The Philanthropic Planning Process(es)

I. Philanthropic Planning Process(es)

People use the same terms to describe different things.  When I ask those who call themselves philanthropic planners to describe their process they all say,

• I meet with clients to set goals.
• Then we discuss tools and techniques to achieve those goals.
• Then we implement.
• Then we monitor.

But what financial advisors mean by goals and what fundraisers mean by goals and what grant-consultants mean by goals are quite different. Likewise the tools and techniques may be different. Typically,

1. Fundraisers go from goals to gift without going through an analysis of the clients overall estate and financial plan. The gift, from an advisor's perspective, is out of context, not integrated, an appendage.
2. Planners generally take goals to be centered on self and family with a glance to a tax reduction strategy called "philanthropy." They may also set and achieve goals around investment strategies, to increase return, reduce risk, and fund specific dollar outflows.
3. Grant making consultants or gift consultants (like Tracy Gary or The Philanthropic Initiative) start with goals for society or a specific cause, and match that passion with appropriate giving grant making strategies, whether the grant comes from a checkbook, a donor advised fund or a foundation. But they don't back that gift up into the financial and estate plan of the donor. They deploy the existing giving budget, and maybe nudge the client to increase it, but they do not work at restructuring the client's finances to increase that giving budget, while also taking into account the donor's many other non-philanthropic goals.   

II. What These Silos Sound Like Defending their Siloed Approach

I once asked a group of leading planned giving consultants if they got the donor's financial statements prior to structuring a planned gift. The only one who did that had been trained as Certified Financial Planner and treated donors as clients.  I also asked some independent fee only  gift/grant advisors if they asked to see the donor's financial statements before recommending a giving strategy as part of the donor's overall financial life.  One gift planner told me, his face expressing horror,  "Phil, that would be a intrusive. I would not be so impertinent as to ask to see the donor's financial statements. Those are none of my business."  To a financial advisor this reticence about getting financial information is baffling. For us making recommendations without seeing the overall structure of a client's financial life is like making a prescription before diagnosis, it would be malpractice.

On the matter of goals, advisors tend to concentrate on quantifiable goals for standard issues, like tax, investment, savings, or protection.  Fundraisers concentrate on goals of their organization, and how they fit with donor's goals.  Goals their organization can't meet are not relevant. Gift consultants talk mostly about goals around societal  impact. They look at many possible ways to put money to work for social good, but they do not work with clients to see that philanthropic picture as part of their overall financial life. 

Who then is responsible for coordinating these similar sounding but actually quite different processes, all of which might be called "philanthropic planning"? Who fits the moving parts into one coherent vision of self, family, and social impact, now later, and at client's death? I guess it must be the client, but few clients are capable of doing this without help. So each of us plans away in her or his own silo. And the results are sub-optimal for client, family and society.

Ah well, the pay is good. And things go faster in a vacuum.

III. Suggestions for Each Silo

To advisors I would say, "Consider nonprofits and change agents as stakeholders. Include philanthropic conversations with these real world action-oriented people as a part of the vision building process for your clients who have a social conscience."

To fundraisers I would say, "A rising tide of philanthropy will boost your boat too. Don't be so quick to ask for a gift. Close for having the donor meet with advisors to see how the gift might be enhanced with the donor's overall estate and financial plan. Ask for a seat at the planning table, rather than a gift. Let the process be your friend. Your cases will take longer but the gifts will be larger and more effective."

To grant/gift consultants I would say, "Wealthy families may have a giving budget, and a foundation with a grant-making budget, but they all have the capacity to do more. Placing the grant making strategy in the context of the donor's overall financial life, with the assistance of the donor's advisors, will lead to happier clients, more giving, and greater social impact. Don't close your process without engaging advisors around the larger question of how the giving fits in the donor families overall financial and legacy plan. Consider yourself as one specialist on a team. Think of team building as part of your job."

To me these three groups might say, "Good luck. We wish you well. But we have a nice process. WE have our time-lines. We know we get paid. We know our process. We will change in some other life, some sweet day."

IV. Suggestions for Donor Clients Given These Siloed Worlds

So, to you who are donors I would say, "You and you alone must be the creator and the keeper of the vision. That is a job you can't delegate. Float lightly among those who want a piece of you, until your vision comes together.  Trying talking to your fellow donors. Begin in conversation that includes representatives of the various provinces in your 'empire,' including those from your business interest, family interests, financial interests, and cause-driven interests. Realize that seeing how these pieces fit (at the macro level of purpose) is most likely your job, like it or not.

V. Appendix in Which the Satirist Cannot be Suppressed, but Settles for a Good Local Beer Instead

"For meaning and purpose, tell them to see their Rabbi,"  I have been told by one philanthropic planner roughly that.  Yup. We have a long way to go, I am afraid, in seeing meaning and purpose as a professional responsibility of philanthropic advisors. For the time being, you can find that conversation with Diogenes in a Dumpter, if at all.  People think that meaning and purpose for a life or a society are about as easy as picking Ford over Chevrolet or vice versa.   In fact nothing is more difficult than achieving responsible clarity about the world you wish to leave behind and ways you can advance that vision given your limited resources, and in community with others.  Philosophy is the mother of the financial sciences. She sure as heck was the mother of moral and political theory and economics too. You could look it up in Locke, Hume, and Adam Smith. (Ah me, if I write another paragraph it will be satire, so instead I am going to stand up, hit post, and walk away from the keyboard before I do myself or someone else an injury. I am going to go to the refrigerator and chuggalug a Shinerbock, a good TX beer with a nice head and a clean finish. Who needs moral philosophy, or philanthropy for that matter, when we have anti-depressants?)