A healthy civil society is an ecosystem. Yet philanthropy remains either transactional ("gift solicitation") or advisor relationship-based ("let me be your trusted advisor"). As a nonprofit, to increase philanthropy you schmooze and solicit donors ("make the ask"), or you can cultivate referrals from advisors who work with wealthy donors. That is current an far from visionary status quo. But to radically enhance the health of our communities, I believe we need to take a more "ecological" or "total systems" approach. To understand an ecosystem you have to know the food chain, who depends on whom, and what. Who wants and needs what? We all, as members of this ecosystem, should support one another in creating an environment in which the good prevails, and all are appropriately served, paid, and rewarded - not just our firm, our charity, our cause, but the whole of which our special pleading is but one part. The good we get may return to us from unexpected quarters as the ecosystem of gifted givers thrives. (I am saying, foolishly enough, "Go at giving with a giving heart.")
What do each of these key players want and need? What do they offer? And how can we collaborate to make our mutual inter-dependence thrive?
- Donors - financially prudent plans with inspired outcomes for self, family, and society. Lower taxes, higher returns, asset protection, risk management, yes, but also fulfilling lives for the parents and the children.
- Financial Advisors - "sticky clients, and sticky assets," but also happy, fulfilled clients who make personal introductions to other potential clients. Likewise advisors wants centers of influence (nonprofits are an example) who make high quality referrals in return for high quality work for those to whom a referral is made.
- Financial Firms - more successful advisors, more sales and assets under management, but also a good reputation in town, and access to circles in which wealthy clients congregate (as at philanthropic civic events).
- Legal advisors - more clients who do more complex planning, but also a good reputation for the firm and access to networks of prospective clients.
- Nonprofits - larger gifts now and later from more active and engaged donors. Lower cost per dollar of money raised as when advisors drop a gift in their laps.
- Community Foundations - assets under management and a leadership role in community life and betterment.
How can we in our respective roles align our efforts, not just in pairs, but in a system that will help each of us accomplish our mission and thrive in the process? What are some of the blockages that might be addressed?
- Donors are frustrated with their advisor's sometimes myopic emphasis on prudent and selfish planning. They want more - more vision, higher ideals, more help with making a difference. This is a driving need in many a client, though seldom addressed. The demand is there.
- Donors are also concerned, as was Warren Buffet, with the effect of wealth on children. They are looking for help in preparing heirs to inherit money and use it responsibly as good citizens. "Who provides that service?" they ask advisors, who have no good answers, usually.
- Nonprofits provide all kinds of opportunities for parents and children to get involved together. A community foundation can help with a small donor advised fund that can be like "training wheels" for a larger gift or foundation later. A community foundation can pair wealthy parents up with the right volunteer and leadership opportunities. But the community foundation is not at the table when estate and financial plans are created.
- Nonprofits are so hungry for money now that they do not position themselves as often as they should as "seed beds" for the soul, or providers of a great service to active donors, as well as other constituents. Many nonprofits are mission-aligned with values-based financial planning, since the mission of the nonprofit has to do with culture, spirit, ethics, knowledge - yet the solicitors of gifts do not see themselves as carrying forward the mission themselves, they are just salesperson's sadly enough making a quota.
- Advisors are narrowly trained, managed and compensated to move money to tools they sell or manage. They are not enlightened enough generally to take a total systems view and see that by moving money to charity they not only do a better job for donors who crave meaning and engagement, and not only do a better job for society, but that they also position themselves for referrals from the the civic organizations to well-heeled donors and potential donors.
- Again, nonprofits don't make referrals, they seek them. Furthermore, they may not be perceived by the donor as trustworthy source of referrals, since they tend to intent on making a repeated "ask," rather than looking out for the donor families overall well-being. The currency in this game is relationships with wealthy people. The greatest "coin" the nonprofit has is the ability to cultivate such trusted and elevated relationships based on meaning, mission, and caritas. But the relationship cannot blossom fully, cannot blossom into a life changing gift, until advisors are involved to help the client be as generous as possible now and later, all things considered within a prudent plan.
So around and around we go, year after year, with giving stuck at a low percentage of income and net worth, and with wealthy people often feeling disconnected, stifled, handled, badgered, and used. Bringing together the positive forces, staging events that promote wise giving and civic engagement; building teams and networks of qualified professionals; promoting active referrals back and forth; helping advisors distinguish themselves through civic engagement, both their own and that of their clients - all that is possible. Call it an ecosystem, or an open system. We are not there yet, the opportunity has yet to be seized, but the vision is increasingly clear as are the next steps.
As more and more wealth accumulates in fewer hands, and as income tax, capital gains tax, and estate tax wanes as the means to recycle the cash, it becomes more and more important that we cultivate the ecosystem that will enable the wealthy to be admirable human beings, legacy leaders, enlightened and engaged civic leaders who can see that success is not measured in dollars held, but in the good done with all resources from time and talent to wealth and connections. Yes, becoming a good person starts at age 2, and I'll bet your nonprofit has great programs for 2 year-olds. Why not align your prospect cultivation with your mission? Give to get. Think what you have to give, before you think what the other can do for you. What helps the ecosystem of giving prosper will help us all.