As Ultra High Net Worth (UHNW) donors, family foundations, and lean grantmakers make grant awards and donations, they might want to think about the bridge between smart strategy and great grantmaking.
Kemp Whitfield, our strategy consulting firm in metropolitan Chicago, just spent some time interviewing industry leaders about how to help the uber rich leverage strategic planning in a way that connects them to their goals of making gifts that matter and align with their overall priorities and philanthropic identity.
This is of particular interest to those who don’t want to take on a full-time staff, need a relationship anchored in trust, and who treasure the ability to be both nimble and philanthropic.
Why does it matter?
Even with a fabulous plan and best intentions, if UHNW donors and new philanthropies are working with a team, that team is typically really lean (or focused on wealth management), and they get stuck when staff members change; they are understaffed, work alone, or don’t have the right staff in place. And, honestly, if a philanthropy is trying to do it solo, there just isn't enough time to focus on the art of grantmaking in a way that drives impact.
No matter how great the plan is or how dedicated they are, it’s the strategy implementation that is often the ultimate differentiator.
What are hunches that drive towards solutions?
We asked industry leaders what were some of their hunches about solutions. It was a small (and thus not scientific) sample size, but there were some great themes that emerged:
1.) There is a middle market to provide flexible services to individual UHNW donors, family foundations, family offices, and leanly staffed foundations. This market is different from the traditional philanthropy consulting often provided to well-endowed and old-school legacy foundations that focus on policy, content expertise, and omnibus strategic plan implementation. It is also different from the increasingly crowded philanthropy advising space that helps donor families and individuals identify their philanthropic identity, structure their giving vehicles— and typically do so tied to their wealth planning.
2.) While conventional thinking among philanthropic advisors is that most “new” donors, philanthropies, and lean funders are intentionally light on strategy and more interested in their charitable impulse, some understand the importance of the middle ground: strategy, effective grantmaking practice focused on the big picture, and philanthropic identity are not mutually exclusive.
A philanthropy consultant’s strategy experience can help UHNW donors, family foundations, and lean philanthropies shore up their grantmaking to consider not only their passion on certain issues but also the ecosystem of grantmaking across other foundations and funder networks. The more they are aware of the philanthropic landscape, the more they can best leverage their grantmaking for maximum results.
3.) Philanthropy consulting needs to factor in the 90lb gorilla of trust — or lack thereof — that is present when UHNW donors, family foundation, and lean philanthropies make decisions about services. The saying that “work happens at the speed of trust” is flipped on its head here: Work doesn’t happen if a trusting relationship (or at least trust by proxy) isn’t already there. The risk might feel too high for UHNW donors to bring in a philanthropy consultant, even one with years of experience among foundations. Engaging a philanthropy consultant means letting that person or firm into family dynamics, intel on assets, and other intimate details. Trust is just as important — if not more important — than the quality of the consulting itself.
The reality is, onramps are typically built on prior relationships or relationships by proxy where a philanthropy consultant is vouched for by a friend or trusted resource.
So what’s the uptake?
Given the three themes above, there seems to be an opportunity for a bridge portfolio for philanthropy consultants to support UHNW donors, family foundations, and lean philanthropies. This bridge portfolio (something similar to a bridge loan in the finance industry) could include staffing flexibility as a service to help them manage the nuts and bolts of a great grantmaking program informed by strategy and field practice, while being nimble enough to address undercurrents around philanthropic identity and staffing supports along the way.
