Ronald Blue & Co. LLC and its chief executive, Russ Crosson, have put their faith in charity.
“We have a unique niche, made up primarily of affluent Christian clients — people who want to be stewards — and we help them free up resources to give to foundations, churches and ministries,” said Mr. Crosson in explaining why the fee-only firm has made
charitable giving its chief focus as a wealth manager.
He points to 1 Timothy 6:17-19 as the credo to which the firm adheres in its work. The passage begins with, “Command those who are rich in this present world not to be arrogant, nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.”
The passage also makes sense for the firm's work with its clients, who typically have at least $1 million in investible assets.
Ronald Blue, which has a diversified, conservative investment philosophy, manages about $4.23 billion in discretionary assets.
The philosophy has benefited clients and the less fortunate through tax-deductible
charitable giving.
“We help our clients see that they can give $100,000, and it will really only cost them $60,000,” Mr. Crosson said.
In better times, the firm also works with clients to donate appreciating stocks, get deductions for fair market value and avoid capital gains taxes. But the market decline meant that the firm also had to remind its clients of its four other investment tenets: maintain cash, pay off debts, spend less money than you make, and diversify.
To help clients weather the downturn, Mr. Crosson used objective-based portfolios, segmenting the clients' accounts in buckets and setting money aside for different time periods. “If there was money set aside for the longer term, we won't have to stress if that investment is down 30%,” he said. “Meanwhile, they have ample cash and three to four years of living expenses in the bank. They can relax and ride through this, whereas they would be a little more stressed if they owed money.”
Naturally, some clients weren't prepared enough to pay down all of their debt or accumulate as much cash as they would have liked, because they preferred to remain invested in the markets.
“Those investors are more teachable now,” Mr. Crosson said. “They can refer back and say, "Let's pay off the house and accumulate some cash."
