Tuesday, July 15, 2003

Managing the Giving Portfolio

A new report from Boston College's Social Welfare Research Institute (Schervish and Havens of the now-infamous $41 trillion wealth transfer estimate) shows that people who use planned giving options are inclined to use more than one at a time. (2003 Survey of Planned Giving, Schervish and Havens, BC, June 2003).

This aligns directly with our findings that more and more donors are using multiple giving options to manage their charitable giving. We've come to represent this in a graphic we call "The Giving Portfolio."
The Giving Portfolio.ppt

In other words, people are using lots of tools to manage their philanthropy both during their lifetimes and as they plan their estates.

What are the implications of The Giving Portfolio and these multiple giving/planning options? There are many for every constituency, from donors to advisers to community groups to the vendors of the different products. Here are just some examples:
* Funds are more fragmented, possibly making it even harder for donors to track they're giving and for community organizations to find the resources
* Donors are beginning to compare and contrast one option to another and demanding increased accountability from the
various vehicles.
* Different vehicles have different costs and will need to be able to show returns that justify those costs.
* Opportunities to advise the full portfolio (whether or not managing the actual assets) will take on a higher precedence
* Advisors or managers of one element of the portfolio should know about the other elements - and probably don't.

Most important at this stage of the game is the degree to which the various vendors in the portfolio are unaware of or in direct competition with their peer vendors. Once you recognize that the customer (the donor) is buying from all the vendors, you can see that the value of each option needs to be complementary and niche-filling, not all encompassing. This has implications for marketing strategies, results, accountability, and pricing. Its how the current marketplace is working, and the opportunities abound for those who can sell their services or products to strengthen this system rather than working against it.


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