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April 17, 2007


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Lucy Bernholz

Phil - great post, good questions. How to make help donors know all their options, not just the one that their advisors know/benefit from selling is a real question.

Sean Stannard-Stockton

Speaking strictly from the standpoint of a wealth manager who works with philanthropic families (there are many other advisors who need to be having the philanthropic conversation as well), we can see that a similar conflict existed in traditional wealth management. Brokers were paid for selling their own companies product. Today, there are many independent advisors who are paid for giving advice and can select from investment products/choices from across the entire landscape.

The need in philanthropy/social change is to create platforms of various structures and social change options, which independent advisors (wealth managers and others) can plug into. We need to get away from philanthropy advice being a sales process. If you look at community foundations, which do lots of great work, they are still bound by the fact they have to sell donor advised funds. If a private foundation or investment in a social project is a better choice, community foundations can't get paid to help.

Aligning incentives. This is key. The existing infrastructure doesn't exist for incentives to be fully aligned. But that is the direction we need to move in.


Exactly, Sean, and well said. Aligning incentives is the right phrase for it. You can't blame people for doing what they are well trained, well supported, well managed, and well compensated for doing. There are big pieces of the philanthropic advisory landscape for which there is no really attractive and proven business model. How to get paid when the client puts money to work in a social venture, or direct gift? Comes down to hourly. But many make hourly rates plus percentages of assets under management, so for them to go to hourly alone would not "float the boat."

Do you have any specific thoughts on advisory business models supportive of direct gifts and investments in social ventures?

Dan Bassill

I hope the WSJ article generates some new discussion of the way donors and non profits and those served, as well as those who benefit, might connect in on-line forums where they can learn from many resources, connect and build relationships with many stakeholders, and build a commitment to long-term involvement in problem solving and social benefit activities.

One of the challenges is keeping the visibility in front of the public on a regular basis so that we can not only attract a crowd, but we can keep them involved and grow the number of people involved over many years.

With Chicago competing for the 2016 Olympics, I posted a message on my blog suggesting that we encourage cities, businesses and foundations to compete for Gold Medals that recognize them for how good they are at using their resources to help end poverty.

My point is that since the media will be writing about this story at least once a week for the next 2 to 9 years, we have a great opportunity to build off of this Gold Medal imagery to encourage higher levels of involvement in support of social causes.

We don't need to buy the front page of the local newspaper if what the media are writing about draws attention to what we're trying to do.


Great idea, Dan, on the Gold Medal in various categories of giving, or civic engagement.

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