Sub-Optimal Current Outcomes
I think the field of giving may be stuck in a sub-optimal configuration in which donors give less than they might want to give, nonprofits receive less, and advisors make less than they could and provide less service than they should. First I will discuss why we are stuck, then give one thing that each group might do for the good of the field, one another, society, and themselves.
Clients are diffident about their latent passion for giving while talking to advisors. Asked, "Are you philanthropically inclined?" the client's heart closes. "Surely, no one could discuss giving with such fusty professional?" "No," the client says, "I am not philanthropically inclined."
Donors are diffident about discussing their income and net worth with their nonprofit fund-raiser friends. "Keep your hand on your wallet," could be the internal client voice. "If they know what I have they will constantly ask me for more, more, more, more."
Fundraisers don't care how much the donor gives in toto, or what joy it gives the donor, or how much it uplifts family and society. Fundraisers are trained, managed, and incented by and large to get money for their institution. Of course there are exceptions. A few fundraisers serve as philanthropic consultants, but it takes an enlightened institution to be so large-minded.
Financial advisors don't much like giving, real outright giving, because it depletes assets under management. For advisors "giving" means bottling money up in trusts and foundations managed by the advisor.
Attorneys and CPAs worry about giving because they represent the client not the charity, much less society. The tax and legal advisor's instinct is to protect the client from those who want the client's money. Clients who give their wealth away for the good of society don't make economic or legal sense. Nothing learned in law school or in accounting explains altruism or prepares the professional for carrying on a conversation about meaning, purpose, social impact.
Three Things We Collectively Can Do for Happier Outcomes
- Donor/clients can take the lead with advisors and with charities. They can clarify their own vision and come forward as lead partners to advance their concept of the a good life for self, family and society. Instead of waiting to be well-served, the donor must demand it - nicely, of course.
- Nonprofits can treat donors with generosity. The nonprofit can encourage and applaud the donor's total giving, and the joy in that, rather than simply being advocates of one institution. The greater the total giving, in the context of a sensible overall plan, the greater the money raised on average by the institution that actively promotes the donor's overall well-being, satisfaction, and impact.
- Advisors can win by being less grabby. In a suboptimal current situation, some very wealthy and influential people are being systematically under-served. How you get paid on a client is only an issue if you get and keep the client. As donors become more proactive, advisors will lose clients if the advisor stonewalls giving. No, the donor is not "philanthropically inclined." The donor is inclined to find a professional who honors and supports the client's best self with strategies that realize the client's highest dream. If you can't kindle to that, go into the backroom with the scrivners.
If donors, nonprofits and advisors embrace these three strategies, we will see greater total giving, happier clients, healthier families of wealth, and a more vibrant civil society. Advisors will get clients, charge fees, and manage money not given to charity. Charities will ride a rising wealth wave.
Will these good things happen? Not likely, unless the donor takes the lead. Real outright giving is not the shortest path to an advisor payday, and giving will always be cautious without the support of advisors. To jar the situation to a higher set of outcomes, donors must go to advisors and charities not to be handled and processed, but as active partners - in fact as lead partners.
Training advisors, donors and nonprofits to get on the same page strikes me as a small scale business opportunity and potentially significant public service. I hope Inspired Legacies and those who partner with it tend in this direction.