Wealthy people would give more if they had more trust in nonprofits and more help from community foundations and financial advisors, so says a new survey from Luxury Institute whose motto is " The Knowledge of Luxury, the Luxery of Knowledge." ( Download key findings in pdf .) Is philanthropy a luxury good? No, but it is probably true that financial advisors who want to market themselves to the wealthy, and get themselves a new Beemer in the process, would do well to treat philanthropic advice as an essential client service.
Getting advisors, causes, and community foundations to collaborate effectively, particularly in working with new money or with blue collar business entrepreneurs is difficult. Advisors and community foundations compete as well as collaborate for assets under management. Advisors look upon giving as part of an overall estate or financial plan, and as a tool or technique of tax reduction. Community foundations and causes think of giving as a transaction to be promoted among those who are cultivated. Community foundations working with established wealth and old line community leadership may be nonplussed by wealth embedded in 7/11s, lumberyards, car washes, beer distributorships, and Rotor Rooter franchises. Nonprofits too, often think of the donor as a "donor," rather than as a parent, business person, or visionary, with his or her own complex situation and capacity to lead. (Nonprofits contrary to the teachings of both Kant and Jesus all too often see donors as means to the nonprofits ends, rather than seeing the nonprofit in service to the donor's ends, or donor and nonprofit as a Kingdom of Ends. The nonprofit wants the donor to give mightily - but not to others, just to them, as if the donor were the cow and they were the milkmaid. What donors want, often, is active agency. They want to lead in their giving as they do in their working lives, not be handled and milked. They want to be active agents whose money and engagement leads to gratifying results, so that there is a feedback loop, and some accountability, as there would be with an investor in an entrepreneurial business.)
If you work with a client from A-Z, from vision of a life and a legacy, through the financial planning, to the gift, and then from the gift to specific projects carried out with the donor's money inside a nonprofit, or via a nonprofit the donor creats, or via a social venture business the client creates, or in cooperation with an activist building a movement, you feel that you have "gone a journey," almost like Marco Polo, through any number of cultures and way stations, where those in the middle journey have never heard of those at either terminus, those at the end points have only the dimmest sense of the middle. Going end to end in a giving project for a client you talk many professional languages, and meet many for whom their "parish"
of professional expertise is the whole world. All the studies I have read, and all my personal experience goes to the conclusion that most who work in philanthropy are like country folk who know only the road they walk daily, and have little interest in walking the longer journey that a human being (call her a client, donor, parent, citizen, visionary, leader, sojourner) must travel to bring vision through money to impact. "That is not my role, not my job, don't get paid, not how we do it," that is what you hear over and over. You quickly see how the compensation systems of advisors, and community foundations, and nonprofit fundraisers make inveterate the habits that lead to the unhappy donors that survey after survey shows. How we get these cultures to collaborate effectively (and sustainably i.e., on a cash flow positive basis) is my central interest these days, one shared with Tracy Gary at Inspired Legacies.
The business person who figures this all out will get the Beemer. "The knowlege of luxury, the luxury of knowlege." Maybe if we figure it out, and do it right, we might even do some good, unleashing the pent up idealism of our fellow citizens and uplifting our communities. How do I get paid for this? Have not figured it out, and it seems almost obscene to ask when the topic is giving, and helping those in need, but getting others paid royally is the way this work will get done. Until we can show results all around, including the Beemer for the advisor, and the advisory firms, the real givers will be ill-served. You would have to a saint, like Ms. Gary, to lead by example, giving sacrificially in order to encourage others to do the same.
To end on a positive point: Charles Collier of Harvard and Ron Black of LDS Philanthropies are among those who share the vision of philanthropic advisor as a trusted member of a donor's planning team; they see that in doing what is right for the donor's overall financial, estate and gift planning, the team not only stimulates a donor's overall enagement and giving, but garners more, on average, for the fundraiser's institution than could be extracted by a conventional "ask." Some advisors will ask, "What is in it for me?" And we have to answer that, but those who begin by asking the donor, "What can we accomplish in community with your advisors, your family and causes you care about?" will be in the forefront of an emerging profession that may yet transform our sector and the world for the better.