‘The adviser should play the role of an educator or a coach in supporting the decision-making of the donor,’ says Marcos Kisil of IDIS (Brazil). As more and more donors, especially substantial ones, want to be more closely involved in their giving, there has been increasing demand for the services of professional advisers to provide the ‘coaching’ that Kisil is talking about. But advisers don’t have godlike impartiality. In addition to knowledge of the sector, they bring their own values and preconceptions. What happens when either good practice or their own views conflict with the wishes of the client? How difficult is it to strike a balance between ‘coaching’ and ‘supporting’? Alliance asked a number of professional advisers for their views on their role and the terms of their relationship with clients.

The role of the adviser

‘The most important contribution a philanthropy adviser can make to his/her clients,’ believes Fernando Espada, a freelance adviser (Spain), ‘is to help them elaborate and understand – revisit in the case of experienced donors – the true nature of their social interest and to define their own profile.’

Clearly, as Marcos Kisil says, and especially in the case of novice donors, there is a strong educational element to the adviser’s work. Betsy Brill of Strategic Philanthropy, Ltd. (US) believes that ‘it is the obligation of philanthropy advisers to ensure, to the best of their ability, that their clients are well educated about the dos and don’ts of philanthropic engagement’. Similarly, The Philanthropic Initiative’s (TPI, US) view, says Ellen Remmer, is ‘that donors go through a natural growth curve. Our job is to nurture, nudge or propel them along that curve.’

This can include ‘reminding clients to bring their full set of skills to their philanthropy’, because ‘sophisticated investors and business people are sometimes reactive in their giving’, says Lisa Philp of J P Morgan Private Bank (US). ‘Donors typically start with specific gifts to organizations they know first-hand, and that’s wonderful. But the transformative part typically occurs when they work with us to take a step back on what they hope to accomplish and seek out new relationships and organizations to help them get there.’

The importance of due diligence

Here, due diligence has a tremendously important part to play, says Betsy Brill. ‘Through the presentation of due diligence to clients, advisers have a platform for highlighting both the positive aspects of the work and the challenges and potential downsides to supporting the opportunity in question,’ she explains. In short, due diligence provides what she calls ‘teachable moments’ that ‘begin to instil effective ways of working’.

Helping new donors understand due diligence, says Lisa Philp, often means helping them adapt their understanding from a business to a charitable environment. ‘At a baseline level,’ she says, ‘this means getting a sense of the strength of the leadership, programme and finances of various organizations and being clear about expectations.’

Advising and influencing

Do advisers try to influence their clients? Of course they do. In a sense, donors go to advisers to be influenced. ‘Philanthropists who think that they know it all,’ points out Patrick Frick of Social Investors Partners (Switzerland), ‘would most likely prefer to work without an adviser.’ Moreover, the relationship is conditioned not only by the views and values of the donor but by those of the adviser, too. Philanthropy advice services frequently have their own aims which means they have a fairly specific set of desiderata when it comes to the clients they can usefully serve. As Maria Chertok of CAF Russia puts it, ‘as an NGO that provides advice not just to generate profit but rather to advance our mission, CAF Russia does make an effort to influence our clients’.

‘The adviser’s background is decisive for his philosophy and his flexibility in dealing with donors,’ agrees Wolfgang Hafenmayer of LGT Venture Philanthropy. In LGTVP’s case, advisory services ‘are built on our own investment activities with local people in four continents and are implementation-oriented’. This produces a preference for working with ‘clients supporting scalable, well-managed organizations with effective social or environmental solutions serving the less advantaged’. He concludes: ‘For both the donor’s and the adviser’s satisfaction and the success of the philanthropic engagement, it is important to agree on the basic values, the philosophy of philanthropic giving.’

For novice donors who are looking to the integrity and experience of advisers to guide them, having such a clear position on how the adviser operates is often attractive. ‘For the great majority of clients,’ says Marcos Kisil, ‘the very fact that we have and make clear our ethics in conducting our support to them is considered an advantage point to contract with us.’

Forming the relationship: trust is the key

Beyond a reasonable dovetailing of interests and values, the relationship will depend on understanding on the part of advisers and a realization that, as Kisil points out: ‘Philanthropy is based on voluntary action. No obligation forces anyone to give. And there is no obligation to have an adviser to the giving process.’

‘As a philanthropic adviser,’ says Lisa Philp, ‘I try to meet donors where they are.’ The need to listen emerged as a leitmotif to advisers’ responses. As Patrick Frick points out, ‘philanthropy is a very personal matter; the personal life of the client greatly influences their choices in philanthropy. The adviser must therefore know how to listen.’ In strikingly similar terms, Ellen Remmer believes that ‘to be an effective adviser, and particularly one that can challenge a donor on the really tough issues, you have to build trust. That takes knowledge and expertise, but even more important is meeting donors where they are, restraint of judgement, and deep listening.’

It also takes the humility to accept that, while the adviser guides the client, he or she ‘cannot know it all’, says Patrick Frick. ‘We believe that if the client feels that the adviser, despite his/her recognized experience, is not pretending to know everything, the client will be much more inclined to discuss openly with the adviser and to listen to the adviser’s views.’ Above all, he insists, it must remain ‘a relationship among equals’ with one purpose: ‘how can the impact of the client’s philanthropic engagement be maximized and for him/her to obtain the certainty that he/she is making a difference’.

Following best practice

Accepted best practice in philanthropy is the ‘gold standard’ that donor advisers will inevitably refer to, though of course new donors cannot be expected to be aware of what best practice is. As Cynthia D’Anjou-Brown of HSBC Private Bank (Hong Kong) points out, ‘best practice donors are not born, they grow through experiential learning’.

And it’s not just a matter of experience, believes Patrick Frick. Educating donors about best practice is another important element of the adviser’s job. ‘In the process of establishing a relationship of trust between the adviser and the client,’ he suggests, ‘the independent and responsible philanthropy adviser has as a key role to promote best practice.’

At the same time, as Betsy Brill points out, while being bound on the one hand by best practice, ‘the adviser must facilitate the donor’s interests’. How much of a strain does this place on the relationship? In practice, believes Ellen Remmer, ‘most donors, if not highly aspirational, don’t want to be outside the norm. Relying on benchmarks, best practices and even “next” practices is a very helpful approach to inspire, inform and support them to a higher level of impact.’

Usually, however, it is not a straightforward choice between following best practice on the one hand, or the donor’s wishes on the other. ‘The final product,’ feels Maria Chertok, ‘will often be a compromise between the best solution and what the donor can afford – not just financially but in terms of how innovative, long-term and unconventional he/she is prepared to be.’

What about the trivial or unwise donation?

The respondents clearly felt that it is an adviser’s responsibility to try to dissuade donors from a gift that is trivial or unwise from either an ethical or a financial point of view. ‘Fiduciary responsibility (especially in a bank) requires the adviser to point out any potential for misuse of donations,’ argues Cynthia D’Anjou Brown. She concedes that unintended consequences are not uncommon in grantmaking, but that ‘telling’ donors that a particular donation is unwise may contradict the adviser’s ‘coaching’ role. ‘Getting the donor to actively review the charity request or donation [at a mid-point through a progress report] allows them to come to their own conclusion; this is a powerful learning opportunity.’

However, argues Betsy Brill, ultimately, ‘if a donor still wants to proceed with an unusual gift, it is the adviser’s role to provide advice and guidance and support the successful implementation of that gift’.

How do you stop them? Developing the relationship

How great a dilemma does this pose for the adviser? In the event, most felt, if the relationship has developed as it should do, disagreement over a gift is often easily resolved and does not lead either to conflict or to a breach of the relationship. ‘If the client is willing to learn and the adviser has the necessary patience,’ says Patrick Frick, ‘situations of fundamental disagreement can be avoided.’ Having a fairly clear set of criteria for taking on clients also helps to reduce the risk of serious disagreement. As Wolfgang Hafenmayer says, ‘to clients planning to support a philharmonic orchestra in Zurich or to protect animal rights in Greece, we would recommend better partners with adequate thematic expertise and networks’.

Others suggest some specific ways of avoiding ‘situations of fundamental disagreement’. ‘Encourage your donor to review their donation, and they may come to the conclusion themselves that the particular donation was not the best course of action,’ suggests Cynthia D’Anjou Brown.

Ellen Remmer’s approach differs according to the experience of the donor. For new donors, she says, ‘my philosophy is to expose them to best practice’ – sending them to donor conferences or bringing in peer groups of donors to talk to them. For those you have the beginnings of a relationship with, ‘it often works to expose them to the range of options they have and in that way offer pathways for growth’. Finally, for those with whom you have developed a trusting relationship, ‘it is possible to confront them and tell them that their idea is not best practice, and may in fact be wrong. This is the height of an adviser/client relationship, when you can respectfully challenge them.’

Patrick Frick agrees that here, as elsewhere in the relationship, trust is the key. ‘If there is a relationship of trust, the issue of drawing a line between promoting best practices and the client’s wishes/interests becomes a non-issue.’ Either there is trust and confidence between the two parties, in which case the conflict does not arise, or trust is lacking, in which case, ‘there is no place for the adviser in the first place’.

An example

Lisa Philp provided an example of this idea that, if you have the confidence of the client, you can head their intentions in a more sensible direction. ‘One of our clients got to know a nurse who spent her vacation time running a camping programme each year for children on ventilators.’ The client was so taken with the scheme and its leader that ‘she encouraged her to dream big’, with the result that a large request was made for capital expenses for a year-round programme. While the client wanted to go ahead, Philp explains, ‘our approach was to do a feasibility study about ventilator camps to learn about various operating models, the market demand across regions, and effective practices’. Their conclusion was that the year-round project wasn’t viable. In the event, the client ‘stepped away’ from the original capital request, but provided ‘consistent general operating support’ for the camp.

Parting of the ways

In the last resort, however, if a client insists on a course of action that flies in the face of good sense, good practice or generally accepted ethics, ‘one must extract oneself from the relationship’, as Betsy Brill puts it. This happens, says Marcos Kisil, in a very limited number of cases, most often where the client is a corporation and ‘giving is only an instrument of PR or marketing in which the main beneficiary is the business itself’.

On the whole, it makes sense not to pursue the relationship where there is no common ground, not just in cases of outright disagreement. Where TPI ‘can’t add value and develop a trusted adviser relationship, it is unsatisfying and unproductive for both parties’, says Ellen Remmer, and the organization ‘chooses not to work with a donor or to resign a donor relationship’. In similar vein, Fernando Espada sees nothing for the adviser in what he calls ‘marriages of convenience between donors and recipient organizations just because they “look great together”… After the first couple of discussions, our advisory role becomes a referee activity where we have nothing to win or contribute.’ ‘For a donor who does not share our philosophy of deep analysis, understanding and support and is not willing to invest time/money in a comparatively detailed and high-quality level of screening/evaluation and monitoring of the supported organization, we might not be the right partner,’ says Wolfgang Hafenmayer.

In a nutshell, for both the donor’s and the adviser’s satisfaction and the success of the philanthropic engagement, it is important to agree on the basic values, the philosophy of philanthropic giving and be able to offer hands-on expertise and networks in the fields the donor wants to engage in.

One implication of such a contingency is that, like most organizations in the sector, philanthropy advice services need to diversify their sources of income. As Maria Chertok says, CAF Russia is ‘lucky to work for a wide range of donors and not to be dependent on one particular client too much. This position gives us freedom to terminate relations or decline the project where we don’t feel the common language can be found between us and the client or where our advice will clearly be wasted or misused.’

From best practice to ‘next’ practice

If the conflict between best practice and client inclinations is less problematic than it might appear at first sight – providing the relationship is on a firm footing of mutual trust and community of interest – the real challenge for Patrick Frick lies elsewhere, in what Ellen Remmer calls ‘next practice’. ‘Often best practices aren’t good enough,’ he argues. ‘They still fail to tackle the challenge at hand. In that case, the job of the philanthropy adviser becomes to push beyond best practices and to actively encourage the search for new ways. We believe that embarking with the client on a new journey with an uncertain outcome is way more challenging for any adviser than promoting best practices.’

Alliance would like to thank the following for contributing to this article:

Betsy Brill President, Strategic Philanthropy, Ltd., US
Maria Chertok Director, CAF Russia
Cynthia D’Anjou-Brown Senior Adviser, Philanthropy and Governance, HSBC Family Office Services Limited, HSBC Private Bank, Hong Kong
Fernando Espada Freelance adviser, Spain
Patrick Frick Partner, Social Investors Partners, Switzerland
Wolfgang Hafenmayer Managing Partner, LGT Venture Philanthropy, Liechtenstein
Marcos Kisil President, IDIS, Brazil
Lisa Philp Global Head of Philanthropic Services, J P Morgan Private Bank, US
Ellen Remmer President, The Philanthropic Initiative, US