Gifts + Estate Planning

From Barron’s: Trust is the Future of Giving, Says Outgoing Rockefeller Philanthropy President

BY Spectrum Wealth Management | Nov 15, 2022
By Fang Block
November 4, 2022

Donors looking to boost causes they support will increasingly turn to trust-based philanthropy, impact investing, and crowdfunding via social media, says Melissa Berman, the outgoing president and CEO of Rockefeller Philanthropy Advisors (RPA).

A pillar of trust-based philanthropy is unrestricted grant-making, preferred by big donors such as Mackenzie Scott, which does impose any restrictions on the use of the grant. 

“Donors will say to nonprofits, ‘You know more than I do and you’re gonna figure out how to use the funds,” Berman says.

Another dimension of trust-based philanthropy is where people who are most affected by the issues are the ones who make the decision. “There’s a lot of evidence that shows people know what they need money for and that they’ll use it thoughtfully,” Berman says.

A great example of this is direct cash transfer, either from private philanthropy or from the government. One poor family may need money to pay medical expenses and another one may need to fix the car, and the third one may need to have some capital to start a small business. “But they know what they need most,” Berman says.

Following her announcement earlier this month that she’s stepping down from her post in 2023 after 20 years of service, Berman spoke with Penta about her achievements at the RPA, her thoughts on major issues and trends in the philanthropic field, and her most important advice to donors and charities.

Under her leadership, Rockefeller Philanthropy Advisors has facilitated more than US$3 billion in grantmaking in 70 countries and currently advises on and manages more than US$500 million in annual giving.

“The RPA is really in a great position in terms of its reputation, talented people in the organization, and its financial status. And we have a new strategic plan and a really clear direction, so to me that makes it a great time to turn things over,” Berman says about why she has decided to step down.

She will continue to teach at Columbia Business School, where she is an adjunct professor, and she would like to do more writing, something he hasn’t been able to do much of due to her day-to-day job, she says.

In 2002, when Berman helped the Rockefeller family to establish the advisory, she says the focus was on “helping donors be more thoughtful about philanthropy and take a knowledge-based approach, rather than just find what they were familiar with,” she says. 

The knowledge-based philanthropy has helped bring about many positive changes in the last 20 years.

 “Donors from around the world are getting engaged with philanthropy and impact investing much earlier in their lives and much more intensely,” Berman says. “They want to be great advocates for the causes they care about, not just underwriters.”

RPA advisors are currently talking to donors to try to understand the big system that the issues they want to address exist in. For example, if a donor wants to start a school in a disadvantaged community where the kids are hungry, “It doesn’t matter that there’s a school there, or how good the school is.” Berman says. “If the kids are too hungry to learn, you haven’t really accomplished what you’re trying to do.” 

In the last five years, Berman says more and more donors are aware of and trying to think through systemic barriers and inequities, which will continue to be a major issue going forward, along with climate change. 

“Obviously the two are very connected—people who suffer the most from climate change are the most disadvantaged and who have the least voice in the world,” she says.

Her most important piece of advice for donors? “Take some time, to listen and learn, to talk to lots of people, and especially the people who are most affected by the issue that you’re trying to make a difference,” Berman says.

For charities, while it’s very tempting to tell the donor what the donor wants to hear, “there are opportunities that charities have to try and tell the story using real examples, to show how long change is gonna take, how complicated it is, and what that process is really going to be like,” she says. “Storytelling is a great way to help people get empathy with one another.”

Berman says it’s very easy for people to consume news and become discouraged, but philanthropy has had an impact in the past and will continue to have a positive impact.

“There are a lot of very legitimate questions about wealth and whether people have too much wealth and whether those wealth holders have too much power. But being charitable is a natural part of being a human person everywhere in the world. So I still believe very strongly in the power of philanthropy to make our world a better place.”

This article was originally published in Barron’s on November 4, 2022, and written by Fang Block.


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