INCREASING THE FLOW OF CAPITAL FOR GOOD - INVESTING AND GIVING
Joining forces for more impact
In October 2015 four Dutch Charity Desks at banks offering philanthropy services to wealthy clients set up the FAFI network (the name derives from Philanthropy Advice by Financial Institutions). The aim of this cooperation is to meet regularly to share best practices, new perspectives and research results so as to improve knowledge and insights in philanthropy and to be able to expand the number of clients making use of philanthropy advice.
Recent research in the Netherlands shows that wealthy individuals are looking for ways to give more strategically. Charity desks of banks provide this service. In the end, it is all about helping clients with their giving plan and to increase the number of clients investing in charities: making the pie bigger for everyone!
The Netherlands has a long tradition of joining forces. This started when Holland was one big swamp and everybody (regardless of background or social status) had to work together to manage the water, create land and then keep the water out so that we could survive. We even have a verb for joining forces so as to get positive results that are beneficial for everybody. We call it ‘polderen’ (a ‘polder’ is reclaimed land below sea level). So in the Netherlands it is not strange that the philanthropy advisors of four competing banks (ABN AMRO MeesPierson, Insinger de Beaufort (part of BNP Paribas), Rabobank and Van Lanschot Bank) are getting together and sharing knowledge. As a result they can provide clients with the best possible advice available – in short, helping clients to keep their feet dry when embarking on their philanthropic voyage.
Banks provide this service because customers show a keen interest in it and it is part of these banks’ DNA. Guus Loomans of Rabobank states: “We have a long tradition of giving through our foundation and through our employee giving fund. Giving is in the DNA of our Cooperative Bank. To be able to support our clients with philanthropy we started our Charity Management Services eight years ago.” Andrew Mackay of Van Lanschot Charity Service remarks: “The client is asking us about giving and social investing. They see it as part of their financial planning, so we have to provide the client with the best advice we can give which means we need professional staff dedicated to this topic.” Jasmijn Melse adds: “The slogan of ABN AMRO MeesPierson is ‘A better bank contributing to a better world’. Our Philanthropy Advisory Services shows we really walk the talk.”
Getting closer to the client
Speaking with clients about philanthropy gives bankers the opportunity to talk about things besides financials, numbers and investing. It is fun to discuss philanthropy and find out what deeper passions have led clients to support specific charities. It also may involve connecting with other family members.
Some might think that banks offer this service purely because of commercial reasons but according to Andrew, “this is not logical thinking. We are actually stimulating clients to give away money!”. But there are benefits for the bank. Research among staff shows that clients are happy with this service. It also increases client satisfaction. As Jacqueline Komin, Insinger de Beaufort, puts it, “We are moving towards a more holistic approach to banking”.
It might surprise some that in the Netherlands clients pay for philanthropy services. Some banks are experimenting with ‘pay what you want’ fees and others have an hourly or lump sum fee for specific services. ABN AMRO MeesPierson reinvests 25% of fees for activities that stimulate philanthropy in the Netherlands, including research, publications and media activities. Maartje van Aardenne mentions that: “Clients can determine what our advice is worth to them because of our ‘pay what you want’ fees. We have found that clients value our services and this approach works. This is important to us as philanthropy and responsible giving is a serious and professional business.” “In FAFI meetings, we discuss how to spread the word among banking colleagues. Sometimes we feel like pioneers, exploring new terrain, convincing our colleagues of the value of philanthropic services, and making sure they start conversations with clients,” says Jacqueline. “And after 20 years of providing this service, I know that time is on our side now. Philanthropy is a hot topic and our bankers often bring me in at client meetings.” Maartje adds: “We regularly give in-house presentations for our fund managers. Last week after one of such meetings a manager came to me and told me he was so inspired by our talk that he wanted to start donating to charities himself!”
This shows that impact is created within the banks as well.
Effect on clients
At these four banks, clients receive professional support in developing a giving strategy. But clients are also assisted with practical tasks such as creating a website, writing a policy plan, defining the focus and identifying reliable organizations. Banks aim to provide independent advice about whom to support, and some work together with the Kennisbank Filantropie, the Dutch database where charities can register for free, to find suitable organizations.
What is the effect on clients? Andrew says: “Van Lanschot is a bank for wealthy individuals. Discussing financial planning is a big part of our services. In these discussions, the client can realize that he or she has the means to give (more) to philanthropy. One client has no children and helping her with her legacy plan gives her peace of mind”. Jasmijn continues, “Many clients that we visit are involved in philanthropy but often in a very unstructured manner. They donate to whatever comes along, without focus or clear direction. We sit down with them and their family members to work out what they really want to achieve with their giving. Once a clear focus is in place, feedback shows that they feel happier and enjoy their philanthropy more”.
Jacqueline agrees: “At Insinger de Beaufort we also help clients by providing administrative services. We set up the foundation and manage administrative tasks. For the client this means more time for giving and less time spent on the hassles of running the foundation.” Guus adds, “We help Rabobank clients who want to donate over 50,000 euros to develop a strategic plan. We need to listen well as their wishes are often personal and motivated by emotion. We develop the giving plan and help find the right charities, enabling the client to color this world more beautiful.”
Impact on the charities
Do clients of the Dutch philanthropy services of these banks ask about impact measurement and creating change? Jacqueline observes: “It is usually not the question my clients start with. In the beginning, there is o much to think about and measuring impact is not on top of mind. I do see the most entrepreneurial type of giver wanting to support projects that are scalable. For example one client invested in a research programme in a hospital which was, in the second phase, expanded to nine other hospitals.” This gentleman enjoys seeing the larger impact of his given euros.
Andrew explains: “Because of our conversations with clients, they end up giving more to charities. It is often not only about money, they also want to help with their time and networks. Last month we started a programme with Ashoka, so now if we have clients who want to support social entrepreneurs we can direct them to Ashoka or invite them to one of their events.”
Jasmijn says: “Because we work with a national database for charities, we have access to detailed information of thousands of charities. It really helps to ind the organizations that are most effective and best fit our client’s preferences. As a result, money does not go to the most well-known organizations, but to the most effective ones.” Clients do not want charities to depend on them forever, so designing an exit strategy is important to them. Guus adds: “Giving is only a success if at some point you are not needed anymore. Clients are also looking to invest in structural changes, so for example instead of providing food aid, they want to provide knowledge about farming.”
Another typical Dutch word is ‘concullega’s’. It is a mix of ‘concurrent’ (= competitor) and ‘collega’ (colleague). The four banks are competitors but there is enough – non-sensitive – information they can share and discuss. In the FAFI network, they are colleagues first and competitors second, and by sharing best practices they improve their work. The participants in the network all strive towards more people giving, and more euros given, leading automatically to benefits for charities. Clients benefit too by being better informed, giving more wisely and enjoying their philanthropic journey more. This leads to positive effects on the charities that can, in turn, create more impact. Client and charity satisfaction leads to happier employees and a better working environment. Paraphrasing one bank’s slogan says it all, “A better world contributing to a better bank!”.
This article is based on interviews with:
Jacqueline Komin, Insinger de Beaufort Charity Office
Guus Loomans, Rabobank Charity Management
Andrew Mackay, Van Lanschot Charity Service
Jasmijn Melse, ABN AMRO MeesPierson Philanthropy Advice
Maartje van Aardenne, ABN AMRO MeesPierson Philanthropy Advice