Over the past four years, with the help of several foundations, GivingNet (formerly Community Foundations of America, Inc.) has been researching the role of financial advisors in philanthropy. We have conducted a range of practical experiments and tested out a number of innovations designed to determine how philanthropy can scale more quickly through the powerful distribution network represented by professional advisors, particularly financial advisors, throughout the country.

Our findings have been illuminating on many levels, and many of our beginning assumptions have proven unfounded. Perhaps the most important discovery is that the connection between professional advisors and donors is not the key to scaling philanthropy—at least not yet.

How did we come to this conclusion? GivingNet started its work to help its clients connect to high net worth donors via their professional advisor intermediaries about seven years ago, with the development of our first Professional Advisor Portfolio. This work greatly influenced the creation of the collaboration called the National Marketing Action Team (NMAT), which was a collaboration of GivingNet (then CFA) and the Community Foundation Leadership Team of the Council on Foundations. NMAT went on to create several portfolios designed to build capacity for community foundations in the area of marketing to professional advisors.

GivingNet subsequently set out on a mission to create national level partnerships between community foundations and financial institutions, in an attempt to leverage the distribution systems and expertise of both. However, two key market realities thwarted these efforts:

1. Donor Advised Funds had become such commodities on a national level as to be both unexciting from a sales perspective, and increasingly unprofitable from a provider perspective; and

2. There was little or no appetite on either the part of community foundations to come together with a standardized national product to offer to financial institutions, or on the part of financial institutions to rally around a standard donor advised fund product.

Recognizing these realities, GivingNet turned its focus away from private-labeled DAF partnerships with national financial institutions to R&D into potential market opportunities and entrepreneurial approaches to offer donors ‘next generation’ philanthropic engagement opportunities via more and various channels. Part of this work focused on how to harness and leverage new work being done on social capital marketplaces. In the final year of the initiative, GivingNet worked to define the high-level business requirements of such a marketplace and create consensus around shared protocols in conjunction with funders, social entrepreneurial organizations and financial institutions interested in the topic.  Download the report, right.