The silent chorus

Philanthropists may grab the headlines, but the truth is they rarely act alone. There is an ecosystem of support around them, such as wealth managers, estate planners, tax advisors, giving vehicle providers and foundation staff. A lesser-known member of this ecosystem is the philanthropy advisor, described by advisor Sharna Goldseker as ‘the silent chorus that can help donors to thrive’. Although STEP members are far more informed than most about the role and impact of philanthropy advisors, until now there has been minimal data and evidence about what kind of people successfully undertake this role, what specific skills they bring to clients and the business model for making this work viable.

Who are the philanthropy advisors and what do they do?

Philanthropy advisors combine technical knowledge with a high degree of emotional intelligence so that they can explore a client’s values and aspirations and work with them to craft a bespoke roadmap for their giving. They fulfil a range of client needs, from helping them navigate the overwhelming array of options to do good, to more practical tasks such as connecting them to peers and measuring their impact. Success for philanthropy advisors includes enabling clients to become more informed and confident donors, which often results in them giving more and changing their practice, e.g., switching from scattergun to more strategic giving.

What is driving growth in philanthropy advice?

There is an increasing demand from wealthy clients seeking help with their philanthropic giving,[1] making this an opportunity for all advisors to build their in-house expertise and develop referral routes with specialist philanthropy advisors. Key drivers behind this growth are listed below.

More potential philanthropists

Over the course of just 20 years, the global population of high-net-worth individuals and their collective wealth both tripled. This wealth is transferring to a generation that is more globally oriented and socially and environmentally conscious, and seeking to make an impact, resulting in the existence of many potential clients with both the resources and the inclination to pay for philanthropic advice.

Greater need for skilled help

Philanthropy and the wealthy are under scrutiny, bringing heightened demands for more ethical and effective practice. New approaches in how best to give, such as effective altruism and reparative donations, are combined with increased complexity, including intersectional issues of climate and social justice at a global scale. This combination of criticism and complexity creates a greater need for expert advice to identify how donors can best contribute without making mistakes highlighted by critics and causing inadvertent harm to beneficiaries.

The business imperative

Philanthropy advice is good for businesses that provide professional advice because it aligns firms with their clients’ core interests, prompts early revelation of long-term goals and enables advisors to demonstrate genuine interest in what matters to their clients. The subsequent deepening of advisor-client relationships may lead to more money being under management,[2] especially if future generations are involved. The value it brings to clients and business has resulted in calls in the UK to require financial advisors to discuss philanthropy with their clients as a matter of course.[3]

The future of philanthropy advising

As well as more firms adding philanthropy to their offer and the number of philanthropy advisors growing, philanthropy advising itself is likely to evolve to be more professional, sophisticated and global.

The current lack of readily available training and the absence of widespread holding of professional qualifications, or even a shared formal framework setting out the core competencies of advisors, militate against philanthropy advising being viewed as on par with other private client advising. More training and standards will address this and raise the profile of the philanthropy advice profession, but this needs to be done in a way that does not erect barriers to a diversity of people coming into this work.

The need for generalist advisors will continue alongside specialisation as the advising profession becomes more sophisticated in its offerings. Advisors will specialise by type of donor, such as supporting women or young inheritors. They will also specialise in cause areas such as the arts or climate justice; approaches, such as venture philanthropy or reparation; and skills, such as support in conducting impact evaluation or managing communications.

Conclusion

The complexity and urgency of today’s social and environmental issues, coupled with the wealth transfer to a more purpose-driven generation, mean that philanthropy advising is needed now more than ever. It is time to shift the dial on philanthropy advising so more clients can access the advice they want and need, and so that more private funds can be mobilised for public good.[4]