Well-advised: How charities can work with philanthropy advisors 1

The demand for philanthropic advisors by major donors has been steadily rising over the past few years, but how can charities work through the advisors to access their wealthy clients? Lena Schreiber lifts the veil on the world of philanthropy advice

Three years ago a couple were sitting in New Philanthropy Capital’s offices with a lot of money to give away but no idea of how to do it. They had the broad goal of wanting to tackle global poverty, but knew little about international development, having never even heard the term ‘NGO’. Today the couple are committed, informed and enthusiastic donors, supporting microfinance, water and sanitation projects abroad, and mental health charities in the UK.

The couple were introduced to NPC by their private banker, who recognised that they could benefit from some professional help. “We wanted to understand how to achieve the maximum return for each pound spent,” explained the couple. “We realised that we needed expertise to help us.”

This role of philanthropy advisor is one increasingly played by private banks, law firms, accountants and family offices across Europe. The last 12 to 18 months has seen a huge growth in advisors offering philanthropy services to their clients. In the second half of 2009 alone, two private banks developed their philanthropy offering: Standard Chartered set up a new philanthropy service; and JP Morgan hired a charitable giving expert to head its philanthropy team. Earlier in 2009 Barclays Wealth also appointed its first head of client philanthropy.

Client demand for advice on giving has prompted the development of many of these offerings. In interviews carried out by the research house Scorpio Partnership with high net worth individuals in the UK, Switzerland and Germany, 90 per cent said they wanted philanthropy support from their advisors. A recent survey by one private bank indicated that 90 per cent of its clients had planned to continue or increase their donations in 2009. If anything, the recession has got people thinking about their philanthropy in strategic and value terms.

“I have definitely seen an increase in the need for philanthropic advice over the last five years,” says Tim Thornton-Jones, a partner at law firm Lawrence Graham. “The current recession has not stopped people from being philanthropic - if anything there has been more interest, and certainly more interest in getting it right.”

In delivering philanthropy advice to clients, there are typically three approaches which advisory firms take. The most common is to offer help directly - usually with the practical and legal side of giving, such as setting up a foundation, giving tax-efficiently, or handling the admin of a client’s trust.

The second is to refer clients directly on to third party experts, such as NPC or Geneva Global, for help with issues such as identifying which causes to support, setting objectives, and evaluating the impact of funding.

The third option is for advisors to refer their client to an external expert, but to continue to work alongside them -a joint relationship which often works particularly well.

Despite many firms offering only basic philanthropy support, a growing number are putting great efforts into developing their own in-house expertise in philanthropy. Many realise that donors are no longer happy simply writing a cheque but want to get more hands on with giving.

Rebecca Eastmond, UK head of philanthropic services, at JP Morgan Private Bank has noticed this trend among her bank’s clients. “People who’ve been giving to charities are continuing to do so but in a more strategic way,” says Eastmond. “They see the increased need around them and realise that they need to be more focused in their giving.”

Charities getting in on the conversation

For charities, working with advisors to access their clients is not as difficult as it may seem.  

"Charities have to be able to demonstrate the results they achieve from donors’ money,” says Plum Lomax, who leads on NPC’s work with intermediaries. “Results are what donors want to hear about, and this is what advisors are being asked about. Gone are the days when people are happy to write a cheque to a charity with no questions asked.”

This is particularly true in today’s tough climate, where donors are keener than ever that charities prove they are using donations wisely. “Funders have a right to question how effective you are,” says Benita Refson, chief executive of the charity The Place2Be, which offers emotional support to children in schools. “It’s not enough just to be a good cause.”

There are certain other things charities can do to get on advisors’ radars.

“Advisors certainly don’t want to be cold called by charities!’ says Lomax. Instead, she advises charities to be aware of what advisors are looking for from a charity, whether that is opportunities for clients to become trustees or chances for them to see the work of the charity first hand.

Charities should also get clued up on events that advisors attend which offer charities the chance to make contact. For example, there are a number of events run by the membership body, the European Association for Philanthropy and Giving, which aim to bridge the divide between charities and professional advisors.

There are also several websites which, though aimed at advisors, give charities an insight into how advisors and charities can work together. One new website, Giving Advice, run by Philanthropy UK and the Society of Trust and Estate Practitioners, is a good example, highlighting a number of databases of charities, including The Big Give, where charities can register their details.

“The most important thing charities can do to get an advisor’s interest however is to show what a great charity they are, by showing what they achieve,“ says Lomax. “We’ve worked with a number of charities to help them find ways to measure and communicate the difference they make on people’s lives. That’s what advisors and their clients really want to see.”

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Well-advised: How charities can work with philanthropy advisors

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