26 January 2021

Power and neutrality: An advisor’s role in philanthropy and society


Alana Petraske
Partner | US

This article was originally published in Philanthropy Impact Magazine, Issue 24 | Winter 2021.

2020: Disruption and reset

Moments of disruption often seem to hit the ‘reset’ button for many people. Whether it’s the disruption of realising wealth — selling a business or inheriting, for instance — or the crisis of losing a loved one, disruption can lead us to examine our lives, to reassess.

2020 has redefined disruption. The global pandemic has disrupted the very fabric of our lives. It stopped many of us in our tracks professionally. It locked us down at home — alone, or juggling homeschooling and work. It stopped so much of our culture, from live music, to sports, to movies, to weddings and other family gatherings. It even paused taxes, though it certainly didn’t pause death. COVID brought technology to the fore across society. It asked us to balance safety with economic security. It showed up in stark relief the inequalities we already knew were present and taught us things we already knew about our politicians.

The needless and horrifying deaths of George Floyd and Breonna Taylor then ushered in a renewed focus on racial justice. This latest iteration of the movement for Black lives has already outpaced the Civil Rights movement of the 1960s in relation to public support across races, economic strata and countries around the world.

As we turn the corner into the last quarter of 2020, the moment is ripe for reflection on who we want to be in this moment and how we can rebuild better to create the society we want to live in.

Neutrality and the professional advisor

For many legal/tax, investment and accounting advisors in the philanthropy space, neutrality is a cornerstone of advice. We aim to support clients in their philanthropy regardless of which cause they support, from religions we may not personally espouse to causes that may seem less urgent to us than others. Neutrality of motivation is also key for many advisors — though they are fairly rare, most of us have met at least one client driven more by status than by a genuine desire to give help. And neutrality of mode is relevant for some of us. While strategic giving has become a gold standard, some clients may prefer the sense of flexibility and freedom that ad hoc and responsive giving may bring.

At a minimum, we don’t need to share our client’s mission or values to help them give tax-efficiently or pursue charitable projects lawfully. And while the study of donor motivation is fascinating, a philanthropist chasing the ‘halo effect’ is still parting with money they might otherwise have retained for personal use. If one encourages giving as a principle, surely this giving still ‘counts’? Likewise, a philanthropist lacking in strategy is still parting with their cash.

Cause, motivation and mode neutrality can have the unintended consequence of encouraging an advisor to self-censor to a high degree, however. In the interests of not alienating a client, or causing them to feel second-guessed, we may keep even some strongly held views on giving to ourselves.

Of course, other advisors may feel less bound to cause neutrality. ‘Pure philanthropy’ advisors, who can be invaluable in helping individual and foundation clients develop or refine a giving strategy, are by definition involved in the question of which grantees to support, and may therefore feel freer in this regard. A pure philanthropy advisor may also have agreed in their scope of work or brief to help a funder choose ways to be more strategic, so neutrality of mode may not be so relevant.

Reset: Reflecting on the society we want

My own moment of reflection and reset came early in the COVID crisis. I returned from some business travel in early March and promptly locked down. We watched with deep foreboding as the crisis escalated in Asia and Europe, knowing the situation in New York, where I am now based, was set to be serious. It was immediately clear that the virus, and the economic fallout from it, would have a disastrous impact on non-profits and our most vulnerable communities. In addition to the pressure on service provision and fundraising events, volatile financial markets threatened the sense of sufficiency that underpins most individual giving, and alarmed foundation boards.

In a departure from my usual position of neutrality of mode, I spoke out early about the importance of continuing to give, and of giving more than planned where possible. I suggested that now was the time to consider spending capital (assuming no legal restriction), and to consider whether foundation perpetuity was indeed the best default setting. While balancing long-term provision against current need is a legitimate element of fiduciary planning, it seemed clear that operating charities would simply fail without intervention.

I also felt flexibility around reporting was warranted, and that provision of unrestricted funding should be considered even by funders who tended to prefer project funding. I knew there would be a rise in demand for charitable interventions and services (food banks, shelters), at precisely the moment fundraising became precarious. This was less controversial but I did have some conversations with other advisors who perhaps felt this simply was not my business, unless asked.

As these ideas were coalescing in mid-March, a foundation client sought advice about whether they could depart from the board’s existing grant policy and current spending plan to give significantly more to existing grantees and to give to COVID-responsive funds, including grantees within their legal purposes, but outside their usual ambit. Speaking to the foundation chair (who was also the principal funder), I felt keenly that funders, like everyone in March 2020, were feeling their way in the dark. This client’s view of the ‘right’ approach to the pressure on the sector and the responsibility of wealth accorded with mine, so it was easy to ‘unmute’ my views and have a free discussion beyond the fairly simple legal and tax issues involved.

I later published an article on philanthropy and racial justice in a non-specialist publication. We had already surpassed 100 consecutive days of public protests of systemic racism and I had just read the truly outrageous results of a study by Bridgespan and Echoing Green showing the chronic underfunding of black-led non-profits. I received some comments that I was dragging philanthropy into the race debate, and others were more hostile or dismissive. I began to recognise that professional neutrality had a role to play in inhibiting dialogue and maintaining the status quo, and that at times, we as advisors were hiding behind it.

Rebuilding better after this 2020 reset is an exciting prospect. Within the many ways society can be improved, I’d like to see advisors reflect on neutrality and in particular whether this concept has expanded beyond its proper bounds to become something of a shield.

Alana Petraske Partner | New York

Category: Article