Guest Post: Advisors Should Help Funders Become "More Tolerant of Risk" + "Transparent About Failure"

Thursday, July 15, 2010

Meg Lassar As a professional who works with both individual donors and family foundations to implement effective and meaningful giving strategies, I considered David La Piana’s observations on the changes in the sector in the context of how they might shape the philanthropic advising profession and how they might inform our understanding of the “best practices” we impart to our clients. 

La Piana emphatically stated that “funders must depart from traditional funding models”. This means that donor advisors must help clients to move away from some of the more inefficient grantmaking procedures that have over the years become standard industry practice. For example, we as advisors can work with donors to shorten the time lags between grant application and approval, integrate the latest technology to facilitate client learning, engage multiple stakeholders in grant award decision-making (recently my colleague, Aaron Spevacek, wrote on this topic [PDF Download]for Alliance Magazine), and help donors to participate in strategic thinking alongside grantees rather than in a “top down” manner.

In addition, as donors increasingly experiment with non-traditional mission-related investments—such as PRIs—we, as philanthropic advisors, must be capable of assisting them in implementing the non-grant strategies that will advance nonprofits’ ability to adjust to the demographic, technological, social, and cultural transformations that will play out in the coming years.

Perhaps the greatest challenge La Piana’s trends forecast poses to advisors—whose job it is to develop successful and effective donor giving strategies—is to encourage donors to become more tolerant of risk and more transparent about failure. We must become comfortable with the idea of mistake-making as progress; that is, as a necessary step in our clients’ development as strategic donors.  Despite advisors’ inherent interest in protecting their clients’ bottom lines, stimulating donors’ appetites for calculated risk will ultimately generate greater returns in terms of lives changed and problems solved.

The need for advisors to adapt to the trends La Piana outlined in his keynote speech (and in his monograph, Convergence [PDF Download]) has reached the point of no return if the advisory industry is to continue, in the words of Convergence, growing “at the speed of change,” thereby remaining responsive to the needs of the next generation of donors. 

~ Meg Lassar, Analyst, Strategic Philanthrophy, Ltd

Note from the Editor: Attendees at Donors Forum's Annual Luncheon in 2010 were invited to comment on the keynote by David La Piana.  We are grateful to Meg Lassar (pictured above) of Strategic Philanthropy, Ltd -- which is owned by Donors Forum Associate Member Betsy Brill -- for her post. Find other posts related to this topic here.  We invite comments and guests posts from other Members, Associate Members, Forum Partners, and friends of Donors Forum.