The Role of Financial Professionals in a Nonprofit Marketplace

Faris Mohiuddin, working under the supervision of Jacob Harold of the Hewlett Foundation, has written a report on the role of financial professionals in facilitating an effective nonprofit marketplace. I’ve agreed to publish the report here. It has not yet been published elsewhere. The report is the work of Faris Mohiuddin and does not necessarily represent the views of the Hewlett Foundation or its staff.

Finacial Sector and the Nonprofit Marketplace (May 2010)


The Scribd service I’ve used to embed the report above does not handle formatting terribly well. You can download the full report here.

I use to think that wealth managers would emerge as the primary philanthropic advisor to high net worth individuals. I’ve written about this potential in the past, such as in this column I wrote for Wealth Manager magazine. However, I’ve come to believe that the philanthropy advisor role is unlikely to be supported well within wealth management firms.

Large wealth management firms currently treat philanthropic planning as primarily a tax planning exercise. To the extent they view it as a unique, valuable service, they see it as a bonus customer service activity for their wealthiest clients. Unfortunately, this means that they eliminate or cut back on the service during economic downturns and so their ability to build institutional knowledge and expertise is limited.

Part of the reasoning behind launching Tactical Philanthropy Advisors was the idea that stand alone philanthropy advisory firms are best positioned to provide top quality philanthropic advice to donors. By viewing philanthropy advice as a core service rather than an “extra” add on, philanthropy advising firms are positioned to invest in growth during downturns and to build institutional knowledge.

One Comment

  1. Sean.

    Operating I’m operating in a different environment, China, where the high net worth advisory role has yet to develop, so take my comment below with a grain of salt

    In short, the gap that I have seen when an investment professional (wealth management, venture capitalist. other) enters this arena through philanthropy, social venture investment, etc is their lacking/ thin knowledge base of the issue.

    That, while they have interest, passion, and a very valuable investment toolbox that has served them well in the traditional markets, the inability to put that all aside and learn about the issues becomes their biggest barrier to success as either a donor.. or a bridge between the organization and the donor.

    It is a gap that is not easily overcome, but those that do (usually by spending a lot of time in the field or with a particular org) often find themselves making smart investments for themselves… and others.