Family Giving | Philanthropic Management

Family Giving | Philanthropic Management

by Richard C. Wilson & Family Offices Group Association Team

Family Giving

Family offices can improve client success in Family Giving much more than they realize.

Many trusted legal, tax accounting and portfolio professionals have effortlessly created Family Giving vehicles (donor advised funds, foundations, etc.) for their clients; however, families of wealth now realize that even though easily obtained, such giving vehicles themselves have been insufficient to ensure philanthropic success. And worse, some giving vehicles could not even reach initial destinations once they become mobilized! What more can family office professionals do?

One solution is for family office professionals to look at already available skills in new ways. Wealth managers, legal and tax experts may not realize their existing expertise can directly improve success potentials in philanthropy. Here are a few soft and hard professional skills that quickly translate well to helping clients with their Family Giving:

1. Clarifying strategic intentions: what expected successes are to result from Family Giving? Are we focused more upon expressing and strengthening the inter-generational transfer of family values, supporting favored organizations, or achieving statistically significant impacts in community and society at large? The soft skills here are literally the same trusted insights applied to teasing out expectations from financial plans, legal strategies and investment portfolios: what results do you want by when; what costs are you willing to afford in order to get them?

2. Outlining portfolio options: since we know our desired results, what concentration and diversification of resources offer the best approach to achieving them? Do we support known organizations already producing impacts; do we seek social entrepreneurs with innovations? As in wealth management, such skills in balancing diversification and concentration in portfolio options similarly improves the probabilities for ongoing performance in Family Giving. These hard skills include research and due diligence needed to identify and engage high-performers in markets where Family Giving will occur.

3. Negotiating performance milestones: one great myth about philanthropy is that it’s impossible to use verifiable and measurable performance standards for targeting success. This is simply not true. Humans in all domains thrive on achievement and being rewarded for it. Since the family’s ultimate giving success is now clearly defined, consequential steps to achieve those results can be explicitly opened for discussion. As portfolio investments and managers can align by term sheet incentives tied to milestones, so too can charitable organizations and Family Giving align by rewards tied to interim accomplishments.

In these simple ways family office professionals can unabashedly apply their acumen on behalf of their clients’ best interests and add greater value. At the very least, the soft and hard skills of a trusted fiduciary can quickly deliver one service needed by many Family Giving clients: simply getting them going in the right direction.

R. Mark Hanna is founder of Social Wealth Partners, a private philanthropy advisory firm, and president of Social Wealth Investment Management, a proprietary, social purpose investment fund.

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Tags: Family Giving, Family Offices Giving, Philanthropic Giving, Philanthropy, Family Giving Management, Managing Charitable Giving, Charitable Giving Advice, High Net Worth Giving

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