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Invest & Give

Updated: Jul 29, 2021

Most of the time I write about positive trends and stories in the philanthropy space. This time I am writing about a failure. I am not writing this to doubt or to criticize people trying something new and different, but to applaud them and to learn from them. Perhaps it is my background at SEI (where the culture is very much about trying something new), that has caused this story to spark my interest.

Here is the concept of Invest & Give: 12 of the UK’s fund managers joined forces to launch an investment fund to provide an investment opportunity and to grow capital to generate a recurring donation to The Prince’s Trust, one of the most respected charities in the UK. Donations to The Prince’s Trust were calculated as a percentage of investment equating to 0.6%per year. To keep charges low and to maximize the donation, the fund managers agreed to discount their normal retail management fees. I think it was an interesting model which launched with great optimism. But, less than a year later, only GBP 1.5 million was raised.

So the question is “why?”

Angus Duncan, who was Head of Distribution for Invest & Give, says, “The short version is that the last 12 months has proved that investors invest with their heads and donors donate to charity with their hearts and though these may be joined by tissue they do not interrelate enough to make the utility of a fund doing both investment and donations be of interest to the public.

As I wrote previously, charity and philanthropy are different. I do believe that there is a component of self actualization in both charity and philanthropy. People want to feel good about their contribution. In this model, the donor was separated from the act of giving. The brochure for Invest & Give talks about the automatic contribution to the charity twice per year. For those who practice charity, I believe there is a certain satisfaction gained in simply writing the check or making the decision of where, when and how much. The donor didn’t have the chance for this and the Fund was not around long enough for the investor donors to look back on the year and see in writing how much of their investment assets actually went to charity. This leads me to believe that perhaps the problem is not with the model, but with the message and the implementation. From what I have read the aim was more about making it easy or seamless, than about providing an environment to learn, to experience and to feel good about the charitable component.

Couldn’t the same result (money to charity) be achieved by fund managers discounting the management fee of a charity’s endowment?

Nonetheless, I do applaud the effort to try something new. I am not convinced that the two (investing and giving) can not be combined in a way that provides all around satisfaction.

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