The Boston Globe ran a story exploring how financial service corporations in general, and Fidelity in particular, are affecting charitable giving (read article). In response, Jon Payson, ECCF's Board Chair, wrote the following letter to the editor suggesting community foundations provide more meaningful alternatives for philanthropic investments:
Regarding the Nov. 12 article citing Fidelity’s prowess as a “pace-setter in charity,” it is true that Fidelity’s success in gathering charitable assets is impressive and the nonprofit sector can take encouragement from that large and growing pool of assets that will ultimately fund philanthropic work on a wide variety of wonderful causes.
To call Fidelity a “pace-setter in charity,” however, is misleading. Fidelity is a “pace-setter in asset-gathering.” The criticism often leveled at the big-box wealth managers is that they have neither the incentives nor the donor service infrastructure to help donors distribute those charitable assets effectively in their own communities. The big-box managers are efficient processors, but they simply can’t be personally engaged in the local communities where the needs and the nonprofits are.
There is a better alternative for the person motivated to set aside funds now for future philanthropy. Essex County Community Foundation—and other community foundations—have been helping donor-advised fund-holders for decades with expert, personal, local insight regarding need, providers, and opportunities for collaborative giving with other philanthropists in the communities where donors live. Besides the obvious value of local presence, personal connection, and the leverage fostered through collaboration, the fees to community foundations are re-invested in the local community.
Growing the pool of assets dedicated to charitable purposes is a worthy and time-honored endeavor, and the charitable arms of many financial service corporations are doing it well. There are, however, more than 700 local community foundations in the U.S. today, with one hundred years of rich experience promoting charitable giving to improve life in their communities. To ensure their charitable dollars are put to work most effectively, donors should carefully consider the proposition that their local community foundation is a better partner.
Jonathan Payson, Chair of the Board
Essex County Community Foundation