How Philanthropy Rewires a Life | Dan Pascone with Melanie Davis | Ep #26

Melanie Davis is the VP of marketing and development at CityTeam, where she oversees the development and marketing team. In the episode, she also shares her own story: she went through CityTeam's residential program for substance abuse, says she has been sober for 14 years, and now raises funds for the same program. She and her husband also personally support CityTeam.

CityTeam is a faith-based nonprofit that helps men and women overcome substance abuse, homelessness and food insecurity. It has 5 locations: 3 in California, 1 in Portland, Oregon, and 1 in Chester, Pennsylvania. Services are free to the people who receive them, and the work is funded by individuals, corporations and foundations. Melanie sums up the approach as "a hand up, not a hand out." She says many clients are women fleeing domestic violence or people returning from incarceration.

She points to these parts of the work:

• Residential and transitional housing: Housing paired with weekly case management. Melanie describes the long-term program as 10 months.
• Job skills: The City Team at Work program aims for a living wage, which Melanie puts at $26 an hour for a single person in Santa Clara County. She mentions certifications such as Google IT and connections to unions.
• Food and neighborhood support: Groceries, plus a program called Elevate in neighborhoods.

Melanie says donor trust comes down to stewardship and results. She notes that CityTeam's president was a finance executive at Seagate, which gives donors confidence in how dollars are managed. On results, she says many programs see sobriety rates under 20%, while CityTeam's long-term program has a sobriety rate of about 70% a year after completion, with women about 2 percentage points higher than men [VERIFY: guest-reported figures, not independently verified]. We include these numbers because Melanie shared them, not because we have confirmed them. Any donor can ask a nonprofit how it measures outcomes and over what time period (we cover how in the FAQ below).

Melanie also points to a gap that giving alone doesn't fill. Many CityTeam clients come from backgrounds of scarcity, and she describes what she calls financial ignorance. Financial training is part of how the organization helps people rebuild.

Melanie says CityTeam welcomes cash gifts, DAFs and gifts of stock, and she points donors to the legacy giving, stock donation and DAF pages on cityteam.org. She is candid that she isn't a financial expert on DAFs. That is where Dan weighed in.

Dan's pitch for a donor-advised fund comes down to 3 things: you control the timing of the tax benefit, you can invest the dollars while they wait, and you can give to causes on your own timing. He says DAFs fit well in big income years and are underutilized, because many people assume they are only for the ultra-wealthy.

Melanie shares an example of DAFs at work. During COVID, CityTeam ran a capital campaign for a 50-unit apartment complex for women and children coming out of homelessness, and she says an estimated 40–50% of them are fleeing domestic violence. Donors used DAFs to give to it.

A general note from us: a DAF is a giving account held at a sponsoring charity. Contributions are generally irrevocable, deductibility generally depends on itemizing and on percentage-of-income limits, and the rules can change. Check current rules with your CPA before acting.

Melanie sees 4 shifts:

• Digital marketing: Reaching donors where they already spend time online.

• Multi-generational engagement: Younger donors want to be hands-on, not just write a check.

• New asset types: She says CityTeam plans to accept cryptocurrency donations "this coming year" [VERIFY: timing, said at recording].

• Speed: The need to pivot quickly as donor expectations change.

Gifts of crypto and other appreciated assets carry their own tax rules, so check with a CPA before giving.

Dan closes with quick questions. A few answers worth noting:

• Habits: Melanie stacks habits by planning calls while she drives. Dan recommends Atomic Habits.

• Food and fun: A new espresso machine for coffee, and French fries on an "80% healthy so I can be 20% unhealthy" rule. She also uses music as a tool.

• Milestone: Balance and time management.

• Advice to her younger self: Pursue financial education earlier. She came from a single-mother household with little money.

• Dan's takeaway: "Don't just pass down assets, pass down knowledge." We explore that idea in how families prepare kids for wealth.

Most executives give reactively: a check at year-end, a table at a gala, a request from a friend. The structure of the gift gets decided last, if at all. 3 things tend to get missed:

• Timing: A one-time income spike, like an RSU vest or a large bonus, is often when a deduction has the most value. A DAF lets you separate the year you take the deduction from the years you make the grants.

• What you give: Cash is the default, but appreciated assets held longer than 1 year can generally be given directly, which may avoid recognizing the gain. The IRS covers the rules in Publication 526.

• The knowledge gap: Melanie's advice to her younger self was financial education. Dollars help today. Knowledge lasts longer.

This is a hypothetical with assumed figures, for illustration only. It is not a projection, a recommendation or a client case.

Say a 48-year-old executive earns $550,000 in a typical year. This year, a $200,000 RSU vest pushes taxable income to roughly $750,000. She plans to give about $10,000 a year to a few charities over the next 3 years, $30,000 in total. Instead of writing 3 separate checks, she contributes $30,000 of shares held for more than 1 year to a DAF this year. The shares have a cost basis of $12,000, so $18,000 is unrealized gain.

• Deduction: At an assumed 35% federal marginal rate, a $30,000 deduction is worth about $10,500 in federal income tax, if she itemizes and stays within the percentage-of-income limits.

• Gain avoided: At an assumed 20% federal long-term capital gains rate, not selling the shares avoids about $3,600 of tax on the $18,000 gain, before any 3.8% net investment income tax.

• Giving schedule: She still recommends $10,000 a year to her chosen charities over 3 years, and the DAF can stay invested in the meantime.

Real life adds state taxes, the alternative minimum tax, itemizing thresholds and the fact that DAF gifts are irrevocable. Recent tax law changes may also affect charitable deductions, so confirm current rules with your CPA. Our video on the 2025 tax overhaul is a useful starting point.

We treat giving as a planning decision, not an afterthought. In Life-Driven Planning, our 6-phase plan (cash flow, retirement and hybrid retirement, risk, expense and goal, tax, and legacy), charitable giving touches the tax and legacy phases and connects to everything else. For executives with RSUs, options and bonuses, we map giving against vesting dates and income spikes using our Equity Compensation Playbook, our structured rules for equity decisions. We then revisit it in our Quarterly Strategy Rhythm, our ongoing plan updates and decision reviews, so a big income year doesn't pass before a giving decision gets made.

We also help clients think about what they pass down, including the knowledge Melanie describes. We discuss CityTeam here because it is Melanie's organization. This is education, not an endorsement of any charity or a solicitation for donations.

This conversation is for corporate executives and senior leaders in their 40s and 50s, with household income of $500,000 or more and complex compensation like RSUs, stock options and bonuses, who give regularly or want to give more intentionally. If your income swings from year to year and you want your giving to line up with your tax picture and your values, this is for you.

If you give regularly, or want to, and your income includes RSUs, bonuses or options, timing matters. A free Wealth Strategy Call is a low-pressure conversation about your giving, equity and tax picture. Book a free Wealth Strategy Call.