The Art and Soul of Advising

By Janell Turner

Jessye Norman. Photo by Sergei Chirikov

The oversized basement doors of 1020 John Street, a creaky old mid-century building in South Lake Union just east of downtown Seattle, slowly swung open to reveal a small conspicuous stage in the middle of the room. In the center of the stage was a priest wearing a mid-century, floor-length robe; his head hung low. The basement felt like a dungeon and guests weren’t typically permitted in the area, but this was a special evening. 

Upon entering the space, we were directed to move quickly and quietly in filling out the corners of the room surrounding the stage for a standing-only performance. Unexpectedly, the priest slowly lifted his head and examined the crowd as if looking for a parishioner guilty of some wrong. He found a victim—an unassuming man standing among us in the crowd. Suddenly, the priest grabbed the man by the shoulder and forced him on stage. He resisted the tug while the audience gasped in horror….until we realized it was all a part of the show. This is when I fell in love with opera. 

Art serves as a bridge in putting our own lives into perspective. It brings clarity, purpose, and connection as we see the stories of our lives play out on stage. Seattle Opera’s production of The Combat: A Muslim Christian Love Story in a Time of War, is one of my most memorable artistic experiences. My memory holds onto some of the elements that have played out in my own life as a philanthropic advisor. Venturing into the unknown with excitement and anticipation, curating spaces that inspire and enchant, and entering the stage to perform at a moment's notice are all analogous to the rarified work of being a trusted advisor to generous families. Advising is indeed an art form in itself and the advisor is the director, producer and actor. Every client engagement is like a mini artistic production tailored for a specific audience. 

Ultra-high-net-wealth advising involves the culmination of thousands of hours of preparation, work, successes, and failures, overlapping a variety of industries that touch philanthropy—fundraising, planned giving, financial advising, estate planning, nonprofit and board leadership, and beyond. While the tools, techniques, titles, and certifications are foundational, how advisors nurture trust and build community with our clients is the real test. It requires us to be flexible, vulnerable, intentional, and most of all creative. In practice, this may look like inviting authentic dialogue that meets them where they are and is void of technical jargon, honoring their values at all levels within the engagement, and taking great care to curate environments where every member of the family can feel seen and heard. It’s not just what we say but how we say it that makes room for trust and transformation to occur. This is what we strive for at Phīla.

But even moreso, engaging in this work at a Black-owned firm has special meaning as we approach Black History Month. It serves as a reminder of how far we’ve come, yet how much further we have to go. My very presence in these rarified spaces–opera boards, family office environments, private family retreats– signals a shift in the industry and in the hearts and minds of our clients. Entering these rooms that were inaccessible not long ago (and some still today) serves as a reminder of the shoulders I’m standing on. As the granddaughter of sharecroppers who worked the tobacco fields of Powhatan, Louisiana alongside their nine children—my father being the youngest and the first to go to college—it’s impossible to do this work without an intention to form connections that transcend differences, build bridges, and unite through a shared mission of service and compassion for the world.  

This Black History Month, I challenge you to join me in channeling your passions, purpose, and resources through a charitable cause that centers on Black art. For a list of nonprofits in your area, check out Giving Gap, a donor platform that allows you to search for vetted Black-founded nonprofits by city. You may also reach out to me directly for a list of some of my favorite organizations.

How Donors Can Develop a Growth Mindset

By Sofia Michelakis

Over the holidays, I was having lunch with two friends who are resource mobilizers for large scale social change efforts. They both shared poignant stories of recent conversations they've had with high capacity donors who are decreasing their giving relative to previous years. Their reasons were some you might expect– economic uncertainty, busy lives etc.--and some you might not– fear of public criticism and wondering if it's the right time to go big.

This got me thinking about my experiences working with some of the most generous people in the world over the past decade. One question I keep asking is what is stopping extremely wealthy people from making 9-, 10- and even 11-figure gifts now and early in the New Year? Especially knowing that, in many cases, gifts of this size are paid out in multi-year installments and allow social sector leaders the freedom to dream big and execute large scale solutions.

A scarcity mindset affects even those with the most resources and advantage.

By mindset, I mean a set of attitudes, a worldview or philosophy of life. Mindsets are important because our beliefs and attitudes affect everything we do in life. I propose that the following five shifts in mindset for individual donors would go a long way toward increasing their confidence to make large scale gifts, even during economically challenging times. Whether you're an individual of great means, or someone who works closely with donors, I hope that these suggestions and examples will be useful.

1. Recognize that social problems compound too

I can't tell you how many philanthropists I've met who have really struggled with when to start giving. They often wonder if it might be better to wait to give in order to increase their wealth over time and have more to give away. While the desire to have more to give is laudable, I've often counseled that it is equally important to examine the societal costs of waiting.

Social problems are compounding, often at a faster rate than your wealth is compounding. Take climate change, for example. We have a very narrow window in which to act collectively as a global society to combat climate change. Philanthropy won't be the only solution, but it can be a critical accelerant. We need a mindset of acting with greater urgency in philanthropy. In fact, the very survival of the planet depends on it.

2. You do have enough

When I talk to philanthropists who just a year ago were conscious that their wealth accumulation is outpacing the speed of their giving, I am struck that many of them over the last 6-9 months now believe that the stock market has eliminated that challenge. This belief leads some people to conclude that they should slow down the pace and amount of their giving.

It is human nature for all of us—not just the very wealthy—to take a very short-term approach to comparing what we have now with what we used to have. I get my retirement fund quarterlies, and what does it reveal? It details my current balance compared to last quarter and last year at the same time. That's it.

Philanthropists should have a longer-term horizon and look at their wealth accumulation over a decade. Over this period, a lot of ultrawealthy people have seen their wealth double and even triple in size. Taking a more holistic and longer look back, recognizing that, "gee, overall, I'm way up" may be quite illuminating and increase confidence in being more generous.

Most billionaires give well below their potential and can afford to add a zero (or two!) to their annual giving.* I love it when newer philanthropists set an annual budget for their giving and then materially increase that amount every year as they gain experience and confidence with larger gifts.

*An exception is people whose wealth is entirely tied up in a private company, limiting their capacity to give until they have a liquidation event.

3. You are not too busy

One of the most common areas of scarcity thinking is in relation to time. I can relate. When someone asks me, "how are you?" the first thought in my head—especially during year-end craziness—used to be "busy." We need to reframe how we look at the competing demands on our time. Feeling too busy is a state of mind. It's more how we perceive our lengthy to-do list and we can become overwhelmed. 

There are approaches that we use when we have long to-do lists in our jobs and personal lives. We prioritize, and we get help.

The unconscious decision many donors make when they feel overwhelmed and busy is to de-prioritize their giving when they could be asking for help and delegating more. Here are three strategies for busting the "too busy" mindset:

• Outsource your giving to a reputable collaborative or give to a collective fund. 

• Hire a competent professional philanthropic advisor to help you articulate your giving criteria and develop customized recommendations that will enable you to give with confidence. 

• If you're the DIY type, use give lists and/or grantees of your local community foundation as a short-cut to identify great organizations to fund.  

In short, don't let being too busy be a barrier to joyful giving. Develop a mindset that you have lots of choices for how to attack the busy-ness of your life!

4. Trust goes both ways; give in ways that earn trust

There is sometimes a misguided belief that people who choose nonprofit work have independent means (therefore needing less pay) and superhuman sources of energy (therefore needing less support and time off). We need to recognize social sector workers are essential workers and we can't keep taking them for granted. Less than 1% of philanthropy goes to programs directly benefiting women and girls of color.  Furthermore, organizations led by women of color receive smaller grants on average and are more likely to receive restricted funding. Is it any surprise that these leaders are burnt out?

It's not just donors who need to learn to trust nonprofits. Decades and centuries of systems of oppression have led to nonprofits and communities, quite understandably, not trusting philanthropists.

A thought exercise that would be helpful to donors is to consider "how does my giving earn trust from my grantees?"

In particular, philanthropy can support women of color leaders better. A significant way to do that is through bold, unrestricted gifts so that they can focus more time on the mission and serving communities, and less time on fundraising and reporting. You will likely find that it leads to greater social impact too. Naina Batra, Jeroo Billimoria, Morgan Dixon, Cheryl Dorsey, Bridgitt Antoinette Evans, Vanessa Garrison, Robin Wall Kimmerer, Solome Lemma, Sudha Nandagopal, and Ai-jen Poo are just a few of the brilliant women of color I admire and who are leading complex, essential work for the world.

MacKenzie Scott attracts a lot of attention for the breadth and size of gifts she makes without strings attached. But she is by no means alone. Some of the other philanthropists I respect for giving at scale and developing trusted partnerships with social sector leaders: Tegan and Brian Acton, Arnold Ventures, Ron Conway, Civic Ventures, Echidna Giving, Chuck Feeney, Gatsby Charitable Foundation, Eileen and Paul Growald, George Kaiser, Libra Foundation, Tricia and Jeff Raikes, Rohini and Nandan Nilekani, Azim Premji, Liz Simons and Mark Heising-Simons, SeaChange Foundation, Stacy Schusterman, and Cari Tuna. These donors use a range of giving vehicles and approaches, from organizations they have founded, to donor collaboratives, to direct giving, and funding advocacy and policy change.

5. An attitude of abundance and generosity will increase your wealth and happiness

Buddhists teach that having a giving heart creates the karmic conditions for future wealth. The inverse is also true—miserliness creates the karma for future poverty. Similar beliefs are reflected in many other world religions as well. Common sense agrees. We've all witnessed in our lives people who have very little, but nonetheless are open and generous in sharing with those who have even less than themselves. These people exude joyfulness and abundance. 

If you don't believe world religions or common sense, there is scientific evidence to back up this theory as well. Researchers at Notre Dame reported that on average generous people make more money in the long run than people who are selfish. There is also evidence connecting generosity with better overall health and greater happiness. Giving generously to increase the happiness of others has huge benefits for the givers themselves.

Embracing a growth mindset and developing new attitudes can help every donor break through the inhibiting, tight feelings that arise from succumbing to a scarcity mindset. Lean into your sense of abundance this year. Your families and your communities will benefit, and I guarantee that you will personally experience more happiness as well.

Edited from an article originally posted on LinkedIn December 12, 2022

Sofia Michelakis is a connector, guide, and experienced leader who helps people turn their vision for social change into action. As former lead strategist and deputy director overseeing the Giving Pledge and past board chair of Social Venture Partners International, she is a trusted bridge between philanthropists, their teams, and nonprofit leaders. Sofia has partnered with influential global visionaries on giving strategy and family engagement, developed engaging curricula and winning models for social impact, and frequently acts as moderator for in person and virtual executive convenings.

2022 Team Lookback

This is me (the one in the middle) at a local drag brunch. I'm incredibly lucky to have access to queer friendly spaces here in Tacoma. I try to support local queer artists and the venues that host them as much as I can.

Claudia DeCasas

In 2022, I celebrated my first full year with Phīla. I'm incredibly lucky to work with amazing leaders in the philanthropic field. I love my team and I believe what we do has a positive impact on the world. How many people get to say that about their job!?

This year I was promoted to Operations Manager. Behind the scenes, Phīla has been growing! The most exciting part of my year has been getting to witness and participate in that growth. The care and thought that Stephanie and the whole team puts into building and reinforcing the foundation of Phīla as a business, really speaks to the deep level of care they put into everything that they do. I've spent this year learning new systems and building out processes. That might not sound like exciting work to everyone, but for me this type of work is my happy place. Phīla has given me the space to use my skills and the support to learn new ones.

Lastly, I adopted a grumpy, senior dog named Oso, celebrated my mom's 60th with a mother daughter trip to New York, and met my personal goal of getting more connected with my local art scene.

---

Our first trip as empty nesters was a hiking trip to the Alps with friends. Yes, that’s the Matterhorn!

Stephanie Ellis-Smith

This year, like every year, was full of milestones and highlights for me. I am continually inspired by our clients and their work. We are generalists at Phīla and that means we go where our clients go. As a result, this year I got to take deep dives into issues like forestry, conservation, Native rights and sovereignty, and another that animates me personally the most, the racial wealth gap. This was also a big year for corporate philanthropy for me. Helping corporate clients reimagine giving programs is completely different from our work with families, and rewarding in a totally different way.

Though a lot was still done on Zoom, I met incredible people who opened my mind and allowed me to share my thoughts on this crazy and ever-changing world of philanthropy. A few highlights were facilitating retreats with an incredible cohort of family foundation CEOs, supporting the Initiative to Accelerate Charitable Giving to reform Federal rules on giving, and collaborating with the Giving Pledge and the National Forum for Family Philanthropy to help donors make the best choices not just for themselves, but for their communities as well. There’s too much to share in such a small space, but suffice it to say, this has been rewarding and challenging in all the right ways. I am grateful to be among this small yet mighty group of women who push me and inspire me with their creativity and optimism every day!

---

My husband and I ran a half marathon in Milwaukee in November. This is me BEFORE 13 miles!

Lauren Janus

This year was one of growth, discovery and finally even some travel for me at Phīla! An unquestionable joy for me this year–as it is every year–has been our client work. Here are some highlights:

• This fall, The Share Fund, a participatory grantmaking body we manage on behalf of two particularly forward-thinking clients, made its second year of grants in support of racial and gender justice in Washington State. 

• Over the summer, Janell and I started work to launch two corporate foundations with the intention and purpose their corporate founders deserve. 

• I’ve worked alongside several other individual family clients to ensure their giving is a powerful expression of their personal values at a time when democracy, women’s rights and our environmental sustainability have felt increasingly fragile. 

Buoyed by multiple COVID vaccines and a trusty mask, I literally took flight this year! In March I flew to Toronto where I met some of the inspiring donors part of Phila’s learning cohort on racial equity giving, hosted by The Philanthropy Workshop. Then in the fall, I presented  on family philanthropy at the University of Wisconsin Family Business Center on the way home from attending Exponent Philanthropy’s annual conference.

Finally, it’s been such a rewarding experience to engage with the wider philanthropy community this year through online discussions, webinars and articles. In the spring, I had the opportunity to indulge my curiosity in the fascinating practice of Zakat giving among the global Muslim community. In July, Janell and I read an online critique of the practice of trust-based philanthropy and had to weigh in. Then just last month I had the opportunity to share my thoughts on MacKenzie Scott’s transformational giving style for the Associated Press. 

As we close out 2022, I’m grateful for the work I get to do each day, but also for those it brings me closer to. In my experience, everyone who works in the field of philanthropy or practices it with real intention, is internally driven to make life better, full stop. These are the people I want to learn from, be inspired by and work in support of now and for years to come.

---

My partner and I were in SoCal for my uncle's retirement party and snuck away for a fun day trip to Venice Beach. We had a blast people-watching and stuffing ourselves with all kinds of unhealthy street food. I could LIVE on the beach and can't wait till my toes find the next sandy beach to land on!

Janell Turner

2022 was a big year for Phīla—not only for the company itself in terms of our growth and impact, but also for our clients who grew leaps and bounds in their philanthropic pursuits. Philanthropy has become incredibly dynamic as generosity shifts to adjust to our changing world. Phīla clients are at the forefront of this shift and their eagerness to embrace new concepts and ideas to do more good in the world inspires me daily.  It’s been a privilege to explore the intersection of wealth, charitable giving, and impact as we learn and grow together. As a woman of color working in a space where racial justice and inequity are always on the menu, there have been moments of vulnerability and honesty that have led to richly rewarding conversations and relationships. The work of allyship in philanthropy can be fraught, raw, and dynamic as we work together to dismantle systems of oppression and inequality; but the friendships formed are life changing.    

Some of my most memorable moments this year have involved working in collaboration with other professionals to bring these perspectives to light. Over the summer Stephanie and I attended the Purposeful Planning Institute’s annual conference and presented on the topic of Giving Circles through a social justice lens to a group of financial and legal advisors with high net worth clientele. In the spring I co-authored a blog post with Nancy, our impact investing partner, on Community Development Financial Institutions and how they are used to deploy philanthropic and investment capital into underserved communities.

2023 will surely present new opportunities for bridge building and educating, and I look forward to sharing these moments with all of you—our beloved philanthropic community!   

---

Here’s a recent photo of me and my daughter having a laugh 😂!

Nancy Reid

The year began with two big client projects. In collaboration with colleagues from the philanthropy community, I supported two foundations as they navigated the realities of shifting their nine-figure endowments toward mission-aligned investing strategies. One was more oriented toward environmental issues, while the other had a clear focus on racial equity. Both organizations will be shifting some portion of their corpus in a nuanced way over time.  

By late spring, both foundation projects had wrapped up and I was able to catch up with a handful of individual investors engaged with similar issues at a smaller scale. I love doing personal impact statements and advisor searches! Helping move money into values-aligned strategies is the most impactful work I have the opportunity to influence. I also learn a lot along the way.

This fall I’ve engaged in a completely different set of projects, the most public of which has been EnVest. I co-founded EnVest in 2017, when accelerating capital into technologies that ameliorate environmental challenges felt like a new idea, and when investors in regenerative agriculture, oceans and fisheries, circular economy, and carbon reduction needed a convening to accelerate deals. Five years later, it’s immensely satisfying to support the EnVest community as they move meaningful capital into more and more inspiring solutions.  

As we approach year end, I’m hoping my energy and optimism from EnVest will fuel me as I catch up on continuing education for my Certified Trust and Financial Advisor (CTFA) designation. While I don’t work as a financial advisor, I do enjoy brushing up on innovations and constraints within that industry. Will I enjoy it enough to get me through 42 hours of content on investment management, tax, and trust administration?  Only time will tell!

---

I got married!

Tara Smith

2022 was very busy. I started out the year in the middle of wedding planning and law school applications. As you can imagine, that was A LOT.  In April, I had a beautiful wedding surrounded by the people I love. Then, it was summertime for what seemed like a week. Later on in August, I found myself attending evening classes for law school while continuing to work. To keep things interesting, my husband and I decided to start house hunting and then we moved. And now, out of nowhere, it is the end of November and here I am reflecting on the year that has passed!

I am so grateful for this last year at Phīla for so many reasons. For one, I get to work alongside a team of brilliant, thoughtful, and strong women who are leaders in this field and in everyday life. I have been engaged with different topics in philanthropy and have had the opportunity to share our thoughts on topics and activity in the field with our audience on social media. I’m proud to have grown enough confidence to write and share my first featured blog on Slacktivism. I look forward to writing more throughout the New Year. For me, 2023 is all about what's next in philanthropy!

Corporate Giving for the Times

By Stephanie Ellis-Smith

Photo by OCG Saving The Ocean on Unsplash

How does a business make good on its desire to “give back” at a time of great need and great polarization? I hope this blog post offers a few insights for business leaders and those interested in corporate giving to get started. 

Corporate Social Responsibility and Corporate Philanthropy are terms that many, especially if you're in the business world, are familiar with. A pretty interesting primer on the connections between the two practices states that modern day CSR has its roots in traditional corporate philanthropy. Like most things, the world today is more complicated and multifaceted, so philanthropic leaders in the corporate sector are juggling a lot: a bigger push for corporate activism from consumers, demands from employees for more personal engagements around values over the bottom line, and an increasingly competitive global marketplace where doing well financially is more difficult than ever.

The Harvard Business Review describes CSR as “a self-regulated framework that has no legal or social obligation for corporations to actually create positive impact for the groups they purport to help.” But I’ve been reading about a newer methodology, Corporate Social Justice (CSJ), which attempts to require greater accountability from corporations trying to “do good”. CSJ practitioners consider their impact on a wide breadth of stakeholders: executive leadership, stockholders, employees, vendors, and anyone else who is connected to or influenced by the company. This new approach to address the bigger and more systemic issues we face today “requires deep integration with every aspect of the way a company functions.” 

Consumers and Americans at large are more conscious than ever of how what they buy can be a statement of who they are and what they believe in. Products can either help or hurt the most important issues that we face as a society: climate change, racial equity, wealth disparities, immigration, reproductive care, I could go on. Given the level of complexity in navigating these hot button issues, one might ask why are businesses still game to wade into these treacherous waters? Here are two key reasons that our team at Phīla has noticed:

First, to attract talent: Millennials, as the largest generation, and Gen Zs moving into the workforce, all want to work at places that contribute to the common good. And it’s not just the young folks who are pushing for a triple bottom line. The majority of human resource executives see it as a great tool for employee engagement and retention.

Second, to strengthen their voice: organizations with a clearly defined social purpose, typically experience more growth, have higher customer satisfaction, and have a reputation as champions for their community. Philanthropy is increasingly a key component to a strong brand. 

Now that you have an idea of what motivates a company to do this work, we can talk a bit about how it can be done successfully.

First, start with WHY. As we always say to our clients, no one has to engage in philanthropy. Getting comfortable with doing a deep dive into motivations is key. What exactly are you looking to get out of it? Do you want to financially support some really incredible work that's already happening in your community? Do you want to engage your employees with volunteerism? These kinds of questions are important to ask yourself because they will determine what type of nonprofit organizations you might work with, who should be involved, and what level of engagement (internally and externally) will be necessary. 

You can find lots of advice and advisors who will tell you how to develop a program in a quick and easy fashion that has a big return on investment, but Phīla does not believe in shortcuts. In this day and age, insincerity and slapdash programming are easily detected and you could end up doing more harm than good to your business. Take time to ask yourself the right questions at the outset and we guarantee you will save time (and probably heartache) in the future.

Decide on your goal or vision. When deciding on where you will have impact, it is not enough to simply settle on the vision that your CEO or founder is partial to. Vanity projects will only get you so far. Instead, create a thoughtful and intentional process that brings together customers, employees, or anyone else you believe to be keys to success, to determine which issues lie at the intersection of the company’s mission and the unmet needs of your community. Spending time on deciding how the values the business espouses connect with your philanthropy will make it easier to make decisions in the long-run.

The objective of this exercise isn’t to arrive at a goal that sounds impressive. In fact, the simpler it is, the better. The goal is to arrive at a vision for your community that your company is best equipped to play a part in creating. The temptation is to jump right in to picking issues and organizations to support, but in reality, having a program you can be proud of and that has longevity requires learning about your community, listening for understanding from your stakeholders, and building trust. It takes time.

Don’t be afraid to take a stance. At this moment, during fears of a looming recession, a fragile political environment, and worker burnout, taking a stand means you won’t make everyone happy. The company must be prepared to decide if it is okay with losing business from certain groups since taking money from those groups would run counter to its philanthropic values and strategy. Being consistent and knowing the issues at hand here is extremely important. A couple of examples of how businesses take a stand on issues important to them are companies who give employees the day off to vote and telling customers why; or retailers who actively reach stock suppliers of color and state why they find it necessary. You get the idea.

Establish mutually beneficial partnerships with organizations by doing the legwork to understand your company’s role in the broader ecosystem surrounding that goal. Identify key communities where you want your presence felt and get to know it on a deeper level by listening. Learn how the issue you care about has had an effect, past and present. Think about what you really want to get out of your relationship with the community. If it's a big employee-driven, social justice initiative that the company really wants to step into -- like what Patagonia did with their environmental focus --  then that affects the kinds of conversations you have with nonprofits. That's going to be your much larger, maybe national, organizations that can meet you eye-to-eye, head-to-head, and give you the type of partnership you really need. 

Conversely, if you're looking to be embedded in a community, then that's a different kind of conversation with maybe smaller organizations. Savvy businesses understand the need to partner with nonprofit experts on the issues they care about, and even more so if they are looking to engage with communities of color. It is important to ensure that these are not token partnerships, but authentic and mutually beneficial for both the business and the local partner. (For a deeper dive into embedding racial equity into corporate social responsibility, check out a webinar I participated in hosted by Benevity called Turning Statements Into Action.)

Kristin Jarrett, Social Impact and Equity Strategist at Spotify, advises large and small businesses to meet with nonprofit organizations and ask them about what big problems they are trying to solve and how you can help. She wisely suggests that businesses stepping into the social sector should plan to “do some backwards planning and create ideas around how you could collaborate to really support them (i.e., nonprofits) in their mission.”

Finally, regularly check in on your progress. Philanthropy is an ongoing commitment to achieve a vision of justice or equity in partnership with one’s community. Build accountability into the process from the start. The same diverse group of stakeholders who help set the vision for the program can also set the metrics by which you’ll measure your performance. While there is no legal obligation to meet these metrics, relationships with stakeholders — especially employees and external communities — are regulated by trust. Continued failure to meet stated goals damages this trust and sours the brand. Better to not do it at all if you can’t dedicate real time and energy to this involved, yet potentially very rewarding, process. 

In its best form, corporate giving is a healthy and mutually beneficial relationship between the business and the communities with whom they interact. The relationship is also driven by the growing desire of socially-aware consumers and employees to do better for their stakeholders and the world at large.

As you consider embarking upon this work for the first time or refreshing your current programs, you will no doubt find joy in connecting your company with your community in new and meaningful ways with a fresh perspective.

How to Be a Racial Equity Donor

By Lauren Janus

About this time of year, I start planning for the end of the year. Do we have enough mittens? Should I get the furnace serviced? Did we make those IRA contributions?

The hardworking fundraisers in your life are making similar year-end plans, but they are likely turbo-charging them about now. The fourth quarter is when nonprofits around the country kick into high gear, rolling out a series of appeals in which they hope to convince their loyal supporters to get any 2022 gifts in before December 31. For many nonprofits, the period between November 1 and December 31 is when they bring in close to half of their annual donations. 

Generous donors like you are used to the annual fall onslaught of emails, phone calls and mailings from your favorite charities. Luckily, the fourth quarter is the perfect time of year to take stock of what you’ve given so far in 2022, how much you’re still able to give, and importantly, how you're going to make those final gifts in a way that fully aligns with your values.

If you’ve vowed to give in support of racial equity in 2022 but feel you’ve fallen a bit short, here’s how you can turn things around before year’s end.

Get clear on what it means–and why it’s important–to give in support of racial equity.

The number one way you can support racial equity in your giving is to give to organizations founded by, led by and serving BIPOC-communities. Why? The funding gap between Black-led organizations and white-led organizations is clear—and alarming. One study of more than 140 nonprofits found that white-led groups had budgets that were 24% larger than those led by people of color.  Groups led by Black women receive less money than those run by white women and Black men. And the unrestricted net assets (donations that can be used for any purpose) of Black-led groups are a whopping 76% smaller than those of white-led groups.

There are several reasons for this. 

• Many donations are based on connections. Leaders of color traditionally have fewer relationships with influential organizations and people. And breaking into the philanthropy community is difficult because new leaders often lack the bandwidth and experience to cultivate relationships with potential funders.

• New leaders are generally stretched thin adjusting to internal challenges—such as staffing and funding deficits—and lack the resources to engage in necessary outreach. Let alone getting an invite to the swanky affairs where big donors tend to congregate.

• This funding gap is also fueled by racial biases—whether intentional or not. And the vast majority of family foundations (or corporate foundations!) don’t use diversity, equity, and inclusion strategies and goals to guide their giving.

If you need help finding BIPOC-led nonprofits to support, you can start with online databases like GivingGap, the BIPOC ED Coalition of Washington state or just search for compilations of Black-led local organizations, like this list of Chicago-area nonprofits. 

Start asking questions of nonprofits before you give.

As those year-end fundraising appeals start flowing into your home, keep that racial equity lens at the ready. Before you make your gifts, ask a few questions of the nonprofits you’re considering supporting:

1. Is this organization BIPOC-led or BIPOC-benefiting?

2. What are the racial/ethnic demographics of the staff and board of directors?

3. What do you know about the Diversity, Equity and Inclusion policies and practices of the organization?

4. Do BIPOC communities stand to benefit from the work of the organization? If so, how? Is it a direct or indirect impact?

You may not find the answers to all of these questions on the organization’s website. A polite, thoughtful email or phone call is always a good option. If the organization is doing this work well, they’ll be happy to help you learn more about their structure and programs.

What if you’ve asked these questions of one of your favorite nonprofits and found them lacking? Don’t despair! You don’t have to stop giving to them, but you can change the way you’re giving. 

With your annual gift, include a letter or set up a time to talk with a development officer. Ask the organization what they are doing to diversify their board, elevate BIPOC and other marginalized voices and expand their reach. Let them know these issues are deeply important to you and that you’re watching, ready to perhaps support them at an even higher level when they’ve made progress on these goals. 

Ask yourself the right questions.

Now it’s time to turn the lens on yourself. To be a racial equity-driven donor, you’ll want to continually re-examine how you’re approaching your giving as a whole. Some questions you can consider include:

• Am I giving as much as I can right now, or am I “saving” my charitable funds for later? BIPOC-serving organizations need your gifts now; not five years from now (or worse–when you’re dead!). 

• Am I giving to more than just tax-deductible organizations? How can I widen my definition of giving in this space? Remember that many groups driving change are 501c4 organizations or others to whom gifts are not tax deductible. Do you really need that tax deduction this year? Maybe not.

• Am I giving in a way that cedes power? Philanthropy is notorious for power imbalances (please read Decolonizing Wealth by Edgar Villanueva if you haven’t yet). Being a racial equity donor means giving freely, consistently and with your whole heart. You can do this by:

  • Making multi-year, unrestricted gifts

  • Educating yourself on the organization’s work; not expecting the reverse

  • Sharing your support of the organization within your network

  • Stepping out of the spotlight however you can

Best of luck planning and making those year-end gifts, and do get in touch if you need an extra nudge or even a partner in creating a complete values-aligned giving plan.  Wishing you a joy-filled giving season!

Moving the Needle for Higher Ed

Photo by Javier Trueba

By Stephanie Ellis-Smith

When donors think of giving to education, most often one thinks of K-12 education (including early learning initiatives) and four year universities – a major recipient of philanthropic giving. According to Giving USA, in 2020 alone, U.S.-based donors gave more than $71 billion to education, which represented 15 percent of all charitable giving, the bulk of it going to the investment pools (a.k.a. endowments) of elite universities. Giving to education was surpassed only by giving to religion.

Yet, with constantly rising costs, greater numbers of students are saddled with ever-larger student loans and the need to mitigate the rising costs of that debt is increasing as well. (See Robert Smith’s big bet on relieving student debt from the private sector, and of course President Biden's new student loan forgiveness program coming online.) The amount of debt the average student is carrying has gotten so bad, it’s got many going so far as to question the basic utility of a university education. So how can a savvy donor “move the needle” in higher ed?

We too often are forgetting the corner of the education universe that serves more people and offers the greatest chance for economic stability and social mobility: the two-year technical and community colleges. For many high school and returning students, going to a community college can serve as a buffer before launching into the hyper-competitive world of university admissions, but making that transition is not easy. According to a 2013 report, 81% of first year students want to transfer to a four-year college or university, but after six years, only 12% were successful. Today, the percentage has risen only slightly to 15%.

This post will give you a brief overview of what these schools are doing today to meet the needs of rapidly changing demographics and job markets. Understanding their focus may offer some insight into how directing funding to two-year and technical colleges offers a unique opportunity to bolster resources in an underfunded area of education.

***

Community colleges are evolving just as quickly as the needs of its students. For starters, they have altered their traditional business model of offering stand-alone associates degrees to offering baccalaureate degrees. Schools in locations that are not served by a nearby four-year college are the ones most likely to do so and the BAs typically serve students who want to become teachers and either cannot afford or cannot travel (or both) to a major college or university. Though such a big change is not without its critics, adapting to address teacher shortages in rural or otherwise underserved areas has become a crucial service of many community colleges.

They have also formalized their relationships with four-year colleges and universities by becoming official “feeder” schools to partnering institutions. Students who may not have had the initial qualifications to attend or who could not initially afford tuition, can start at the partnering community college and easily transfer credits after two-years while saving on fees. 

While the concept of a transfer student is one we’re all familiar with, another trend at community colleges is the reverse transfer students. These “transfers-in” are students who are  returning to community colleges to improve specific job skills after attending four-year colleges. Also due to rising costs of tuition. For example, a student who had been unsuccessful at a four-year school may go back to a community college to build up enough credits to re-enroll at the four-year school or even get the associates degree they missed out on by transferring out. 

Community colleges also make important contributions to higher-education’s mandate to serve the national interest. They have the most diverse student body not just in race (they collectively serve more Black and Latino students than their four-year counterparts), but in other demographic segments as well like Baby Boomers over 55, single mothers, and veterans. Whether students come to retool for a new career, or reintegrate into society as a civilian, community colleges are developing comprehensive programs designed to help an increasingly diverse student body acquire the education and skills they need to return to the workforce.

For a donor interested in higher education access and creating a wider path to the middle class, these trends are relevant and worthy of consideration. Community colleges tend to serve students with the greatest needs yet receive the least amount of support. Philanthropy is not the only sector to realize the disparity. So far, 19 states have free or debt-free tuition to community colleges and see their success as critical to building a workforce and citizenry ready for a new economy. Your local community college is an important piece of the higher education puzzle that deserves attention. 

***

For more information on the role of community colleges in the higher-education landscape, here are a few resources you might appreciate:

Where Money Would Matter Most by Jay Urwitz

It’s Time to Digitally Transform Community Colleges by Sean Gallagher

What Happens When Community Colleges Offer Bachelor’s Degrees? by Natalie Schwartzman

Why We’re Here–The Impact of Community Colleges on the Future (PODCAST)

Revisiting Purpose

By Stephanie Ellis-Smith

If the upheavals of the last few months haven’t left you reeling, I want a dose of what you’re taking. I have been white hot with rage, deeply saddened, stunned numb, and full of hope–sometimes all at the same time! It is cliché to say, but it is true: we are living in unprecedented times and are witnesses to history. There is SO much amazing work being done by nonprofit organizations around the country, but how can all their energy and fire still not be enough to secure our basic rights and general safety? 

Donors are increasingly looking for ever more innovative ways to effect change and I am heartened by increasing numbers of givers open to exploring better ways to support change that are more suited to the times in which we live. It is without a doubt a good trend. In addition, we at Phīla also encourage our clients to engage in a bit of self-exploration as well. At its best, philanthropy should be both externally impactful and internally transformational. 

Most givers focus on only one question: “What difference do I want to make in my community, nation, or world?” An equally important question is: “What difference do I want to make for myself or my family?” How can we shift from transactional giving to a more holistic philanthropic strategy— one that creates targeted change while also pushing us to grow and share power with the communities and causes we hope to lift up? We believe that digging deep into the “why” of your giving can transform you into a “whole-self giver”: someone who gives fully and intentionally of your wealth, passion and power.

While philanthropy itself isn’t going to solve all the world’s or our problems, it can give us true meaning and purpose by working towards something bigger than ourselves. I know many of you may have already created your mission statement or personal giving priorities. Yet, staying true to that, as well as being responsive to local needs, global crises, and random personal requests can be overwhelming. 

Philanthropic advisors can be helpful in times like these. We function as accountability partners, who can help you keep your focus or even adjust what the focus is. We see our role as someone with whom you can learn, experiment, and grow. The goal is to learn by doing so we don’t keep resources on the sidelines while we get organized and try to “figure it out”. The needs are too great and the world is changing too fast. Norms we’ve taken for granted are no longer true or are no longer as we knew them. There’s a tremendous amount of trauma and suffering–almost too much to bear if you follow it closely. And it’s because of all of this change and need, that it’s important to revisit our sense of purpose to connect our words to our deeds. 

Philanthropy spends a lot of time talking about how we hope to change society, but let us not forget or downplay how doing this work changes us too. Personal growth and fulfillment, even in social justice philanthropy, is a huge driver and motivator; and not only is it OK, I would say it is necessary. 

The vast majority of our clients are using their extensive resources for real social change--taking risks, learning by doing, ceding real power to sector leaders who know what they need. What they have in common is that none say (at least not anymore), “Oh no, this is not about me. It’s about those in need.” 

True humility in this work allows one to realize that “I, as a donor, need this as much as you do.” And those of you who have read Dorothy Brown, Edgar Villanueva, Ijeoma Oluwo, or any other person talking about race, wealth, and society knows that this is “your work” too. It requires your whole self to make change–being willing to take real risks and to make oneself vulnerable. Those are among our greatest tools against injustice. And when we situate ourselves in purpose, we will find the courage to take on risks, fund longer term, and give more.

Is “Slacktivism” Slowing Us Down?

By Tara Smith

There has been and continues to be so much going on in our world and we tend to see it all flash by on our screens everyday. Since the global shutdown in 2020, it feels like there has been a different crisis for each day of the week tagged by a surge of social media sharing and hashtags. At the rate that we get information on social media, how effective are our responses? As the Communications Associate here at Phīla and the person behind @philagiving on Instagram, I work to educate the public about causes that align with their values and help interpret shifts in social discourse and dynamics happening on our social media feeds. While social media has been an effective tool in spotlighting different issues, giving a voice to all, building movements, rallying global awareness, and unifying people together in the pursuit for progress, it also has given rise to “slacktivism” and risks leaving action in the dust. 

What is “slacktivism”? It is a kind of activism that we all may find ourselves taking part in from time to time. It is defined as an act where individuals “support a cause by performing simple measures but are not truly engaged or devoted to making a change.” A simple measure in this context could signify a reshare of a post or story, using a temporary filter profile photo to show solidarity with a cause, signing a petition and forgetting about it, or liking a bunch of posts that resonate. While these actions can be helpful for raising awareness and donations to an issue in the immediate, they can also create a habit of reactionary activism and lead to a decline of momentum. 

I hope this topic does not dissuade you from resharing a post you identify with or signing petitions. It is important to share your perspective on important topics and help build awareness for causes you care about. But this is just the first step. We need to do more if we want to be activists. We need to bring ENERGY to the movement. 

I am not alone in thinking we need to do more. I am increasingly seeing the digital community share commentary on the lack of action happening in our society. Recently, in the wake of the tragic mass shooting in Uvalde, TX, I’ve seen posts similar to the one below being circulated around the feed. This is a different message than what we typically see - it’s a social calling out to everyone who uses the platform and engages in online ‘activism.’ This asks us to reflect on our actions and reminds us of the urgency to keep the momentum and not move on just because the media hype simmers down. 

I adapted this graphic and believe it is representative of the general sentiments circulating on social media.

We as social media users are capable of doing so much more than a simple reshare or like. It’s time to break this cycle and embark on a new era of social activism. 

Here are a few ways you can go beyond “slacktivism”: 

1. Learn about the post you are sharing. Read the caption, click the links, find the source, get connected with organizations involved, and learn about what you can do to help. 

2. Build out resources if you are going to share a post. Use your social media presence to add context and resources that you know your followers will respond to. Passively re-sharing posts on your story is reactionary activism and it does not do much in the long run.

3. Be an ally online and offline - speak up in your social circles. 

4. Get educated on the issue. We only see a handful of resources during a media hype, it is important to understand the history, context, and work being done to help contribute to change.

5. If there is a petition, sign it, share it, and don’t forget to follow up. If we want change we have to stay committed. 

6. Volunteer for an organization working on a cause you care about. 

7. Connect with local community groups and mutual aid networks.

8. Get involved in the political process and VOTE. We have the power to vote for leaders and policies that affect the causes and issues we care about. Learn more about congressional, state, and local elections and make your vote count! 

9. Reflect on your activism. What can you do differently?

10. Engage in philanthropy. If there is ever a time to connect with your giving, it is now. 

As we work to collectively amp up our activism in the digital era, I want to leave you with a quote from my colleague, Claudia DeCasas, that I find powerful and applicable to all of us who want to see change. She said, “we all affect the world we live in, whether we intend to or not. Philanthropy, to me, is the willingness to reflect on your own power and choose to make a positive impact with it.” I think this quote goes well beyond philanthropy and it sets the tone for how we can all practice activism moving forward.

Community Development Financial Institutions (CDFIs): A Primer for Donors

By Janell Turner and Nancy Reid

The passing of the bipartisan Infrastructure Investment and Jobs Act (IIJA) last November signaled a commitment to repairing and reconstructing infrastructure consequential to the economic vitality of our nation after decades of neglect. The $1.2 trillion bill aims to improve public transit, reinforce bridges and tunnels, expand access to clean drinking water, and advance environmental justice. Importantly, a portion of the budget is allocated to help remedy decades-old infrastructure design and transportation policies that hindered economic growth in underserved communities.  

In a recent public statement, Transportation Secretary Pete Buttigieg reported on the bill’s transportation budget that directs resources to special programs designed to address the racial inequalities in our nation’s transportation system and infrastructure. But with a budget of only $1 billion, these efforts are unlikely to go very far. What additional investments are needed to establish and strengthen the economic infrastructure required to bring communities of color fully up to par?  And, as Taj James of Full Spectrum Capital Partners asked recently in a conversation about community investing, what forms of capital are our communities of color best able to absorb? And what forms of support can help maximize capital absorption?

While the infrastructure bill aims to amend the bricks and mortar needs of communities, Community Development Financial Institutions (CDFIs) offer an array of complementary investments into our communities’ social infrastructure. Certified by the U.S. Treasury, CDFIs are banks, credit unions, loan funds, and equity capital providers that use a combination of government and private sector capital to invest in low-income communities. Recipients of government CDFI funds have successfully leveraged billions in private sector investments to create jobs, build affordable housing, build essential community facilities, provide financial counseling, and invest in neighborhood revitalization initiatives.  

The Community Reinvestment Act of 1977 initially gave rise to CDFIs by requiring banks to reinvest in communities that were stripped of access to capital through redlining. Almost half a century later, there are hundreds of CDFIs in the United States, ranging widely in size and operations. They include loan funds, venture funds, regulated depositories, and community development credit unions. In the summer of 2020 in response to Black Lives Matter protests, the treasurers of a handful of large U.S. corporations began to take notice of CDFIs as both an investment vehicle and as a way to invest in communities.

Donors who direct philanthropic capital into communities of color have begun to ask themselves what other tools may be available to support economic development. Increasingly, access to capital – affordable loans to consumers and business owners of color – has come into focus as a critical pathway to wealth creation. CDFIs can offer underwriting, diversification, and support for borrowers alongside tailored resources and innovative programs to foster economic opportunity and revitalize neighborhoods. 

While the opportunity to directly support community wealth building is attractive, donors should consider the following:

• CDFIs can deploy both philanthropic and investment capital.  An increasing number of CDFIs offer investment notes, which aim to return 100% of the funders’ capital with a modest, below-market rate of financial return. Placing loans in underestimated communities requires care and support, which must be funded through grant support. Funders can back either of these activities, or use blended capital approaches to do both. For more information on this investment approach, Capital Impact Partners is the largest minority-led CDFI in the country; their investment note is rated by Standard & Poor’s and investments can be supported with philanthropic capital as well.

• CDFIs vary broadly in their size and risk.  While many CDFIs fared better than banks in the great recession, funders should understand that any loan, or pool of loans, bears risk. While Standard & Poor’s began issuing ratings to some of the larger CDFIs in 2015, a nonprofit ratings agency called Aeris has gathered data on CDFIs since 2004 and issues ratings on over 150 CDFIs around the country to help investors and donors understand their financial exposure and impact.  

• CDFIs can offer targeted impact.  Changemakers focused on a particular geography, issue area, risk profile, or population can direct loans through existing organizations that have, in some cases, been building relationships in communities for many years. Aeris has built a helpful tool called the CDFI Locator. Investors focused on a particular U.N. Sustainable Development Goal can sort by the SDGs also.

• The financial services sector is innovating fast.  Several financial technology (fintech) and investment advisory firms are working to provide their clients with vehicles to access CDFIs. If your advisor hasn’t yet introduced CDFIs as an option for capital that doesn’t require the highest financial return possible, ask them! This type of investing sits at the intersection of return-seeking investment approaches and impact-seeking philanthropy. It may only be a matter of time before it becomes a mainstream option for donors.

• Donors may direct assets from a Donor Advised fund to a CDFI.  Some DAF platforms will allow grantors to direct DAF assets into pooled loan vehicles like CDFIs. Ask your DAF provider what options may be available to you. 

The first step when considering any new philanthropic strategy is to clarify your intentions. What outcomes are most important to you? Do you envision building affordable housing? Creating jobs? Helping small businesses get started? Think about what you’d like to achieve in your philanthropy and then seek out a CDFI that aligns with your giving strategy. If you’re just getting started and would like support in developing a giving strategy, Phīla Engaged Giving is here to help. 

Lastly, while supporting CDFIs can be a compelling complement to your philanthropic framework through grants and program-related investments, talk to your financial advisor before incorporating CDFIs into your personal investment strategy. To learn more about CDFIs check out  CDFI Investing for the Impact Investor published by Community Capital Management and A Foundation Guide to Investing in CDFIs published by Philanthropy Northwest. 

*The statements and ideas presented in this blog post do not constitute financial advice or an endorsement of a particular financial instrument. 

What I Learned About the Power and Community of Zakat

By Lauren Janus

Here at Phīla, one of our most cherished values is continuous learning. Sure, all of us have spent most of our professional lives in the nonprofit sector, and we avidly follow the philanthropic news. But we’re always especially eager to turn that new corner, or uncover that new aspect to giving that we’re less familiar with.

April 1st marks the start of the holy month of Ramadan; a time when Muslims around the world pause to focus on their family and their faith. I wanted to use Ramadan this year as an opportunity to learn more about an aspect of Muslim faith that I’ve been increasingly curious about–the practice of Zakat. Zakat is charitable giving mandated by Islamic law. It must be directed to the poor and needy, and totals–get this–between $200 billion and $1 trillion each year. It’s perhaps the most powerful source of philanthropic giving in the world, and yet in my mind, it’s not discussed nearly enough in our field.

Sufyan Sohel, CAIR-Chicago

To learn more about Zakat, I reached out to Sufyan Sohel, Deputy Director and Counsel at CAIR-Chicago, a nonprofit that advocates for and preserves the civil rights of American Muslims. Sufyan responded right away and very kindly discussed the basics of Zakat giving to me. 

Can you explain how the practice of Zakat fits into the Muslim faith?

Islam has five pillars of faith: faith, prayer, fasting, charity and pilgrimage. Zakat fits under pillar number four, charity. 

How are Muslims instructed to make their Zakat gifts? Are there guidelines?

Yes. Muslims are expected to give 2.5% of their assets in Zakat each year. Most of Zakat giving happens during Ramadan, mostly because that’s when people remember to do it. But giving Zakat during Ramadan is also considered to be an especially holy practice. Here at CAIR-Chicago, about 40% of our annual donations come in during Ramadan. 

What does Zakat giving look like? Is it just to established nonprofits?

Actually, no! Zakat gifts must be made to or in support of the poor. But this can mean a lot of things to a lot of different people. For example, you can give cash to a local family you know is struggling financially. Or you can give to an organization that serves the poor. I usually give part of my Zakat to the Chicago Food Bank. You just can’t give to your immediate family members. But it makes no difference if you’re giving to Muslims or non-Muslims.

What about giving to your Mosque? Does that count as Zakat?

It depends. You can’t make a general fund donation to your mosque, but you can give to their Zakat fund. These are funds set up specifically for the purpose of Zakat giving and generally support a range of people in need locally as well as globally. Similarly, other nonprofit organizations will set up Zakat specific funds, or can apply to be designated “Zakat Eligible.” 

I want to thank Sufyan for his time and patience in explaining the basics of Zakat to me and our followers. I continued to be fascinated by this tsunami of giving that washes across the world each year thanks to the global Muslim community. 

For all those who observe this holy month in the Muslim tradition, Ramadan Mubarak!

Loving and Letting Go

Image by Emma Fabbri

By Stephanie Ellis-Smith and Janell Turner

Love is in the air! Valentine’s Day approaches and we are preparing to open our wallets for roses, candies, and nights out (masked or maybe delivery). While that’s all fine, we’d like to use the time to talk about a different kind of love. The ancient Greeks had at least eight or nine words for love. The most well known are eros (romantic love), agape (the highest form of love that is unconditional and spiritual) and philos or philia (brotherly love or friendship). 

Philia is the love between equals who share goodwill toward each other, the root of the word philanthropy. Ancient Greeks defined this deep feeling of friendship to include loyalty, the sharing of emotions (both good and bad), and a sense of shared sacrifice. Philia is a virtuous, intimate companionship that in its highest and best form, can describe philanthropy. It’s that aspirational sentiment that informs the name of our boutique advisory and the premise by which we operate. Though our work is only with donors, we are extremely conscious of the roles and balance between the givers and the beneficiaries they wish to serve. But philanthropy is in the midst of a period of profound change. Post 2020, managing that balance is no longer enough. We saw that the basic systems of governance, health, and justice that we assumed would support us and nurture us instead failed us. Givers and philanthropic professionals alike took hard assessments of themselves and decided that to do our part in repairing these systems, a bigger, greater love was needed.

Perhaps instead of philia, it is agape, the selfless, unconditional love for the entire world: neighbors, strangers, everybody is a better expression of our hopes/desires for philanthropy. Existing on the spiritual plane, it is the highest form of love – and the one in shortest supply in today’s society. Empathy fuels agape; it is given freely without any desires, expectations, or judgment. 

We’ve begun to see this kind of self-sacrificing love take root in the world of philanthropy, particularly within the realm of donor-beneficiary relationships. Donors are beginning to seek authentic relationships with beneficiaries where open, honest, and transparent conversations can take place. They are letting go of some of the limiting norms and narratives regarding performance, outcomes, reciprocity, and recognition that have defined traditional philanthropy. They are more focused on and curious about systemic flaws in society rather than their manifestations and are willing to experiment with new ways of giving. Most importantly, they are beginning to acknowledge their inherent power as givers and make room for others at the decision-making table.  

This agape framework defines our hope for philanthropy in the future and where we at Phīla believe philanthropy is headed. In our client conversations, we’re diving deeper into the “why” and “for whom” of their giving with less emphasis on the “how” and “what” as leading strategies. 

Put into practice, this approach to philanthropy may be expressed through the six Trust-based Philanthropy principles aimed at advancing equity, shifting power, and building mutually accountable relationships:

• Offer multi-year, unrestricted funding

• Do your homework first

• Be transparent and responsive with your beneficiaries

• Streamline your required paperwork

• Solicit and accept feedback on your practices

• Offer support beyond the check

We acknowledge that it’s not easy making these shifts, but the times are asking us to reevaluate past practices with the hope that we will forge a new path forward. Will it be a success? No one knows, but we do know that (quoting The Great One, Wayne Gretzsky) “you miss one hundred percent of the shots you don’t take”. Taking a shot might mean getting out of your comfort zone and plunging into the unknown where the highest expression of love and vulnerability intersect. It might mean taking risks and accepting whatever losses that come with letting go. But what is there really to lose? We challenge you to confront your assumptions about your role as a giver and incorporate the spirit of agape into your philanthropic practice. If you would like to learn more or want support in incorporating these principles in your giving, let’s talk. Happy Valentine’s Day!

This is the Year

by Lauren Janus

In early December of 2021, our full Phīla team enjoyed a rare treat in these pandemic heavy times. All five of us met for an in-person mini-retreat in Seattle. 

We used the meeting to dive deep into the values we as a group bring to Phīla and our work with clients. Importantly, we reaffirmed our commitment to Phīla’s core values of empathy, respect, knowledge, collaboration, and continuous learning. 

Yet we kept coming back to one additional value or core principle in our conversations: we hold our clients and their philanthropic aims in such high esteem that we clearly tell clients when they need to make changes to their giving. We don’t pander, overly congratulate, or stay silent when we see ways our clients could be giving in a way that better serves their stated values. 

Therefore, here’s what we want to tell you, our clients and friends, in 2022: plan on making significant political donations this year. Here’s why.

• For the first time since it was decided in 1973, Roe v. Wade is in clear danger of being overturned. This is a terrifying possibility for women, families, and our society as a whole.

• While awareness of the need for racial justice in America is growing, actions haven’t caught up with the rhetoric and this needs to change starting in 2022. 

• And finally, the recent suburban wildfires (in winter!) in Colorado prove that our planet is on a rapidly warming trajectory with no signs of slowing. 

The most powerful thing we as ordinary citizens can do to avert these dangers and set our country on a truer path toward justice and healing in 2022, is to support political candidates who share our sense of urgency on these issues. This means voting, but it also means giving to and volunteering for political candidates and causes in a big way.

This November, 34 of 100 seats in the Senate will be up for election. Those elected in the fall of 2022 will begin their six-year terms in January of 2023. 

Currently, the Senate is split 50/50 with the slimist possible control in the hands of the Democrats, thanks to Kamala Harris and her tie-breaking vote. The GOP, once a party of problem solvers and leaders willing to compromise for the good of society, is now controlled by extremists who feed on each other’s anger and resentment. The GOP can regain the Senate by netting a single seat in November. In the House, Republicans need to net just five seats to regain the majority. It’s going to be a very close election season.

By making significant political donations, you may feel you’re contributing to the outsized role of money in politics, and we hear you. But the fact is that when it comes to issues as critical as these–climate change, racial justice, gender equity and the preservation of our democracy in general–Congress alone has the power to create the kind of widespread structural change needed. Philanthropy is ill-equipped to solve these problems on its own. We must get the right people in the right seats starting in January 2023. 

As Marianne Williamson said, “You playing small doesn’t serve the world. There’s nothing enlightening about shrinking so others won’t feel insecure around you. As you let your own light shine, you indirectly give others permission to do the same.”

From your friends and allies at Phīla, please don’t play small in 2022. Before you put money into a Donor Advised Fund or make a major gift to a non-political organization this year, pause a moment. Think about how much of that gift you could direct to a political candidate or cause in 2022 (and yes, forfeit the tax deductibility). Consider how impactful that gift could be on the full range of issues you support if it went to a 501c4 organization, or to a political candidate who can advocate for the issues that are most important to you.

We join you in your concern for our country and our world in these trying times and hope you’ll join us in putting your money where your passions are in 2022. We’ll be right there with you.

Wishing you peace, health, and community in 2022.

Out With the Old and In With the New

By Stephanie Ellis-Smith

It seems like only a few months ago that I was summing up that infamous year, 2020. Yet here we are again sitting with the realization that we’ve made it through another monumental year. I don’t know about you, but 2021 seemed LONG. The Capitol insurrection on January 6th was this year. A new presidential administration was inaugurated this year. COVID vaccines became available this year even as new variants continued to emerge. Texas fell into a deep freeze and Ida nearly blew the Southeast off its axis, while much of the West went up in flames. We cheered for amazing athletes at the Tokyo Olympics! The multi-talented Zaila Avant-garde won the Scripps National Spelling Bee, Britney was freed, and billionaires launched themselves into space this year as well. 

We also lost many amazing people. There are too many to list, but those public figures who stood out to me are Tommy Lasorda and Elgin Baylor, sports icons from my childhood; statesmen Colin Powell and George Schultz; iconic artistic figures like Cicely Tyson, Chick Corea, James Levine, and Beverly Cleary; activists who gave so much of their lives for justice, like Chief Leonard Crow Dog and William Sterling Carey; and of course, the gone-too-soons: Virgil Abloh and Michael K. Williams.

As I read through all that happened this past year, one thing struck me the most. These are all experiences we’ve shared together: laughter at silly TikTok dances, elation and pride for the global scientific community on their incredible achievements, grief at so much loss (the needless and the inevitable), and just the daily grind of getting through one day at a time while navigating too much uncertainty. 2021 did its best to try to start off on a hopeful note--we were desperate for a fresh start after a terrifying 2020. But instead, we descended into greater division and chaos than we had before. I have to hope for a fresh start again in 2022. Maybe if we all can acknowledge our common humanity despite our profound differences, we’ll have a chance in 2022. 

The holidays are such a busy time, and especially this year given we have some semblance of normalcy. But perhaps we can spend a few moments each day thinking about our deep ties to each other and what it means to belong. Cultivating belonging and community amidst so much division is an uphill battle for sure, but it is one we must continue to fight. We’ll explore this theme more in our January blog but, for now, I will end the final post of 2021 with wise words from Chief Seattle:

“Humankind has not woven the web of life. We are but one thread within it. Whatever we do to the web, we do to ourselves. All things are bound together. All things connect.”

Best wishes for a safe and joyful New Year!

The Science Of Compassion

Image by Gerd Altmann

By Stephanie Ellis-Smith

Given that we’re approaching year-end and many folks will be thinking about making their final year-end gifts to charities, I thought it would be a good time to re-up this post from 2019 about compassion. It just lands differently after the events of 2020. We have experienced so much collective trauma these past two years that I felt we ought to be reminded of the fundamentals and the root of philanthropy--love of humanity. Please have a read and let me know what you think. 

***
Last week I went to a charity luncheon that raises money to house Seattle’s homeless. After client testimonials and The Ask, we were introduced to the keynote speaker, Shankar Vedantam, the host of NPR’s Hidden Brain. Apropos of why we were there, he spoke to us about compassion and how it is accessed and processed (or not) in our brains.

As someone who for over 20 years has relied upon and tapped into the compassion of many in order to do my part in making our society more livable and equitable, I was captivated by his words. I know that when we help others, we experience greater happiness than if we had done something for ourselves. Now science has weighed in and has offered proof that it’s true. 

One well-cited study shows this clearly. Two groups were given varying sums of money. One group was told it must give the money away, whereas the other group was instructed to spend it on themselves. Consistently and across variables, persons in the first group had greater neural activity in key areas of the brain and were seen as happier than their self-indulgent counterparts. And this neural activity was present even in the mere anticipation of giving money away to help others. In other words, we are hardwired to do good. So why don’t we do it all the time?

Vedantam explained that just as there are predictable triggers in our brain for generosity and happiness, there are barriers to them as well. He shared three with us, and I noticed that the first two address an issue that we talk about all the time in philanthropy: the quest for impact. 

The first barrier is distance. It’s much easier to help someone right in front of us than someone who is miles away. Responding to the immediacy of someone’s needs is a knee-jerk response for most of us. However, when someone far away is in crisis, the time it takes to learn of the problem and then to get your relief delivered, causes many of us to lose interest or become more apathetic than we’d like to be. The reason, Vedantam says, is because we don’t get that immediate rush of happiness that comes from having done well by someone. Helping close by is evolutionary. 

The second barrier is scale. For many of us, when confronted with massive problems that we can’t readily solve, we tend to shut down or simply just ignore it--think about homelessness, climate change, etc. You are not alone if the sheer scope and magnitude of the world’s most intractable problems leave you feeling exhausted. It turns out that we are genetically and neurologically predisposed to being overwhelmed in these situations. When we don’t feel we are having, or can have, a positive impact on a negative situation, we are less inclined to help.

The final barrier is what’s called “the bootstrap narrative.” We have all heard it said that if a person is in trouble, they should “pull themselves up by their bootstraps” and fix their own problems. It’s a widely held notion, but research debunks the idea that the first person who should help someone in crisis is that very same person. Vedantam cited a famous study called the Minnesota Starvation Experiment, which showed that a person’s mind becomes entirely captured by the thing they lack (especially if that thing is essential, like food, housing, or even a drug). In fact, they can think of little else. Scientists have learned that scarcity captures the mind and the afflicted are in fact the least able to solve their own problems. They lose the ability to think rationally and instead do the things that may manage the scarcity today, but do nothing to address the root cause of their problems. Watching people make what we can clearly see to be “poor choices'' makes our compassion for their plight go out the window. But our expectations are unreasonable. Bootstrapping while in distress simply doesn’t work.

So what can we do to override or outwit our brain’s wiring so that we can be compassionate all the time? Well, apparently it takes very little—and you don’t have to be a martyr either. We just need to remember that: 

1. Compassion is contagious. When we are working at something with others or if we even see another person toiling away at something good, we tend to be more eager to join in and to help.

2. Break it down. Instead of thinking you must rescue all stray animals in world, find one. When we can more readily see our impact by breaking off a small piece of the problem and we “solve it,” we’re more apt to do it again, and so will others. (See point #1.)

3. Compassion lives everywhere. There are many ways to exhibit compassion, so don’t be fooled into thinking that it’s all about money. Making a call to check in on a grandparent or mentoring a teen, goes a long way toward making a difference in the world. And when we do it, we give something more valuable than money—time.

Being compassionate is a part of what makes us human. As we get strategic with our philanthropy, let us not complicate what it’s all about in the end.

Tough Talk

By Stephanie Ellis-Smith

Having tough conversations are often a necessary part of social change -- both in funding it and in carrying it out. But how do we have a tough discussion that gets our point across without it coming across as a personal affront? I was recently asked to present a webinar for the National Center for Family Philanthropy on how to navigate difficult conversations. I found preparing the material to be a fascinating exercise because it forced me to think in clear and in no uncertain terms how exactly that is done. As a result, I thought I might share a few tactics I’ve learned with you and hope you will find some of them useful. 

But before I get to the tips, I want to linger on the conversations themselves. From where do they arise and what exactly makes a conversation difficult? There are a few key elements that come together to make for gnarly conversations. The first is simply two people having differing perceptions. We each see our reality as right and rational and we have different interpretations of the same event or issue. But our interpretations come from different life experiences that have shaped the lens through which we view others, issues, or conflicts. Those differing views can clash.

We assume others’ intent but we do not know what a person’s intentions are. Only they know that. Unless someone explicitly states their intention, again, we do not know their intentions. We cannot assume. Yet, we do.  

We also come with impassioned feelings. Oftentimes the main reason why conversations go off the rails is because of the intense emotions that are behind the topic-big or small: race, politics, children or even things as mundane as the timing of a family gathering. They can affect our ego, sense of belonging; they make us feel vulnerable at the wrong time and then emotions run high.

Finally, we search for someone to blame. Someone has to be at fault. Blame is about making judgments, but effective conflict management is about learning from mistakes, understanding different perceptions of the same reality, and adjusting one’s behavior for better results in the future.

The past two decades have given us no shortage of opportunities to have difficult conversations. Whether they’ve been at the dinner table with friends or family, in the office with colleagues, or even in the grocery store with a total stranger. The worst are those when you find yourself in a confrontation with someone you actually care about or with someone with whom you’re in a relationship that you would like to preserve. How do you get your point across yet still honor the relationship, be liked, loved, and cared for? Here are a few tactics I use if you find yourself facing a tough conversation. 

Prepare. These are not conversation to go into haphazardly. We need to prepare for them. First by reflecting on what you really want or need from the conversation. Keeping the purpose clear will aid you if things turn sour. You can always recenter yourself in purpose if you lose your way.

Define what success will mean. What it will look like will be different for every situation. Sometimes success will be getting someone to change their mind or do what you want. Other times it may be as simple as awareness of a differing point of view. Manage your expectations by going into the situation with this point clear.

 Don’t avoid it. Remember, it’s conflict management, not conflict avoidance. While it may be tempting, avoiding the issue will not make it go away. In fact, small issues simmering in the background can grow into bigger, more intractable problems if left alone to fester. 

Make it safe to talk. Having a “safe” conversation means the other person feels they can trust you. You can build that trust by acknowledging your mutual purpose—you’re both there because you’re upset and want to leave feeling better. 

Listen. “Seek first to understand and then to be understood.” Good listening in a conflict situation requires an open and honest curiosity about the other person, and a willingness and ability to suspend judgement. Listen because you care, not to prove them wrong.

 Ask open-ended questions by beginning with “Help me understand…” or “Tell me more about…” To make sure you are getting the accurate meaning, you can paraphrase what you heard back to them. And finally, acknowledge feelings. I mentioned earlier that it is a key component to what causes these interactions in the first place, so you don’t have to ignore them!

Separate intent from impact. We all come into situations with our own narrative. Be honest and check what assumptions you’re coming in with. The authors of the book Difficult Conversations: How to Discuss What Matters Most (Viking Press, 1999) said it perfectly: “It is common during a difficult situation to make an attribution about another person’s intentions based on the impact of their actions on us. We feel hurt; therefore we believe they intended to hurt us. We feel slighted; therefore we believe they intended to slight us. Our thinking is so automatic that we aren’t even aware that our conclusion is only an assumption.” 

Use “I” statements. Sentences that start with “I” are less inflammatory and they keep responsibility for what is expressed with the person doing the speaking. 

Attempt a solution. I use the word “attempt” here purposefully. Some difficult conversations, like those about race, may not have an immediate solution. Expect and accept that there may not be closure. It is not likely that you will resolve your personal understanding about discrimination or another person’s life experience that drove them to hold a certain view in a single conversation. Authentic and productive conversations about anything difficult are continuous and always evolving. We don’t always get closure. 

Follow up. If this is a relationship that needs to be nurtured, following up is always a nice gesture. Was there any unfinished business that can be taken care of? Is there an opportunity to reset casually on the phone or over e-mail (a little distance). If it feels right, do it.

 All of these tips require a high EQ and an ability to have self-knowledge. Not only must we know ourselves, we also must tap into the spirit of our partner in dialogue. What moves them, what triggers them, what kind of delivery are they most apt to hear and respond to? (story or data?). It requires energy, thought, and time, but the effort is usually worth it. And, you will find that it does get easier with practice.

What Matters Most?

By Nancy Reid, Impact Strategist

You know it when you see it—a person or group who knows what matters most to them, and who acts accordingly. Some of them are lucky enough to have resources—philanthropic capital, investment capital, social capital, and time—to bring to bear in addressing those issues. The WNBA players on the Atlanta Dream who spoke out for voting rights in Georgia and Patagonia and its decision to withdraw its products from fundraisers for sedition-backing politicians both strike me as examples of people and groups who’ve identified what matters most to them, and acted on it with boldness and clarity.

So I’m always amazed when I have the opportunity to work with people who are taking thoughtful action to advance the issues that matter most to them through philanthropy or politics, but who haven’t applied that same lens to their investing lives. They may have clarity on how they want to use their political or philanthropic giving in order to affect change in the world. They may volunteer on projects that are important to them. And they may even drive an extra 15 minutes to buy from a store that treats its employees well, rather than shop at one that doesn’t. But when it comes to their investing, they avert their gaze.  

We are all susceptible to this. Investing can be technical and obscure. It’s difficult to know where and how you can exert influence; and when we try, we fear we may risk losing all our money! But in a world in which the profit motive drives outcomes, from carbon emissions to hiring policy, those of us who own businesses bear some responsibility for actions taken on our behalf.  

How can we concern ourselves so greatly with each donation, and even stand in the supermarket aisle reading the fine print on food labels, while ignoring the pressures that our investment decisions are exerting on the world around us? For those of us lucky enough to have significant investments, the footprint left by our investing activity is far greater than that left by most of our other decisions.  

Like a philanthropic advisor, I have the privilege of guiding clients to greater clarity on what matters most to them, but in my practice, I help them find ways to reflect and advance those ideas in their investing lives.  I’m not a financial advisor—I don’t sell investment products or recommend specific strategies. Instead, I help people identify the issues and ideas that matter most to them and then use those issues as a framework to evaluate their current financial lives. Are you a feminist whose entire advisory team is male? Do you donate to environmental organizations while your investments include multinational corporations who lobby against climate change legislation? Are you wearing a Black Lives Matter shirt, while your portfolio includes for-profit prisons?

Not everyone feels ready to face the power they hold as investors, and to take responsibility for all that’s being done in their name. In many cases our choices are constrained by family members, trusts, and limited resources. When I work with a new client, in addition to asking about their learning and decision-making style, I also often ask about their appetite for disruption. For those who aren’t ready or able to completely upend their financial life, here are a few steps to consider taking as we begin to take greater responsibility over what we own:

• Before your next meeting with your financial advisor, write down a few questions you’d like to get answered and send them to your advisor in advance. There are no stupid questions. Questions like “Do I own oil pipelines?” or “Do any of my fees go to pay for lobbyists?” can be an easy place to start. If you’re feeling very brave, you can ask more difficult questions like “What’s the gender composition of the boards of the private companies in which I hold investments?” Keep in mind that these may be new questions for your advisors as well, and they may not be able to answer right away.

• If you’re looking for ways to engage your adult children in the topic of investing, ask them what kinds of business behavior they wish they could see in the world. Are they concerned about carbon emissions, forced arbitration for sexual harassment claims, or hiring practices? If so, working with your advisor to research these practices among the companies you’ve invested in may be illuminating.

• If you have a donor advised fund (DAF), ask your representative how the assets in your DAF are invested.  Most DAF platforms have “socially responsible” investment options that you may not know about—and that even your representative may not know about. Switching to a socially responsible investment option probably won’t make a big difference in the real world, but it may send a message to others that you are interested in this topic.  

I’m not here to tell clients what to do or how to invest. I am here to ask gentle questions about what matters most, to dare people to be just a little more brave than they were yesterday, and to share a vision for the impact that thoughtful investors can have on their advisors, their communities, and the global financial system.

We are thrilled to have Nancy join the Phīla Giving team as a collaborator. She can be reached via email at “nancy (at) philagiving.com”. And here are a few resources that you might find useful.

What Nancy’s reading this month:

• The World May Be Better Off Without ESG Investing: "Contrary to what many investors think, most ratings don't have anything to do with actual corporate responsibility as it relates to ESG factors. Instead, what they measure is the degree to which a company’s economic value is at risk due to ESG factors.”

• A stock market test for stakeholder capitalism as public benefit corporations go public: "Early data suggests publicly traded public-benefit corps. trade at a premium to other companies in their peer group.”

Where you can find Nancy teaching later this month:

Activate Your Money: Impact Investing 201

Bringing the Family Business into Philanthropy

by Stephanie Ellis-Smith

I’ve been reading a lot about what has become of all the pledges business and corporations made to racial justice and economic equality after the reckoning of 2020. According to one statistic, of the $50 billion dollars pledged, only $250 million was actually given. Yikes. While that stat is almost entirely about large corporations like JP Morgan Chase, Google, and others, smaller family businesses can take a lesson from it. Today, more than ever, the world is watching not just what you say, but what you do--or don’t do, as the case may be!

So how does a business make good on its desire to give back at a time of great need? This blog post offers a few ideas to help you get started. And of course, we are always happy to have a conversation, if you have specific questions.

First, some data to set the scene. A study published in the Harvard Business Review found that family businesses maintain high levels of corporate social responsibility (CSR) regardless of what the business environment is. Additionally, an impressive 81% of the world’s largest family businesses are engaged in philanthropy, which shows just how important CSR is to family enterprises. 

Why do family businesses focus on philanthropy, corporate responsibility and giving back? Here are three key reasons:

1. To attract talent: millennials, as the largest generation, and Gen Zs moving into the workforce, all want to work at places that contribute to the common good. It’s a great tool for employee engagement and retention.

2. To deepen family legacy: this one is really important. The desire for an owner to pass on the business within the family is a significant driver behind an organization’s philanthropic goals. Ernst and Young’s recent Family Business Philanthropy report indicated that family business owners with strong trans-generational intentions are particularly concerned about the well-being of future generations, and are therefore more motivated to address long-term social and environmental issues by engaging in philanthropy. And further, participating in philanthropy as a family (at home or in business) helps to keep the bonds of family strong over generations. Giving together publicly demonstrates a family’s core values and unites them behind a common cause.

3. To strengthen their voice: organizations with a clearly defined purpose, often exemplified by a philanthropic strategy, typically experience more growth, have higher customer satisfaction, and have a reputation as champions for their community. Philanthropy is increasingly a key component to a strong brand.  Now that you have an idea of what motivates family businesses to do this work, we can talk a bit about how it can be done successfully.

First, start with WHY. As I always say to our clients, no one has to engage in philanthropy. Getting comfortable with doing a deep dive into motivations is key. What exactly are you looking to get out of it? Do you want to financially support some really incredible work that's already happening in your community? Do you want to engage your employees with volunteerism? These kinds of questions are important to ask yourself, because they will determine what type of nonprofit organizations you might work with, who should be involved, and what level of engagement will be necessary. 

You can find lots of advice and advisors who will tell you how to develop a CSR program in a quick and easy fashion that has a big return on investment, but Phīla does not believe in shortcuts. In this day and age, insincerity and slapdash programming are easily detected and you could end up doing more harm than good to your business. Take your time to ask yourself the right questions.

Decide on your goal or vision. When deciding on where you will have impact, it is not enough to simply settle on the vision that your CEO or founder is partial to. Vanity projects will only get you so far. Instead, create a thoughtful and intentional process that brings together family, customers, and employees to determine which issues lie at the intersection of the business’s mission and the unmet needs of your community. Spending time on deciding how the values the business espouses connect with your philanthropy will make it easier to make decisions in the long-run.

The objective of this exercise isn’t to arrive at a goal that sounds impressive. In fact, the simpler it is, the better. The goal is to arrive at a vision for your community that your company is best equipped to play a part in creating. The temptation is to jump right in to picking issues and organizations to support, but in reality, having a program you can be proud of and that has longevity requires learning about your community, listening for understanding from your stakeholders, and building trust. It takes time.

Don’t be afraid to take a stance. At this moment, during the ongoing uncertainty of the pandemic, a fragile political environment, and calls for racial justice growing by the day, taking a stand means it’s likely that you won’t make everyone happy. The company must be prepared to decide if it is okay with losing business from certain groups since taking money from those groups would run counter to its philanthropic values and strategy. Being consistent and knowing the issues at hand are as important as ever. A couple of examples of how businesses take a stand on issues important to them are restaurants that make public that they’re discontinuing their use of plastic straws and telling customers why; or retailers who actively reach stock suppliers of color and state why they find it necessary. You get the idea.

Establish mutually beneficial partnerships with nonprofit organizations by doing the legwork to understand your company’s role in the broader ecosystem surrounding that goal. Get to know the community on a deeper level and learn how the issue you care about has had an effect, past and present. Think about what you really want to get out of your relationship with the community. If it's a big employee-driven, social justice initiative that the company really wants to step into -- like what Starbucks or Patagonia did with their environmental focus --  then that affects the kinds of conversations you have with nonprofits. You're not going to be working with a small community-based organization. They don't have the wherewithal to respond, they don't have the data, the metrics that a marketing team is going to need or want to justify it. That's going to be your much larger, maybe national, organizations that can meet you eye-to-eye, head-to-head, and give you the types of things that you really need. Conversely, if you're looking to be embedded in a community, then that's a different kind of conversation with maybe smaller organizations.

Family businesses understand the need to partner with nonprofit experts on the issues they care about, and even more so if they are looking to engage with communities of color. It is important to ensure that these are not token partnerships, but authentic and mutually beneficial for both the business and the local partner. (For a deeper dive into embedding racial equity into corporate social responsibility, check out a webinar I participated in called Turning Statements Into Action.)

Kristin Jarrett, a community and social impact strategist at Booz Allen, advises large and small businesses to meet with nonprofit organizations and ask them about what big problems they are trying to solve and how you can help. She wisely suggests that businesses stepping into the social sector should plan to “do some backwards planning and create ideas around how you could collaborate to really support them (i.e., nonprofits) in their mission.”

Regularly check in on your progress. Philanthropy is an ongoing commitment to achieve a vision of justice or equity in partnership with one’s community. Build accountability into the process from the start. The same diverse group of stakeholders who help set the vision for the program can also set the metrics by which you’ll measure your performance. While there is no legal obligation to meet these metrics, relationships with stakeholders — especially employees and external communities — are regulated by trust. Continued failure to meet stated goals damages this trust and sours the brand. Better to not do it at all if you can’t dedicate real time and energy to this involved yet potentially very rewarding process. 

In its best form, philanthropy in a family business environment is a healthy and mutually beneficial relationship between the business and the communities with whom they interact. The dynamic is also driven by the growing desire of socially-aware consumers and employees to do better for their stakeholders and the world at large.

As you consider embarking upon this work, you will no doubt find joy in connecting your family business with your community in new and meaningful ways. 

Summer Reads to Celebrate the Power of Humanity

Lauren Janus, COO and Philanthropic Advisor at Phīla Giving

A year ago this month, the world felt like an incredibly tense place. 

George Flyod had just been murdered, on camera, at the hands of white police officers in Minnesota. With no vaccine and uneven testing capabilities across the country, COVID rates were raging while medical experts issued daily warnings of the deadly summer ahead. It wasn’t exactly the sort of atmosphere that made you want to stretch out in your lawn chair, pour a cool drink and delve into the latest crime novel. 

Instead, in my “summer reads” blog post last June, I recommended a handful of excellent books that dig deep into the issues of race, poverty and inequality laid bare to us all in the past year. I still strongly recommend all of these books not only because of their subject matter, but also because each of them is highly readable and engaging--not quite beach reads, but close enough to make you think differently and want to pass along a copy to a friend.

While it still feels audacious to even suggest that this summer could be more normal than last, expanding vaccination rates and decreasing COVID deaths do make it feel less scary. I’ve been using this new breathing space to take a step back and focus on the broader beauty in the world, including the power of individuals to move the needle on social justice, family relations and a more just and loving version of humanity. 

If you’re in a similar frame of mind as the weather warms, here are some of my top book recommendations:

 A Hope More Powerful Than the Sea: One Refugee's Incredible Story of Love, Loss, and Survival, by Melissa Fleming 

It’s difficult to argue that any refugee’s story is not harrowing. But Doaa Al Zamel’s is truly incredible. Doaa is just a teenager when her fiance convinces her that the two of them should flee Syria for Europe after passing their life savings over to smugglers with a rickety boat. When the boat capsizes, Doaa (who cannot swim) floats for days on an inflatable tube clutching two toddlers, who were thrust into her arms by their drowning parents. Doaa’s story ends well, but its glimpse into the astonishing bravery, love and sheer grit of today’s refugees will stick with you. 

Interpreter of Maladies, by Jhumpa Lahiri 

I first read Interpreter of Maladies nearly 15 years ago, not long after it was published and won the Pulitzer Prize. While this time around I remembered many of the stories in this short compilation written by the now famous Jhumpa Lahiri, every single one of them struck me anew for their achingly rich storytelling. Lahiri excels at telling stories of relationships--between lovers, family members and neighbors both in the U.S and in India. Not all of her characters behave well toward each other, but each of them needs each other in a very human way. Try stopping at just one of her stories in this short read.

Empire of Pain: The Secret History of the Sackler Dynasty, by Patrick Radden Keefe

No, I’m not suggesting that the Sackler family represents a beautiful sort of humanity to be celebrated in these challenging times. Quite the contrary. Patrick Radden Keefe’s 2021 expose on the Sacklers is shocking, engrossing and peppered with moments of pure ickiness. The way members of the elder and younger Sackler clan have used their wealth and personalities to manipulate nonprofits, government officials and the American public to further swell the family’s coffers is increasingly horrifying as the generations replace each other. The bright light of this story is Nan Goldin, the 60-something photographer who spear-headed the first protests against the Sackers inside the museums (the Guggenheim, Smithsonian, the Met) which have accepted the family’s donations for decades. 

Keefe explains how Goldin, who herself suffered from an addiction to  OxyContin, organized fellow artists, students and victims of the opioid epidemic to drop empty prescription bottles on the floor of the Guggenheim lobby and stage a subsequent ‘die-in.’ Her efforts worked, finally drawing a bright light to the unfettered greed and morally abhorrent behavior of the Sackler family.

The Purpose of Power: How We Come Together When We Fall Apart, by Alicia Garza

Alicia Garza’s recent book is a similarly inspiring, authentic story of the power of the individual. Garza is the woman behind the original #BlackLivesMatter hashtag, and co-founder of the Black Lives Matter movement. In her 2020 book, Garza describes her childhood as one of only a few Black children in a predominantly white, upper-middle class neighborhood, and her entry into the world of community organizing following college. What makes Garza’s arguments so welcome in these divisive times, is her insistence that movements like Black Lives Matter are successful when they are accessible to everyone who, like her, are striving to move our country--and arguably all of humanity--progressively forward. 

Happy reading!

The Mother’s Day Legacy -Making an Impact with Planned Giving

Janell Johnson, Philanthropic Advisor

The origins of Mother’s Day are deeply rooted in philanthropy and grassroots advocacy. In response to appalling infant mortality rates and poor sanitary conditions, in 1858 Ann Reeves Jarvis organized a Mothers’ Day Work Club to mobilize women to take action by purchasing and distributing medical supplies and providing in home education to families in need. Their work later evolved into antiwar activism that led to unity and reconciliation among Confederate and Union soldiers.  

Members of the Mothers’ Day Work Club took bold action, responding to present needs in the community with their time, talents, and treasures leaving a lasting legacy. These values – health, welfare and unity – are still present in today’s modern nonprofit sector where women continue to demonstrate leadership, passion, and conviction. As of late, this leadership is on display for the world to see as stories of transformative women philanthropists fill the media airwaves. While we continue to honor the contributions of these incredible women, it’s important recognize commitments at all levels.  

As noted in this Forbes article on women philanthropists who offer advice to younger women on having an impact, regardless of one’s age or financial status there is room for everyone at the philanthropic table. You don’t have to be a billionaire philanthropist or social activist like Ann Reeves Jarvis to leave a legacy.  

Even if you are unable to give to charity right now, many women are leaving meaningful legacies that extend far beyond their lifetimes through Planned Giving. Planned Giving simply refers to the financial and legal tools used in the gift planning process. Many of us have life insurance policies or retirement plans that offer comfort and security during life and provide for loved ones, but did you know that these tools also make wonderful legacy gifts to charity? Gifts of this kind do not impact your current finances, they’re tax efficient, and are very easy to arrange.   

Here are a few simple gifting approaches and things to consider as you embark upon your gift planning journey:

Retirement Assets

If you are like most people, you probably will not use all of your retirement assets during your lifetime. Around 60%-70% of your retirement assets may be taxed if you leave them to your heirs at your death. Donating unused retirement assets, such as your IRA, 401(k), 403(b), pension or other tax-deferred plan, is an excellent way to support charity. Charities do not pay taxes on these kinds of gifts and benefit from their full value. Neither you, your heirs, nor your estate will pay income taxes on the distribution of the assets. 

Life Insurance

Naming your favorite charity as the beneficiary/partial beneficiary of your life insurance policy is the simplest way to transfer death benefit proceeds from the policy. For policies that have outlasted their original purpose, such as providing for minor children who are now financially independent adults, you might consider gifting the entire policy to charity. If you still owe premiums on the policy, the charity might choose to take over those payments. You may also consider making an annual donations to cover the premium costs in exchange for a lifetime income tax deduction. 

Beneficiary Designation Forms

It is not uncommon for retirement and insurance beneficiary designation forms to change several times throughout life to reflect your current relationships and financial goals. Often these changes can be made online or over the phone at no cost to you. The division of assets and gift values might be considered within the context of a comprehensive estate planning effort, but it’s not necessary. These are changes you can make on your own with the click of a button. Further, these gifts are completely revocable and can be changed at any time. 

Bequests

A bequest is a simple statement in your will that transfers assets to charity. It’s completely revocable and can be changed or modified at any time. Below are some common ways to approach bequest giving:

• Specific Bequest. A specific bequest involves making a gift of a specific asset such as real estate, artwork, or a gift for a specific dollar amount. For example, you may wish to leave your home or $10,000 to charity. Keep in mind that valuations are important in order to ensure that the property being gifted is truly representative of your intention in leaving the property.

• Percentage Bequest. Another kind of specific bequest involves leaving a specific percentage of your overall estate to charity. For example, if you wanted to leave 10% of your estate to charity you might name one charity or divide that percentage among several organizations. This is heartful work and there is no wrong way to do it.

• Residual Bequest. A residual bequest is made from the balance of an estate after the will or trust has given away each of the specific bequests. A common residual bequest involves leaving a percentage of the residue of the estate to charity. 

• Contingent Bequest. A contingent bequest is made to charity only if the purpose of the primary bequest cannot be met. For example, you could leave specific property, such as a vacation home, to a relative, but the bequest language could provide that if the relative is not alive at the time of your death, the vacation home will go to charity. 

Legacy Society Recognition

Many nonprofits have established member associations called Legacy Societies to recognize people who have given notice of a planned gift. It’s their special way of recognizing your philanthropic leadership and allows them to celebrate with you during your lifetime. There is typically very little process involved in joining a legacy society other than a verbal commitment and minimal documentation of your gift. 

If any of these ideas spurred new thoughts about how you might maximize your giving, reach out to me or your tax advisor/financial planner to join the movement by planning for gifts today that will make a big impact tomorrow. And Happy Mother’s Day!

It's Time to Upend the Status Quo of Charitable Giving

This blog is adapted from the original work created for the Initiative to Accelerate Charitable Giving.

Image courtesy of Unsplash

In addition to my work at Phīla Giving, I co-founded, with Christina Lewis, a nonprofit organization called Give Blck in September of 2020. Give Blck gives voice to 500+ Black-founded nonprofits and addresses racial equity by offering a comprehensive database for donors to find and fund Black nonprofits. It began as a response to individuals seeking a way to support Black-owned business and Black organizations in the wake of the murder of George Floyd in May of 2020. 

Given our involvement in philanthropy as non-profit founders and individual philanthropists, we are acutely aware that funding and investing in Black nonprofit organizations are critical – yet often forgotten – pieces to tackling systemic racism and inequality. We have seen first-hand how structural issues in the philanthropic sector slow money getting to working charities and the out-sized impacts they have on communities of color. The lack of transparency of donor advised funds makes it difficult for organizations to cultivate relationships with donors. Not to mention the fact that despite the hefty payouts during the pandemic, commercial DAFs are still sitting on billions of dollars that are already dedicated to the common weal but are sitting fallow instead. While these difficulties hit all organizations, the hit is disproportionally devastating to Black and BIPOC groups. Just this past February–Black History Month–only four percent of the $450 billion dollars donated to charity went to organizations led by underrepresented minorities. 

Through Give Blck, I have signed on to support The Initiative to Accelerate Charitable Giving’s reforms because they address outdated provisions in the current tax structure and reforming these charitable giving laws is a crucial step towards achieving racial and economic equity in our sector. What can be done? IACG has specific recommendations for reform for private foundations and donor advised funds.

For private foundations, while they are subject to a 5% payout rule to ensure a regular flow of dollars to tax-exempt public charities, savvy trustees can easily work around this requirement. At a time when every dollar counts, Congress should ensure that existing rules are reformed to fulfill their purpose by stipulating that:

• Private foundations cannot meet their payout obligations by paying salaries or travel expenses of foundation family members. 

• Private foundations cannot meet their payout obligations by making distributions to donor-advised funds.

• Donors cannot avoid private foundation status (with its attendant rules) by funding their entities through donor-advised funds.

Congress should also enact incentives and reforms to ensure that private foundations continue to play a pivotal role in the charitable ecosystem by distributing more of their assets to operating charities, such as:

• Reduce to zero the private foundation excise tax for any year in which the private foundation’s payout is 7% or more.

• Eliminate the excise tax for any newly created, time-limited private foundation with a life of 25 years or less. 

Donor-advised funds (DAFs), on the other hand, call for a completely different approach. They have over $120 billion set aside for future charitable gifts. The problem is that current rules fail to provide any incentives or requirements for DAFs to ever distribute their money.

DAFs can and should continue to play an important role in charitable giving, but there need to be rules to ensure that funds donated to DAFs are made available to working charities within a reasonable period of time. Congress should enact reforms that ensure that payout occurs by allowing donors to choose one of two regimes for their DAF donations: 

1. A 15-year DAF Rule under which a donor would get upfront tax benefits (as under current law), but only if DAF funds are distributed (or advisory privileges are released) no later than 15 years from the year of the donation to the DAF. 

2. An Aligned Benefit Rule, an alternative for donors who want more than 15 years to distribute their DAF funds, allows a DAF donor to continue to receive capital gains and estate tax benefits upon donation but would not receive the income tax deduction until the donated funds are distributed to the charitable recipient. This rule would create an incentive for donors to get donations to charities sooner. View details and other proposed reforms on their website.

It is critical that we implement IACG’s reforms now because we are in a unique moment of awareness and openness to examine how business has been done in the past and how it may aid in nurturing inequality at a time when more people than ever around the world are motivated to make the rules work better for everyone.

If these proposals become law, there will be short and long-term benefits that would do much to invigorate and make our sector more equitable. But we don’t need to wait for Congress to act. You can implement some of these changes now and on your own to move your money faster and more equitably.

We must be more deliberate with our philanthropic giving and intentional with regard to who we want to fund. Casual, colorblind donations to organizations, believing that somehow everything will work itself out in the end, will at best be ineffective as it pertains to dealing with pre existing racial disparities. It is far more likely that the absence of deliberate and meaningful reforms in philanthropy will only widen gaps that should be closing.