Are generous families and their advisors prepared for the future?

Generous families and business owners have many people serving as their advisors. They range from attorneys and wealth managers to the staff of community foundations and family foundations. Each brings a different perspective on the value and use of money and other assets.

But what those families and business owners are really seeking is help with finding meaning in their money. How can their resources be used effectively to pass on values to their heirs, benefit society, and even leave a legacy?

On these issues, U.S. Trust and Foundation Source reported in separate studies that families and business owners seek advice first from their peers. They’d like their advisors to help, but find that advisors either don’t discuss the issues or do so through a technical lens. Even foundation staff can become too focused on process and not enough on purpose.

Those families’ heirs are proving fully willing to leave their parents’ advisors, family offices, and even their foundation if they’re not finding compelling ways to connect money and meaning. Those younger generations are the face of trends challenging: 1) how families will come to a common definition of “community”; 2) how family members will work and volunteer together; and 3) how they’ll use their resources for social good.

To navigate those trends, families will need philanthropic tools that are resilient – able to anticipate and shape change and to bounce back after stress. They’ll need to re-examine issues of governance, leadership, participation, and strategy. Their advisors will need to ask different questions – ones that go beyond tax deductions and nonprofit effectiveness. Those advisors and foundation staffers need to help families navigate the collision of how families work and how philanthropic tools work (see graphic below) as both evolve in the 21st century.

Family philanthropy 2 systems


Fortunately, there are pioneers charting paths for us. They’re collecting their ideas through networks such as the National Center for Family Philanthropy and Purposeful Planning Institute, education providers such as the American College and 21/64, and free resources by experienced consulting firms such as The Philanthropic Initiative and Rockefeller Philanthropy Advisors.

I’ve been honored to speak about those trends and solutions for resilience for the Colorado Association of Funders, Pikes Peak Community Foundation, and Community Foundation of Elkhart County this year. I’ll be doing so for the Indiana Philanthropy Alliance in September and for the Florida Philanthropic Network next February.

Need to think about your philanthropic family’s journey through the trends and tools I’ve described? If you haven’t been able to make one of those sessions, I’d be happy to talk one-on-one. Feel free to contact me at tony [at] or 317.250.3805.

Revealing Risk in Philanthropy – part 1

Inviting Your Feedback!

Hey there – The National Center for Family Philanthropy and I are asking for your thoughts on risk in philanthropy.

  • For donors and grantmakers: What type of risk most concerns your board and staff? When does philanthropy feel most risky to you?
  • For nonprofits: What types of risk seem to most concern your funders and donors?

By October 11, I encourage you to add your response to the comments below, or via the social hashtag #NCFP15Risk on Twitter, Facebook, or LinkedIn.


Philanthropy is often described as society’s risk capital. However, grantmaking and giving are highly influenced by the risk tolerances of the people involved. Those personal risk tolerances and personal assumptions about risk usually remain obscure during grantmaking conversations.

Our views on risk are partly hidden because all of us are lousy at understanding the mental shortcuts and hidden biases influencing our decisions. Many books and articles have been published in the past few years on this subject. Two recent publications related to philanthropy include Understanding Risk Tolerance in Grantmaking and How Shortcuts Cut Us Short.

Our views on risk are also hidden because grantmakers and philanthropic families rarely take the time to fully discuss risk in a strategy or in individual grants and investments. Those groups lack a common internal understanding of the individual members’ views on risk and how those views add up to a collective picture.

One challenge to creating a common understanding of risk is terminology. Philanthropy doesn’t have a shared framework for discussing and assessing risk. Some terms and ideas are borrowed from corporate culture, others from strategic planning, and others from specific issue areas such as the environment. Many overlap. A few definitions of types of risk I’ve found in grantmaker publications include:

  • Evidence – the ability to measure results, let alone attribute them very directly to an organization
  • Idea – the idea’s track record and the logic connecting the activities to the desired result
  • Implementation – some board members may perceive this as performance risk – “Will the organization do what it said?”
  • Industry – the likely stability and trajectory of a market segment
  • Investment – the likelihood that a funder will lose some or all of the intended social impact of their investment as a result of disruptive events
  • Project – the likelihood of disruptive events occurring which interfere with the successful conduct of a project or program (businesses would call this assessing externalities)
  • Operational – risk of not having the right operational approach to support sustainable impact
  • Strategic – risk of not having an accurate strategic perspective on the social problems
  • Reputation – the perceived potential damage to the reputation of a board or staff member, or to the organization, because of a decision

I’m facilitating a session on risk in family philanthropy at the 2015 National Forum on Family Philanthropy. John Bare, VP of The Arthur M. Blank Family Foundation, wrote a terrific article as a preview of the session. Laurie Michaels, founder of the Open Road Alliance, and June Wilson, Executive Director of the Quixote Foundation are participating in the session. Members of all three foundations have been terrific resources in shaping the session.

We’re hoping to use the session and your feedback to begin shaping a common framework, or at least a good set of revealing questions to ask internally. I’ll keep you posted on our progress after the session!

Chart of philanthropic actions and recipients

Signals From the Future (part 3): Tools and Strategies

When I’m asked to speak, I describe myself in three roles – philanthropist, philanthropoid, and philanthropy geek. The more practice I have in living out each of those roles, the more I find myself returning to three core beliefs:

  1. Philanthropy – voluntary action for the public good – is a big tent concept. It is too often devalued to only mean tax-deductible gifts to charitable organizations.
  2. A wide variety of values and purposes, often unvoiced, drive the voluntary philanthropy of individuals, businesses, and grantmakers. Too many messages from nonprofit staffers, advocates, program officers, and consultants demean the welcome diversity of values and purposes.
  3. There is no one right tool for philanthropic action. Philanthropists can choose from many legal structures (or lack thereof) and strategies and each structure and strategy has its own advantages. There are too many articles and conference sessions claiming one tool is wrong or one strategy is the most correct.

I’ve struggled to incorporate those beliefs into an easy graphic or two. My latest iterations came when preparing for a “Navigating 21st Century Giving Trends” workshop for the Bayer Center of Nonprofit Management and the “Strategic Grantmaking Deep Dive Day” for the Indiana Philanthropy Alliance.

The first graphic mapped three types of philanthropic action – investing, buying, and giving (cash, time and other resources) – and three recipients of that action – nonprofits (and government agencies), businesses of all types, and individuals. During the “Navigating 21st Century Giving Trends” workshop, we discussed trends in philanthropy and filled in the chart. It resulted in this:

Chart of philanthropic actions and recipients

The second graphic was for the “Deep Dive Day” and attempted to group the tools available to philanthropists and grantmakers into three headline strategies – impact, influence, and leverage. Credit goes to the Annie E. Casey Foundation’s Making Connections Initiative for the three headlines, and to many other funders for the tools in use.

Graphic of funder tools for impact, influence, and leverage

Some of the ideas in the graphics are long-standing practices. Some are newer, evolving signals from the future of philanthropy. My sense is that an increasing number of donors, grantmakers, social innovators, and everyday people are purposely using multiple tools. They may have different terms for the tools and strategies, but they’re sharing in a belief that they can deploy their resources for social good in multiple ways. America’s largest two demographic groups are driving the trends:

  • Baby Boomers currently provide 43% of the money donated to charities and are the largest demographic in Congress and state legislatures, in nonprofit executive director roles, and on the Forbes 400. As they transition into retirement years, will have even more time to use their resources and talents to accomplish social and public policy goals.
  • Millennials will make up at least half of the workforce by 2020. They actively commit their time, money, and networks for causes and don’t mind if those causes aren’t managed by charitable organizations. They expect companies to be involved with causes and proactively seek options to buy from and invest in businesses that have positive social and environmental results.

Your Thoughts?

Both graphics pack in too many complex ideas to stand well on their own. And, both are works in progress. I’m offering them up for your feedback and comments. Do the frameworks make sense? Am I missing key tools and ideas? I welcome your thoughts!