Creating and Professionalizing the Philanthropic Advising Field in Asia

The sector is buzzing lately about the growth of the philanthropic advising field. I thought I would lay out some of my thoughts in growing such a field in Asia.

In the philanthropic advising field, there are three groups of players. We have one group that is focused on raising money for their organizational needs and, thus, it is difficult for them to come to the philanthropic advising field in a neutral position – there is a perceived conflict.

The second group, or what we call, centers of influence, include advisors like wealth managers, accountants and attorneys. They have expertise in the creation and management of philanthropic vehicles but not in programmatic and/or philanthropic approaches. Both groups have access to good information but the information is limited and very specialized.

What is currently missing is the third group – groups that serves as generalists or what Jacob Harold of the Hewlett Foundation calls, a philanthropic concierge, in sourcing projects, scanning the field, providing donors with thought leadership research, and evaluating not just the impact of the donor’s gift but in the field or issue area. It is difficult to build firms in this category – even in the U.S where many resources are available (Guidestar, Foundation Center, Philanthropedia, etc.). Trying to build these firms in Asia is even more difficult.

One reason is that a generalist needs to know a bit about the trends and the philanthropic field overall.

The second is that the generalist needs to know a bit about the various issues that donors are interested in to hold a conversation and then bring in experts that can deepen that knowledge.

Third, the generalist needs to know how to engage with donors, their families, and their advisors (including knowledge of their various cultural practices and customs and also getting beyond the language barrier).

Fourth, we know that sophisticated Asian donors give locally, regionally and globally. What is needed is not just local knowledge of how to work with clients/donors and provide advice on implementing their charitable goals, but also connections to regional and global experts to implement their giving. There are not many individuals or firms that have this reach.

Fifth, the costs associated for growing such a firm is quite high. In order to properly source projects, you will need to build networks and manage across multiple countries and regions. I have not found a for-profit firm that has been successful at this work but I do know of several nonprofit groups that are entering this field.

In the U.S., the philanthropic advising field was originally built with the support of foundations and/or profits from groups closely tied to the organization. The groups that were mentioned, RPA, TPI, Institute of Philanthropy – all these groups are in some way supported with foundation funds to do their work, whether unrestricted or fee-for-service projects. The cost of their operations and the amount they charge for their general educational and philanthropic services are not sustainable on fees alone. This is why it is so difficult to find a philanthropic firm that is not subsidized in some way, whether in the U.S. or Europe. Some business models have proven more successful than others – but no one has found the secret formula.

If philanthropic advising is to work in Asia, we need to build platforms, whether for-profit or non-profit, that not only encourages philanthropy but also collaborates with groups one and two mentioned above. It has to deliver tangible fee driven services to sustain itself. Most important, the platforms need to be advocates that help create service delivery standards that earns the trust of donors. Finally, we need to professionalize the philanthropic advising field by requiring practitioners to acquire specific core knowledge in the field. In the US, we have certifications such as the Chartered Advisor in Philanthropy (CAP) program offered by the American College. Universities also offer nonprofit management degrees. This creates professional standards and increases the demand in the marketplace for well-trained philanthropic advisors. The goal is to get to the point where donors value the advice and services of philanthropic advisors and thus, are willing to pay, maybe not as much, but close to, the fees charged by their attorneys and accountants.

About the photo: Friends International, Aceh, Indonesia, May 2009