I am presenting at the Planned Giving Group of Connecticut’s (PGGCT) September 13 meeting a paper via powerpoint on Philanthropic Funds. The Program Chair has given it a name that is wonderful for the academic world — “Taking the Initiative: Why Charitable Organization Should Consider Managing Donor-Advised Funds” (notice the required academic colon) — but my own title is a bit more in line with a Public Relations approach –”In a Phrenzy for Philanthropic Funds!!”
There’s a goodly amount of public relations and marketing in the field because development officers for an organization also have public relations in their portfolio and sometimes in their title. I approached PGGCT to speak on this issue because it is, in part, a public relations one — not-for-profits have lost the language battle in this area of planned giving to the financial services companies, like Fidelity, Vanguard, and Charles Schwab, even though not-for-profits created the philanthropic fund in 1931. Proof that they’ve lost? You probably have never heard of Philanthropic Funds, but are probably more familiar with the term Donor Advised Funds. That is a term that was put into the IRS Code in 2005 at the behest of the financial services industry.
Why is it important for not-for-profits to get back into this area? I have no particular argument with the financial services industry seizing an opportunity, but I am concerned that not-for-profits — and I work with a lot of them — have lost touch with demographic cohorts below the age of 60. The philanthropic fund is a great way to connect and reconnect with these cohorts. And why insist upon using the term philanthropic funds? Because as anyone involved in how public relations works in the world knows, once you use the other guy’s language, you’re not playing on your turf, but on his. By accepting donor advised fund as the preferred term, not-for-profits have given up their strongest suit — their philanthropic mission — which is why their donors give them any money in the first place!
My goal in my presentation is not only to review the history of this planned giving instrument and its legal requirements — and there are very few — but also to spur not-for-profits to reviving moribund philanthropic fund programs or to urge their creation by those not-for-profits that do not offered them to their donors and supporters. Finally, I’m hoping that the PGGCT will set up a program similar to the very successful one they created in 1990 (Leave A Legacy), which has help so many people leave a bequest in their wills and has helped a tremendous number of not-for-profits.