Key in a door lock

Trusted advisors are key to unlocking high-impact philanthropy

One of the biggest barriers to high impact philanthropy is the fact that the people with the most  financial resources are rarely the people who have the most proximity and access to the complex social challenges that matter most to our shared future.

This means that donors very often need to get help when it comes to maximizing their impact–and this is where trusted advisors can play a pivotal role.

When a donor recognizes that they want to get help with their giving, they have at least three different options:

  1. Hired help: someone who paints between the lines the donor lays out, under the donor’s continuous supervision
  2. Faithful steward: someone who protects the donor’s interest and ensures their decisions are fully carried out –faithful stewards make sure the paint stays inside the lines while the donor’s attention is elsewhere
  3. Trusted advisor: someone who focuses on what to get done and why, including advising the donor to paint outside the lines of their comfort zone when the advisor judges that would actually be the best way to advance impact in the donor’s field of interest

Bringing on a trusted advisor requires the greatest willingness to stretch and grow on the part of the donor–but the benefits are commensurate with the challenge. Great trusted advisors in philanthropy are people who are able to embrace a donor’s perspective and interests while also authentically leveraging their own passion, practical experience and proximity to an issue to help the donor achieve both lasting social impact and personal fulfillment.

In the relationship between an advisor and a funder, mutual trust is crucial because seeking and speaking the truth about the complexities of social change is vital to unlocking high-impact philanthropy. When there is mutual trust, the advisor is willing and able to share their full and honest perspective with the donor, and the donor is willing to deeply consider the advisor’s recommendations, even when they are hard to hear. 

Unfortunately, dysfunctional relationships between advisors and donors are all too common. In many cases, the advisors that donors engage to help with their giving—whether family foundation staff or consultants on contract—fear that the relationship with the funder won’t survive sustained truth-telling.  They sense that what the donor really wants is a faithful steward, or even simply hired help, rather than a true trusted advisor.

When a donor does take the leap to seek out a trusted advisor to help them achieve greater impact with their giving, the biggest mistake they typically make is that they start with trust and try to build proximity and passion—but this is actually much harder than taking the opposite approach. 

My advice to funders is to seek out the people who have a proven passion for a subject, practical experience with the systems surrounding that issue, and proximity to the people you seek to impact. When you identify those people, you can then work to build a trusting relationship with them. It’s usually far easier than you might think.

So how do you find those people? Here are three approaches you can take. 

How to identify philanthropic advisors who can unlock impact and meaning in your giving

1. Look for philanthropic advisors who have a background in social entrepreneurship

Advisors who have come from the ranks of social entrepreneurs have deep practical experience and they typically continue to maintain close connections to the issues and the networks within which they previously worked directly.

When you’re evaluating advisors, don’t substitute “expertise” and polish around concepts and ideas for practical experience. 

2. Be open to building trusted advising relationships with active leaders of social enterprises

This might seem counterintuitive: how can someone who is actively raising money for their own change-making venture not have a conflict of interest providing trusted advice to you?

But the evidence is right there—these are folks who have chosen time and again over the course of their lives to give their all to tackling some of society’s toughest challenges. In far more instances than you might think you can trust these committed change agents to prioritize impact, even if that means setting aside their own ask, to help you make the best possible allocation of resources to address the challenges they have dedicated their lives to solving.

3. Look for pooled social impact funds that are run by social entrepreneurs

Recently,  more and more social entrepreneurs have been coming together to create pooled funds to attract investment and provide direct advice to funders about how to allocate resources. For example, look at funds like Black Voices for Black Justice Fund, the Southern Reconstruction Fund and The 1954 Project—where a whole array of Black social entrepreneurs with lifelong commitment to key issues are joining together to amplify the voices of other Black social entrepreneurs and build power across all kinds of issues and  communities.

These funds allow social entrepreneurs with a lot of wisdom and proximity to particular issues to focus philanthropists’ attention on compelling change agents whose work is already making a meaningful impact on those issues. 

Funders and social entrepreneurs: Ask each other this powerful question

For a funder and a change agent to establish a trusting relationship, they must both break free from the bounds of a transactional relationship where only the funder has something to give. 

In these settings, there’s a simple two-part question that I love to see both funders and social entrepreneurs ask each other, which can transform an interaction from a one-way transaction into a much deeper exchange of value: 

“What would make this next year an extraordinary year for you? And what’s your single biggest challenge in doing that?” 

When a social entrepreneur and a funder can exchange honest answers to this question, they lay the foundation for a trust-based relationship that has the potential to accelerate impact and joy for both parties.