Lessons for Local Philanthropy: What We’ve Learned, Part III

By Aude Anquetil, Director of Strategic Partnerships

Magnify Community began as a small and nimble philanthropic innovation lab in late 2018, working with urgency and a three-year time horizon to start to change norms around local giving in Silicon Valley; make local giving easier, more rewarding and high-impact; and catalyze $100 million of additional philanthropic investment in local community-serving nonprofits.

As we prepare to sunset and turn this work back to the community, we are sharing the final set of our reflections, focused on what we’ve learned from the partnerships we established over three years of experimentation.

While we also partnered closely with nonprofits and nonprofit associations, this piece focuses specifically on our partnerships with donor-supporting organizations and philanthropic intermediaries, such as foundations, donor-advised fund (DAF) sponsors, wealth advisors, and philanthropic advisors.

Our specific goals with these partners were to:

• Reach a broader audience for our giving tools to activate greater local giving through their networks
• Learn from them about the barriers that made it difficult for partners to activate local giving among their clients
• Gain insight to aid in designing more effective tools to bring more new local donors into the fold

We had the opportunity to work with organizations of varying stature and size, from DAF providers managing thousands of accounts to donor communities stewarding a few hundred members. We are extremely grateful to all of these partners who agreed to test new approaches and tools with us, share metrics, and help us accelerate our learnings. All findings noted here are trends we observed at a macro level, and do not refer to any given partner with whom we had the privilege of collaborating.

While many donor-supporting organizations share our goal of accelerating giving, differing ideologies, agendas, and timelines often get in the way of collaboration.

Although many donor-supporting organizations and philanthropic intermediaries share a willingness to activate more giving, stewarding different archetypes of donors often means working with different timelines to impact. For example, we found that organizations working primarily with newer tech donors often had multi-year engagement plans with their members, and far less urgency around moving dollars directly into the community, due to the specific donor journey associated with wealth events. This made it harder for us to partner in effective ways to unlock donations in the short term, despite alignment with our mission and an openness for collaboration.

There are also multiple ideologies, and various messages — often complementary, sometimes conflicting — that we, as a sector, push out to donors: give effectively, give more, give more equitably, give together, and the like. In this patchwork of philanthropic advocacy, we sometimes fail to unstick donors who struggle to prioritize messages. For example, the effective altruism movement has found great resonance in the tech donor crowd, which often made the conversation around local giving more difficult (due to the cost of operating nonprofits in Silicon Valley and delivering impact, and the perception that the scale of potential impact here is small). COVID, in this sense, was a tremendous opportunity to witness the power this community holds to move money when we all speak with one voice.

→ The addressable market for high-capacity givers in Silicon Valley is tremendous and constantly growing (from 76,000 millionaires and billionaires in 2016 to 148,000 in 2021). This is an incredible opportunity to cultivate and steward new givers, if we, as a sector, can find effective ways to work alongside each other and reinforce our messages rather than compete.

There is power in leveraging trust relationships that already exist between partners and their members, rather than seeking to build new relationships directly with prospects, even though this limits opportunities to control the message and build direct relationships.

We approached our work with partners as a way to reach a broader audience quickly, and get in front of more donors. While our initial goal was to interact directly with as many prospects as possible, we quickly realized that partnering with other organizations in this space would mean relying on them to carry our message across to their clients and members, whether that meant sharing an invitation to a donor briefing or asking the partner to send a specific resource to a client. Due to the privacy concerns that surround work with high-capacity individuals, as well as a scarcity mindset that pushes organizations to hold relationships with their members very tightly, we often found ourselves limited in our ability to track what happened after we made our requests or shared our resources.

Despite these constraints, we were able to build trust along the way, aided by the credibility we had built, and the fact that we did not ourselves aggregate capital, charge fees, or compete for business. We found through anonymous surveys as well as direct feedback from partners that the resources we were developing were helpful to their members. New donors started showing up at our briefings and engaging with us, and we received more requests from wealth advisors to source giving recommendations for certain clients or provide guidance on where donations were most needed.

→ It takes a non-vested approach to holding relationships and taking credit for giving recommendations to bring more people into this movement, and tap into the full potential of the donor-supporting ecosystem in Silicon Valley.

While many philanthropic partners express interest in co-designing events and initiatives, execution capacity is often a barrier.

When we first started engaging with philanthropic partners, we believed many of them would want to co-design with us, as a prerequisite for agreeing to share resources with their members, whether that was putting together a donor briefing or a site visit, or designing a new giving tool.

Many did express an interest in co-design. However, very few actually had the capacity and resources to partner in this way. Most donor-supporting organizations are lean and stretched to execute on their own work plans. Through Magnify, we had the capacity to adapt partnership models to meet partners where they were, whether that meant sourcing speakers for a briefing, taking on logistics for a virtual event, or defining the framework and associated metrics of a giving tool. This enabled us to move fast: between March 2020 and August 2021, we hosted 23 donor briefings and events, close to half in partnership with other philanthropic organizations or donors. It also enabled us to better anticipate needs and develop unique, timely resources like our Housing Justice or Education Equity issue briefs, which were widely adopted and amplified by partners, and utilized by donors.

→ Collaboration requires investment, even when interests align and when certain tasks and decisions seem like low lifts. Being proactive in partnership conversations, and clarifying available resources to partners, is critical to moving as fast and effectively as possible.

Measuring impact means different things to different partners.

In our early pilots, we were struck by how different the metrics we wanted to track could be from those tracked by our partners. Where we brought a razor-sharp focus on moving money, many of our partners focused on more general measures of online engagement, such as email clicks, website visits, or interactions following an email with a given resource. In that sense, some pilots that we viewed as less successful (since they didn’t result in substantial donations) were actually perceived quite positively by our partners (since the donors engaged with the digital content).

To reach our goals (i.e., moving money), we found that a key success factor was the quality and persistence in following up after an initial touch, which unfortunately many partners do not always have the capacity or incentive to do. This directly relates to how this sector is funded. Many DAF sponsors, community foundations, or wealth advisors seek to position themselves as leaders in the quality of philanthropy advisory services they provide. However, most of these types of organizations actually struggle to deliver this very high-touch support, due to lack of staff and technological bandwidth and investment in resources to deliver these services. The ratio of advisors to clients, even in structures dealing with high-capacity givers, is usually one advisor to 100 clients. We saw what a difference a high-touch approach could make in organizing and activating more donors.

→ A high-touch, personalized approach is key to getting more donors off the sidelines. Despite the cost and the challenge of scale, we need to continue to invest in this powerful web of philanthropic intermediaries to activate more donors in a way that deploys philanthropic capital faster and more effectively to local communities and nonprofits.

Educating and engaging wealth advisors to support their clients on philanthropic giving — beyond setting up charitable vehicles — is a necessary, yet insufficient step to unlocking more resources.

As a sector, we often place unrealistic expectations on wealth advisors to proactively activate their clients’ giving, in terms of the quantity of dollars devoted to philanthropy, the speed of deployment, and the discernment they can foster about where to direct the dollars. In 2019, we commissioned a consultant who had deep experience as an institutional wealth advisor to high-net-worth clients to assess the potential to activate more giving through advisors. We discovered that while advisors absolutely hold a privileged position in their ability to nudge their clients toward more giving, they often reported that their conversations with clients focused more on how to give (“which vehicle”) or how much to give (“for tax purposes”) rather than who to give to (“which nonprofit or type of nonprofit”). In regard to the latter, many shared that clients turned to their friends and peers for specific giving recommendations or resources to inform their giving, rather than to their wealth advisors. Without advisors encouraging their clients to give or educating them more broadly about how to make a philanthropic impact with their funds, clients may never start devoting resources to philanthropy or develop “philanthropic muscle” and expertise. And without the final touch from a peer or a friend nudging them toward a specific opportunity (sharing a recommendation of a nonprofit to support, inviting them to a fundraising event, etc.), resources fail to move.

Several of our partners have developed valuable resources specifically targeting wealth advisors, like Stanford PACS’s Advisor Toolkit or 21/64’s trainings. These need to be shared and adopted more broadly. But, as a sector, we must remind ourselves that the final step usually lies in activating donors as ambassadors, leaders, and influencers of bolder giving themselves.

→ To realize the potential for wealth advisors to be a motivating resource for greater and more effective philanthropic giving, those advisors must see themselves as donor organizers and find key allies within their client base whose voice and leadership they can leverage to create more momentum around giving. Donors can also be more proactive about working through their advisors to rally peers around issues most compelling to them.

The promise of scale through corporate partners is usually elusive.

In the early days of Magnify, we believed working with the corporate sector would present an opportunity to scale our outreach efforts, particularly in either companies with a sizable group of highly affluent executives, or fast-growing startups close to an IPO event. However, we found large corporations to be more timid than we expected about the idea of promoting local giving, particularly for those with a global footprint, even when they were headquartered in Silicon Valley. As for startups, we realized that very few of their early employees relied on internal resources (peer groups, dedicated social impact leader or department, etc.) for advice on giving around a wealth event. It isn’t clear that it would occur to many to do so. Executives in companies big and small, young and established, were often reluctant to use their “personal” voice to influence others to give, whether that was to give locally or in any other way.

→ High-capacity individuals tend not to seek advice about philanthropy or giving recommendations in professional settings. Philanthropy is deeply personal, and their larger gifts are generally unlocked through other channels, and in more personal environments.

While this list is neither exhaustive nor fully reflective of the deep nuance of this work, we hope these observations will be helpful to others in the sector who can continue to build on these efforts and insights.

We are incredibly grateful to all the partners who dedicated resources to working with us in the limited time we had. Magnify will sunset as an organization on September 30, with our successful pilots transitioning to other partners, who will sustain and scale them. The team remains committed to this continuous learning journey. We have made all our learnings accessible on Medium, and we remain open to further questions and conversations. (Find us on Linkedin!)

With hope for what the future holds, we encourage you to keep testing new ideas, be audacious in challenging donors to meet local needs, and find partners with whom you can build momentum and engage more donors in this work. This local giving movement is just getting started, and we can’t wait to see what it can achieve.