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June 04, 2007


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I think where we differ is that this vision for philanthropic consulting doesn't seem like a lost cause to me, in terms of being a reasonable/sustainable business model. (And yes, it could just be that I'm a young fool.) If you are giving the donor something so precious it is not sold in stores, it seems reasonable for them to give you money in return.

I know the idea of paideia appears to have been left for dead by the many marketers in this blog space, but a marketer's job is generally to connect what they're selling with what people already want. CHANGING what people want isn't the role of the marketer; it's the role of the entrepreneur, who decides what the marketer is selling. As you note, entrepreneurs have demonstrated excellent abilities to change people for the worse - why not for the better?


Thanks for the encouragement, Holden. I am not sure that the model would be, other than tuition, speaking fees, and donations. When you stand with a prospective donor and follow the donor's own energy, you have no idea where the course will lead. As a result you can't position your "financial collection bucket," or pay point, with any given nonprofit or any given investment or firm. There are a few people eking out a modest living doing this, but much less than they could make it they were in the business of persuasion rather than elicitation. Tracy Gary's model is "pay it forward," consultation as a gift, and then a gift in return if the donor is so moved. Pretty weak as a business model, but asking for fees puts people off when they are trying to be generous.

If you have thoughts on a sustainable "model" for open-ended philanthropic advisory services, I would be interested.


I think your analysis is right that it's a tougher model to sell. So all things being equal, you are leaving money on the table by choosing to go this route, but you can leave money on the table and still make a living.

I guess I'm thinking less about philanthropic consulting ("I will help you figure out what you want, for a fee") than about running an actual charity. I think charities should start with what they think is the best way to improve the world, then try to sell it to donors who may or may not already agree. Compromises in message and even activities sometimes have to be made, but I feel that the fundraising I see now has come way too far toward building the message and the charity around what donors want to hear, rather than building the marketing around what they should hear. Charities should aim to educate donors, not just serve them.

When it comes to consulting, it still seems logical to me that you could say "I offer more than tax management; I offer deep discussions about values." Some people would hate that, others would want to buy it. But you know this market far better than I do.


One more thought: it seems that you think one of the problems is that it's typical to charge for "money under management," which means the financial incentive is not to give it away. What about a model that says "I will charge you a fee on what you GIVE (to actual today-work, not to foundations and vehicles) - and you will give only when I can convince you that it's really worth the money"? More like a contingency recruiter or real estate broker (you pay when you've found something you want to buy) than like a money manager (you pay every year regardless).


Yes, an exit fee from say a donor advised fund. I believe some organizations do use that model. I can't help thinking that the best answer might resemble a school, or institute, with materials, programs, tuition, discussions, and ultimately gifts. Your point is well taken about making a suboptimal living is still making a living.

The distinction you draw between organizations and consultants giving donors what donor's want, rather than what they need, is critical. Selling to wants is the path to success. Getting people to want what they need is more difficult, as every teacher knows.


I don't know why you still struggle about this business model issue. You are already operating in the ethic of the gift economy, why can't that work? There should be no reason to assess a fixed fee as we would in a fee for service model, you are in conversation with the donors. You simply have to explain that in order to do the good work that is helping them fulfill their dreams for a better world in their giving plan, and to make that gift available to anyone who can use it, you need a certain amount of cash and other resources. If your clients don't give you more that you can use, enough that you would have to give some of it away yourselves, then I would say the process isn't working right.

Beyond the work of coaching the givers, I expect that a community will form around this network node, and this community might take a more comprehensive approach to their giving. Once projects and people are identified that are doing the necessary work, this community might organize a capital campaign. Several donors would step forward to lead the campaign, and raise the necessary resources for the projects that make it through a collaborative vetting process.

Holden is getting at this above too. Rather than having donors direct funds based on their desire, there needs to be collaboration between donors and activists. Maybe a congress of sorts that identifies needs and funds organizations working effectively on those areas of need, and quantifies the appropriate size of each initiative and authorizes capital campaigns to meet those needs. This should all fit well within models that donors already are familiar with in philanthropy, but would be much more collaborative.


Gerry, excellent comment, thanks. The model you describe is actually the one Tracy and I are groping around with. Yes, she is funded mostly with gifts from donor friends, and secondarily with speaking fees and consulting fees. Yes, we are "donor-centered," but also "community-organized." The donor is called "a donor" because she is engaged with a community of interest. Her giving strategies are created in conversation with peers and with activist leaders. The "congress" you describe is much like Threshold and Momentum and Women Donors Network and other networks in which Tracy is a catalyst.

That said, when you introduce advisors and advisory organizations into the picture, there is no one "Congress" or community. The advisors and firms will bring in prospective donors from all walks of life, all religions, all geographical areas, all educational levels, all shades of political viewpoints. That leads "professional advisors" to be "values-neutral values-based planners."

So, Tracy would be perceived in such "values-neutral donor centered values-based planning" circles as an advocate rather than an "objective and disinterested" resource.

Inspired Legacies has made a conscious decision to try to be a network of networks, a catalyst across the range of causes and communities, rather than a special pleader for a specific community. Better yet, it has made the decision to both work from passion for specific causes, while also being a node on a transpartisan network. (Like being both an owner of the Boston Red Sox and also on the Board of the Baseball Commission. You root for our own team, but also try to keep the playing field level and fair - an old fashioned notion these days, and one worth upholding.)

I am not sure this is good business. I am sure it is a good use of personal time. A sophist does nothing without checking your credit card first, as would a physician's staff person in a medical facility. A Fool, however, just dives in. "First do no harm," he says, reaching for the hacksaw, with a smile reminiscent of Curly in the Three Stooges. "All that matters to me is that your life insurance is up to date."

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