wealth management

Dexterity Consulting is just going through its annual strategic planning review and stakeholder engagement.  As a reader of this blog your ideas, suggestions, input is welcome so that we can provide even better service to our clients.

It has been a busy few weeks - tax season means people are starting to look at their overall wealth plans and laying out their charitable giving plan.  On the upside of this busy-ness is the fact that it looks like philanthropic activities are going up.

Before I get into today's blog, I just wanted to let you know that a podcast of an interview I conducted with Collin Glassco will be posted in the coming weeks.  Collin is the founder and CEO of the Glassco Foundation.  I interviewed him for a book I am currently researching on Strategic Philanthropy.  This is my first foray into podcasting so learning as I go...

But onto a topic that has come up in recent conversations.  What would a diversified portfolio look like if one of its objectives is to generate social capital?

Of course there would have to be charitable investments.  Ideally ones that not only resonate with the individual, but also have greater impact on society.  How do other businesses play into this portfolio?

Here are my thoughts - a social capital generating portfolio would include general revenue generating funds/shares/stocks.  Some people feel that change can happen from the inside, so by holding a piece of an oil company's assets you are providing them with the means to make change.  Fair enough.  Others feel that social capital can only truly be generated by investing in companies that have society's interests at heart (i.e. green energy).  That's fine too.  Whatever the motivation, there should be some source of revenue generation in the portfolio.

The second piece would be investing in a social enterprise.  I see social enterprises as companies that have social interests at the core of their business model.  They are for-profit enterprises and can be in any industry.

I was recently speaking with a woman who is looking at opening up a restaurant that is sourcing its food from local farmers.  Her approach to seeking investors has been the traditional business model (except that she is only asking those who align with her personal values).  Of course, as many of us know, investing in the restaurant business is high risk and therefore difficult to attract investors.  We talked about her changing her message from restaurant investment to a community enterprise investment.  By buying a share of her company you will not only be bringing a new eatery to her city, but you will be supporting other local businesses.  Most specifically, your investment will provide a foundation for local farmers to continue to strengthen their own farms in the shadow of the major agri-businesses that are cropping up around North America.

Of course, this positioning only works with those who already have a social bend.  But if you are reading this blog my guess is you have already given some thought to the idea.

The final piece of the social generating portfolio is charity (as mentioned above).  Charitable investments do not have to be to a specific sector or organization to have meaningful impact.  The most important thing about your charitable investments (aside from the fact that they align with your values) is that you know where your money is going and how you can best get it there.

So the issue for Baby Boomers isn't which charity to give to, rather the question is can I afford to give to charity at all?

Coming from someone who is advocating investing more in community projects this seems like a moot question.  I recently had a conversation with Nick Offord of The Offord Group about the direction of Canada's charitable sector and specifically about talking to people about strategic philanthropy.

Our conversation touched on several topics but one that resonated with me and why I am writing about it now is the conversation on the values of charity.  The wealth transfer (something that I have blogged about before) in conservative numbers is around $3T in Canada over the next decade.  When Canadians spend less than 1% on charity currently what will that look like in the coming years?  Nick's comment to me was that charities competition isn't necessarily with each other (though that is a big part of it), rather the competition will be with people and companies that are telling Boomers to save "just in case."

Just in case of what?  Donations to medical institutions are increasing, not because of an "insurance policy" mentality of giving (i.e. I am going to give to St. Michael's because I might end up there).  Medical giving is increasing because Boomers are getting sick and so they are giving after the fact.  If it was "just in case" then hospitals and medical organizations would be growing by leaps and bounds and people would be giving to them before they got sick.

What would it look like if financial institutions worked with the charitable sector to help address the "just in case" mentality?  My assumption would be that there would be more money invested in asset management firms so that people could funnel their charitable giving directly to organizations that are effective, efficient, transparent and can show proof of impact. 

So while Boomers are saving for rainy days they can also be securing their future by investing in community, social services, the arts and medical that will ultimately help them during those rainy days.  Let's face it, the government isn't going to be doing it.