An insider view of the US market

Chances are, if you ask your financial advisor for ideas about how to deal with a bothersome tooth, she will decline to offer a point of view. If you ask your dentist about how to write your will, he’s likely to ‘pass’ on answering. But if you ask your financial advisor, your dentist, or even your car mechanic about where to donate your money, they will be delighted to reply.

Advising on charitable giving, in other words, is regarded more as common sense than as a professional activity. Want to set yourself up as a philanthropic advisor? Go right ahead. There’s no certification, registration or qualification in any jurisdiction.

Sure enough, many people (although not so many in the past year) have decided to become philanthropic advisors, reasoning that it is better to give than to receive. Some of them tell us, with charming candour, that they think it will be more fun to give away money than to try to earn it, or that they are weary of the law, accountancy, public relations, investment management – or simply of working hard. Philanthropic advising, they are convinced, is easy, gratifying, and remunerative. Since they are not listening to a word I say, I tell them they will be successful. Philanthropy means ‘love of humankind’, but it is a struggle sometimes.

Having confessed my sins, I feel better, and am prepared to address the topic seriously. Over the past decade, many well-qualified, thoughtful and ethical individuals and entities have entered the field of philanthropic advisory services. In the US, the pioneering entity was The Philanthropic Initiative, founded by Peter Karoff and now ably led by Ellen Remmer. There are now a handful of US-based entities (including Rockefeller Philanthropy Advisors) with national and international capacity, and I’m sure more will come. There are also dozens of topflight regional firms and individual advisors with deep expertise in many important issue areas. The UK has several terrific firms and practitioners, as does continental Europe. Philanthropy advisory services have also emerged in the Middle East, Asia and Latin America.

What accounts for this blossoming? Trust me, it’s not because the work is easy or lucrative. But private philanthropy has entered an important new phase worldwide, marked by seriousness of purpose, an orientation to results and a global outlook. In addition, wealth holders increasingly are convinced that philanthropy is not just a retirement hobby, but one that is part of a vibrant, complete life – and that it can and should involve their whole family.

Among other profound consequences, this ethos means that more donors or potential donors don’t just want to give to what they know, but to what they know to be effective. And that process involves research, analysis and exploration. Many donors choose to do this themselves – with remarkable effect. Others seek to get professional help with this research, analysis and exploration; hence the wonderful opportunities for those of us fortunate enough to be philanthropic advisors.

We work with people who have the capacity to ask the right questions – and then act swiftly on information and insights from trusted sources.

In fact, philanthropic advising could be growing even faster if it were not for two invidious factors. The first is the wide-spread conviction that since being charitable is a natural impulse (and indeed it is), one should naturally be able to carry it out unaided. Many potential donors are embarrassed at the idea of seeking professional help: they feel it must indicate that they are not truly charitable. Often their financial, legal and other advisors reinforce this view. Lurking beneath that assumption, in all too many cases, is a general sense that the charitable sector is simple and easy compared with the business sector, and requires no expertise.

Second is the presence of those self-proclaimed philanthropic advisors (see the above rant) who have no experience or resources – they reinforce the idea that no expertise is needed to use philanthropic resources productively. What could change those perceptions? First, philanthropic advising needs to organise itself as a genuine field of practice, with a code of ethics, standards and criteria. Ultimately, certification should be a goal. The aforementioned financial advisors, dentists, lawyers and accountants are all certified.

A good start in forming a field of practice is being made through various groups in the UK and the US, and it would be ideal if these nascent efforts could be connected if not combined. A second force for change would be more active communication by philanthropic advisors and, if this works, by financial and legal advisors, and then donors themselves, about how  philanthropic advising can help donors achieve their goals efficiently and effectively. Nothing succeeds like success, and we have great successes to celebrate.

Melissa A. Berman is President & CEO of Rockefeller Philanthropy Advisors. www.rockpa.org