Most donors agree with Andrew Carnegie: It is harder to give away money intelligently than it is to earn it in the first place. By ending years of steady asset growth, the events of 2008 have only exacerbated the difficulty.
For the last 10 years or so, the main concerns in the philanthropic sector have been strategy, effectiveness, and evaluation. Market conditions have swiftly and radically changed the focus. The question has turned from, “How can I give well?” to “Where do I say no?” Attention has turned from allocation of philanthropic capital to its very preservation. The Madoff fraud, which has fallen heavily on many philanthropic entities, has shaken investors into asking, “Who can I trust?” Conscientious donors have long thought that their philanthropic capital, if managed well, could exist into perpetuity. After a year of 30 percent declines, perpetuity feels like a long time.
Old questions, new urgency
At the same time, the need for charitable giving has only grown. These are the times when philanthropists can truly gain that sought-for goal: impact. To do this, givers need not only external resources but, most importantly, internal ones. In tough times, we all need wise counsel: a deeply grounded sense of direction, support, and hope.
An analogy from the investing world may be instructive. We all know that, rationally, investors should buy stocks when the market declines, because every dollar they spend purchases more value in corporate earnings.
One can make a similar case in philanthropy. During flush times, your dollars may join millions of others in chasing great philanthropic opportunities. Any one donor has less ability to make an impact, simply because there are so many donors in the field. When economic conditions worsen, every philanthropic dollar makes more of an impact: there are fewer dollars to compete with, while needs have only grown.
The mind may say that these moments of need are exactly when philanthropy can make the most difference. But the heart says, “No, wait, see what happens. Who knows what may be next!” Fear is powerful. Sometimes it helps protect us; sometimes it keeps us from doing good things, for ourselves and others. But in every case, if we learn from it, it can lead us to the real issues.
The first step toward wisdom is discerning what’s going on in our hearts. We cannot give or receive wise counsel if we don’t know ourselves. A series of simple questions can help start us down this path. They are adapted from questions long used in financial planning, most famously by George Kinder. Take a moment to ask yourself, as a philanthropist, these questions, giving yourself a few moments of reflection between each one:
· If I had all the money in the world to give, what would I do with it?
· If I had my current level of philanthropic capital, but knew that I had to deploy it all in the next three years, how would I give it away?
· If all my charitable resources had disappeared yesterday, what would I most regret not having done?
The first question opens up the universe of possibilities, the candy shop of philanthropic opportunities in which we all would like to find ourselves. The second forces one to refine those possibilities and to impose limits (time and money) and priorities upon one’s choices. The third question brings us to a place deeper than possibilities and opportunities to the fundamental, sometimes spiritual, realities: What really matters to me? What have I neglected amid all the hustle and business of life? Where do I really want to spend my time and money?
Knowing what’s in our hearts is the first step in finding wise counsel. The next is consciously preparing ourselves to receive it. From psychology we know that three main things help people bounce back from tough times. People need to take care of themselves, both physically and spiritually. They need to develop a resilient attitude. And they need to establish and maintain quality social connections.
Taking care of oneself can involve taking more moments to relax, looking deeply and getting clarity about what is important to us. Philanthropists need to remember that taking care of themselves is the basis for their helping others.
Donors also need to be attentive to establishing quality social connections, which provide the context for giving and receiving wise counsel. These connections can be with family members, friends, colleagues, or advisors. The key is trust. As the philosopher Francis Bacon observed, seeking counsel involves sharing deeply personal information with someone else. The need for trust becomes all the more apparent when the counsel concerns our wealth and our choices surrounding it.
Some other qualities of trusted relationships include:
· Respect: both members of the relationship respect each other and their work;
· Affirmation: truly wise counsel affirms what we do well and leaves us feeling all the more equipped to take on our next challenges;
· Hope: wise counselors are not Pollyannas or Naysayers but realistic reminders that we have the power to make choices that can protect, preserve, and ultimately increase our philanthropic impact.
When looking particularly at our connections with trusted advisors, it is helpful to have in mind some of the qualities of a true consultative relationship, to serve as a North Star when we are seeking wise counsel.
Certainly excellence in technical knowledge, around investing, or taxes, or philanthropic mechanisms, serves as a beginning. And the accreditation of trusted third parties can help us identify that excellence when we don’t know the fields ourselves.
Additional qualities of trusted advisors include matters of character that go beyond technical excellence, such as:
· Integrity: a counselor with integrity will advise what truly helps, and not just what the client wants to hear;
· Good intent: as noted, seeking wise counsel opens us up to risk, and so believing strongly that our counselors truly have our best interests at heart is crucial;
· Insight: people with insight can cut out the “noise,” put themselves in their clients’ shoes, and listen to their own hearts to know the right thing to do in a given circumstance.
All of these are rare qualities, but insight is particularly uncommon. It seems to rely upon the ability to empathize, to listen to one’s own heart, and to trust oneself. It’s the place where the characteristics of wise counsel come together with practices that prepare us to receive wise counsel, particularly the ability to develop a resilient attitude.
Clearing your lenses
As a philanthropist, it is easy to feel down amid the current market and economic turmoil. People depend upon you and your choices: charitable organizations, the communities they serve, and perhaps your own staff and family members. It is easy to look back and blame yourself or look forward and imagine the worst. This is what we call developing “cloudy lenses.” There are a few easy steps that you can take to clear these lenses, and to put yourself in a much more effective place to choose well and wisely around your philanthropic efforts. First is to recognize that how you feel (for example, sad, worried, angry, even hopeless) depends upon what you think or the things that you’re saying to yourself.
Next, listen to yourself and identify what it is that you are saying about your philanthropic choices, work, or prospects. In tough times, there are a few common thoughts that may “poison” our minds and get in the way of our offering or receiving wise counsel. Each of them also has an “antidote,” or way of turning the thought around in a more helpful direction:
· Blame: For example, “It’s all my advisor’s fault that I had so much of the foundation’s assets in equities.” One can try saying instead, “I wish my advisor had recommended reducing the foundation’s equity exposure, but I still trust her judgment and know that it would have been almost impossible for her to predict these events.”
· Personalization: “I’ve let people down and deprived my charities of dollars they need most right now.” Try instead, “I made some decisions that I wish I had done differently, but I did the best I could with the information I had and many things are out of my control.”
· Should-have, would-have, or could-have: “I should have sold back in 2007!” A more helpful thought would be, “It would have been good if I had sold then, but there’s nothing I can do about that, so I need to figure out what I can do now.”
· Selective negative focus: “I can’t believe the foundation has lost $1 million: this is horrible.” Try instead, “The foundation has lost a lot in the last six months, but it has done very well in the markets over the last four years, and I have to keep in perspective how much I still have to do good.”
These unhelpful thoughts arise naturally in the present circumstances. The key is what we do with them. Do we manage them or let them manage us? If we are going to manage them, we must avoid the blame game, substitute more constructive thoughts, and keep our focus moving forward.
Clearing one’s lenses in this way does not make the painful or difficult things go away. But it does allow us to assess the hard stuff as clearly as possible, with a view towards moving forward wisely.
A humble approach
For all the good that they do, philanthropists as a group have not acquired a reputation for humility. This perception has long caused difficulties between philanthropists and their recipients, their staff, and even the community at large.
Recent events have brought a new sense of humility into many parts of our community, particularly the financial sector, and also to the charitable world. This humility could go too far, into self-doubt, self-blame, and withdrawal. Or it could lead to a renewed and, perhaps, better-grounded sense of purpose, priority, and engagement.
Philanthropists who engage in the practices described above—asking themselves the heart-seeking questions, taking care of themselves, establishing trust connections, and clearing their lenses—will find wise counsel from others and within themselves. They will also be a source of wise counsel to others.
Recent events remind us that we—as philanthropists, advisors, or citizens—have much more than money to offer to each other and ourselves. To reply to Mr. Carnegie, if giving were only about money, it would be much easier. Since it’s really about wisdom, it can be far more fulfilling.
Contributing editor Keith Whitaker is managing director, family dynamics, for Calibre, a division of Wachovia Wealth Management, and director of Wise Counsel Research, Inc., a public charity devoted to understanding and sharing knowledge about the role of wisdom in contemporary life.