DEBORAH: Hi, everyone. I’m Deborah Goldstein, Co-dean of Philanthropy for the Purposeful Planning Institute. I have my own philanthropy advising firm, Enlightened Philanthropy. And I’m joined today by Richard Marker of the Institute for Wise Philanthropy. This is a follow up conversation to the conversation I had with Janelle Turner, about why one should work with a philanthropy advisor and also when to bring them in. And today in our conversation with Richard, we’ll be talking more about how you actually choose a philanthropy advisor. So thank you so much for joining me today, Richard.

RICHARD: Pleasure.

DEBORAH: One of the ways we like to start our conversations in these podcasts is by asking you, what is your purposeful journey? How did you arrive at this work?

RICHARD: Okay. Well, I’ll try to give you the shortest possible answer because I know we want to get onto the subject. But the long answer — which is not going to give you the long answer — but the long answer is that I actually had a grandfather who was a philanthropist. And that didn’t really resonate as much with me until I actually got in the business. But I realized that on some level that was formative. But the shorter answer is that this is my fifth career. I began as an academic. I was an executive in the nonprofit sector.I did some for profit strategy consulting. I found myself in Berlin, the day the Wall came down (we don’t have time to go into that story). And I can’t take full credit, but nevertheless, that’s kind of changed my life, as you can imagine. And went back into the nonprofit sector and started doing a lot of international things. And not too much after that, I was tapped to head a fairly substantial private foundation. It was a corporate foundation that was sold by companies still controlled by the major fat by a family. That foundation closed in 2002. And since that time, even while I was still heading the foundation, I’ve been an educator of philanthropists first at NYU now at the University of Pennsylvania, and also at our own institute around the world. We’ve educated through formal programs of one sort or another, several 1000 philanthropists and foundation executives. The institute also does a very specific boutique kind of advisory work strictly related to either evaluation or strategy. We don’t manage anything that’ll be relevant in our conversation. And we don’t do any management, we don’t take retainer contracts. It’s really a very specific boutique firm. And it’s important to mention (and we’ll talk about that a little bit later) because there are lots of people that call themselves philanthropy advisors. But that can mean a lot of different things. And so I kind of make it a point to emphasize to people not only what our business model is, what our approach is, what we don’t do, what we don’t try to do, and even what our financial model is, so we talk about those things. But for me, it’s been a very defining part of the last quarter century. And frankly, I believe in the importance of volunteerism, generosity, and philanthropy as a universal phenomenon. I do things all over the world and there is no society, no culture I’ve come to where there is not some form of volunteerism of people utilizing private resources for public good. And to be a part of that to help people make good decisions to help them make the world better because of our volunteers and it’s something I take very seriously and cherish

DEBORAH: Incredible. Thank you so much for sharing the nutshell version and bringing your wisdom and experience to bear today. You know, we will be getting into the factors that one needs to consider when choosing a philanthropy advisor. And there are so many factors as you’ve already alluded to. I’m wondering if there’s one that you would pick out of the bunch to consider that feels like the most important or the top priority for a couple or a family to consider when making this choice. 

RICHARD: We’re a foundation. I think the most common element for the people that I talked to over the years, whether they become personal clients or not, is that there’s a question that needs to be answered. And that question can be precipitated by positive change or a negative change. Somebody can get married, somebody can have kids, somebody can sell a business. So that can be a positive change. Or somebody can die, or there can be other kinds of reversals. But one way or another, when the thing that sends people got philanthropy advisors on the whole is there’s something changed that that they need an answer to. And as I say that can have to do with how long the foundation exists, or whether there should be a succession plan, or what the priorities or the focus should be. There’s all sorts of things that it may be. But until one is clear what the question is, it’s a little bit difficult to somehow say, “Who’s going to be the right person? Or the right firm?” Sometimes it’s an individual, sometimes it’s a big firm. But until that, until you’ve gone through the process of figuring out what question do you really need answered, then you can’t really even bid until that happens. You don’t really know the right combination of skills, right combination of personalities and competencies that are going to be most useful for you.

DEBORAH: Wow. I think that’s such a great point, Richard, is that you need to be clear as a family on what that question Family Foundation, couple, or individual of what questions you need answered, because that really helps you to get the right answers that you need for all these other things you talked about-

RICHARD: I’m gonna interrupt you, though, not by being rude. I do want to say that doesn’t mean that the potential client has always has necessarily figured it out correctly. Very often, as we all know, and anybody who’s watching this or listening to this, sometimes people think there’s a precipitating question. But in fact, underneath it, there’s a set of questions that haven’t been articulated, or they’re not willing to articulate, or it raises too many family challenges or personal challenges to articulate. But one of the roles of an advisor is to get to what the real question is, but usually there’s a precipitating question that leads to the discussion.

DEBORAH: Yes, thank you so much for raising that distinction. Because it is true, they often do come to us thinking it’s one question, and it may be, but we may need to answer some other questions before we can get to that one. So tell me you did touch on this in the beginning about the business model of a philanthropy advisor, and how does that play into this?

RICHARD:  Sure. I like to tell the story of people over the years when people have told me that they’ve had frustrations of working with philanthropy advisors. And by the way, one of my personal bugaboos is that I like to call us philanthropy advisors, not philanthropic advisors. And the simple reason is everybody should be philanthropic. But the subject about which are advisors is philanthropy. That’s a personal bugaboo. It’s a grammatical error but okay, let me come back to that. When I talk to people about either their satisfaction with or dissatisfaction with the people who may have worked with in the past, invariably, it’s because they didn’t have clarity ahead of them. There’s one of two things that happens. One is they didn’t have clarity as to what the assumptions and or business model of the advisor is. And later on we come to it, even what the methodology is, but if it turns out that there’s not an understanding of it, that often can lead to some unhappiness or discomfort. And I like to give examples of us. We, as I said, very quickly, don’t take retainer contracts, which means that if we come in as an advisor, the positive is that people know that they’re going to get independent in suggestions, because we have nothing at stake in what we propose. Again, we do try to help them figure out how to implement it. But if somebody is really looking for somebody who’s going to be a long-term, a part-time employee — as it were, which many philanthropy advisors are — we’re not the right people to talk to, because we’re not going to be doing the management kinds of things if somebody needs somebody to prepare aboard packets. We’re not the right people for that. So understanding the business model and how we charge and what our long term relationship is going to make all the difference as to whether you’re choosing us for the right reasons. Many people don’t know that there are folks like us around who really will only take project related strategy work. Sometimes people will say to me, “How come we didn’t know about people like you before?” But you know what? That’s okay. And that doesn’t mean every philanthropy advisor is pushing it. What they have to be careful of, though, the reason I pushed so hard in asking for the clarification of the business model, is so that it gets the potential advisor to articulate exactly what their approach is and what their intended relationship is. And then if it turns out that the client says, “You know what, that doesn’t sit right with me or that doesn’t sound exactly what I’m looking for.” Or conversely, “Oh, my goodness. I’m so glad I met you. That’s exactly what I’ve been looking for.” The degree to which that’s articulated upfront, works better on both sides.

DEBORAH: Agreed. Yes. So I was speaking with somebody the other day and explaining what I do. And they said, “Oh, so you want your clients to become self-sufficient?” And they said, “Yes, I do, that is the intention here that they can do that on their own.” Talk to me about, you also referred, I believe, to maybe somebody’s needing a team of advisors, versus an individual advisor. So talk about the difference in that.

RICHARD: A good example is a very good friend of mine who sold quite a substantial business, and he’s not around right now. But it’s such a substantial business. I would have breakfast with him once a week. So somebody I knew quite well. And he was setting up a foundation, and he chose one of the very large philanthropy advisory firms. And I asked him why he made that choice. I didn’t say, “Why did you choose me?” I said, “Why did you choose to make that choice?” And he said, “It’s very simple. I have grandchildren living all over the United States. And I want to have a firm that’s going to be able to deal with them directly over a period of time.” And so I needed a firm that’s going to have various offices. And that was a thoughtful response, because he really just wanted to set up a foundation that was going to outlast him, who’s going to at least list it into his grandchildren. And he was smart enough to recognize that they were going to need some of the professional support that a large firm could bring to bear. On the other hand, however large the family had been, if it turns out that he had been at an earlier stage and what he really wanted was an opportunity to really think through what his strategy was going to be, then he would not necessarily have needed a big multi-office firm like that. And some more boutique firms might have been appropriate for him. But it was very thoughtful on his part, and he really had a very good reason for wanting the bench strength of a large firm. But many people, if it’s a single or if it’s a couple, or maybe people are in one location, or there’s a different set of questions, one has to be careful. Sometimes if you contract with a very large firm, you may be assigned somebody who’s very junior, or the way in which the pricing is established, goes beyond what really is necessarily called for in the work that you have to do. So there are trade-offs. And it’s really important for a potential client to make that determination. What are you really looking for? What stage in your thinking do you need this advisor? And by the way, I fully endorse that people should be self-sufficient, but not everybody wants to be self-sufficient. But what they need at the end isn’t the same. Some people want a program officer. Somebody wants somebody else to run back offices. Some families may want people to do the site visits for them. There’s a range of ways in which people can be supported over a period of time. But until they understood that they have these options and understood where that fits with their own personality and their own family culture. They may be pushed into making decisions that really are not going to satisfy what their long-term needs are about. If self-sufficiency is the way to go. great.

DEBORAH: Yes, I understand and the thing is philanthropy advisors work in all these different ways and can meet all these different needs. And yes, in some cases, I do want my clients to be self-sufficient. And in other cases, I realize they need a little bit more hand-holding along the way. And that’s just the nature of that relationship. Talk a little bit more about if there is any more to add about experience when it comes to a philanthropy advisor.

RICHARD: Right. Very, very good question. So let me focus that on a couple of areas. So the first thing I’m going to talk about is what I call the one trick ponies. And there are two kinds of one trick ponies. And one is where somebody has come from a very prestigious background that’s worked in a foundation. Maybe one of the famous foundations has a very important role there and developed a very credible reputation within that foundation, and decides to go off on his or her own. What often happens is that the experience of having worked in that one foundation may be perfect, but has nothing to do with your situation. You may be much smaller. You may have a very different focus. You may have a very different ideological set of assumptions. And they wish to assume that the internal experiential database of that person with that experience is automatically applicable to you can be a false assumption. So in that sense, if you are going to work towards somebody and not putting that down, but make sure it’s aligned with what your needs are. The other one trick pony is, the example I like to give is that we know the expression: To a hammer, everything is a nail. And we’ve all met advisors, consultants, people who have a particular methodology, and as far as they’re concerned, everything is going to fit into that approach. And it doesn’t matter what your question is, whether it has to do with metrics, or whether it has to do with methodology or has to do with what outcome measures or whatever you want to talk about, everything’s gonna fit there. Well, the truth is that people have different sets of questions with different sets of needs at different stages of their philanthropy, and one has to and that’s why it’s so important to ask questions about what their approach is. Mariela — who is both my wife and partner — who’s an expert in program evaluation, likes to talk about in the American Evaluation Association. There’s I don’t know how many but dozens of different valid evaluation approaches. People often assume that when you do an evaluation, there’s only one thing that’s going to be measured: what the numbers may be, or what the outcome is going to be. Turns out, there’s a wide variety of different approaches. And it’s very important for a potential client to understand what the underlying approach and methodology is. The last thing I want to say is, it depends. It depends what you want to accomplish. And so I’ve reached the stage of life where people refer to me, I decided to embrace as an elder. Or as a matter of fact, I was recently introduced on an international webinar. I was doing it as an eminence grise, so I decided to embrace that. I guess, if you get to a certain stage, but that’s kind of irrelevant. Because that experience means that I can sometimes have conversations with a founder, with a senior member of a family foundation, that can be very difficult for somebody who’s substantially younger than I am, and may even be difficult for members of their own family or of the staff that are working for them. I have that ability, you have to do it carefully. You have to do it with a degree of skill. But the fact is that that level of experience can be there when I can sometimes say things I don’t mean only to make somebody like me say things to somebody who really needs to hear it, but nobody’s yet comfortable to say it. On the other hand, there are other times when different kinds of experience are appropriate. In the scheme of the world in which we live I’m a straight, white, older male. Well in a family that hasn’t many generations, I may serve a useful role, but not a sufficient role. And it may be important to have people on the team who I can relate to or not as beside the point they may not feel that they can relate to me. And so it may be important to have somebody on the team who is a woman or depending on the family or is of color or or substantially younger wherever that may be. Recognizing that the three generation family is very diverse I may need to have a different persona with whom they’re going to be comfortable talking. So experience matters. But the relevant experience is what matters the most.

DEBORAH: That’s so great. And I’m also thinking about, of course, PPI is this community that is made up of so many different advisors, and so that they come to these families of wealth with different experiences. So talk to me about the collaboration of a philanthropy advisor with other families.

RICHARD: Well, that’s great. And one of the things that I really hope comes out of this series is that we develop a methodology for philanthropy advisors. Really, truly being a part of the professional advisory teams, for families, for family offices, for family foundations, it’s tricky. And I want to talk about why it’s tricky and why sometimes that makes sense and sometimes it doesn’t make sense. So I’m going to talk about a situation where it may not make sense. I was at the Community Foundation, non-ordinary where it brought me out to give some talks and to do some workshops. One of the very wealthy funders in the community wanted to meet with me privately, when I met with him, the first thing he did is he said, “The Community Foundation’s gonna get its money. They don’t have to worry. It was only about $5 million.” Or so he promised them. They didn’t have to worry about it. But what he said to me is, “I need to talk to you privately because you don’t live in this community, and in this community, everybody has their hands in my pocket. And frankly, I’m a lot richer than anybody knows. And I’m not even comfortable talking to my lawyer about this, who doesn’t have a full understanding of my wealth. And the person who manages my local money doesn’t really understand at all. And I need to talk to somebody about my philanthropy, who doesn’t have his hand in my pocket, in the community where I’m living.” So that’s a classic example where being an outsider-independent was exactly what this particular client wanted. On the other hand, there are other times when the opposite would be the case where a trusted estate attorney may understand their client very well, but that doesn’t necessarily have the expertise. And what does it mean to talk about philanthropy, looking two or three generations down the road may not have the experience in anticipating the philanthropic implications of a major gift, only the legal implications of a major gift or setting up the foundation or that donor advised fund or the LLC, or whatever it may be. And so that there are times when being a part of the team can make a difference. And now give them a positive example of that, if I may, somebody who had taken a course with me had not been a client called me from their lawyers office, about to sign a contract with their alma mater to give a major building to that alma mater. And at the last minute before signing asked if I would come take a look at it and be a part as it were, functionally be a part of the team. And sure enough, it was as there were not that many issues, there were no financial issues during the naming was all they’re all taken care of. There were all sorts of things that these perfectly fine lawyers totally overlooked. For example, we now know better, there’s already a few years ago, people would probably think about this today. What happens if somebody comes along and offers more money to the university than this person was giving to have the building named after him? Now, today, I suspect a lawyer would ask that question. This goes back a bunch of years. And the lawyer never thought to ask that question. The lawyer never had thought to ask the question who’s responsible for cleaning the building or putting new HVAC systems in five years from now or ten years from now. There were all these Cortlandt or other things —I’m just giving a couple of examples — the lawyer’s office was a classic case. We’re bringing in as a partner to make the client have a better arrangement. The legal stuff was handled more completely because of my involvement. And the philanthropy stuff was handled better, because I was brought in. And that’s a positive example. And I only wish that happened more frequently than it does. I also want to be sensitive. I want to put on the table a recognition that’s very important, because I know when PPI, there’s lots of people who are lawyers, and lots of people who are Wealth Advisors. And I want to recognize that there are legal implications to your taking a client that are different from what it means for us as a philanthropy advisor. And so when I come in, I can say I want the entire family or the entire foundation to be my client. It’s very difficult for a lawyer to be able to make that requirement. Ultimately, the way the law works is there’s a specific client. And then the lawyer may be sensitive to it. But ultimately, if the client wants something, it may be very difficult for that lawyer to somehow say, “I don’t think that’s the best decision.” And so I want to be, I don’t want to be too harsh about the distinction. But it’s one of the reasons that when there’s philanthropy discussions, there’s so much value in bringing an experienced philanthropy advisor into the picture, because there are ways in which we can have conversations and discussions in a way that can counterbalance some of the legal restrictions that a wealth advisor or a lawyer can confront. So to the end where I began, I really do hope that one of the things that emerges from this PPI series is that there are some an expansion of examples where we can talk about very effective partnerships that really build on what the theme of the PPI is about, but doing includes experience philanthropy advisors from the get go.

DEBORAH: Thank you so much for joining us. And that’s my hope, as well. And I can’t believe how fast our conversation has gone. But I would be remiss if I didn’t ask this last question before we go, which is about accreditation and this field is still sort of a growing, evolving field. So could you speak in our last few moments here about accreditation?

RICHARD:  Our field, the field of philanthropy in general and philanthropy advisory is the only field that has no barrier to entry. If you want to hang up your shingle and say, “You’re a philanthropy advisor, and somebody wants to hire you.” You don’t have to demonstrate that law. You don’t have to demonstrate that philanthropy history. You don’t have to demonstrate that you know what the ethics are, or best practices, or a whole series of other kinds of things that fundraisers have to do. So every professional has it for a variety of reasons. Our field has not yet gotten there. Now, be careful in listening to me, I’m not putting everybody down. We have some wonderfully trained people. People that know a lot of people that have a great experience. People understand ethics. People understand best practice and do a wonderful job. The problem we have is that there’s no credential that will tell a potential client that they’re talking to somebody who has that credential. And I think that one of the signs of the maturity of the philanthropy field in general, people who work in foundations, people who are doing philanthropy advising, that one of the measures will be when there was a credential of philanthropy credential, not an investment credential, not a family systems specialty, but a better philanthropy grantmaking expertise. A credential that shows that somebody at least can be guaranteed to know what we consider to be the core competencies and the basic knowledge of the field. So I’m really hoping that we can move toward that we reached that level of maturity, after all. But in between the advisory work that we do in philanthropy itself, we’re responsible for billions of dollars. We are responsible for an entire sector. We are responsible for influencing public policy. We’re responsible for helping determine succession and public priorities. We owe it not only to the field of philanthropy but we owe it to society as a whole. To take that matter seriously is what we know when we go into this field. And when we start working with clients.

DEBORAH: Well said. What a great place to end and thank you so much for sharing your knowledge and wisdom and experience with us today, Richard. I really appreciate it.

RICHARD: It’s my pleasure. Anytime.

DEBORAH: Thank you.