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Financial Institutions Gain Market Share From Nonprofits in Philanthropy Advice for the Wealthy

Bank of America commissioned The Center on Philanthropy at University of Indiana to do a survey of wealthy donors. About 700 responded. Results were compared to a similar survey done in 2006.  I am proud to say I served with some leading lights on a panel to guide the study's questions. One of the most striking of the survey's findings is this:

Major shift in the source of charitable advice. One of the most striking differences between findings from the 2006 and 2008 studies is the dramatic increase in donors’ use of legal and financial professionals to help them make charitable giving decisions. Our 2006 study found that donors relied on non-profit personnel (41.2%) and their own peers (35.9%) more than any other source for advice in this area. Our 2008 data finds accountants (43.2%), attorneys (41.7%) and financial/wealth advisors (32.6%) to be among the leading sources of charitable advice.

The press release for the Bank of America survey is attached here, as is the final report.
 2008 Bank of America HNW Philanthropy Study - press release.
2008 HNW Study - Initial Findings Fact Sheet 

Bank of America is a fine bank. Amnesty International, say, is a fine nonprofit. For nonprofits to compete and collaborate effectively with the financial institutions and the tax, legal, and financial advisors who now are the preferred providers of philanthropic advice, the nonprofits are going to have to learn more about how wealth planning works. I hope at the American College, through the Chartered Advisor in Philanthropy curriculum to bring the financial and nonprofit people together in meaningful common purpose for the benefit of donors, families, and society --  as well as for the benefit of the money center banks and other financial intermediaries.

Demand For Philanthropy Advice Grows

Wealth Briefing (link may not work since Wealth Briefing wants money for the info, in the spirit of philanthropy):

Philanthropic investment advice is in demand and will be a core service required of wealth advisors, according to a report commissioned by New Philanthropy Capital, a charity offering investment advice.

Wealth managers need more training in this area but the benefits are considerable, such as new and increasing sources of revenue, strong client relationships and new clients from referrals, the report said.

The report, produced for NPC by wealth management consultancy Scorpio Partnerhsip, says that owing to increased client demand more advisors are offering philanthropy services to their clients. But the lack of training means the range of services is limited and many donors are unaware of the advice available.

The research was based on interviews with 100 private client advisors across Europe, including private banks, multi-family offices, trustees, private client lawyers and accountants, and other specialist wealth advisors.

The report goes on to say that wealth advisors who give philanthropic advice tend to talk about philanthropic vehicles (allowing for continued money management), rather than about how to get the money out from management and into the world via direct gifts and grants. This is not surprising given how wealth advisors are compensated.  How, then, do donors get advice on how to make gifts effective in actually making the world a better place? At some point the wealth advisors will have to make room at the table for fundraisers and nonprofits leaders who can partner with them to serve the wealthy person who in turn wants to serve some larger purpose.

Hint for fundraisers: What if the wealth manager saw that the money passing from his or her firm to your organization were going to go into a permanent endowment that the wealth manager would manage? Getting advisors paid is a good predictor of cash flow.

Hint for Donors: It is your money. Ask for what you want. If you want grant-making advice, ask for it.  If you want your nonprofit allies at the planning table, so that the money does some real social good, invite those leaders.

Hint 2: For Fundraisers: Educate donors about grant making and about how to work with advisors for social results.

Hint for Advsiors: Game over? Not yet, but soon donors will see through the financial tools and techniques (moving money around inside accounts at the wealth management firm) and will demand that their philanthropic money goes to work sooner rather than later in strategic gifts and grants. If you want to get and keep good clients, don't fight the mega-trend. If you can't offer deep advice on grants in-house profitably, partner with nonprofit allies. What goes around comes around. Advisors who make good partners get a good reputation and good referrals too.   

Pharisees, Scribes, Rabbis, and Fools in Philanthropic Estate Planning

Judges_robe Approximately:

  • Under 10% of Americans leave anything in their will to charity
  • Perhaps 50% have no up to date will at all.
  • 95% of those who fail to complete their estate plan say it was because they could not see how it connected with their goals.
  • 97% of attorneys whose clients did not complete their estate plan said they were "unconcerned."
  • Over 93% of clients who did not complete their work said the attorney made them "uneasy."
  • Other common complaints from clients were to the effect that the plan was mystifying, and the advisor "talked down" to the client.
  • Still, despite these challenges, over 80% of planned gifts are actually bequests.

I observe, as a trainer of advisors to the wealthy:

  • They are mostly male, or adopt the macho mode, if female
  • They are proud to say, "I do not do touchy feely."
  • They are proud to sound like attorneys, see it as a badge of honor, and have no shame or compunction about talking in the jargon of their trade.
  • Mystification suits them down to the ground. They find it ego-gratifying.  And a mystified client is a good prospect for complex, costly techniques, once the client goes passive and defeated.
  • That the client never finishes the plan does not much matter when billable hours are collected on time.
  • Literary sensibility, refinement of sentiment, a cultured understanding of the the needs of society, a religious sensibility, good listening skills, empathy, are not part of what it means to "think like an attorney."

I observe in working with nonprofits:

  • Many fundraisers are women, often with degrees in English, History, Art, Dance, Sociology, Mythology, Psychology, Philosophy, History of Religion, and other useless subjects.
  • Fundraisers often have highly developed interpersonal skills.
  • Nonprofit personnel are often good role models for sacrifice and for devotion to something larger than themselves.
  • Often fundraisers have limited knowledge of the tools, techniques, and processes of financial planning, estate planning, and investment planning.

My hope:

  • Nonprofits will open a space for wealthy constituents to consider their "last will and testament," not as a dry legal subject, but as the constituent's last act on earth, whether tragic, comic, wise, foolish, vain, visionary, faithful, or inspired.
  • Nonprofits will see major gift fundraising as an extension of their mission, as an extension, say, of the liberal arts, if they are a college or prep school devoted to those, or as an extension of pastoral care if the nonprofit is a religious organization, or as an expression of social justice if the organization is devoted to that. 

Who is the Rabbi here?

  • I have been told by advisors, "Look, Phil, get off it. I am not the client's Rabbi."
  • OK, so where is the client's actual Rabbi? And why is the Rabbi who is out fundraising not raising the ultimate issues? Who else will? Rabbis, Priests, Fools and Liberally Educated Fundraisers. The attorneys won't. Meaning and truth and solidarity or love and human kindness are not attorney work, and will if engaged in disgrace the profession.
  • How, then, can our nonprofits, who are the soil in which living traditions of value grow, nurture their constituent's and help them be fruitful, so that when the apple ripens and falls, its seeds will grow another orchard? Is that not, as we say, in bidnis, a win win situation?

Planned Gifts? Mostly Bequests, It Turns Out

Jonathan H. Gudema, Esq (a Managing Director, Planned Giving Services at Changing Our World):

What about the top 100 planned giving programs based on total dollars reported, including bequests and deferred gifts?  The average number of bequests was 73, for an average bequest size of $239,494.  The average number of deferred gifts was 39 for an average deferred gift size of $90,720.   Planned giving as a percentage of overall fundraising: 14.63%.  Bequests as a percentage of total planned giving:  83.06%.

Does this make planned giving a simple matter of reminding donors to remember your organization in their will? Or, does it mean that nonprofits should be working more closely with advisors on the donor's overall legacy plan, to give it some impact beyond self and family?

Crown Philanthropic Solutions: Creating A Technology Bridge Connecting Philanthropies, Financial Advisors, and Donors

I recently spent 90 minutes with several principals of Crown Philanthropic Solutions being walked through a demonstration of their Donor Advised Fund platform. To get a sense of how it works you can read around on their public site, but to get a real feel for it you need to be given a tour of the Donor site itself.  The company is run by veterans from various disciplines, including venture capital, financial sales, advisor training, DAF fund deployment, technology, general business, and philanthropy. They are alert to emerging trends in online community building.

Crown has given their DAF platform a human, interactive, and engaging interface. It feels like a community site, or multiperson blog. You see faces of donors, donor family, the donor's financial advisor, and the philanthropic advisor associated with the sponsoring nonprofit. You also see timely cause-related stories, pictures, videos, and the faces of those providing the updates. You hear many voices and the buzz of converstion between family, nonprofits, and friends. The site for the donor serves as a dashboard to organize giving through the DAF for self and family, while staying in touch, via on site messaging, with the nonprofits supported by the family. The supported charities can push info at the donor, and the donor can turn that info on or off. Financial information about giving history and investment performance is also available by clicking on a link from the main page.

Crown's primary market could be deliminted by drawing three overlapping circles: donors, nonprofits, advisors. The firm seeks to bring these players into productive relationship on a common platform. Say a college or community foundation sets up the platform. The major donors to the college would have a giving fund on the platform and might give to all kinds of causes, not just the college, but the college would be there in the thick of it, giving its message and building its relationship. The donors to the college would be able to use their current money managers to manage the donor advised fund money. This turns the donor's financial advisor from gate-keeper to door opener.  To the extent that donors use the "Groups" function, inviting into the site their donor networks, the site becomes a prospecting fishbowl for both the sponsoring organization and the advisor. Pricing for the platform includes a fixed set up cost, an ongoing percentage of assets in the funds (scaling down as assets increase), and a minimum ongoing maintenance charge offset by the asset based charges. The out of pocket cost for the charity is not huge. A mid-sized organization could most likely consider it. 

The vision behind Crown's platform like that of the web itself is inclusive, and open architecture.  It is not meant to be a world that gets walled off by a financial institution or a nonprofit. Gracious, lively, and open might be a good word for the experience. The donor can brings friends and family in. He or she can give to many causes. So why would a financial organization or a nonprofit want that kind of openness to the world at large, including competitors? Maybe because in today's world client's, donors, citizens demand it. The sponsoring organization as the facilitator is "in the mix" at all times, and is likely to garner disproportionate gains. If your organization's vision is inclusive of making the overall philanthropic ecosystem prosper, doing a service for donors, as well as prospering yourself in competition with peers, you may find a "mission match" with Crown.

In the mid-term, community foundations will have to ask, "Is this kind of DAF platform and community building platform something we adopt, or are we in competition with such online systems, and the financial organizations that may also sponsor them?" Essentially, what Crown provides is an open-architecture, virtual, virally growing, community foundation.  Once again the net is changing the game. A donor group, an advisor network, a financial organization, could set up such a platform for not much money. Note too, as a community foundation, who is garnering the asset management fees. What is your take down, after advisor and Crown are paid? Are you being built up, or disintermediated? How much "load" (between Crown, Advisor, and Community Foundation) can these funds stand? Does the system reduce admin costs and save you money? How does your sustainability model look at you collaborate and/or compete in this increasingly competitive/collaborative space?

Conflict and Collaboration: The Coming Battle over For-profit Donor Advised Funds

Conflict, including conflicts of interest, are a fact of grown-up life. How well we manage them is often an issue. For-profits compete for clients. Nonprofits compete for donors. Donors use philanthropy to advance competing visions of a better world. One site of contestation today are "for-profit organized nonprofits." That is, a for-profit sets up, say, a donor advised fund family, or provides foundations, or reaches inside a community foundation, or a college, or donor federation, to provide sub-accounts that the for-profit manages. Such services are offered through Philanthropic Services Divisions at banks and brokerage houses which are judged by their managers on profit and loss. "We are not an eleemosynary organization," the managers will chide those who forget for whom they work. Calling a division "Philanthropic Services" should not confuse those who provide them into thinking that money out the door of the bank to the poor is a good thing. It is at best a necessary evil, and cost of doing bidnis.

Imagine a charitable account into which a donor, Melody, has deposited $300,000. Imagine that the account is managed by Jane, an investment advisor whose asset management fee is 1.5% a year, or in this case, $4,500 a year, an amount equal to Jane's lease payment on her Beemer. Imagine that Bill works for a hospital that needs exactly $300,000 more in order to open the new neonatal care unit. Tamar is another fundraiser. She works for the religious organization where Melody has long been active. Tamar needs exactly $300,000 to endow a teacher of religious history for pre-teens.

Question: Are Melody, Jane, Bill, and Tamar partnering here for inspired outcomes, or are they engaged in a tacit tug of war of win and lose?

More enlightened question: In what way can the players in a philanthropic ecosystem rise, at certain moments, beyond competition to cultivate a system in which, on balance all prosper more than they would without healthy collaboration/competition?

Jane the Advisor will lose her Beemer if Melody funds either charity unless Jane picks up another $300,000 somehow. From her client? From a client referred by the charities? Now, say, that Jane does not flinch when the gift is in prospect, that she in fact works late into the night facilitating a gift the net net of which is that infants survive in the hospital, or that preteens get religious instruction, an that her broker dealer loses $300,000 of assets under management. Who will notice? (Other than her manager who may be irked.) Will what goes around come around? Or, will Melody lose the Beemer and maybe her job, if her manager sees she has lost focus on bottom line results? If what goes around does not come around, we all ought to re-read Hobbes, Machiavelli, and Leo Strauss, and cut each other's throats with a courtier's smile. "Faith, hope and charity," said a Fool, "and the greatest of these is charity." Sometimes it takes faith in others to be charitable, because we are giving more than we can rationally afford. Each of us in the giving game can keep an eye out for those who are doing good deeds and acting out of enlightened self interest, or blind faith, or foolish hope. And, by referring to these hopelessly idealistic people, honoring them and making them more visible, we can help the system thrive, to the betterment of all concerned. Jane, if others reciprocate as they should, will lead her firm's top producer list, not because she holds onto the money in that one account, but because she has won the trust and confidence, indeed the gratitude, of some of the best clients in town. When her manager gives her "Rep of the Year" award for assets under management, the ecosystem is working as it should.

Should nonprofits rejoice in each other's victories? Well, why not participate in creating a climate in which donors are more likely to give? Leave a Legacy is one such civic program in which competing nonprofits can collaborate for shared positive outcomes. Sharing the cost of speakers for events is another. Sharing best practices is a third. Or, forming a study group of fundraisers trying to elevate their level of play. Or, forming a group of fundraisers and advisors to collaborate? 

I predict that the next "illumination" among fundraisers will be that for-profit philanthropic surrogates control many a  major gift. We in financial services over the last ten years have flat out whipped the nonprofits at their own game and now control the money, including philanthropic uses. Nonprofits will have to collaborate more with for-profits and with other nonprofits if they are once again to be leaders in the big dollar philanthropic wealth transfer process. To put it bluntly, the state of the game is that for-profits don't need nonprofits because for-profits now own and operate their own nonprofit surrogates. We got the money!, smiles the financial advisor managing donor advised accounts, or assets in a foundation his firm has set up for a client. We control the donor! We don't need Baylor, or the United Way. We run our own charity, set up in Arizona. We encourage our clients to fund our nonprofit family of funds inside our branded donor advised account, or docs-in-box foundation. The clients don't know the difference. They think they are being philanthropic since our donor advised fund is tax-deductible. Their not knowing zip about grant-making suits us fine. An ignorant client just lets the money pile up in the funds, and that works out for us. Beemer number two in my garage.

The rancor that follows the above illumination will lead to many a belligerent moment at cross-silo (for profits with nonprofits) conferences; in fact I have witnessed a little of that at a recent conference as fundraisers and forprofit managers of donor advised funds contested what counts as philanthropy. I suggest that the solution is not name calling, but carefull attention to those in the for-profit philanthropic world who are making sacrificial moves for the public good, and actually moving the money along to the "real nonprofits," the ones doing good works in the community. Notice, please, who does that, applaud them, and help the good that goes around to get around. Unless you do, the money is going to pile up in for-profit donor advised funds whose key benefits are tax deductions for donors and Beemers for those who manage donor advised funds assets.

Inspired Women's Philanthropy: Prototype in Dallas

Scene 1

Around the planning table four men sit planning the fifth man's money. They will take care of the man, his spouse, his business and his capital. They are not going to get into any mamby pamby touchy feely stuff. They are self respecting males;  they don't do anything soft and squishy like making the world a better place. The wife is there too, but unseen and unheard. He (her husband) controls a net worth of, say, $10 million. She is given a philanthropic budget of $15,000 a year. With it she has learned over 20 years so much about the community, by being so active in it. When it comes to wisdom, she has it. Yet she sits silent, and sad, in this planning interview, her life and posterity reduced to documents that are dead to her.

Scene 2

Eight wealthy women, several of whom are married as it happens, sit together at a conference table at a brown bag lunch. The convenor is a planned giving person at a local nonprofit. The topic is how to make their voices and vision heard at the planning table. The advice is that they first articulate their vision of a better world for self, family and society, and then share with their husband, parnter or other decision maker. Then out of that conversation will come talking points for advisors. The woman mentioned in Scene 1 is speaking animatedly about her recent deadening experience. The group encourages her to rethink that scene and see how she might have contributed more and to better effect.

Scene 3

The wife and husband from Scene 1 are talking around their kitchen table about how much is enough for them, how much is enough for kids, what is their fair share of taxes, what role giving will play during their lives and what might go to nonprofits at death. The conversation is loving, two voices, in a duet, rising and falling until a shared vision is reached. He, when it comes to the language of love, defers to her wisdom. She, perhaps, when it comes to the langauge of finance and law defers to him. Her vision prevails. His strategies give it life. Or, will when they next meet with their advisors.

Scene 4

The convener of the bag lunch has helped each woman review (via a professional from the nonproft's board of advisors) her family's current documents versus the emerging vision. Lo and behold! Many a current plan fail to fulfil the inspired legacy vision. Many a family conversation will ensue. 

Scene 5

The convener is surrounded by advisors at that same conference table. She is saying, "I am working with some of the wealthiest women in the city, and their husbands.  They have found that their current plans are out of touch with their vision. They are currently shopping for new lead advisors. I have asked you here to see if you are interested in being considered, but also to see if you would be willing to meet with us to talk about how woman can best partner with advisors for inspired outcomes." In other words, the convener is suggesting that the advisors teach and be taught, that they learn new skills too.

Scene 6

The wife and her husband from Scene 1 are back with their advisory team. They have determined that they would like to leave at death little in taxes, some to children, and the bulk to nonprofits. They have also determined that they would enjoy this giving more if they do it during their lives rather than at death. The advisors have worked out how much the couple can give now, later, and at death.

Scene 7

Around the table for the brown bag lunch, the talk today is all about the new estate plan created by our couple from Scene 1, and about their current giving too. The woman who has had her plans redone announces a major gift to the convenor's organization, a major current gift, to be followed by more as a legacy at death. Her example inspires several other women at the table to do the same.


I am in conversation (in cahoots) with several women in Dallas about such inspired legacy lunches. I believe that what will result are better plans, happier families, and more abundant gifts.  If elaborate estate and business and financial plans are gendered male (even when the advisors are women), maybe we can say that inspired philanthropy is gendered female (even when the giver is a loving husband).  Whatever the gender aspects, we all need plans that embrace the moral health of children and the health of the world we leave behind. When women lead in those areas, men will follow, or should. If men insist that they are touchy feely too, so be it. But, my fellow males, let's call it something respectable, hard and dry, like social investing. 

Megatrends in Philanthropy: Towards Donor, Advisor, Nonprofit Collaboration

Had lunch today with Cynthia Krause, now with Baylor Medical Center  in Planned Giving. She will be delivering the keynote at the annual conference of National Committee on Planned Giving. Her topic is Megatrends in Philanthropy. One such trend is the shift in philanthropy-as-driven-by-fundraisers to philanthropy-as-driven-by-advisors and financial institutions. She interviewed me as she has other advisors on how this trend is playing out and how fundraisers might turn it to advantage. My observations:

  • Small dollar sales activity and fundraising are generally transactional. A contact is cultivated; a story is pitched; an ask is made; objections are answered. Small transactions, but frequent, are the most likely result. Both new salespeople and most fundraisers are managed to activity goals and quotas, as a condition of employment, leading to routinized transactional activity which can be experienced by the client or donor as dehumanizing. ("What am I to these people, an ATM?").
  • Higher level planning activity, whether by major gift fundraiser or financial advisors is relationship based, time consuming, requires a full understanding of client aspirations, values, vision, goals and finances. Gifts and sales are few and often very large. The money moves from both income and from assets. Sometimes the money moved is a big percentage of net worth. The creation of such gifts or sales is a team sport. Insurance agent, financial planner, JD, CPA, and investment advisor may be involved. A family business consultant or family dynamics consultant may be involved. The process is driven by a Trusted Advisor. Fundraisers seldom participate on such teams, as Cynthia Krause's ongoing research bears out.  As a result their major gift ask is often quashed by advisors who say, "Not invented here. If this was a good idea I would have thought of it. Why is this fundraiser trying to upset the apple cart? Why didn't the fundraiser talk to me?"
  • What banks and brokerage houses mean by philanthropic planning is not generally a gift to Baylor or some other outright gift to a nonprofit doing good works in the community. What a well managed bottom line oriented financial institution means is, very often, keeping money inside the bank or brokerage firm in a philanthropic holding tank that they control (foundation, charitable remainder trust, donor advised fund). From these accounts at some later date some money may leak out to Baylor or some other nonprofit doing good works. But for the time being, the firm itself (or its philanthropic product line) is the charity, if you want to look at it that way. That is, they set up tools that qualify for a charitable deduction. They steer clients to those tools. And they hold on to the money as long as possible inside those tools. When the money escapes and goes to work at, say, Baylor, the bank is out the money. 
  • While it is true that advisors and fundraisers have some adverse interests (both want the money under their control; fundraisers want current dollars; advisors want the money in accounts from which grants will be made later). Still, advisors and fundraisers have a common interest in serving the donor. In the end it is the donor's intention, donor's money, donor's life, donor's heirs, and donor's posterity.
  • Another point of commonality: If we don't serve the informed donor client, we will lose the informed donor client. Moral for those who care about philanthropic impact on society: Let us educate the donor to be well informed. That is what Tracy Gary and I are trying to do.
  • Tip for Fundraisers: Instead of closing for a big gift, ask to be allowed to speak with the client's advisors. Meet with them and ask them how a gift might best be positioned, if the client chooses to make a gift. Such an open question will tend to put the advisor's on the team, and make them more like allies and colleagues.
  • Tip for Advisors: Realize that giving is about changing or preserving something in the world. Putting money in a deferred account (Charitable Remainder Trust, Donor Advised Fund, Foundation) may change the world - later. Consider including current grants and gifts in your plan, if that meets the donor's intention. Many donors are quite happy to find that current gifts are feasible for them. (Meaning that they can afford such gifts without it affecting the achievement of their other planning goals.) Nonprofits love  such gifts. From current gifts come current referrals. From such gifts come a better world, sooner rather than later.
  • Tip for Donors: Yes, we all want to serve you. (Or, at least we are all dreadfully concerned about losing you to our competitors.) But all advisors, even fee only, have their own vision of the world, their own ways to get paid, own biases and blind spots. Think well of advisors. Think well of fundraisers. But do not be passive. You have one non-delegatable responsibility: to be clear what you are trying to accomplish for self, family, and society. When you come to clarity and communicate it clearly, perhaps in writing, you will lead the planning team. You can do that with style, grace, tact and good humor, but only your leadership will produce an inspired result. When you lead, we follow. Please do! Tell us what you want to change or preserve in the world. Tell us when. Tell us how, through what social investment or nonprofit. Ask us to work together for your benefit, both fundraisers and advisors. You can convene us.
  • Tip for Nonprofits: One way nonprofits can capitalize on this Megatrend of advisor engagement is to hold events for both donors and advisors teaching them how best to partner. Tracy Gary and I are providing such training to donors, advisors, and nonprofits. The results seem quite promising.  One other thing you can do as nonprofit is to refer to and make visible those advisors and firms who are enlightened enough to support current, direct gifts. That incentivizes advisors to think about social impact, not just tax deductions and money under management.
  • Tip for Those Who Manage Fundraisers by the Numbers: I agree we must sweat these fundraisers as we do sales people. We manage, as bigshots;  they race around town defeating themselves at every turn. We must count what they do each day. Tally it and ask for more, more, more. The result will be what you have now. Donors turning to financial people for advice on giving. Donors keeping fundraisers at bay while they consult their Trusted Advisor.  That will not work to your benefit. I would not counsel you to take fundraisers off quotas. However, it might be wise to counsel them to spend 10% of time learning and using a relationship intensive, donor-centered transformational process as pioneered by, say, Charles Collier, Senior Philanthropic Advisor at Harvard. I predict that for wealthier prospects this 10% of time will, within 2 years, account for 50% or more of results.
  • Plea to Those Nonprofits who are Mission Aligned with Humanity: Does your nonprofit draw on religious traditions, like tzedakah, the heart of compassion, or caritas? Is your organization devoted to the liberal arts, or the culture of a noble human life? If so, why is your fundraising objectifying your best donors? Why not align your giving programs with your institutional values and treat donors as cherished members of the kingdom of ends (Kant) rather than as means to an end? Get your giving process aligned with your deepest mission as an organization, and I (being a prize Fool) predict that your fundraising will flourish as never before.

We (donors, advisors, and nonprofits) do need one another. We all have a role to play in the dance of philanthropy. Out of that dance will come happier donors,  more fulfilled heirs, more effective plans, healthier nonprofits, and a better world. 

Conducting the Philanthropic Dialogue

Randy at InKnowVision, a planning back office for high level financial advisors:

GenSpring Family Offices just released its most recent study, entitled Men & Wealth. You can read all of the pertinent data by downloading the study, of course, but there are some things I find particularly interesting and puzzling.

What puzzles Randy is that his client base and that of Genspring are about the same, successful entrepreneurs, but Genspring's survey shows that most are philanthropic, while Randy, working with clients through their financial advisors, finds that most such clients express little interest in philanthropy. My experience is the same as Randy's when working with client goals  via other advisors.  Here is my interpretation.

Most frontline advisors fail to quicken the client's latent philanthropic or civic passion. The advisor asks macho questions and gets macho answers. Most top producing, commission based advisors, particularly in the insurance industry (with whom I assume Randy works) are in fact men. Most of their clients are self made men. Remember, tough guys don't eat quiche; they don't dance, and they don't do touchy feely. At least they don't want another tough guy catching them at it. Philanthropy is (apparently) gendered female. Here is how a real man asks another man about a sappy topic like giving:

Q. Age?

A. 56

Q. Net Worth?

A. $10.5 million

Q. Year started in your business?

A. 1978

Q. Business form?

A. S Corp

Q. Married?

Y. Yes

Q. Wife a foreign nationals?

A. No

Q. Real Estate owned out of state?

A. No

Q. Health problems?

A. No.

Q. Philanthropically inclined?

A. No.

Q. Want to reduce taxes?

A. Yes

An effeminate, touchy feely, humane,  and entirely appropriate and even necessary conversation might go like this:

Q. Do you have a plan to take care of yourself, family, and business?

A. Yes.

Q. Been reviewed lately?

A. Yes.

Q. Does your family really understand the ins and outs of it all?

A. Maybe not.

Q. Would it be helpful if our firm diagrammed it for you so you could explain it to them?

A. Yes.

Q. In your planning, are there any things you love or care about that go beyond spouse, children, and your business?

A. What?

Q. Do you want in any way to have an impact on something beyond self and family?

A. I am not sure what you mean.

Q. Are there things in the world that get you upset, or you want to fix? Things left undone that you may have wanted to do earlier in life? Do you want to make an impact, say, in your community. country, or in the larger world, if you could?

A. You mean, like, through my church?

Q.  Is that of interest to you?

A. Well, at one time I wanted to be a minister, actually, or a missionary, believe it or not..... I was raised that way. I grew up poor in the inner city. My father left when I was a kid. My mother raised me in the church. I always thought I would be the minister one day and help kids like I was helped.

Q. Do you still plan on getting back to that dream?

A. Yeah, well, sort of. Been thinking of cashing out and doing something new..... Not a minister. It is a little late now for that.  But do something for the kids. But I also want my family and business to do ok.

Q. Would you do more for the at risk children, if you could, if it did not interfere with your other goals for your family and your business?

A. Yes. Yes, I would.

Q. Do you have any idea of when?

A. Not sure. Not sure what is possible.

Q. Would you enjoy getting started sooner rather than later if you could?

A. Yes, I would love it. I have always wanted to to do that.

Q. Would you want your project for the kids to be something you do alone? Team up with others? Start a venture? Give?

A. I don't know. Who do you talk to about this stuff? Can you help me think this through? I mean, am I crazy? Could I actually make this work? I would love to make this happen in my lifetime, if I can....

Q. Yes, I believe I can help. Let me ask a couple of more questions. Does your spouse share your vision?

A. Yes, I believe she will, or does. We need to talk more about it.

Q. OK, what about your children? Have you thought about how much is  enough for them? How much might be too much?

A. Sort of. Yes. I mean we want to do something for them, but they are both doing well on their own. We don't have to leave them rich.

Q. Do they share your vision of helping the disadvantaged? Would they participate?

A. Well, maybe, but not likely, not at this stage. They are still in their twenties. Maybe as they grow they will grow into it. I don't know.

Summary Close:

  • OK. So lets summarize my understanding of what you want.
  • You want us to review your existing plan and diagram it so you can explain it clearly to your spouse.
  • You want us to explore what you might be able to do for the disadvantaged children.
  • You want to do that without shortchanging your other goals for your spouse and your own life style.
  • You want to determine if now is the right time to begin your project, whether it is possible.
  • You want to leave your kids something, but not a lot.
  • So, are we in agreement as to goals for our engagement?
  • As a next step, then, let me collect your documents, see your CPA to get the financials, and let me run some numbers.
  • I will be back with a mini-feasiblity study to see if you can likely afford to take on the project for the disadvantaged at some point in the foreseeable future. I can also introduce you to some people through the community foundation who work with disadvantaged children, so you can begin to scope out what a meaningful project might entail.You might also want to talk to your minister and see if he has projects you might volunteer for in the meantime, to get a feel for the work.
  • Is this process in line with what you want?
  • Would it make sense to meet next time with your spouse present?
  • Should we think about getting the children into the conversation at some point?


The second conversation above is open ended; exploring for purpose, for buried passion; for things the client might not dare discuss with a hard headed accountant, or tax advisor, the things he or she might more likely discuss with a trusted friend. Out of that conversation of purpose comes a new financial plan, a new plan for the business, a new estate plan. In that plan money is freed up for a noble purpose, so is time and life energy. Such clients become passionate advocates for the advisor.When money moves to or through a nonprofit, maybe in this case, the projects done through the client's church, the nonprofit too becomes a passionate advocate for the advisor, and referrals may flow.

So, what does Genspring do differently? I am not sure, but I'll bet someone there has mastered the liberal art of asking open-ended questions, listening with empathy, and following the emerging theme where it leads.

Imagine that a client like the man above dies with his dream buried in his heart. How well served was he? Sometimes there is no dream. But more often, in my experience, a human being yearns to fulfill some larger intention. We are called, as advisor, client, citizen. Don't let the long distance call go into voicemail.