May 7th, 2018
Quite frequently, when I speak at an investment related conference, I am asked about what a philanthropy advisor does, and how one chooses among us. Not so surprising that I am asked since, after all, philanthropy is why I am invited to speak. What is surprising is how many don’t realize that there are those of us with this expertise.
In choosing, there are many subjective factors, of course, such as compatibility, but there are also substantial differences in what one does, how one does it, and what the business models are. Periodically, it is useful to give some perspective to new readers, and remind older ones, to help you make appropriate choices.
Some of what I do professionally is to advise funders, philanthropists, families, and philanthropists in their philanthropy decision-making priorities and style. It is a growing field and can include those from a variety of other professions: wealth management, trust and estates, family systems, content expertise, family offices, non-profit management, and more, as well as those of us with extensive background in the philanthropy sector on the funder side. Since there are no barriers to entry, it is very much “caveat emptor” – let the buyer beware. Does the advisor know about and have experience in philanthropy, or about the finances of philanthropy, or about family issues, or about the fields that are a funder’s priorities?
Even among those of us with extensive and relevant professional background, there are a wide variety of business models: Some charge straight fees, some a percentage of assets or giving, some prefer retainer arrangements, some a smorgasbord of services – pay as you go. And more, I am sure. Each business model has its legitimacy, but it is important for any funder to fully understand what they are, how they compare, and ultimately, what is best for the funder. [To take our firm as one illustration: we only provide advisory services on strategy, evaluation, and inter-generation matters; we charge on a project-fee basis, determined by how long a project is estimated to take; and we do not accept any management or retainer contracts. Our model is perfect for funders who want an independent advisor who has no longer-term agenda beyond what we offer, but it is not very appropriate for someone looking for “full service,” or ongoing management of their philanthropy or a part time program officer or an impact investment guru.]
Having determined the relevant expertise, it is also useful to learn something about our methodologies. Most good advisors will probably get you where you need to be, but we may not all get you there the same way. We should be able to articulate why we do it the way we do and show you how our method can be implemented in your situation both during the “process” and after. Not so good advisors give you advice that gathers dust.
My final point is a bit of a nit-pick. Some use the term “philanthropic advisor” and others “philanthropy advisor.” I have a strong preference for the latter. After all, I would hope that any and all of us in this field, and many other fields, are philanthropic. We should all be philanthropic, generous with our time and money, as are many with totally unrelated expertise. But to be a “Philanthropy” Advisor should mean that we bring expertise, experience, and perspective to the services we provide.
Our field is responsible for granting and investing billions of dollars, sustaining an entire sector, influencing public policy, and visioning more equitable societies. I certainly hope we are philanthropic, but even more that we are experts in the humbling and even sacred work of philanthropy. Any client deserves no less.