As globalization, technology, and financial innovation combine to create great wealth — and great inequality — individual donors and foundations are under increasing pressure to be more nimble, more strategic, and to take more risks. Even as philanthropy struggles to respond to these challenges, the role of the philanthropy professional is evolving. Business as usual is out; managing complexity is the order of the day.
Earlier this week, PND spoke with Olga Lech, a philanthropic advisor at Geller & Company, about some of the changes roiling the field.
Philanthropy News Digest: We often hear that it's harder to give a large fortune away than it is to make one. Do you agree?
Olga Lech: I think they are equally difficult, but in different ways. The level of complexity changes – sometimes significantly – depending on what it is you are trying to achieve. If you simply want to be charitable and support good causes to make the world a better place, you may look to donate to a local charity such as a church or school in your community with a year-end gift that supports their operations and/or mission. If you are looking to be a philanthropist, however, your giving will most likely be focused on longer-term programs that seek to address bigger social issues, which would most likely cause you to look at other components such as sustainability, governance, and the recruitment of staff and volunteers.
The difference between charity and philanthropy is really where the complexity comes into play. Another dimension is impact. Philanthropy often strives for the highest impact in terms of results and outcomes, which in this global age can also require international cooperation and logistics. This often means you need to follow and measure the results of the projects you fund. That said, both charity and philanthropy are equally noble endeavors, and choosing which to pursue is a highly personal decision based on a variety of factors, not the least of which is complexity.
PND: What are the most common mistakes made by high-net-worth donors? And what can a good philanthropic advisor do to help them avoid such mistakes?
OL: It all begins with the personal vision of the wealth owner and the degree to which an advisor can help translate that into an effective plan in line with other wealth management elements such as taxes, investments, and even succession issues. The advisor role is to not judge the endeavor, but to help strengthen it. For example, the John Templeton Foundation gave a grant to establish an institute for research on unlimited love. If the donor or client came to me with this idea, my role would be to research it, identify the most effective way to advance the cause, outline the risk factors, and find the best ways to mitigate those risks to protect the client's assets. The beauty of private philanthropy is that it allows donors to fund projects, programs, and initiatives that no federal, state, or local government would have the freedom to fund. And many of these initiatives lead to breakthrough discoveries with impacts that touch many lives.
PND: Although I’ve never worked for one, I suspect that private foundations face a different set of challenges. What are some of those challenges? And is it true, as the saying goes, that if you've seen one foundation, you've seen one foundation?
OL: That is indeed a humorous saying, but I’m afraid only half true in the sense that while most every foundation is different in its mission and scope, nearly all gravitate toward best practices when it comes to operations. Many of the practices we employ for our corporate clients also represent best practices in the foundation sector.
PND: How has technology changed the foundation field?
OL: Technology is often the great equalizer for foundations in that it helps the organization get to these best practices faster and with greater consistency. For example, there are many grants management software packages out there that make the experience of applying for grants easier and more streamlined. They also help private foundations be more efficient in managing their work load. The philanthropic community is extremely open to sharing knowledge, which helps us all in our pursuit of the best possible solutions out there, and that’s very nurturing and encouraging.
PND: You presented at the 9th Annual Grants Managers Network Conference in San Diego earlier this week. What does a grant manager do? And what did you tell those in attendance?
OL: A grants manager at most foundations wears many hats. They manage the proposal intake, oversee due-diligence and compliance, coordinate proposal reviews, work with boards of directors, manage grants management software, create RFPs – I could go on. In an interdependent global economy where philanthropy is gaining more momentum and becoming the creative, driving force behind many social solutions, grants managers have to be modern-day renaissance people. They need to know a little bit about law, accounting, management, project management, tax policy, social problems, politics, et cetera to effectively facilitate the grants process.
The GMN conference brings industry professionals together to address common challenges and gain new skills, make connections, and share ideas. My message to them was that in this fast-moving world, having influence broadly in an organization with a degree of control and creativity requires exceptional skills, and that's where project management opens new possibilities to grants managers. Being a certified project management professional, I want to inspire other grants managers to use project management skills to manage and embrace complexity and change.
-- Mitch Nauffts