by: Melissa Bank Stepno, VP of Data Insight
A couple of weeks ago, the entire HBG team attended the NEDRA conference. Part annual team retreat, part professional development, we immersed ourselves in 3 days of learning, team building and networking.
It was so great to see everyone in person! Especially in our post-COVID world, with many more of us working remotely, I can’t understate the power of “togetherness.”
Now that the dust has settled and I’m back in my remote world, and in true HBG fashion, I wanted to pay it forward for those who were not at the conference.
So, here are three of the top themes and takeaways from our time together (at least in my perspective!):
1. Family Offices – one of the most interesting sessions was a plenary session on family offices, given by Josh Roach, who manages one such office. For those less familiar with the concept of a family office, these are typically small private business entities* that are owned by an uber-wealth family with the specific function of working on behalf of the family.
*Note that some large financial firms operate “family offices” that serve multiple families at the same time, however the information that Josh shared relates to single family offices that are fully dedicated to one family.
While Josh was clear that there is no typical or average, he did share that frequently, an office will serve multiple generations and broadly be responsible for supporting the family vision, assisting with transition of family leadership and assuring the family legacy is maintained. Specific responsibilities typically include wealth and asset management but can also include a wide array of other concierge-style services such as travel planning, property management, general accounting, arranging social calendars, and, you guessed it, providing advice on philanthropy.
These offices are incredibly discrete and private – by design – since part of their role is to protect the privacy of the family that they are serving. As such, sometimes one family office might not even know of the existence of another family office!
Families with family offices usually have net worth of at least $750 million – $1 billion and you rarely see one for families with net worth under $250 million. Why? They are expensive! The average family office runs an operating budget of $6 million and employees 6-8 full-time employees.
If you want to learn more about Family Offices, check out this benchmarking study conducted by The Wharton School at University of Pennsylvania or the Family Office Association.
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2. Data Compliance is an ever changing, complicated quagmire.
In addition to the ever-present General Data and Protection Legislation, or GDPR for short, which covers all of Europe, in the past few years the United States has seen a significant uptick in legislation covering data privacy. In fact, there are currently 15 states with privacy laws in effect and 18 additional states with pending legislation. The IAPP manages a fantastic website that tracks both pending legislation and existing laws – without it, I’m not sure how we would keep up!
Just last month, a bill was introduced in Congress called the American Privacy Rights Act, or APRA for short (anyone else notice the irony that the acronym is APRA?).
The good news is that a national law would supersede the variations in all the state laws. The million-dollar questions are: what would be included in the final bill, when would it go into effect, and how would it impact our industry?
Heard at the end of the session: “I did not expect this to be a wild ride.” When was the last time you heard a comment like that at a Prospect Development conference!?
For more reading on this topic, check out my two colleagues’ recent Intelligent Edge Blog posts: Data Privacy: Where We’ve Been and Where We are Going by Michele Borucki and Data Privacy (Part 2): Practical Tips and Better Practices by Jessica Woodbridge.
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3. Due Diligence – the conference included not one, but three sessions on due diligence. It truly is a statement as to how much more important this topic is becoming for our industry. Five years ago, there wouldn’t have been any sessions on this topic.
Essentially, due diligence is the subset of prospect research that focuses on the assessing the legal, reputational, and financial risk for our organizations when considering whether or not to develop a deeper relationship with, and/or accept a gift from, a donor.
At this point, it seems as though many organizations have a process in place for due diligence but the level of formality and how/when specific due diligence research is conducted varies from shop to shop.
It must be noted that what passes a due diligence “test” for one organization may not pass the test for another. Due diligence is, and always will be, highly contextual and nuanced. For more on my thoughts on the matter, check out my blog post Philanthropy’s Shades of Gray. Also, look forward to a joint report on due diligence by Xapien and BWF that will be published later this year.
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Of course, there are a lot of other important topics in our industry right now. These just happened to be the three that piqued my attention the most during this particular conference.
If you missed the NEDRA conference, perhaps I’ll see you in Seattle in August at the Apra Professional Development conference? You can learn more about it and register here.
