Expert: Rennie Hoare, Hoare & Co and Elizabeth Steinhart, LCM Family Facilitator: David Barks, Consultant
Headlines:
- Philanthropy focuses on influencing change through engagement, advocacy, and strategic support, while charity often involves detached monetary donations
- Integrating philanthropy into wealth management deepens client relationships, aids wealth transfer, and fosters family engagement in financial discussions
- Time constraints, cultural alignment, and practical education are significant barriers to making philanthropy integral within organisations
- Leveraging technology and in-house expertise enables innovative approaches to philanthropy, enhancing client participation and knowledge-sharing
- Tailored strategies for generational wealth transfer ensure philanthropy resonates across family members, encouraging long-term engagement with advisory firms
Discussion points:
Distinguishing charity from philanthropy
Philanthropy was defined as a proactive approach to influencing change, involving advocacy, networking, and pro bono support. Unlike charity, which often entails detached monetary contributions, philanthropy emphasises engagement and does not necessarily require vast financial resources.
Donor-advised funds and structured giving
Donor-advised funds were highlighted as a flexible mechanism for philanthropy, with significant examples like funds exceeding £100 million. However, inexperienced advisers often focus too quickly on product-based solutions instead of aligning with client goals.
Philanthropy in wealth management
Attendees noted that wealth managers typically assist clients in managing money rather than guiding them on impactful giving. Contrary to fears of revenue loss, philanthropy can deepen relationships, with solutions such as foundations or donor-advised funds providing alternative wealth management structures. A strong organisational culture supporting philanthropy is crucial to embedding it successfully.
Embedding philanthropy in organisations
Barriers to embedding philanthropy include time constraints, lack of practical experience, and misconceptions about its accessibility. Practical exposure to philanthropy, such as involving colleagues in micro-level giving, was identified as a critical educational tool.
Digital approaches and corporate foundations
The potential of digital platforms was explored, such as co-investment opportunities in geographically or interest-aligned projects. Corporate foundations serve as excellent examples of leveraging in-house expertise for impactful philanthropy. Sharing due diligence insights from established foundations enhances client understanding and trust.
Philanthropy for family engagement
Philanthropy is an effective tool for initiating conversations about wealth purpose within families. Starting with smaller giving funds (e.g., £5,000–£10,000) encourages families to collaboratively explore wealth management and decision-making.
Generational wealth transfer and emotional intelligence
Generational differences in philanthropy approaches were discussed, emphasising the importance of facilitation over directive advice. Emotional intelligence is critical for advisers leading these discussions, with a need for training to ensure effective guidance without requiring certification as philanthropic experts.
Data capture and personalised engagement
Embedding philanthropic discussions into CRM systems was recommended to systematically track client support, methods, and objectives. Personalising the onboarding process, such as using prioritisation cards, enhances face-to-face engagement and helps clients articulate their values and goals.
Key takeaways:
- Develop digital tools to enable client co-investment in philanthropic projects, showcasing opportunities by geography or interest
- Overcome barriers to embedding philanthropy within firms by fostering a supportive culture and addressing time constraints through practical exposure
- Encourage family philanthropy with small initial funds to spark collaborative learning and engagement
- Address generational dynamics by facilitating discussions on trust structures and wealth purpose to ensure meaningful wealth transfer
- Train advisers in emotional intelligence to guide philanthropic conversations effectively without requiring expert certification
- Embed philanthropy into CRM systems to capture metrics on client giving and tailor engagement strategies
- Personalise onboarding processes to help clients prioritise and articulate their philanthropic goals, fostering deeper connections
