Advising the people with money

A US report offers a psychological analysis of the services on offer to philanthropists

Susan Mackenzie, director, Philanthropy UK
Susan Mackenzie, director, Philanthropy UK

A report on donor advice from the US offers a psychological analysis of the services on offer to philanthropists. The rise of philanthropy over the past decade has been accompanied by a boom in advice services for donors. A report published last year by the Los Angeles-based Human Interaction Research Institute looked at the growth of donor advice in the US, concluding that it was a "fast-growing cottage industry that has not yet fully developed a business model". It also offered some useful insights into the way the field might develop.

The institute exists to help not-for-profit organisations, donors and communities "handle the challenges of innovation and change" using an approach based on behavioural science. It is not surprising, therefore, that Donor Advisors and Philanthropic Strategy, written by Thomas E Backer, president of the institute, and Lilli Friedland, its senior research scientist, takes an explicitly psychological approach. Rather than offer an analysis of donors and advisers, it focuses on the psychological complexities of identifying a cause, developing a strategy and connecting with donors. There is also quite an emphasis on what the authors call the "complex human realities" of families - and the different attitudes towards philanthropy held by different generations.

The report is a thorough and extremely readable first analysis of the field. It draws on a great deal of expertise and knowledge taken from interviews with 75 specialists, including philanthropic advisers, lawyers, development directors, private bankers and "thought leaders in philanthropy".

It identifies seven types of adviser and goes through the process of what a donor adviser does. It also highlights four essential characteristics that make an effective adviser. First, the adviser must establish trust between themselves and the donor they are working for. They must have a "psychologically-based understanding of donor intent and behaviour". They need the ability to draw on knowledge and experience of philanthropy, the not-for-profit sector and the community. And they must research the information that donors need to make their decisions.

Not all advisers demonstrate all these characteristics, according to the report. It concludes that, as well as better business models, the field needs "more rigorous training and professional guidelines for advising on philanthropy". It also suggests a number of areas for future research, including young donor advisers, the personal characteristics of donors and advisers, evaluation strategies and "dual-passport advisers" - advisers who have considerable wealth themselves.


As director of Philanthropy UK, Susan Mackenzie provides the kind of donor advice described in the Human Interaction Research Institute's report, Donor Advisors and Philanthropic Strategy.

The organisation provides free and impartial advice, both online and face-to-face, and Mackenzie oversees an advisory board made up of representatives from across the sector. Philanthropy UK was founded in 2001 and is supported by a range of charitable foundations and government funding. It directs donors to the specialists or networks that best match their interests and needs. The resource section of its website links to more than 110 organisations, including research institutes, charities and other donor support networks.

A background in business and finance prepared Mackenzie for her current role at Philanthropy UK. She expects to see the need for donor advice services grow rapidly over the coming years, and says giving circles or networks are also becoming increasingly common.

"Whether formally or informally, givers want to share their experiences with like-minded people," she says. "We provide a platform for that sharing."


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