Better advice for thoughtful philanthropy: Why it matters and how to get it

Article content

The role of good philanthropy advice has evolved and holds even more potential for affluent people and families. With giving down in Canada by as much as 25 per cent, the community needs philanthropists who are informed and engaged and avoid unintended harm through their giving.

In short, good advice matters.

So how do families find quality philanthropy advice? Community foundations often provide services to fundholders, while offerings at financial institutions, wealth management firms and family offices in Canada vary in breadth and depth. Some provide exceptional counsel.

Some advisors are uncomfortable raising the philanthropy conversation, while others are uncertain about how to meet client needs beyond basic advice on charitable giving structures and tax-efficient gift strategies. They also wrestle with whether and how to bring expertise in-house; this is especially true for those serving complex families with sizable charitable assets.

Such concerns can be due to a lack of knowledge, or limits resulting from fee formulas based on assets under management that don’t account for some of the deeper or longer-term work that generous families might benefit from.

Sadly, philanthropy can be left as an incidental afterthought. This despite the UHNW Institute’s inclusion of a Social Impact & Philanthropy component in its 10 Domains of Family Wealth, distinguishing it as core to the stewardship of family wealth and cultivation of family capital.

As family wealth advisors are increasingly becoming aware, ultra-high-net-worth families want advice beyond technical considerations. Thoughtful individuals and families want to explore issues of purpose and identity, meaningful giving strategies and resourcing, approaches to engage family members of all ages, and preparation for generational leadership change. They often need access to deep community expertise and knowledge of the charitable landscape.

They also crave ways to align the values and issues that are important to them across the spheres of their lives, not just their charitable giving.

The new book Wealth 3.0: The Future of Family Wealth Advising, by James Grubman, Dennis T. Jaffe and Kristin Keffeler, explores how the objective of family wealth is shifting from the preservation of capital to the flourishing of families and family members. This has implications for how advisors work with families as well as the skills they must develop and the need for families to build a more multi-disciplinary and collaborative bench of advisors who see both the trees and the forest. This includes philanthropy.

More from Canadian Family Offices:

• Montreal’s Trottier family foundation tackles ‘existential threat’
• Hotelier Sukhdev Toor came as immigrant and now gives back through foundation
• Calgary’s Van Wielingen family foundation pivoted to mental health
• ‘Lot of light, not much heat’: Climate lags among charitable causes in Canada

Partnering with and drawing on independent professional philanthropy advisors can bring tremendous value and help bridge both identified and unrealized gaps. In fact, savvy families and wealth advisors quickly see how skillful conversations about philanthropy can be influential relative to other parts of the family system. For example, intentional philanthropy has always been grounded in explorations of purpose and individual and collective values, now more widely understood as core to effective family function and collaboration.

Three things to consider

Whether you are an individual, family, or advisor, here are three things to think about as you look to engage professional philanthropy advice.

• First, consider your goals and where you or the family may be stuck. Are you new to philanthropy and want to get off on the right foot, or do you have a long tradition of giving but need new inspiration? Do you need practical assistance to make a major gift to a specific charity? Has there been a divorce, death, generational change or business sale that impacts philanthropy and governance? Do you want to give as a family, chart an individual giving course, or both? Initial clarity on needs and goals will help to align with the right expertise for a family’s circumstances.
• Second, consider the scope and range of your knowledge. Very few people are a blank slate when it comes to giving, and it’s important to honour and draw on experience and wisdom, especially within the family. At the same time, charitable giving is a distinct domain that evolves with new insights, practices, societal expectations and regulatory shifts. As advisors, we also need to be candid about the limits of our professional scope of practice. The principal of a multi-family office once declared to me with gusto that he advises all clients against supporting charities with cost ratios above 25 per cent. This is, in fact, poor advice, as such metrics rarely indicate mission effectiveness. This advice also deprives a vast number of high-performing charities and causes of needed support. Awareness of what we don’t know and where we need support can create opportunities for greater impact.
• Lastly, consider the investment of time and funds that will support a vibrant giving journey. For example, there is a financial cost to getting good counsel. Personal reflection, family conversations, strategic exploration and community outreach also require an investment of time and heart, but with great returns.

When I think about the generous people I have had the privilege to work with, the commitment they’ve made to being thoughtful philanthropists has been commensurate with the aspirations they have of their giving for self, family and community.

Good philanthropy advice can make all the difference.

Dr. Sharilyn Hale, C. Dir, MFA-P, is president of Watermark Philanthropic Counsel, where she helps those who give, give well and channel their wealth and influence for good. She works with leading philanthropists, generous families and social purpose organizations across Canada and the Caribbean. A faculty member of the UHNW Institute and advisor with 2164, Sharilyn’s doctoral research led her to develop a model that helps multi-generational families approach their giving in a way that works. She serves on the advisory council for Carleton University’s graduate program in Philanthropy & Nonprofit Leadership, where she also teaches leadership and governance.

Please visit here to see information about our standards of journalistic excellence.