary, I was a professional counselor and did some college ministry on the side, and that was probably about a six- or seven-year season of my life before I did get into a small family business ,importing and wholesaling flooring materials with my father-in-law.
Darryl: Then you transitioned over, I'm probably skipping a few years here, to the National Christian Foundation. How did you get there?
Ryan: Yeah, so it's a long story. For podcast purposes, it's probably worth skipping over a few things, but I’ll just say when I learned that there was an opportunity to help charitably minded people make gifts in a better way, I was super intrigued. I came to work within NCF in 2014, and so our goal, our mission statement is mobilizing resources by inspiring biblical generosity. [06:11.3]
We work with a lot of business owners, and like the world I grew up in, we work with a lot of family businesses particularly, and we help people create giving strategies so we can really mobilize the things that are in their hands. Coming to work with NCF is a blend for me, personally. It's a blend of my vocational ministry past, as well as my family business past, and now I get to help business owners give more things away and give away assets as well as cash for efficient purposes and in ways that help people really advance their charitable causes in their lifetime. It's more about giving during life than after death, so you can be a part of the giving and enjoy that while you're still alive. [06:54.8]
Darryl: My father-in-law collected sports cards and all growing up, and even as an adult, and just recently, because I enjoyed collecting, too, I collect sports cards, still do, and as opposed to he had all these sports cards sitting around, so he was like, Okay, I'm just going to, when I die, I’ll just give these away, and he scratched his head and he’d go, “You know what? It'd be much more fun to give him out now.”
Ryan: That’s right.
Darryl: And so he started giving him away now and it has been more fun, and as a guy named Ron Blue said, it's better to do your giving while you're living.
Darryl: And so, a lot of what you do is you find ways to do that, which is to help people do their giving while they're living. I mean, not exclusively, but a big part of that.
Darryl: Which is a lot of fun, and oftentimes, we think of giving cash to a church, but sometimes people want to give, they want to give because they want a tax deduction in a specific year, maybe to offset a big year, but they're still scratching their head going, “I just don't know who to give it to, and I just don't want to write a check to somebody, but I want the deduction and I'm torn.” How do you solve that problem?
Ryan: And so, that's one of the reasons people use donor advised funds. It’s because it decouples the tax implications of charitable giving and the strategic grant-making that really requires a lot of thought and a lot of prayer, and a lot of reflection. [08:14.2]
For people who have, say, income is lumpy and they really don't know what they're going to make until the end of a calendar year, instead of writing random-sized checks at the end of the year to the charities that are on your radar, you can make a gift to a donor-advised fund and get your deduction in the year that you make that gift and the year that you earn that income, and then take your time being prayerful and thoughtful and strategic about where those dollars should go. So, you can, again, decouple the tax implications of charitable giving and the strategic grant-making choices to better make use of your entire charitable experience.
Darryl: Yeah, that makes sense, which is something I’ve done personally and I’ve encouraged clients to do, and so I’ll get the tax deduction and then I get to enjoy, I just go online and I was at a gala the other day and I was like, I want to give to this ministry because I just really like what they do. [09:10.4]
By the way, I'm a real nerd on giving. I used to spend a lot of time looking at the financials of every charity that I gave to, trying to ascertain if they're good stewards of the money, if the leadership is aligned, and I spent a lot of time. After about 20 or 30, I realized that, honestly, most of them are pretty good stewards. I know there are -
Ryan: Most are.
Darryl: - some outliers, but I just found that most of them have pretty good hearts and they weren't really doing a bad job.
Ryan: Yeah, we find that to be true, and I love that story, Darryl, because you're a studier, you're a researcher, you love diving into the details of. It’s one of the things that makes you good at running PAX. But what I would say about that is most of the charities you come across do have good hearts. They do want great things for the world and they are doing the best they can with what's been given to them. [09:58.6]
So, how you define stewardship and how you get particular about is somebody using their money well or not, really, there's lots of different ways to use money well. There's lots of different ways to steward a ministry well. The question comes down to do you trust the person that you're giving to and are you aligned with what they're trying to accomplish?
At that point, for most donors, they have to decide, “Do I really want to be just a donor or do I want to try to get into the weeds and control this charity?” in which case, they might want to think about going on staff and not just be a donor. There's a point where you do kind of have to be hands-off and say, “I'm going to trust you to do well with the resources I'm going to give you,” and pray that that goes well.
Darryl: The other thing that PAX has done, and I don't mind people knowing this, is that a portion of PAX is currently owned by a donor-advised fund. Now, the donor-advised fund is built in such a way that whenever I give to a donor-advised fund, I no longer control it. It is out of my hands. I am given a right to be able to distribute or not even to recommend to the donor-advised fund where that money goes. But it's not my money anymore. I have completely given. If you don't completely give it, you don't get the tax deduction, and that's just the rule of the game. [11:14.4]
Ryan: That's right.
Darryl: But I authorize, I give the National Christian Foundation the recommendations to certain charities. My biggest concern, Ryan, if you could speak to this, is the reason I use National Christian Foundation is, if I were to use a secular donor-advised fund, and I don't know these this to be true, but let's say Vanguard or Schwab or TD or Merrill, and I said, “I want to give to Focus on the Family,” there's a chance that they could make the case that it's a hate group and disallow, disallow that distribution, or they could say, “Our policy is to make your distribution public,” so then I can be subject to harassment.
I've seen that in the news, but I’ve never experienced it personally. Do you see that to be a possible trend that could take place in secular donor-advised funds? Give me your thoughts on this. [12:04.2]
Ryan: Yeah, so is it possible? Yes. Let me clarify something you said a second ago. When you make a gift to a donor-advised fund, you are making an irrevocable charitable gift where you lose control of that asset, that money, that business, that stock, whatever it you gave. You have lost control of it. You've given over control of it to that donor-advised fund sponsor.
What that means is you really should trust that donor-advised fund sponsor. You want to know who they are. You want to know what makes them tick. You want to know what their values are. You want to know how they're aligned, because you are giving away the right to control that money when you make the gift, and so you want to be aligned with your donor-advised fund sponsor in every way. In as many ways as possible, let me say that. [12:54.5]
So, if you make a gift to a donor-advised fund and you recommend a grant to a charity, the sponsor has the right to say no to that grant request. If they think the charity that you want to support is a hate group, they can say no. If they, just more generally, say, “Hey, that charity is not aligned with our charitable purpose, with our values statement, with our beliefs,” then they can say no to your grant request and that is a legal right of every donor-advised fund sponsor out there.
At NCF, we make our grant policy public. We make our values public. It's all at NCFGiving.com, and so for people who want to go dig in and see that, it's available. Yes, particularly when you're making gifts of significant size, if it's a piece of a business or a huge income year and you're going to fund a donor-advised fund with a lot of cash, you want to know that you are well-aligned with your donor-advised fund sponsor. It's a big deal.
Darryl: Now we're going to touch on something and we won't be able to really go into the details, but that's why you're here and I’ll make sure if anybody needs to connect with you-- [14:01.9]
Actually, I prefer that if anybody wants to do a donor-advised fund, they check with our advisors so we can do it in the context of a plan, like the other day. We actually did a financial plan for somebody and we recommended that they convert their Roth IRAs, and then at the same time, simultaneously, give to a donor-advised fund. Basically, the Roth IRA transaction was, generally, not creating a taxable event—beyond the scope of this, but if somebody is listening and they want to do a donor-advised fund, come see PAX and then we'll connect you with NCF through us. Text 74868 and just put in “Texas”.
But you touched on something that was important and that's giving of a business, which, again, we gave some equity of PAX to a donor-advised fund. People can give land. They can give portions of their business. It's kind of crazy because you're giving an illiquid asset to a donor-advised fund and receiving a tax deduction that year. Can you speak to that? I know there's some rules around it, but just generally speak to that.
Ryan: Yeah, there's a bunch, and I will say this, this is on just the general donor-advised fund topic. Not all donor-advised sponsor funds have the same gift-acceptance policy. Just like we don't all have the same grant-making policy, we don't all have the same gift-acceptance policy, and so what I'm going to talk about is particular to NCF and not necessarily applicable across all donor-advised funds. [15:15.5]
But at NCF, one of our core competencies is that we have a gift-planning team that is chock-full of attorneys and then it's probably 15 or 16 attorneys deep, and then all they do all day long is look at non-cash assets for the purpose of charitable giving. These are in-house attorneys that have tremendous expertise and experience in dealing with complex assets and charitable giving so that, if it makes sense, either because of a donor's charitable intent or because of a donor's tax situation, or some combination of the two, it makes sense to make a charitable gift of business interest in particular, that can be done. [16:01.6]
Many business owners are familiar with you’ve got a profit and loss statement, you've got some cash left over, and we're going to write checks from the business for charitable purposes. That's great and you can do that. That's not what we're talking about. We're talking about actually making a gift of entity interest itself. Membership units, if it's an LLC, shares of stock, if it's a corporation, making a gift of the business entity itself to charity.
NCF has a team that can organize those documents, that can evaluate your current formation documents and shareholder agreements and partnership agreements and things like that, and then figure out -
Does it make economic sense to make a gift of business interests? In other words, does that gift actually promote more liquidity for charities down the road or not?
Then, two, if it does, how do you legally make a transfer of interest? Every partnership agreement, every business has transfer restrictions on who can own it, how they can own it, and what the processes are to transfer that interest.
Our team helps facilitate that process so people can make a gift of their actual business, if they want to. [17:16.8]
Darryl: That's really cool, and you can also do that with land, too, right?
Ryan: You could do that with real estate, whether it's developed or undeveloped. You could do that with mineral rights. You could do it with intellectual property. You can make gifts of assets of all types. Again, at NCF, we work with you to figure out, does it make sense charitably and is it possible legally? And if so, we can walk with you the entire way.
Darryl: Ryan, you and everyone over at National Christian Foundation have been really good to work with, very professional, so I appreciate all that y'all have done. We’ve covered a lot of ground in a short period of time.
Obviously, there's a lot of rules and we can't get into that today, but I hope everyone kind of got a flavor of who you are, who National Christian Foundation is, along with just an introduction to donor-advised funds and the power they have to be able to time your charitable gift and do your best to reduce your taxable income. Hopefully, people got a teaser of that today and so I thank you for coming on board and sharing your expertise. [18:13.8]
Ryan: Glad to do it. Thanks, Darryl. Have I got one more minute?
Darryl: Yeah, go right ahead.
Ryan: What I would say is, really, NCF, as a Christian donor-advised fund sponsor, we believe that we are all called to excel at the grace of giving, right? That's a scriptural command, and so what we love doing is coming alongside people and helping them give better, helping them really excel at the grace of giving, because we believe giving is a portal to intimacy with God.
In an effort to help people connect their faith and their finances, connect their faith with their giving and let giving really be a portal to growth in their faith, that's our goal. That's our ministry. That's what we try to help with and that's why we like working with like-minded advisors like the folks at PAX, like your team, Darryl, and it's a joy to serve people together in this endeavor. [19:06.7]
Darryl: Yeah, thank you for what you're doing. It's really cool. At first when you say that, I don't really get it, but the more I’ve gotten to know you, I see that you guys really believe that, and that's awesome.
Ryan: Absolutely. Absolutely.
Darryl: Thank you for being here today.
Ryan: Thanks, Darryl, appreciate the time.
Darryl: Yeah, thank you. For those that have listened to the end, thank you and I want to remind you to text “Texas” to 74868. That's “Texas” to 74868, and we'll connect you with an advisor.
In the meantime, I want to remind you that you think different when you think long term. Have a great day.
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