Lifting the Curtain on Philanthropy Advising

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What unites Aristotle, Andrew Carnegie and MacKenzie Scott, but not your average car mechanic or dentist? The understanding that doing philanthropy well is harder than it looks.

The maxim that “it is more difficult to give money away intelligently than to earn it in the first place” is usually attributed to Carnegie. But the same sentiment was expressed as far back as the 4th century BCE by the Greek philosopher Aristotle, who noted that “to give away money is an easy matter and in any man’s power. But to decide to whom to give it, and how much, and when, and for what purpose, and how, is neither in every man’s power nor an easy matter.”

Fast forward to the present day, when MacKenzie Scott’s distribution of over $14 billion with support from the Bridgespan Group has put philanthropy advising in the spotlight. Unlike more visible intermediaries between grantors and grantees, such as fundraisers and foundation staff, philanthropy advisors — as well as their role and impact — had been flying well under the radar until Scott’s headline-grabbing gifts. But the relationship between Scott and Bridgespan is by no means unique: There are professional advisors around the world providing philanthropy advice to clients who are willing to pay for expertise to organize and manage their giving. 

Deciding which good causes to help, in what way, and how best to be an effective and ethical funding partner is challenging for many reasons. These include the sheer number of worthwhile organizations that are seeking donations, the absence of straightforward ways to make comparisons between them, and the ever-present fear of getting it wrong at a time when good intentions do little to mollify eagle-eyed philanthropy critics. Yet the complexity that good giving involves is not widely appreciated. As Melissa Berman, the founding (and now outgoing) CEO of Rockefeller Philanthropy Advisors, one of the most longstanding advisory organizations, amusingly points out, “While your car mechanic would not give you advice about your teeth, and your dentist would probably decline to look at your carburetor, both will likely happily tell you where to donate your money.”

An overall lack of awareness of the existence and value of philanthropy advice made this a tempting topic, and so we embarked on the first global study of philanthropy advisors. Our research, presented in a newly published book, “Advising Philanthropists: Principles and Practice,” explains who does this work; their background, experience and motivations; and what skill sets and mindsets are required to do it well. We also explore the challenges and opportunities faced by those working in this emerging profession, and how their work might exacerbate or mitigate concerns about problematic aspects of private giving. 

We interviewed 40 philanthropy advisors working in 15 countries, from Australia to Brazil, Italy to India, with a concentration on the U.S. and U.K., where the most developed philanthropy advising sectors have taken shape. Here are some of our key takeaways.

First, we found that the philanthropy advising industry reaches across the world, engages with different types of donors and levels of giving, and encompasses a great variety of styles and approaches. This new cadre of professionals come from diverse backgrounds, including fundraising, financial services, grantmaking and front-line humanitarian work. They operate in a range of settings — within banks and wealth management practices, within nonprofit organizations such as community foundations, and as independent practitioners or part of consultancy practices. Their business models differ accordingly: Some are full-time employees of their clients — within family foundations for example — some charge per hour or a project fee, while others secure donated income so they can offer support to donors for free. 

While all philanthropy advisors share the motivation to see private money used for social good, they have divergent views on issues like how best to select cause areas, how to structure donations, and how to appropriately evaluate the outcomes and impact of giving. They are not passive facilitators of their clients’ wishes, but active agents who add value by deepening donors’ understanding of wider issues and debates in the world of philanthropy and the nonprofit sector writ large. Their influence on donors’ decisions therefore makes it important to better understand who does this work and how. 

Our second big takeaway: Philanthropy advisors commit to this career because they want to see more and better giving. Philanthropy is increasingly being held to higher expectations, which explains why some observers are quick to call out perceived underperformance. Advisors and donors share those expectations. Why else would donors invest their money and time in seeking expert support? Numerous studies show that donors are motivated by a desire to catalyze transformational change, or even “change the world.” Realizing such expectations clearly requires a lot of money, but it also requires — in the words of Tom Tierney, founder of Bridgespan and now a trustee of the Gates Foundation — “complementing heartfelt generosity with a disciplined consideration of what you hope to accomplish.”

This is where advisors can and should play their part by helping donors achieve more positive impact and greater public benefit in their philanthropic activities; by inspiring confidence in donors to give more; and by moving more money away from private consumption or inheritance toward philanthropic distribution. Of course, philanthropy is always a work in progress. Nobody begins their giving as a fully informed and fully formed donor, certain of their ultimate philanthropic goals and how to achieve them. The work of the advisor is therefore to guide a donor along this journey — bringing knowledge, connections, challenge and encouragement. 

Thirdly, philanthropy advisors ought to be natural allies with colleagues working across the nonprofit and philanthropy sector, especially those in fundraising roles. By helping donors move beyond being overwhelmed by choices or being immobilized by the fear of getting it wrong, advisors play a part in encouraging more people to become donors and to be more generous. 

Some advisors and fundraisers do work well together, but there can also be a lack of understanding and even mutual suspicion, especially in relation to the question of who has greater access to, and influence over, the donor/client. There can also be more practical concerns, such as whether advisors who charge fees are diverting funds that would otherwise go to good causes, and whether the rise of the advising profession creates additional gatekeeping to be navigated before fundraisers can initiate and develop relationships with major donors. The frequent (but by no means inevitable) association of advisors with the wealth management industry also heightens concerns that their function is to placate clients rather than to serve the non-profit sector and wider society. 

Three observations from our research may help to provide reassurance. 

  1. Advisors rarely point clients toward, or steer them away from, specific causes. While the fundraising profession exists to cultivate donor support for the fundraiser’s organization, advising is more about cultivating broader donor support for all causes, helping to educate donors and equipping them to sustain their philanthropy. 

  2. The provision of good advice often includes advocating for the nonprofit sector and promoting good funding practices. This should help counter criticisms of philanthropy, which often derive from a mismatch between donors’ grand ambitions and their limited knowledge of the field where they want to make an impact. Smarter and more effective donors are a walking response to critiques of “bad giving.” 

  3. The coming wealth transfer, in which huge amounts of wealth will be passed on to descendants through the inheritance of property, assets and cash, creates an opportunity for a step change in philanthropy. The desire of younger generations to use this bounty to create a more just and sustainable world is well-documented, but good intentions need help and support to graduate to action. As one of the advisors we interviewed explains: “Clients know the money is not going to give itself away.” Keeping philanthropic funds moving to those who can best use them is a key role that advisors play in the overall health of the nonprofit sector.

As the challenges facing our world grow ever more complex and daunting, the need to extend and improve philanthropy’s response will only become more evident. While media coverage and public interest in philanthropy tends to shine a spotlight on individual donors, it is important to bear in mind that they rarely act alone. Philanthropists have always talked to, sought advice from and collaborated with others — including fellow donors, peers, family members and professional advisors. Behind every successful philanthropist, there is likely to be some source of advice and support — a wise relative, friend, lawyer or professional advisor. We are convinced that advisors can enhance the quantum and quality of giving amongst mass affluent as well as super-rich donors, and we agree with advisor and fellow author Sharna Goldseker that philanthropy advisors are “the silent chorus that can help donors to thrive.” 

While philanthropic decisions can be tricky, advisors can help the altruistically inclined navigate analysis paralysis and fear of criticism, and become more thoughtful, effective givers. They can also help shift worrying trends toward lower levels of charitable giving, which likely have more to do with donors feeling overwhelmed rather than ungenerous. Some say the road to hell is paved with good intentions, but we say the path to philanthropic impact can be made more straightforward with the support of a good philanthropy advisor. 

We hope that our effort to lift the curtain on philanthropy advising will increase the overall transparency of the sector and encourage more people to consider becoming an advisor. We also hope it will encourage those already providing professional advice, such as wealth managers, lawyers and accountants, to add philanthropy to the topics they routinely raise with their clients. Lastly, we also hope that it will lead to greater understanding that meeting the bars set by Andrew Carnegie and Aristotle — to give money away intelligently and with excellence — rarely happens by accident, whatever your mechanic or dentist might think.

Dr. Beth Breeze is Director of the Centre for Philanthropy at the University of Kent, UK. Emma Beeston is an independent philanthropy advisor to philanthropists, families and foundations.