Podcast: Finding your philanthropic purpose

Speaker 1: Hi, everyone. Thanks for joining us back at the Intersection, a podcast that brings you candid conversations with members of our community and leaders in our industry, enjoy today's episode.

Leslie Wojcik: We're joined today by Michael Farrell and Jeff Ladouceur who are in our Private Wealth Management group here at SEI. Gentlemen, thanks for joining us today.

Michael Farrell: Proud to be here. How are you?

Jeff Ladouceur: Yup, thanks for having us.

Leslie Wojcik: Two of my favorite gentlemen at SEI. So getting right into it, both of you have spent a significant amount of time working closely with high-net-worth families. You've been lucky enough to partner with and work with a variety of successful families that are significantly invested in a wide range of philanthropic activity. Tell us about the types of families you work with and what you believe has made them successful?

Michael Farrell: Leslie Wojcik, thanks for this opportunity. I think sometimes when we describe our clients, we sort of described them first-generation wealth creators value system and process, think about their wealth aspirationaly sort of self family and community. I think sometimes it resonates a little bit easier if you think about, we work with really accomplished entrepreneurs, CEOs, executives, and families who've been successful really across almost all the facets of their life. They've built businesses, they've created new ventures. They built typically strong families and they have been community leaders. And I think they bring that same sense of intention into their work in philanthropy.

I think working with these families we've really come to believe that successful philanthropic strategy and by these four elements that I think have to exist in the approach. If you will, I'd like to just sort of list those out. I think first is this deep and rigorous discovery, scurry something that private wealth management has thought about for a long, long time. And what we mean when we say it, it's taking the time to engage in sort of a deeper discussion of goals, values, priorities, sort of spending time answering thoughtful questions around purpose and vision. And frankly challenging some of the maybe assumptions that you brought into philanthropy or the thought of charity, right? So that's number one.

Number two is communication across all the participants, and that means your partners, your family members and your professional advisors. Number three is engagement with the family in philanthropy. We'll talk a little bit about not trial and error, but trial and learning. And then fourth is a clear definition of outcome. What's the sort of clarity or purpose for our charity. Once that's complete, then I think you get to take sort of action, right, with time, talent, and fortune.

Leslie Wojcik: Certain ways of well-developed approach. Where do you typically start with clients with this process?

Jeff Ladouceur: This is Jeff. I would probably say we see clients start from maybe three different orientations. Some clients come to us pretty sophisticated and thought out and really they're ready to move to action. I would say more clients come with a clear sense of vision. They've really thought about their values. They know where they want to go, but they're a little bit less clear about how to get there and they need some help kind of formulating a plan, I would say, or another terms really, what are the rules of road for them when it comes to giving? And I think lastly, we have clients who really start at the beginning. They know that they want to do something, but for them it's a new process. It's an idea and they need some time to develop it, and I think that's where some of that kind of learning that Michael talked about and experimentation really comes in handy.

Leslie Wojcik: Can you share with our listeners, maybe talk a little bit about clients who come really prepared but don't have all the pieces that they need yet to put their plan into action?

Jeff Ladouceur: Yeah. I think this is the client who comes with a sophisticated kind of thinking around philanthropy and a strategy approach that they need help kind of bringing it to life, right? What kind of comes to mind is a client who we met three years after the sale of their business. They had established a foundation of really what they came with was a funding vehicle and a lot of aspiration and a commitment, but they really weren't organized around that commitment. What we did for them and we were able to do this rather quickly because they had thought it out so well and they were so committed to getting there, plus we were able to kind of confer kind of that aspirational or that thinking into three things. One, a set of shared giving guidelines, let's call those the rules of the road. How are we going to do this?

We were able to establish roles not only for the family members, but for non-family members that they had involved in the foundation, clear pathways and how they were going to get things done. And third, we facilitated a kind of quarterly meeting that set a tone and a way in which giving decisions were going to be made, right? So now they had a shared decision process. Their commitment to the community was now organized, actionable, and trackable, and that's what they wanted. And it led to benefits for them. I mean, the obvious was they clearly were able to take the money that had been sitting in the foundation and kind of in a bit of inertia and put it to work inside the community. So they had that kind of financial impact. But I think as importantly, they were able to transfer skills and values to the next generation within their family.

In one example, a daughter who was barely non-financially oriented in their career took on the role as treasurer for the foundation. And as you can imagine was facing off against folks like Michael and I and accountants, and her role wasn't to become an expert, but her role was to become kind of good at facilitating, managing that service, and asking good questions. And that transferred into her personal finances as well, so that was valuable. And I probably would say another one of just kind of present skill, but values. We saw one of the grandchildren who was at the time 10-years-old really learning the values of the family. And in this example, our 10-year-old, with probably a little bit of help from the mom and dad, but put together a PowerPoint presentation on why the family should or the foundation to give money to an animal shelter.

I'm pretty sure the pigtails and the puppy pictures won the day, but I think the most important thing was that she was getting an opportunity to understand the process and clearly the family was happy about the values that were being transferred to that third generation.

Leslie Wojcik: Yeah, that's an incredible less than an opportunity to learn at such a young age. That's amazing. Michael, what about those who haven't necessarily invested a lot of time in their vision?

Michael Farrell: Yeah, I think the client who comes sort of earlier in the process who sort of hasn't developed kind of a clear vision and strategy really needs to begin with that self-discovery. What do they want, or how do they want to be philanthropic? Sort of an example of that or where a client that comes to mind is sort of new to wealth. Their wealth had grown rapidly. And I think as often is the case with these, they had sort of stumbled through some of the early requests for gifts from sort of members in their community. And as kind of a result, they were left kind of wanting, right? They given this money, but it just didn't seem to kind of hit the mark.

And so I think the place for us to start with them was to begin to go through this discovery process as I outlined earlier. But what we didn't do was stop their philanthropic giving. We just made it smaller. And the idea is that we wanted to keep momentum, but since so much of the learning in philanthropy is kind of incremental and experiential, we didn't want to do trial and error. We were doing trial and learning, right?

So just what things were felt good to them with these particular gifts and what things sort of felt wrong. And what happens over time is the individuals begin to see kind of a pattern in their behavior, either a mission or a particular cause becomes very clear to them or just the types of organizations that they want to impact becomes very clear to them. And that's when you can really settle in on your mission and settle in on a clarity of purpose, which also lets you understand how you're winning, and then that sets up kind of the ability to take more decisive action. In this case, we ended up funding DAF or Donor Advised Fund for this particular client. And today we're actually undergoing some work with potentially building a family foundation, but the win for them was that experiential learning that then resulted in sort of clarity of purpose.

Leslie Wojcik: I think that's amazing. I love the message of trial and learning. I think that's a great approach to discovery. Jeff, do you see common pitfalls in philanthropic approaches that you think others can really learn from?

Jeff Ladouceur: Yeah, I think we've probably hinted at them in some of the stories that Michael and I have told it because on the inverse of the successes some of the things to watch out for. And for me, there's probably three that people should pay attention to. I think that number one, and it's clearly number one is, people jump to execution too quickly. What I mean by that is they jumped right to the check writing and they haven't really kind of set up the kind of the guidelines of values and the meaning behind it. It doesn't mean they're not impactful, but I don't see people who do this being as impactful or as satisfied as the folks who kind of do a little bit of the pre-work.

I think second, people start too big. This is a little bit to Michael's point around trial and learning. You need to iterate, you need to do small donations, you need to do small pieces of time, you need to involve different family members, and then you need to grow from there. So don't start too big. And I think lastly, you see people just not getting organized properly. There's a little hint of that in the story I told where the sale of the business generated a foundation, but they didn't really have the proper alignment, the people and place or the roles established. And that's an example of kind of your organization is just misaligned against your purpose, right? So you need that work in for you. So again, I think don't jump to execution, don't start too big, start small and make sure you kind of right-size the organization against the giving.

Leslie Wojcik: Terrific. And so much of the insight you've shared today is a reflection on your work with high-net-worth individuals and families. How much of this learning and approach applies to someone who may not have the same level of financial resources, but still really do have a desire to make a meaningful philanthropic impact?

Michael Farrell: I think the good news is the four elements of success, right? Discovery, communication, engagement, clear definition of outcome, they hold true whether you are a checkbook philanthropist or whether you are a family foundation philanthropist, right? I think giving at any amount has the potential to be more impactful to you and to your family and your community when you take those steps, that result in sort of a clearly defined purpose. Especially since giving is also more than just about dollars, it's about time, it's about talent, it's about financial resources. When we take that time, I think we can get them to work harder for the causes we care about. And consequently, we can be confident that our philanthropy is being impactful.

Leslie Wojcik: I think that's a great message, Michael, it's the combination of resources, of time, of passion, your values, that's how we all can make an impact on our communities. Thank you gentlemen so much for joining us today. We look forward to having you back on to talk about some other topics, but really appreciate you taking the time.

Michael Farrell: Happy to be here. Thanks for giving us a chance to talk about this. We love doing this kind of work for our clients.

Jeff Ladouceur: Yeah. Thank you very much, Leslie Wojcik, appreciate it.

Speaker 1: Thanks so much for joining us today. Stay tuned for more conversations with members of our community, until next time, stay well. And of course we hope you'll meet us back at the Intersection soon.