It was about this time last year that I received a phone call from a very worried trustee of a family foundation. On behalf of her Board she had contacted her investment advisor to alert him to the fact that the trustees were concerned about all the nonprofits in her community. Many of their grantees and applicants were clearly struggling under the weight of the economic downturn and holiday demand. The Board had determined to raise the payout for end of year giving. Their reasoning was simple; if the foundation was affected by the effects of the recession, certainly their nonprofit colleagues were in much more difficult shape.
She went on to tell me that she had explained all this to the advisor and, knowing their investment strategy was flexible enough to accommodate her request, asked him to plan for a larger fourth quarter payout. They were well aware what this might do to their end of year position and to their commitment to perpetuity. They had just decided that the needs were too great to ignore. The advisor told her that if they raised the quarterly payout appreciably, they would be in violation of the prudent investor rule. In a part pitiful, part frantic voice she asked me what she should do.
Now you should know I take all such calls very seriously. I try to be supportive, give good, clear, considered information, and responsible referrals to other sources if needed. I am rarely rash or flip in such cases. So it was a big surprise to me when I immediately replied: “Get another investment advisor!” But I knew there were so many talented, caring advisors out there that surely she could find one more in tune with her values and goals.
One of the great privileges of family philanthropy is the opportunity to make grant, administrative, and financial choices that will best express your values, mission and goals to serve the public good. Some will choose perpetuity; other not. Some will seek an impact in the extent to which they are able to alleviate immediate suffering and need; others will find that impact in longer term work and systemic change. When we build a team of fellow trustees, staff, colleague networks, and advisors, we look for those who will help us realize our goals for our giving. In this case, her advisor appeared less interested in helping the foundation make more generous grants than in preserving the assets to be invested.
“One of the great privileges of family philanthropy is the opportunity to make grant, administrative, and financial choices that will best express your values, mission and goals to serve the public good.”
For donor families, it is always the season of giving, but the end of the year is always THE SEASON OF GIVING. It might be your religious or holiday traditions that inspire your giving and it might be the need to meet payout by year end. Whatever is driving your generosity, it should be nurtured, encouraged and supported. That is certainly what we try to do here every day at the National Center.
I had a wonderful conversation with that trustee. I was moved both by her compassion and the clear-headed financial sense she and her fellow trustees had brought to their decision. I was especially struck by the commitment she had to her grantees and her sensitivity to their own financial struggles.
As you approach your end of year giving decisions, I hope you find a few minutes to remember the reasons why you do this extraordinary work as well as the privilege of being part of the extraordinary work of your grantees. I think that is just the inspiration needed to get you through all those holiday and end of the year chores on your To Do List. It might also be the inspiration that will encourage your own yearlong commitment to the public good … and sustain the courage of your own convictions whenever you run into someone like that advisor.
I am looking forward to a very special Christmas holiday with my family and, if you are too, I hope it is filled with love and joy. When the New Year comes, I am looking forward to rejoining my National Center family – and that includes you. I wish you the same sense of joy and privilege I experience every day. May it be a New Year filled with good work, good colleagues, and the very best family and philanthropy have to offer.