Comments on: Paying for Philanthropic Advice

By: Terry Smith

Terry Smith — Wed, 27 Aug 2008 11:07:08 +0000

Sean, as Gena noted, my experience in Canada is that percentage of fees of either the gift or the endowment are not acceptable (and I was told that by several philanthropists as I was setting up my business). I usually negotiate a set contract for my services or have monthly retainers. Terry

By: Gena Rotstein

Gena Rotstein — Tue, 26 Aug 2008 23:58:08 +0000

Hi Terry and Sean,
As someone who is providing this kind of advice in Western Canada my fees have evolved. I originally started with a percentage of total giving, however found that it was more palatable and easier to sell as a project (hourly) fee instead.

Terry, I look forward to visiting your site. I launched earlier this year and things are picking up for me as well. I couldn’t agree more with you that more of these types of services are so needed in Canada.

By: Sean Stannard-Stockton

Sean Stannard-Stockton — Tue, 26 Aug 2008 12:52:01 +0000

Thanks Terry. It looks like you have a great business. How do you think that fees are framed so that the services are viewed as having the most value by donors? Hourly fees? A percentage of the amount given to charity? A percentage of the amount held in a foundation or other charitable vehicle?

By: Terry Smith

Terry Smith — Tue, 26 Aug 2008 01:10:21 +0000

Sean, I too provide philanthropic advice to donors in Canada. Aside from banks and community foundations, there are very few services here for donors to help them do what they want to do and to help them find their passions,provide proper assessments of charities and monitor the impact of their philanthropic giving. My business is two years old, it is a small but quickly growing business as philanthropists realize that it is indeed hard to give away money and they may not necessarily have all the right information and tools to make their decisions. I agree most do not wish to pay advisory services,but some have discovered the value of good advice and assessment far outweighs the costs associated with such advisory fees when they realize the charities and projects they are supporting are indeed matching their philanthropic goals. I see nothing but growth in this area!
Terry Smith Philanthropic Partnerships Inc.

By: Sean Stannard-Stockton

Sean Stannard-Stockton — Fri, 22 Aug 2008 14:59:36 +0000

Renata, wise donors have, but most donors have not. There are simply not that many people making a living selling giving advice to the mass affluent. You’re just ahead of your time! But you’re in good company. Warren Buffett set up his investment partnership with its unique fee structure decades before others followed.

Foundationwriter, in re-reading my post I realized it sounded like I was saying community foundations were being misleading. I’ll clarify. My point was that when grantmaking and administration was bundled together, donors paid the bill, but when Schwab and Fidelity unbundled the giving advice from administration we found that many, many donors preferred not paying for giving advice if given the choice.

By: foundationwriter

foundationwriter — Fri, 22 Aug 2008 13:16:13 +0000

Schwab and Fidelity may charge less than most community foundations, but certainly not all. And the administrative fee is clearly just what it says it is; I don’t know a community foundation that claims that its advice is free.

By: Renata Rafferty

Renata Rafferty — Thu, 21 Aug 2008 18:36:22 +0000

Wise donors have been paying for philanthropic advice for quite a few years now — I should know, I was one of the first “purely” philanthropic advisors in the US, going back to the early ’90s. Same is true of forward-thinking financial advisors (today’s ubiquitous “wealth managers” weren’t an industry back then).

Wise advisors and donors both have recognized for quite some time that they had little insight into the “shadow world” of charities, and wanted an experienced guide to assure their giving would accomplish that which it was intended to accomplish.

With the explosion of the internet and “charity ratings” websites, too many donors and advisors have come to believe that a little trolling on line will tell you what you need to know before choosing a charitable beneficiary.

Smart advisors, and donors, continue to use experts, engaged privately, to provide information, insight, and assessment that simply can’t be accessed any other way. But that trend will not grow as long as “3-star” and “B+” ratings sites continue their very effective marketing and PR campaigns.

Renata Rafferty
Author of “Don’t Just Give It Away: How To Make the Most of Your Charitable Giving” and the soon-to-be-released “Smart Generosity”