Philanthropy 3.0 Beyond Just Cheque Writing - Vehicles for Giving
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This document provides an overview of philanthropy and the charitable sector. It discusses how philanthropy is becoming more complex, with greater focus on impact and multi-generational engagement. Generational shifts are changing how wealth is managed and transferred. The document outlines different donor profiles, vehicles for giving, and tools for developing a strategic philanthropic plan, including evaluating charities and measuring impact. The case study demonstrates transforming a tax problem into a multi-million dollar foundation with long-term social goals.
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Philanthropy 3.0 Beyond Just Cheque Writing - Vehicles for Giving
- 1. ABFI Philanthropy 3.0 Beyond Just Writing a Cheque 03-12 & 14 -2019
- 2. Philanthropy 3.0 How much? Leave enough for your children that they will do something, but not so much that they won’t do anything. - Warren Buffet “It’s not your pearls, it’s your pearls of wisdom.” - Karen Roth Warren Buffett, Melinda & Bill Gates 2
- 3. Philanthropy 3.0 Learning Objectives • A bit about Karma & Cents Inc. • What is a Philanthropic Advisor • How did we get here? • Terminology • Levels of Giving • Perspectives on Philanthropy • Who is at the table? Generational analysis • Donor Profiles • Business of Philanthropy • Canada’s charitable sector • Managing a Foundation • Tools & Resources • Vehicles for Giving • Evaluating Charities & Donor Logic Model 3
- 4. Philanthropy 3.0 About Us Karma & Cents Team • Gena Rotstein, FEA, Philanthropic Advisor • Richard Ouellette, Managing Director • Hallie Caplan, Lead Researcher Who we Work With • Family Businesses & Entrepreneurs • Philanthropists • Next Generation Inheritors Current client roster: $200M charitable assets under advisement 4
- 5. Philanthropy 3.0 The Lab Process •Create space to define the problem Step 1 •Strange Bedfellow Conversations Step 2 •Design a Solution •Test risk Profile Step 3 •Deploy to the Field •Design the Test for Impact Step 4 •Review Analysis •Pivot/Tweak •Decision Time – Go/No-Go Step 5 •Scale for Impact Execute Create conditions that allow for experimentation: Set ground rules, loosen policies, encourage diversity, agree on what should be measured, share knowledge, allow for rapid failure 5
- 7. Philanthropy 3.0 Family Legacy 7 • Transitioned from third generation to 4th generation • Went from an operating company to a holding company • Combination of private family foundations and donor advised funds • Family that is around the world with different political and social interests 7
- 8. Philanthropy 3.0 About the Charitable Sector Driven by Values, Not Valuables Impact First Time, Talent, Treasure and Ties Crafting their Philanthropic Identities How did we get here? Lay it on the Line Terminology and charitable landscape 8
- 9. Philanthropy 3.0 Terminology Impact Investing Social Return on Investing Social Entrepreneurship Social Finance/ Social Capital Legacy Gifts/ Bequests/ Endowments Private Foundations Shared Value/ Blended Value Collective Impact Social Innovation Social Good Annual Campaigns Giving Circles Donor Advised Funds (DAF) 9
- 10. Philanthropy 3.0 How Money Flows 10 What we do to show our support How we show our support Why we support charities • Front-line Charity • Annual Giving • Special Events • Private Foundation • Public Foundation • Charitable Trust •Volunteering Time •Donating In-Kind •Chequebook Charity •Engaged Philanthropy •Strategic Philanthropy •Leaving a Legacy • Personal/Family Social Vision • Donor Advised Fund • Giving Circle • Crowdfunding • Micro-Loans • “Groans” • Social Impact Investing
- 11. Level 1 – Needs Based Giving Level 2 – Empowering Individuals Level 3 – Capacity Building Level 4 – Networked Philanthropy 11 Philanthropy 3.0 How Money Flows
- 12. Philanthropy 3.0 About the Charitable Sector Driven by Values, Not Valuables Impact First Time, Talent, Treasure and Ties Crafting their Philanthropic Identities Perspectives on Philanthropy How attitudes shape the way money flows in the sector 12
- 14. Business Edge Where is the Wealth? Source: 14
- 15. Philanthropy 3.0 Activity: Values & Characteristics 15 - What stereotypes are being presented? - What are the external influencers (ie. Woodstock, Band Aide, etc.)? - - - What are the political pressures on that generation (i.e. Cold War, 9/11)? - How do you think these markers have influenced or defined that generation’s view of money and philanthropy?
- 16. Business Edge Next Gen Motivators Driven by Values, Not Valuables Impact First Time, Talent, Treasure and Ties Crafting their Philanthropic Identities Source: 16
- 17. Philanthropy 3.0 - Donor Profile Donor Profiling What type of donor are you working with? 17
- 18. Maverick Informed Steady • Research driven but validated by gut • Shot-in-the-arm • Emergency funding • Limited track-record • Start-up • Non-trackable • Research driven and validated by relationships • Longer-term relationship • May include start- up/seed capital • Trackable • Solution oriented 18 • Tried and true • Low-risk • Problem focused, not necessarily solution based • Established Donor Profile Types Characteristics of the Donor Profiles
- 19. Five Approaches to Philanthropy Maverick Informed Steady • Venture Philanthropy • Collaborative/ Network Philanthropy • Responsive Philanthropy • Results-Based Philanthropy • Collaborative/ Network Philanthropy 19 • Cheque-book Philanthropy
- 20. Donor Profile – what it Looks Like 20 Simplicity Autonomy Nimbleness Risk Complexity Engagement Consistency Security Family Donor Risk Profile Dad Mom Family Foundation
- 21. Philanthropy 3.0 About the Charitable Sector Driven by Values, Not Valuables Impact First Time, Talent, Treasure and Ties Crafting their Philanthropic Identities Business of Philanthropy The industrialization of giving 21
- 22. Business Edge The Business of Philanthropy Philanthropy is BIG Business • Canada’s Charitable Sector = Automotive + Agriculture + Retail + Manufacturing • Today’s philanthropists do more than just write cheques • Time, Talent, Treasures & Ties • Tackling some of societies most complex social problems where government and industry have fallen off Impact Investing • Impact investing in Canada is expected to reach $300Billion by 2020 • International investments in private equity impact funds (19.7% ROI) outperformed the benchmark (14.2%) by 5.5% 22
- 23. Business Edge Focusing on the Rising Generation Source: 23
- 24. Philanthropy 3.0 Case Study Driven by Values, Not Valuables Impact First Time, Talent, Treasure and Ties Crafting their Philanthropic Identities Silver Gummy Case Study Working lunch – review case study From managing a tax problem to generating social change 24
- 25. Philanthropy 3.0 Silver Gummy Case Study Impact First Time, Talent, Treasure and Ties Crafting their Philanthropic Identities Immediate tax problem Young professional. Father passed away leaving significant estate. Tax problem due to inheritance. Technical Solution: Set up foundation $750K as a base to start foundation Social Solution: K&C Social Impact Lab Started running client through Social Impact Lab 25
- 26. Philanthropy 3.0 Silver Gummy Case Study Driven by Values, Not Valuables Impact First Time, Talent, Treasure and Ties Crafting their Philanthropic Identities Domestic Violence Health Care and Mental Health Education System Urban Planning Diversity Training/ Public Servants Social Services Justice Business Community Government and Policy Immigration •Strange Bedfellow Conversations Step 2•Create space to define the problem Step 1 26
- 27. Philanthropy 3.0 Silver Gummy Collective Impact Driven by Values, Not Valuables Impact First Time, Talent, Treasure and Ties Crafting their Philanthropic Identities Source: Collective Impact – Kramer, FSG Consulting •Deploy to the Field •Design the Test for Impact Step 4 •Review Analysis •Pivot/Tweak •Decision Time – Go/No-Go Step 5 •Design a Solution •Test risk Profile Step 3 27
- 28. Philanthropy 3.0 Silver Gummy Case Study Impact First Time, Talent, Treasure and Ties Immediate tax problem Young professional. Father passed away leaving significant estate. Tax problem due to inheritance. Technical Solution: Set up foundation $750K as a base to start foundation Social Solution: K&C Social Impact Lab Started running client through Social Impact Lab $9Million Foundation w/ multi- generational strategy 28
- 29. Philanthropy 3.0 About the Charitable Sector Driven by Values, Not Valuables Impact First Tools & Resources How a Philanthropy Advisor works on the team 29
- 30. 1. Understand what your family is really saying? • Social Vision Assessment Questions handout 2. What type of family are you working with? • More than just the wallet - 4 T’s worksheet • What assets do you bring to the table? FISH(E) account 3. The Giving Plan • What is impact? • Donor Logic Model • Giving Vehicles Comparison Chart • Evaluating charities 30 Business Edge Tools & Resources - Handouts
- 31. Transition Planning Legacy Plan Accounts The Accounts • Financial • Intellectual • Social • Human • Enterprise 31
- 32. Time Talent Treasures Ties 32 Activity – More than Just your Wallet 4 T’s – Time, Talent, Treasures & Ties
- 33. Philanthropy 3.0 About the Charitable Sector Driven by Values, Not Valuables Impact First The Giving Plan What is impact? What goes into a plan? Donor Logic Model handout Giving Vehicles Comparison Chart handout 33
- 34. Philanthropy 3.0 Identifying Big Bets - Impact • Nature of Impact o Type of change created • Scale of Impact o Number of people helped • Depth of Impact o Amount of change generated 34
- 35. Philanthropy 3.0 What goes into your philanthropy plan? Your Giving Strategy Should… • Define a clear social objective • Why is this important to you/your kids or client? • What are the expectations? What does success look like? • Ask meaningful questions and connect with experts to help find the answers • Include all the 4T’s • Have impact measurement standards • Be able to share findings, including failures, with other funders and organizations
- 36. Philanthropy 3.0 Evaluating Charities – Donor Logic Model 36 Mission, Vision & Values By supporting this organization, will I achieve my social vision? Articulating the problem What are my goals - Institutional or Systems Change? Why is this important? Goals & Objectives What is the issue I want to address? Conduct due diligence. Integrate a vehicle for giving Set expectations with fundee Activities & Outputs Outcomes, Short & Long-term Impact
- 37. 1. Changing landscape • The bifurcated world between charity and for-profit businesses is blurring with the rise and success of social enterprises & social purpose businesses 2. Generational changes • Women will control 70% of wealth in Canada by 2050 • $8Trillion will be transitioned in Canada from spouse to spouse or generation to generation by 2050 • There are now five generations at the decision-making table • Estimated that 85% advisors who do not engage with their NextGen clients early on will be “dumped” within six months of wealth transfer 3. Giving Plan • Time, Talent, Treasures & Ties • There are different vehicles for giving, each provide you with different supports to meet your philanthropic objectives • Start with WHY – everything leads back to your Social Vision & Mission • Everyone can be a philanthropist – it’s not just about the size of the cheque 37 Philanthropy 3.0 Summary
- 38. Philanthropy 3.0 Driven by Values, Not Valuables Impact First Time, Talent, Treasure and Ties Crafting their Philanthropic Identities How to reach us grotstein@karmaandcents.com rouellette@karmaandcents.com 1-866-936-GIVE (4483) 38
Editor's Notes
- Focus on the disconnect occurs and provide advisors with tools and resources to engage and carry the philanthropic conversation to the next level.
- What is a philanthropy advisor? A philanthropic advisor is someone who works alongside the individual or family and their other technical advisors supporting them in a number of ways from setting up the impact strategies of the giving, conducting research, providing governance support, interviewing family members for legacy documents and writing the business plan of a foundation. This type of advisor does not represent the interests of any one charity and holds the trust and relationship of the family and the donor as sacrosanct. This advisor also manages the granting, onboarding of charities & disbursements to organizations. They will also do follow-up reporting and evaluations.
- Lay it on the line Start with an easy one and warm up to more obscure statements I need coffee to kickstart my day I donate or volunteer to charity at least once a year I am a first generation Canadian English is my first language I have gifted a Goat I have received a Goat I have a will and it is up to date Family vacations is the glue that holds us together My siblings and I always get along My family has shared what our intentions are for our legacy with every relevant member The government should be the main source of funding for all our societies social, educational, and healthcare needs Private donors should be responsible for arts, culture, recreation and non-basic need support I can be pretty sure of having my voice heard in a group in which I am the only member of my age When I open up a history book, I know I will easily find positive images of someone of my gender We have an obligation to give to charity locally We have an obligation to give to organizations internationally I am a philanthropist
- Explain buzz words but also distill down so that people can see the relevancy for themselves.
- Start with WHY
- Level one – Needs based giving Front-line charities Band-aide solutions Level two – Empowering Individuals Funds are a one-to-one or a one-to-many experience Seeing your money put to work in the life of an individual Level three – Capacity Building Supporting organizations that help other organizations Investing in an agency’s operational effectiveness Level four – Networked Philanthropy Leveraging your network to further the issue
- Activity – In groups of 3 or 4 take a piece of flipchart paper and a few coloured markers. You will see a generation title at the top of the page. Draw a character like one of the images on this screen (or perhaps make it gender neutral) Over the next few minutes discuss what factors influence the generation that is identified and draw images that reflect that generation. Regroup and discuss what is drawn. What stereotypes are being presented? What are the external influencers (ie. Woodstock, Band Aide, etc.)? What are the political pressures on that generation (i.e. Cold War, 9/11)? How do you think these markers have influenced or defined that generation’s view of money and philanthropy?
- Just like an investment strategy, we assess the risk tolerance of donors. This helps us understand the types of charities and best ways to design solutions for the funders.
- What donor types look like. Notice that it is a horseshoe not a line b/c Mavericks and Informed donors are so close together. What makes them different is how they give.
- How these donor types finance charitable activities.
- What it looks like as we map out a family’s donor profile.
- These tools are to help you have more meaningful conversations to deepen the relationships between you and your clients and differentiate yourselves in the market. For families these tools can help ensure your advisors are able to support you in your philanthropic planning.
- The assets in these accounts get translated to the 4 T’s
- Family – use this to map out personal 4 T’s Advisor – use this to help your clients map out their 4 T’s What do you have available.
- Successful giving plans are ones where the funder isn’t just bringing financial resources to the table - the resources are Time, Talent, Treasures and Ties.
- Worksheet and DLM handout How do you decide which charities to engage with? Decide my philanthropic goals then identify the charities that will support those goals Does this feed back to my social vision and my giving mission? Are you an institutional donor or a social change donor? Do you want to fund root causes and systemic issues, or do you want to fund front-line emergency type organizations? Does the vehicle for giving enable you to achieve what you want to achieve in the time you want to achieve it Conduct due diligence and do research before supporting a charity Gather information about an organizations operations, their effectiveness and success track-record Set expectations on what you want charities to measure and how you want them to provide you with feedback as a result of your contributions Determine how you want to communicate information about your charitable giving
- These tools are to help you have more meaningful conversations to deepen the relationships between you and your clients and differentiate yourselves in the market. For families these tools can help ensure your advisors are able to support you in your philanthropic planning.