Becoming a Trusted Advisor

A debate emerged in the community foundation field with the rise in popularity of donor-advised funds starting in the 1990s that posited the question of whether a community foundation should be “donor focused” or “community focused,” implying that one was either-or, but could not be both. Thankfully, it appears that for the most part that argument is dead. How did this happen?

The main reason for the end of the debate was that those foundations that started engaging donors in philanthropy early on realized that in reality you just can’t separate donors and community. There simply was no denying that more donors giving more money to causes they care about was a good thing for everyone. The increased asset size and grantmaking of these foundations from the recommendations of their donors raised their visibility in their communities, and made them more and more of the go-to place for charitable giving.

In fact, the R&D we have been conducting on this very topic for the past five or so years shows that those foundations that have been engaging donors in philanthropy for the longest time now know that the result of many years of relationship-building with donors and the professional advisors who serve them is that they ultimately attain the level of “trusted advisor.” This goes far beyond just attracting donors and getting their “foot in the door.” Becoming a trusted advisor requires developing a true and strong relationship, and consistently providing, over a long period of time, high quality service in a donor-centered manner. (See our recent white paper , “Advanced Professional Advisor Marketing: Becoming a Trusted Advisor,” for more on this topic.)

It is these donors who view the community foundation as a “trusted advisor” who are willing over time to trust the foundation with their legacies, and who will even introduce their family members and friends to the foundation. These relationships are the ones that leverage the assets of all the players involved to their maximum potential: the charitable dollars of generous donors, the philanthropic expertise of community foundations, and the powerful relationships of professional advisors.

This evolution of the business model toward a blended approach that serves the needs of individual donors, respects the value of their grantmaking, and maintains the added value of offering thought leadership and strategic grantmaking toward the most critical issues of the region means that everyone wins. Donors win. Foundations win. Grantees win. And most importantly, folks in the community who need the support of donors, foundations and nonprofits win.

Caroline Heine

Posted at 9:23 AM, Sep 13, 2007 in High Net Worth Donors | Philanthropic Strategy | Permalink | Comment