One of the frequent questions I got when I was telling people about my plans for Tactical Philanthropy Advisors, was why it was a for-profit instead of a nonprofit. In our FAQ section we answer this question:
We chose a for-profit legal structure because we believe doing so gives us a competitive advantage in hiring the very best client advisors. In addition, a significant element of value to our clients is our ability to leverage our deep philanthropic networks to source the knowledge our clients need. We feel that we are better able to navigate networks of large foundations because we are operating as their peers rather than as potential grantees.
Tactical Philanthropy Advisors is committed to advancing the field of philanthropy. We believe our service benefits the public because we help our clients maximize the effectiveness of their giving. Even though we have not requested tax-exempt status, our fees are in line with leading nonprofit community foundations that offer similar services. We are a “double bottom line” company that tracks financial and social impact performance and strives to maximize both. We are committed to the idea of knowledge sharing in the philanthropic sector and seek to aggressively share any reports, information or practices we create with the public.
We’ve also incorporated the needed language in our operating agreement to pursue B-Corporation status as soon as possible. We believe that the field of philanthropy advising will mature into one in which multiple legal structures are used and certain structures become dominant in different areas. In addition to the social impact we think our services generate directly, we’re also committed to advancing the field of philanthropy through our corporate philanthropy. Rather than duplicate efforts already underway, we’ve decided to support an existing public foundation.
Again from our FAQ section:
Philanthropy Ventures Foundation is a public charity founded by maverick grantmaker Bill Somerville. PVF operates a “demonstration foundation” to highlight creative philanthropic practices and has a mission to advance the field of philanthropy. Tactical Philanthropy Advisors has made a commitment to assist Philanthropic Ventures Foundation in bringing its brand of creative grantmaking to the national stage and to work collaboratively to advance the field of philanthropy. Separately, we have engaged the services of Bill Somerville and PVF to provide grassroots philanthropy solutions to our clients.
Through working to support PVF, we hope to extend our mission to “bring innovation, effectiveness and joy to philanthropy” to people who do not have the resources to hire us directly. We think that the Grassroots Philanthropy approach promoted by PVF founder Bill Somerville is an invigorating form of giving that meshes well with people at all levels of wealth. In addition, we think that the current trends towards “peer-to-peer” philanthropy online is a manifestation of Grassroots Philanthropy and we hope to bring Bill’s almost half century of experience into the online “peer-to-peer” conversation.
We are also highly engaged with many volunteer efforts that support the social sector. These projects include the Alliance for Effective Social Investing, the World Economic Forum’s Global Agenda Council on Philanthropy and Social Investing and the advisory board to the Chartered Advisor in Philanthropy program.
Finally, we are committed to donating 1% of our revenue to the Tactical Philanthropy Fund for Advancing Philanthropy. The Fund is in startup phase and intends to make grants that support the development of an innovative, effective and joyful philanthropic field.
Sean, this is a decision we made too and something I’ve been advocating for the last few years. We’ve been making the case for it for quite some time as my blog today relates: