The role of leadership in endowment development

In my first two posts I tried to focus on some strategic concerns about our field of endowment development at Jewish federations and pointed out many of the issues involved in growing our asset base and why I thought that endowment development was so important to the future growth of our system.

 

In this post I’d like to build out the role of lay leadership in endowment development.

 

Helping donors to see the validity and power in involving themselves with charities such as community foundations and federations is a life’s work.  Donors don’t tend to become “accidental philanthropists” to use the phrase of a close personal and professional colleague.  They make gifts because something has happened in their life experience which compels them to do so, they believe strongly in the financial and professional validity of charitable giving and most importantly someone has had a profound impact on their desire and knowledge of charitable opportunities.  Such a person can be a mentor, a child, a financial advisor or an executive with one of the charities they support or most importantly a peer.  In the world of Jewish philanthropy for over 100 years communities have relied on the power of volunteer involvement and ownership of the charitable product.  This ownership has had profound and intimate involvement in every aspect of what Jews have accomplished as a federated  system….perhaps more so than in many other non sectarian charitable organizations.

 

Our training as professionals has instilled in us the importance of involving lay leaders as partners.  The more complex the decision making around governance, finance, fund raising, internal operations, strategic planning and even grantmaking, the more systematic the involvement of our lay leadership. 

 

Endowment development is a crucial philanthropic resource which requires command of  a variety of  rather technical disciplines in order to be successful.  A particularly skilled leader once told me that “endowment development can’t be taught.    You learn by osmosis”.    She was an estate planner to one of the wealthiest donors in our community.  Is this true and what do we need to do in order to help our communities find and train their most successful leaders?

 

1.     Finding endowment leadership isn’t for the faint of heart.  The most sophisticated financial, investment and legal minds are attracted to this business and they are frequently intolerant of mistakes, lack of understanding of complex transactions and sloppy thinking.  Some operate on the periphery of what we do as an institution and are even unfamiliar with the work.

 

2.     The reasons that we need endowment leaders are several - to extend our reach in donor education and solicitation, to solve complex problems of the law, public policy and its impact on giving and investment and to provide leadership to our overall institutional advancement.  Great endowment leaders will motivate others along the way and make the case for endowment development in public places and among peer groups and to their clients. 

 

3.      Many times, the people we crave to take on important roles in our endowment campaigns are those who are most remote and difficult to access because of their business lives.  They simply do not have the time to relax and solve problems with you or if they do they will be able to take precious few minutes to do so. 

 

4.     Those who have actually created funds will understand the fund development process particularly well but may or may not be able to motivate others.  Because endowment development is a business which is not well understood by much of the generally philanthropic public we have to look even harder.   Someone perceived to be a potential leader may have served in many capacities with other charities in all likelihood.

 

5.     Corporate executives who support what a foundation or federation does may be best choices for an overall endowment chair while estate and tax planners may be best for the Professional Advisory committee.  Next gen leaders whose families have been philanthropically active are becoming increasingly visible as are women with either fund raising or professional background in this area or who are donors in their own right with or without their spouse.  Exceptions to every rule abound though.  Endowment leadership will frequently come from the financial and legal disciplines which provide the key components of what we do to secure gifts.  But there are historically comparatively few legal and financial pros who feel very comfortable asking their respective clients to make gifts.