An Exchange of Opinions #25: Charity
By Klarise Yahya, Commercial Loan Broker, DRE: 0095710 MLO: 249261
Building a loan package is both science and art. The science is predictable: certain things must
be included in each file and adjusted for the type of property we’re talking about. The science is
pretty standard. The art is different. A lot of underwriters left the business after 2008 and the
ones still remaining are swamped. She may have 80 files on her desk right now, and the last
thing she wants is another one. So each loan package must be presented with the expectation
that the underwriter, the one who must sign off on your file, hates the additional work, hates the
loan officer, hates the project, hates your client, and hates the client’s pair of breeding
Whippets. The art is in making her change her mind. If that happens, your application will need
fewer addenda and your loan will close quicker, and possibly at a better rate.
But even before it gets to underwriting, which bank are you going through? Banks cannot offer
loan programs or interest rates or terms the bank doesn’t have. That is important. If the bank
doesn’t offer it, you can’t get it. You know that, and that’s one of the reasons you come to me.
‘s my job to present your file to several banks that are currently looking for that specific kind
of loan and are eager to compete for the very best rates and terms. Then I present more-than-one
offers to you and you pick the one you want. This is not shameless self-promotion. ‘s Truth in
So when your loan broker (see the clever switch to the third person? But we both know who
we’re talking about, don’t we?) is constructing a loan package for you, it’s important she has a
really good idea of your needs so she’ll know where to place the mortgage. But it’s not all
business. When she’s on the phone with you and you’re discussing a property loan, there are
almost always little pauses where you discover things about each other. These moments often
lead to friendships. Frequently you learn things you’d not even considered before. Like charity.
Not everyone has the money early in their career to be terribly altruistic. The giving of useful
amounts is something that generally happens later in life, after investments have had a chance to
mature. If you’ve been following these articles over the past decade or more you’ve probably
developed enough net worth that thoughts of charitable giving have already occurred to you.
The purpose of this letter is to discuss something that might be worth considering before
actually signing a check, whichever side of the social fence you’re on.
Allison Armstrong wrote a book (Keys to the Kingdom, 2003) discussing the life stages a man
goes through. She wrote pretty much exclusively about men because her target audience was
wives who needed help understanding their husbands. According to Allison, there are five
stages. The first is the preadolescent Page when a boy tests himself by doing the most
outrageous things. When my sisters and I were seven years old and quietly reading our
individual subscriptions to Vogue in front of the fireplace, boys of the same age were sliding
headfirst down banisters and jumping off shed roofs. If our Page won a $1 million lottery he’d
buy a video game. Some men never get beyond Page.
The second of Armstrong’s stages is Knight, the period between Page and the late 20’s or
early 30’s. The young man is off adventuring. In many ways this is an extension of Page but
now he must do his own laundry. He might join the military or the Peace Corps, or perhaps
become a PRCA bull rider or maybe a staff member for PETA. Think idealism on an entry-level
pay scale. If he won a $1 million lottery he’d fund his own adventures.
Sometime in his early 30’s, he settles down and focuses on his career. He gets married, the
consequences of which are always expensive. He begins a career and a budget at the same time.
If there’s any money left over, he might invest in a little real estate down the block for his wife
to manage. Family time is limited and reserved for weekends; he’s just too busy with his career
during the week to give much attention to his wife or kids. This is the Prince period, when
he’s establishing his domain and he senses the possibility of doing great and wonderful things.
If he won a $1 million lottery he’d invest it until it grew into something really, really worthy of
In his late 40’s or early 50’s the Prince matures into a King. The King is comfortable with
himself. He’s not done everything he fantasized as a young Knight, not even everything he
worked for as a Prince, but it’s enough and he’s satisfied. The King helped out his children
when really necessary, but because he raised them to be self-supporting emergency grants
weren’t required very often and the King’s investments could be left to quietly compound.
Loans were retired. Rents went up. The King was in the sweet spot. He’d learned to live within
his emotional and financial means. If he won $1 million he’d live on the rents and dividends.
Sometimes in his 60’s or 70’s he becomes an Elder. He’s accepted that he’s on the backside
of the trajectory curve and recognizes inevitability of his own mortality. He’s thinking about
leaving some money for his children. Warren Buffett, before he turned loopy about other
people’s taxes, said, Leave your children enough that they can do anything they want to, but
not enough so they can do nothing, and that’s probably a reasonable idea.
Even after making his children well off and giving something to each grandchild, the Elder will
still have a significant sum remaining. As an Elder if he’d won a $1,000,000 lottery he’d plan
for charitable transfers. Even though he hasn’t won the lottery, the Elder begins to contemplate
his legacy and considers making charitable gifts out of his own assets.
Note for hopeful young women: If you hook a beau, ask him what he would do with $1 million
and you will learn the stage he’s going through. If he says Buy a video game throw him back
If we were to greatly simplify the history of social philosophies and their consequences, two
grand ideas would need to be addressed. I’ve scratched out a little figure to illustrate them.
To use this chart, pick one alternative from above the line and one from below. Because there
are two choices above and two below, we have a universe of four possibilities. This chart
applies to individuals, of course, but also to organizations. For example, the National Teachers
Association might be under Alternative 1 while the United States Marine Corps might be under
Alternative 2 (vide infra).
Alternative 1: Do anything you want to do, but demand equal outcomes is the philosophy of
the social left and anyone who thinks cultural equivalency is a supportable position. The Liberal
would argue that simply by being alive she has the right to the same standard of living as the
person who just drove past her bus stop, the person who made more right decisions than wrong,
who stayed in school, got pregnant only after she was in a stable marriage, took care of her
husband, continued to accumulate apartment units for their old age, and raised their children to
Regardless of all the dreadful decisions a Liberal may have made in her life, she demands that
she has access to the same goods and services as anyone else. She would like you to pay for it,
because, sadly, she doesn’t have the funds. The Liberal never quite gets around to what happens
when she runs out of your money.
Alternative 2: Respect authority, cherish group identity and accept that outcomes will be
unequal is associated with the social right and the USMC. The Conservative might take the
position that a society’s culture establishes acceptable behavioral norms, that these norms are
passed on to us by the previous generation and that these norms function as sort of a social
lubricant, but there are variables in life and even if the guidelines are followed people will still
wind up with unequal outcomes. There are, however, at least two types of unequal outcomes:
the one that happened because you consistently made wrong choices (dropping out of high
school; drugs; unwed pregnancy), and the one that just happened (think spinal bifida, etc). If
you believe the main stream media, the Conservative lumps those two causes together and never
considers that what happens to some people might not be an individual problem. It might be a
social problem. But we all know there are some things that are just too big for a family to selfinsure
and we’d hope that decent treatment of those who through no fault of their own (that’s an
important proviso) are unable to compete should be a societal obligation.
Alternative 3: Do anything you want to do, but accept that outcomes will be unequal is pretty
much the Libertarian motif. Although polls have shown that few adults will admit to being
Libertarians when sober, the you made your bed, you sleep in it philosophy has a lot to
recommend it. First, people are not required to monitor the behavior of other adults, and that
saves much time. Second, it lets people elevate themselves, as long as they are competent in
their current corporate position, to the next level up. They can rise to the level at which they
stop being promotable because they have become inadequate in their current position. This
would explain a lot of things.
The difficulty with the Libertarian philosophy is that a very minor individual act can have
significant complications when everyone else is doing it. Take smog, for example. That blue
1966 Bug trying to burp its way onto the freeway in front of you is just belching clouds of black
smoke. If that were the only car doing so, the environment could certainly handle it. But
multiply that by the (formerly) millions of pre-smog checked cars in the L.A. basin and you
could have a pretty convincing reason to support many of the clean air regulations. No
reasonable person could support all the regulations, of course, because they just go on and on
and on. I understand there are now limits on BBQ starting fluid. The problem with government
is that it just doesn’t know when to stop.
Alternative 4: Respect authority, cherish group identity, but demand equal outcomes is the
cry of the totalitarian state. We’re not going to spend much time here other than to note what
Orwell observed: We are all equal, but some are more equal than others.
Ok, let’s go back to our Elder who is contemplating charitable gifts. He’s just read what you’ve
read, and he’s starting to think that if he’s going to give money he should be careful to support
charities that further the causes the Elder believes in. But you’ve got to be cautious where your
money goes because the great difficulty is that the four social philosophies in our graph are
antithetical. They just can’t get along.
If you demand equal outcomes then you’re opposed to people who accept unequal outcomes. To
put it another way, if you’re a secular free spirit, you want to bring down the main sources of
group identity and respect for authority: family and religion. And vice versa. So if our Elder
wishes to leave a legacy that is likely to further the principles he lived by during most of his
adult life, it’s important to consider the philosophical foundation of the organization(s) he or she
wishes to support. This applies whichever side of the social fence you’re on. The only way I can
think to do that is to determine (a) how much of their donations are used for overhead and (b) if
you support where the rest of their charitable income goes. To do otherwise would be to
diminish the principles by which our Elder earned the wealth he is now passing on. As one of
your possible sources, and you should have several, you might refer to
Klarise Yahya is a Commercial Mortgage Broker. If you are thinking of refinancing or
purchasing five units or more, Klarise Yahya can probably help. Find out how much you can
borrow. For a complimentary mortgage analysis, please call her at (818) 414-7830 or email