ELITE ADVISOR BEST PRACTICES

Philanthropy by Design - Part One

Savvy advisors focus on client passions and the goals of their families, children and grandchildren

By Randy Fox interviews Rod Zeeb

Key Takeaways:

  • A philanthropist by design focuses on the passions of the donor—not the needs of the organization.
  • Kids and grandkids don’t necessarily have the same values and passions that the parents do.
  • A wealthy donor commented, “When charities start focusing on my need to give rather than their need to get, they’re going to get a lot more from me.”
  • Sometimes a nonprofit has to be willing to help a donor find the right giving opportunity even if it’s not within its own organization.

Randy Fox, editor in chief of the Planned Giving Design Center and regional representative of the Charitable Giving Resource Center, recently sat down with Rod Zeeb, head of Portland, Oregon-based The Heritage Institute, to discuss the future of philanthropy.

Randy Fox: Rod, tell us a little about The Heritage Institute.

Rod Zeeb: Sure, Randy. We focus on helping advisors improve their communication and relationship-building skills with clients and also help clients prepare their kids for the wealth they’re about to receive. This helps keep the family together. Again, this doesn’t happen without good communication, so that’s a key point for all of it.

Fox: Rod, you talk a lot about the idea of being “a philanthropist by design.” What does that really mean?

Zeeb: A philanthropist by design does not focus [necessarily] on the needs of organizations, which is the normal thing for nonprofits, but focuses on the passions of the donor. What gets them excited? Then you provide opportunities for [the donor] to fulfill those passions.

Fox: So, how do you do that?

Zeeb: Normally you start with Generation One, and if [you] can get that going, then [you] employ the same model with the kids and grandkids so that you’re raising “philanthropists by design.” That said, you must understand that the kids and grandkids aren’t necessarily going to have the same values and passions that the parents do. They may not be interested in the same charities.

Jerry Nuerge, a financial representative of Northwestern Mutual, introduced me to one of his friends and clients who is on many boards and who gives a lot of money to charity, and I explained this concept to him. He told me, “When the charities start focusing on my need to give rather than their need to get, they’re going to get a lot more from me.” That’s really what it is. It’s focusing on the donor’s need to give and [his or her] passion.

Fox: That’s really interesting. As a mentor of advisors, how do you teach advisors to open this conversation? I imagine it doesn’t come naturally.

Zeeb: It doesn’t [come naturally]. There are two ways of doing it. For advisors, it’s really an open conversation. You put all the tools aside and you start with the client. You’re asking in some way or form, “What is it that [you] want for yourself and your family in the future, and where do you and your family want to make a difference in the world?” You usually have to ask that question several different ways, but when you’re asking it, you have to have an open mind. You need to be listening and not looking for a solution at this point. You’re just getting clients to talk and really focus.

Fox: Makes sense. What’s the next logical step?

Zeeb: If they’ve been involved in philanthropy—this is how we teach the nonprofits to start the conversation—you can start by asking them how they first got involved with whatever organization they’re working with. That first engagement probably had an emotional link for them. Then later on, they feel like an ATM. Every time the nonprofit calls, it feels like [it’s] looking for money. We need to get them back to the emotional link. It’s just starting with no agenda, just a real open [dialogue] about [how] is it that you want to make a difference in the world and what things really either concern you or excite you. Let them go. Let them tell you the stories. Let them get it out. Then you start looking for [what] it takes to get there and providing them opportunities to get there.

Fox: Could you be more specific about that second aspect?

Zeeb: For advisors, this is easier than it is for nonprofits, because for nonprofits, sometimes the way to get there is not its organization. A nonprofit has to be willing to help a donor find the opportunities to get there even if it’s in some other organization. That can be a challenge sometimes. For advisors, this is where you can bring in your network—and if you don’t have a network, people like the Advisors in Philanthropy say, “This is where the passion is; what opportunities are out there to fill this passion?” This ends up helping you build a network. You’ll find different organizations that do that.

Fox: Any other organizations you can recommend?

Zeeb: In most cities or communities, there are organizations such as United Way or community foundations that touch on a lot of different areas. These kinds of organizations can do a lot. In fact, I was just talking to a client who is on the board of one nonprofit, but he also works with the Catholic Church, the archdiocese, in his area. He said, “When I looked at this, I realized that for the archdiocese, this is great because if you want health care, we do health care; if you want education, we do education.” Those kinds of charities—community foundations are great for that—can provide opportunities in pretty much anything that is in their communities. If they have a worldwide view, you’re going to have to go do some research and find out what’s out there in the world.

Fox: There are also philanthropic consultants who work on that side of the equation helping donors identify the best outlets and the best resources.

Zeeb: In terms of the advisors, there aren’t very many advisors [who] are out there asking their clients, “Where do you want to make a difference in the world?” and helping them get there. That’s because it’s not the niche that [the clients] have the advisor in. They’ve got the advisor in a certain box, and helping clients with this is not one of the pieces in that box. So it changes the relationship with the client because now you’re talking about what his or her biggest passions are.

Fox: There are a couple of clichés. When the donor says, “Charity begins at home” or “Blood is thicker than water; I want to take care of my kids,” how do you overcome those? What is the method by which you take a donor or a potential donor from “Charity begins at home” to “What’s your biggest passion in the world besides your family?”

Zeeb: Even if the biggest passion is the family, charity can be the world’s best opportunity to teach the kids something about money. It’s a different model when the kids are working with money that they don’t get to spend on themselves. Using philanthropy as a training tool for kids is great. A lot of times, how I end up making that transition is “What do you want for your kids?” If you want them to be responsible, if you want them to look beyond just themselves, if you want them to be involved in the world, now you’re back to philanthropy, and now we may be letting the kids decide what those passions are and get involved.

READER NOTE—In Part Two of this interview, Zeeb talks about the next generation and the right ways (and ages) to get kids involved.


About the Interviewer

Randy Fox is editor in chief of the Planned Giving Design Center and is the regional representative of the Charitable Giving Resource Center.

About the Interviewee

Rod Zeeb is the co-founder and CEO of The Heritage Institute and co-developer of The Heritage Process™. The Heritage Institute provides training in the discipline of heritage planning and professional certification in The Heritage Process.