Philanthropists and Professional Advisers: Working Together for Lasting Change
On June 14th 2017 Philanthropy Impact organised an event in Amsterdam with the title: “Philanthropists and Professional Advisers: Working Together for Lasting Change”. Besides spreading knowledge and exchanging ideas, this Roundtable event is one of those opportunities to meet and network with professional advisors, philanthropists, trusts, foundations and charities. Four speakers gave a short presentation to the audience of more than 50 attendees after which an interesting panel discussion was chaired by Dr Maximilian Martin (Global Head of Philanthropy - Lombard Odier). The central topic of the discussion was how professional advisors can help philanthropists to translate their motivations into action, in order to achieve lasting impact. Speakers at this event were: John Pepin (Chief Executive - Philanthropy Impact), Andrew Mackay (Manager Charity Service - Van Lanschot), Karl Auersperg-Breunner (Wealth Advisor - Lombard Odier) and Ana Morales (Philanthropist & Founding Member of the Maverick Collective).
Results of research on philanthropy
Some of the results of research that had has been carried out recently in the UK were presented. The result outlined three stages of philanthropy advice given by advisers to individuals and families of wealth. Besides, results indicated that only one in five of the UK’s advisory firms offer philanthropy advice even though clients are increasingly interested in receiving more of this type of service. The research shows that philanthropists who take professional advice give 17 times more than those who do not. Some of the implications and opportunities for advisers, philanthropists and charities based on the results of the market research were discussed. For example, the research indicated that clients who had received professional advice rated that service with 5.9 out of 10. Therefore training for advisors in philanthropy was recommended, which is also a business opportunity for financial institutions.
Philanthropy advice adds value to the bank
Research among clients shows that 50% of the clients find it suits the bank to have philanthropy advice services. The same research indicates that 20% would actually take the advice. Because 10% receives advice already, it would suit banks to offer philanthropy services to the other 10% of their clients. The process banks have to make to deliver philanthropic services could be quite a challenge, for instance because new product approval (legal, compliance) is needed. In the end, as one of the speakers indicated, three achievements will be accomplished: it helps clients, it adds value to the bank, and it contributes to a better world.
What information is needed?
Research shows there is a lot of information about what kind of philanthropic advice is needed. The challenge for bankers and wealth advisors is to find out where to get the information which serves their client need best. What is needed may differ a lot between individuals and families, for instance between families with active businesses and those which sold (part of) their business (and receiver dividend). But for all of them the drive to be active in philanthropy comes down basically to the combination of two things: creating their own legacy and giving something back. In this perspective a critical note was made that the ‘traditional’ bankers do not always ‘read’ the client’s needs the right way, so the client might not be helped.
Networks and junctions
Wealth advisors often need a strong network of other advisors to refer to, especially in case of advising international families which is quite complicated. A lot of (starting) philanthropists struggle, partly because there is no access to the right information and advisors. It would be very useful to establish junctions with family advisers. And to establish a network so advisers know whom to direct to, which could be seen as ‘outsourcing’. But personal contact with the client is seen as essential for building understanding and trust.
It was put to the attention that more and more emphasis is put on impact. It was mentioned that there are still some rigid forms and methods existing in how to measure impact. Some topics as mental health and happiness are not easy to measure. In practice it could be a tough process to value and increase impact. As been stated by one of the speakers: “better access to information (read: monitoring data) means the client is better informed, which will eventually lead to higher impact”.
In this perspective it was suggested that wealth advisors and philanthropy advisors have to make their own list of suitable target beneficiaries. And by selecting one you should also check the capability of directors and supervisory board. But not everything can be determined which means that overall one should have faith that the beneficiaries is worth the grant.
During the discussion the ‘next generation’ was given specific attention. A general observation is that the next generation wants to do philanthropy in a different way. This is the case with families, as well as in general philanthropy. Philanthropy could bring families together, for instance when they lost contact after the business had been sold. But this should of course not be the only driving force for 'doing good'. There are many ways how to involve the next generation. One example is the ‘next generation academy’ of one of the joining banks. Another method practised is bringing the family together in a meeting with tax-advisors and legal specialists, learning by doing or puting different families together to exchange insights: what do we want and how to do that.
Join and share information and best practises
The number of philanthropic advisors is growing, and the panel sees that as a good development. The more advisors are active and involved the more money will be donated and invested. Unfortunately, best practises and relevant information often remains at the parties involved, whereas that information would be very useful for others. By joining meetings and conferences, one is able to go beyond the “data” and develop insights in trends. In that way one get a better understanding of the topics and what is going on, so to be able to advice clients better. An appeal was made to join and share knowledge and forces so that professional wealth advisors like charity desks could collaborate with philanthropy advisors. First steps are made, such as with this seminar to bring people together. And bankers could start approaching their clients differently, less business oriented.