Philanthropy is not a casual pastime.
The charitable sector has advanced considerably since the 501(c)3 IRS code was established in 1969. The philanthropic landscape is increasingly intricate, and those who step into today’s giving arena are no longer passively writing checks. They are playing an active role shaping, convening, and resourcing big movements for important issues at a time when stakes are high.
But too often today, well-intentioned donors struggle to navigate philanthropy’s multifaceted waters.
In my work with donors, I have clients who are surprised and a bit dismayed when their expertise as a successful entrepreneur or financier does not translate into natural aptitude when it comes to social impact.
There are roughly two million nonprofit organizations in the US – and ten million globally. How does one know the most impactful path forward? What approach will lead to real results? Which organizations and leaders align with your goals and what is the most effective way to engage?
Enter the philanthropic advisor. Increasingly, individual donors and family foundations are choosing to bring in a third-party expert; a broker capable of advising, analyzing, interpreting, and interceding to help maximize a societal return on charitable giving.
Think of a passionate athlete who has audacious dreams but is relatively new to the sport. Working with a good coach - one who brings deep experience and also respect for the game, its history, the players, and the outcomes – will help guide this new entrant on a thoughtful course that avoids pitfalls – which, in the case of philanthropy, are often at the expense of nonprofits and community members.
The role of philanthropic advisor has significant potential to be the glue that connects disparate parts of a complex ecosystem, benefiting everyone from the funder to the partner nonprofit organization to, ultimately, the vulnerable parts of society that will function more effectively.
Currently, however, the field in aggregate has not moved past “having potential”. This is because we are not yet functioning in a coordinated manner. To do so, we must put some intention into building the field - thoughtfully, together.
A splintered and imprecise field
The philanthropic advisor role began to surface in the late 1980’s, in an organic fashion. I spoke with Patricia Angus, a long-time advisor to families about this little-known history.
As she shared with me: "In the early days there was a small group of advisors from multiple disciplines. Peter Karoff of The Philanthropic Initiative brought us together with curiosity and collaboration around the question of how to help donors understand and act on their philanthropic potential. Our goal was to increase impact for the good of all."
Though well-intentioned, this convening led to the creation of several independent organizations, each with aims to corner a nascent market. And since then, the field has grown in a largely splintered and competitive fashion:
- Large firms use standard management consulting models and very pricey retainers
- Independent advisors offer bespoke services ranging from one-off projects to full-time capacity
- Family offices often have their own private in-house teams
- It is becoming increasingly common for financial institutions to build advisory services under their wealth management offerings
The term philanthropic advisor is used in all these instances. However, there remains a needless air of secrecy and a competitive nature which breeds confusion: it is unclear whether the same level of service, quality of expertise or competency is behind the advisor title. It is even unclear whether we all do the same thing. To date there is not a singularly agreed-upon definition of the role – or its core competencies.
Now is the time to change this. To demystify the role and pump-up market demand, this field must become well-defined and organized. There is a ripe opportunity for codifying philanthropic advising as a single, strong, specialized industry. Let’s be crystal clear. Take out the guesswork.
Now is the time to build a field
Successful fields share several cemented components, like an industry-wide definition, clear parameters and well-defined credentials.
In an ideal world, the order of events would be defining the field, building the field, and then growing and sustaining said field. In the case of philanthropic advising, we have skipped the first, ignored the need for the second, and we are seeing a landscape of initiatives taking aim at the third.
Several universities including Stanford, The University of Pennsylvania, and Indiana University have robust centers dedicated to philanthropic research and pedagogy; several are preparing to launch training programs for advisors. The Chartered Advisor in Philanthropy at the American College of Financial Services is a graduate level certificate program for advisors, offering comprehensive training in areas like gift planning, financial strategies, and family dynamics. P150, an initiative of Schmidt Futures, has assembled a peer-to-peer network of philanthropic advisors collectively advising over $60 billion in charitable giving. And a handful of intermediaries like Advisors in Philanthropy and The Philanthropic Initiative exist to support those who are committed to strengthening philanthropy practices through this work.
The problem is that nobody is working together; although a surge of players exists, they do not yet function as an ecosystem – a field.
This is a fertile moment for field building. Demand is already growing. Over the past few years the National Center for Family Philanthropy has seen an increase in requests for information; NCFP President and CEO Nick Tedesco told me that many donors “recognize the value of external expertise to help them navigate their grantmaking and governance.”
To influence greater movement of philanthropic capital and stronger results for those on the front lines, advisors must collectively focus on building demand, which will require a concrete, shared brand.
A precedent in field-building
Fortunately, there is a precedent to follow: we can look to the history of the establishment of the field of private philanthropy.
In 1980, the field of philanthropy was still very nascent. That year, John D. Rockefeller III and other leading donors organized the Commission on Private Philanthropy and Public Needs, a private citizens commission to shape the future of their common interest – the relevance of the philanthropic sector.
They could have done this alone – but they chose not to. Instead, they created a cross-functional alliance and included participation across foundations, higher education, government, religion, and labor groups. It conducted over 86 research projects in two years and ultimately produced a series of high-level policy recommendations that put philanthropy on the map in a powerful way.
There is a ripe opportunity to follow this example of collective action. Philanthropic advising has grown into the precursor of an influential field. Enough time has passed to compile and tell that story – and let history lay the foundation that propels the field into its next chapter.
The need for an independent field study
To make headway on some important field-wide determinations, including a baseline definition, I propose an independent field study to compile historical context – and commission next steps.
This is a call for trusted and influential neutral intermediaries and stakeholders to join forces, perform collaborative research, codify the field, and set the tone for a strong future.
The sheer volume of human and financial capital investment in the charitable sector – and the ultimate environmental and social impact at stake – yields a moral obligation to shepherd philanthropic dollars with the highest level of excellence and expertise.
Forward momentum depends on us adopting a "rising tide lifts all boats” paradigm. As Patricia Angus told me, “The need for clarity around roles and alignment of interests is especially acute in these volatile times.”
Let’s connect the dots.
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