Foundation Source, the country’s leading provider of all-inclusive private foundations services, has released some key findings from a study carried out on philanthropic private foundation donors. The study focused on how the donors involve or fail to involve financial advisors in their philanthropy activities. The findings were obtained from 167 respondents. The majority of the respondents had private foundations not exceeding $50 million in assets.
Robert Chartener, CEO of Foundation Source, said that most of the professional financial advisors usually ask what more they can do to help their philanthropic clients. Some key findings from the study are:
- Respondents considered advice from philanthropic peers than from professional advisors. 34.7% of the respondents said that they would prefer to seek advice about philanthropy from their philanthropic colleagues; 28.1% from no one; 16.2% from philanthropic consultants; 11.9% from financial advisors; 5.4% from accountants; and 3.9% from their attorneys.
- Respondents did not see financial advisors as prospective sources of philanthropic advice. 53.9% said that they never tried to seek philanthropic advice from financial advisors. The reasons for this included: 65.1% said they did not need the financial advisors; 18.1% said it did not happen to them; 8.4% said they lacked confidence in their financial advisors; and 8.4% said that they were comfortable to provide technical advice.
- Respondents said that they might consider seeking consultation services from financial advisors in the coming year on different philanthropy related issues. Some of these issues included: 30.2% said they would seek help on how to ensure that the next generation is involved in philanthropy; 25.0% about impact investing; 24.6% about philanthropic goals and objectives; 21.6% about a major gift; and 16.5% about charitable organizations, causes or projects.
- Respondents said that financial advisors were unable to meet the consulting needs of their clients. They needed their advisors to be better informed about a variety of philanthropic issues. Some of the top issues were: 30.9% on impact investment suggestions; 28.8% about educating and informing the next generation on issues of philanthropy; 25.2% on major gift facilitation; 16.6% about identification of efficient charitable organizations; and 13.0% on how to push forward the agenda of philanthropy.
- Respondents said that there are various ways in which financial advisors can improve their profiles to meet their clients’ needs. Fifty one (51) percent said that they would be grateful to receive training on investment management; 31.5% said they would appreciate if their financial advisors gave them suggestions on educational opportunities and conferences related to philanthropy; and 20.7% said they would like to receive recommendation from the advisors about reading materials on philanthropy.
- Some of the respondents said that they would like to see their financial advisors take the lead in philanthropy development for the next generation. They suggested ways on how to take the lead – by mentoring younger people (42.3%); by launching a board for juniors (6.31%); by organizing family/board meetings (28.8%); by organizing site visits (10.8%); and by helping promote philanthropic activities or community service projects (9.0%).
Page Snow, Chief Philanthropic and Marketing Officer at Foundation Source, said that even though most donors had not pursued help from their financial advisors, there are great opportunities for the latter to improve their effectiveness and add value to the philanthropy sector.