Many alumni and donors are surprised to learn the myriad ways they can support Harvard philanthropically, through a wide array of assets. We spoke with Karen Johnson, senior director for complex asset gifts at Harvard University, who shared more about the types of assets donors can give as well as the benefits these gifts have for both donors and the University.
Describe your background and current role at Harvard.
I spent about 30 years working with Harvard fundraisers on complex assets and planned gifts in a prior role as an outside attorney at Ropes & Gray. I had the opportunity to move in-house a few years ago—first in a role at Harvard Management Company, and ultimately in my position of senior director for complex asset gifts at the University. While I loved my work at Ropes & Gray, I am really enjoying being in a position that allows me to get to know our donors and to help them position their philanthropy in a way that better equips Harvard to meet this critical moment for higher education.
How do you help donors meet their philanthropic goals by considering the types of assets they can give beyond cash, such as cryptocurrency, appreciated securities, or certain property? What are some of the benefits of giving these types of assets?
We think about complex assets in two ways. One is the type of asset: things like real estate, interests in private companies, and private investment funds. In the past few years, we have also begun to work with several donors who have helped us develop a sound gift acceptance process for cryptocurrency. We are excited about the prospect of helping donors unlock the power of these assets for philanthropic purposes, which could be an exciting part of charitable giving for Harvard’s future.
The second way we think about complex assets is how we structure gifts and how we often pair these assets with planned giving techniques like charitable gift annuities, retained life estates, remainder trusts, and lead trusts. Lead trusts, for example, can be a win-win for Harvard and the donor, providing cash to Harvard now and providing tax-efficient wealth transfer to the donor’s heirs in the future. We have a fantastic team in place that can help walk our donors through the legal, tax, and business aspects of these more novel gifts to maximize the benefit for the donor and for Harvard.
I believe that philanthropy, at its core, is a very personal expression of a donor's gratitude for the past but also their hope for the future, and I get to work every day as part of a talented team of fundraisers to help our donors achieve their charitable goals. Part of my job is to help donors look across their entire portfolio and evaluate how to put their assets to work for charitable purposes. Complex asset gifts can often allow donors to stretch philanthropically in a highly tax-efficient way. These sorts of gifts can be empowering for the donors and game changers for Harvard. We have the expertise in-house to manage and steward these gifts to ensure support for donor-designated priorities. In addition, working with donors on gifts of complex assets involves us in their story. Whether it is a gift of a personal residence or startup company or new fund, we come to understand the donor’s specific personal and professional journey and how and why they are in a place that allows them to give back in this meaningful way. Working with Harvard donors is my favorite part of my job!
What advice do you have for alumni and friends of Harvard who want to fulfill their philanthropic priorities alongside other financial planning goals?
If a donor is considering a gift of a complex asset, the sooner they are in touch with their gift officer or Harvard Gift Planning, the more efficient and effective the gift process will be. One of the key features of a complex asset gift is tax efficiency, and to achieve the best tax result for the donor, the gift must occur before certain transactional milestones are met. For instance, a charitable gift of a complex asset needs to be made before there is any formal agreement to sell that asset to a third party. Once the donor can identify the liquidity timeline, we can plan a gift timeline that accommodates the specifics of the exit transaction.
How do you assess the impact of complex asset gifts at the University?
Harvard has been fortunate to receive some really exciting and transformational gifts over the last decade or so involving complex assets that have allowed our donors to establish Schools and programs, grow Harvard’s campus in Allston, and make meaningful strides in ensuring access to a Harvard education through a robust financial aid program. These gifts of private fund interest, private company stock, and general partner carried interest have moved the needle in a major way, and we still feel their benefits long after the gifts have closed. Truly legacy philanthropy!
To learn more about how you can put your assets to work at Harvard, in ways that benefit both you and the University, please contact giftplanning@harvard.edu or 800-446-1277.