By Nicholas Palahnuk
In this series, Nick talks with other philanthropic leaders who help to “get money moving” by addressing systemic barriers to giving. This edition features collaborator, connector, and advisor Sara Byrnell, who has mobilized giving in Canada at extraordinary levels during her career. Sara is Executive Director and national lead of KPMG Family Office’s philanthropic advisory practice.
NICK: We’ve spoken about the emerging trend of spending down foundation and DAF assets. What are you seeing in the sector?
SARA: In Canada, we are hearing more and more clients say they are considering the option of spending down their philanthropic assets in foundations. What’s interesting is that this conversation isn’t limited to one type of client — we are seeing it across multiple generations — ranging from families whose foundations have existed for decades, to third-generation family members taking on new leadership roles with their family philanthropy. The motivations for potentially spending down their capital also vary, from not having heirs to pass along the responsibilities of running a foundation, to a next generation that believes donating as much money as possible to the social impact sector will have the greatest effects.
Clients are realizing that their philanthropy is not merely an act of generosity, but a vital responsibility to drive positive change in the world. By choosing to spend down their assets more quickly, they are embracing a transformative role that can foster lasting impact.
This trend is also an important part of our conversations with clients as they create new foundations or donor-advised funds. Understanding their vision for giving, and the impact they hope to achieve, helps to guide how assets are allocated to various causes. Spending down over time can be an effective strategy towards achieving their goals, however, it certainly doesn’t apply to everyone. Depending on the area of interest, clients are also looking to grow their capital to ensure funding is available to help address long-term challenges. It’s essential that each unique situation be approached with a strategic mindset, reviewing multiple scenarios to find the approach that will best help to achieve their goals.
More About Sara Byrnell:
With a lifelong commitment to philanthropy and volunteering, Sara Byrnell is an experienced social impact sector leader with a demonstrated history of raising funds to advance international development and healthcare initiatives. Her areas of expertise include visioning and strategy development, philanthropy education, charity due diligence, corporate philanthropy, and volunteer management. She is experienced in cultivating, negotiating, and stewarding complex, multi-million-dollar partnerships between charitable organizations and high-net-worth individuals, foundations, and corporations across Canada.
NICK: That’s certainly been our experience. We are often speaking with individuals we lovingly refer to as “spend-down curious” philanthropists, as well as those creating new foundations and donor-advised funds on what their goals are for the longevity of the fund. Broadly speaking, how are you advising people considering this?
SARA: It’s crucial for clients to adopt a forward-thinking mindset and develop a comprehensive plan for their philanthropy. Many individuals who contribute to organizations limit their vision to a short-term horizon of just 2 to 5 years, overlooking the importance of a long-term strategy. Our role is to assist them in visualizing how their philanthropic goals can align with their available resources, empowering them to feel confident in either gradually reducing or strategically increasing their donations over time.
This planning process is not just a one-time discussion. It is a dynamic, multi-year journey that evolves as life events unfold and family priorities shift. Engaging loved ones in these discussions, along with the social impact organizations they support, is vital for crafting a robust and effective spend-down strategy. Our ultimate objective with clients is to get money moving to the organizations that are best positioned to drive the transformative change they aspire to see. By fostering these meaningful conversations and strategic planning, we can ensure that philanthropic capital is used in the most impactful way possible.
NICK: Yes, we’ve seen the power of having a plan. Our research at PhilanthPro shows that having a dynamic granting plan increases confidence and gets money moving with intentionality. I appreciate you bringing social impact organizations into the conversation. We know that individuals are the largest source of nonprofit funding in Canada. How do you see the social impact sector involved in these conversations?
SARA: The social impact sector plays a significant role in supporting the concept of spending down foundations or donor-advised funds. Organizations on the frontlines represent the lived experience of those they support and have critical expertise and knowledge to drive change. However, they also need to be visionary. As we think about addressing significant challenges, leaders of organizations and fundraisers must be bold in how they plan to accomplish their goals if they want to partner with clients looking to spend down assets. Donors need inspiration to infuse large donations into projects, but they also need confidence that there is a strong vision, strategy, plan and the right team to execute it.
Fundraisers who dare to dream big — those with “moonshot” ideas — will find themselves in a unique position to forge powerful partnerships with donors committed to spending down their philanthropic capital. It’s crucial that they have a short-term plan of how to spend an infusion of a large amount of capital, but also strategize for the long-term after these transformational gifts come to an end. Sustainability can be a key factor in decision-making for clients who want to have an immediate impact, but also want to ensure the work continues well into the future.
Nick Palahnuk, Founder of PhilanthPro, talks with experts about strategic philanthropy as part of a series with Foundation Magazine. PhilanthPro is innovative software that brings the power of financial planning to philanthropy so people can confidently create and manage bold, intentional charitable plans to maximize their positive impact.
Related Posts
