If your goal is to work with high-net-worth clients, you can differentiate your financial advisory firm by going beyond traditional charitable planning and offering strategic philanthropic advice.
While many advisors have cursory conversations with clients about their charitable interests, few have truly collaborative conversations that help reveal and align a client’s values and passions with their giving. And the engagement doesn’t stop there. An advisor needs to be ready to help manage relationships with nonprofits and navigate the complex philanthropic landscape. Clients who receive this kind of concierge service and attention are extremely loyal and trust your judgment.
You can provide this kind of service in house or through outsourcing. Here is an example of my recent work with a wealth advisory client who was looking to advance his charitable goals.
A Former Teacher Gives Back
Last year, a local boutique wealth advisory firm, enTrust Wealth Advisors, introduced me to a client of theirs, Wilson Schoellkopf. When Wilson was in town, I met in person with him and enTrust managing partner Mike Crawford. As we sat around the table, I learned not only of Wilson’s values and passions but also of his focus and deep hope to establish a scholarship fund to help bridge the education gap for low-income students in his hometown of Dallas.
Wilson, who grew up in a philanthropic family, is a former teacher who is passionate about education. He had supported students in the past but wanted to create a mechanism to formally support the ambitions of students, based on merit, in a way that would be ongoing and sustainable. His vision is “to change the world, one student at a time by eliminating the financial barriers to a quality education.” He was ahead of the game as he already knew his funding area of focus.
Wilson and Mike agreed upon a funding amount and Wilson asked me if he should consider establishing a family foundation. I asked him specific questions based on his goals and then explained that a donor-advised fund in a community foundation would be the most effective way for him to move forward.
Creating a Roadmap
Wilson knew what he wanted to accomplish but needed a partner to help create a roadmap for him to realize his philanthropic objectives. After our first meeting, I followed up with a detailed scope of work proposal that outlined objectives, deliverables, timeline/key milestones and fee structure.
I connected Wilson with leadership at The Dallas Foundation and coordinated a few virtual meetings for us, beginning in July 2021, to hone in on how the foundation’s existing scholarship program could best accommodate Wilson’s goals. Throughout this process, I kept Mike apprised.
Once we finetuned and confirmed the scope of the Schoellkopf Scholarship Fund with our partners at The Dallas Foundation, Wilson and his expanded team of advisors decided on launch specifics for year one (e.g., funding, eligibility requirements, target school, application format, timeline for process and awards). His scholarship fund application period opened on January 1, 2022. Scholarship awards for year one will be finalized by March 31, 2022.
For year one, Wilson knew he wanted to focus on a PreK-8th grade Catholic school, St. Philip & St. Augustine Catholic Academy, where he had taught. He knew the need for tuition support was great so academically gifted students from at-risk backgrounds could continue in this learning environment regardless of their families’ financial means.
Staying Hands On
Per Wilson’s wish, he is staying closely engaged with the scholarship fund process — identifying the school(s), working with the administrators, being active on the scholarship committee, and presenting scholarship award certificates in person. He keeps me in the loop in email threads and defers back to me periodically.
He not only wants to invest philanthropically in this scholarship fund but he also plans to fundraise through his network to increase the fund’s assets and amplify its impact.
It is truly because of Mike Crawford’s vision and trust in me that Wilson’s scholarship is now a reality. He is an exemplary professional advisor who sought out additional partnership in me to help Wilson realize his dream. Mike saw me as another trusted voice around the planning table with expertise in guiding the philanthropic conversation.
Finding a Strategic Partner
Firms that want rewarding relationships need to truly understand a client’s desires and invest the time in developing an extensive knowledge of nonprofits and contacts at those organizations. For firms that don’t want to make the in-house investment, outsourcing this work can be an excellent option.
Here’s a checklist of what to evaluate when choosing an outside group with expertise in strategic philanthropy. They should be someone who has:
- A partnership with professional advisors on the client’s behalf.
- Knowledge of the nonprofit sector and relationships with organizational leadership.
- A deep understanding of issue areas and how to navigate the philanthropic landscape.
- Expertise in conducting philanthropic conversations with clients in order to bring their giving into alignment with their values.
Satisfied HNW clients bring referrals and business development opportunities. Clients will invest in areas they believe are well managed and well stewarded. You can build upon their satisfaction by creating an HNW peer network for clients to learn from and collaborate with like-minded philanthropists. This also gives your firm an additional lever for business development.
What is the bottom line from strategic philanthropy? The return on investment for your firm is happier, influential clients who will share their confidence in you and your philanthropic focus.
Claudia Ehrlich, a chartered advisor in philanthropy (CAP), is founder of the San Diego chapter of Advisors in Philanthropy and the consultative practice Philanthropy By Design. She helps guide advisors and their clients nationally. Claudia is also an adjunct professor at The University of San Diego, where she teaches fundraising, philanthropy and integrated marketing to master’s students and doctoral candidates.