The Role of a Charity Manager in a Bank
Charity Managers: have you ever heard of this job title before? Increasingly more private banking institutions have them. That got me curious. Because of that, and because it doesn’t always have to be about digital transformation, we invited one of the trendsetters in the Netherlands around our virtual round table.
Guus Loomans, Charity Manager at Rabobank, was our guest on April 20 to explain the role of a Charity Manager in the bigger banking context.
He answered all my prepared questions and triggered many more questions for the audience during the discussion.
The job of a Charity Manager
“Charity Managers are essentially matchmakers between charities and our clients. The clients in scope are private and wealth customers and corporate foundations. If these clients are willing to share at least €50,000, we help at no charge”, explained Guus.
These clients prefer to do this anonymously, which is one of the reasons they prefer to work with a mediator.
Rabobank does the charity planning after a deep intake conversation to better understand their client’s situation and dreams. These conversations give a good understanding of the client’s reasoning behind supporting charity, but it also increases bonding with Rabobank.
Guus: “We have an interview with every client for about two hours. And we ask them about their past, their life moments of truth and their situations of fortune and misfortune. Every entrepreneur has a reason why he became an entrepreneur. You will be amazed about the personal stories and motivations of people behind this desire to have an impact through charity.”
In the selection process, Rabobank has a few guidelines. The charity must be an ANBI (“Algemeen Nut Beogende Instelling”, translated “Public Benefit Institutions”). The Netherlands have around 44,000 of those. The Justice Department supervises these non-profit organisations and provides required guarantees that the money will be well spent.
Rabobank will limit its selection to those ANBIs with at least €250.000 to spend per year, to ensure that the ANBI does not become dependent on one (or a few) source(s) of money, which in terms of continuity would be a risk in case the donor pulls out in the future.
Why Rabobank Set up a Charity Management Desk
The total market of Charity in the Netherlands is around €6 billion a year (€5,6 billion in 2022, according to “Geven in Nederland”, Centre of Philanthropic Studies VU). That is incredible; to put that into perspective: the pharmaceutical market is only 5 billion euros. 2 billion euros for charity come from private individuals and 2,2 billion from companies. The remaining part is donations from the government and the lottery.
To make the picture complete, it is essential to note that private foundations and non-profit organisations have at least approximately 60 billion euros in assets under management.
I guess you understand why, next to the social aspect, banks want to be involved in this business.
As we said in the beginning: Rabobank doesn’t charge for the service, and they don’t limit the services to only their clients or charities under management at Rabobank. That’s where Rabobank’s cooperative structure and values come into play.
Guus: “We have had our corporate foundation for about 60 years, and they spend 35 million euros annually. In the past, they helped about 4 million farmers in 23 countries. And then we also do some club support and other sponsoring. If we add all this, we read 150 million a year that Rabobank shares with charities. We had this experience and wanted to share that with our clients.”
The Challenge of a Charity Manager
With many anecdotes, Guus explained the diversity of his job and why he believes he must always remain curious and eager to learn. A Charity Manager is a generalist with broad expertise and even bigger curiosity. From fiscality, art, and well-being to ethics, religion and even business development. They know it all.
When we challenged him on the fact that ethics can be very situational and dependent on cultures, he acknowledged this with the example of orphanages. Some ANBIs are Christian groups with an evangelistic mission sometimes. When they approach Rabobank for a project to set up orphanages in Buddhistic or Islamic countries to help and educate local orphans, the Charity Management Desk goes into dialogue.
They consciously follow up and discuss new projects based on rational and scientific facts to ensure the right results for the beneficiary and the donor. In the case of helping orphans, they believe that local families (e.g. uncles and aunts), or even a widow, to support taking care of these orphans leads to much better results than building an orphanage. They base that belief on conclusions from Better Care Network of NGOs specialised in caring for orphans.
A completely different story is the support of African single mothers by improving their financial well-being. 100weeks.com is such an example that builds on a mobile money revolution. They support women by providing them a sum of money every week for 100 weeks to help these women change their life (a model that is now being copied in the Netherlands, by Stichting Kansfonds).
Another example, in the area of impact investments, with a return, is, for example, microcredit institution Kiva. They successfully support entrepreneurs, mainly women, to help them set up their businesses, with a payback ratio of 97%.
New trends that Guus is closely following are the concepts of “Giving Circles”, and “Community Funding” which flew over from the United States.
According to Wikipedia, a Giving Circle is a voluntary association with an “express philanthropic purpose” and a structure that is usually “informal and independent”. Even more after COVID-19, local involvement grew, and with that, also the wish of wealthy families to give back. Local-oriented Giving Circles suddenly became much more popular in the Netherlands. A good example is the Cooperative Giving Circles, which aims to give children extra education.
On the other hand, there are the Community Funds, that The Dutch government is actively promoting. They provided a 40-page document to facilitate the legal and fiscal rules for setting up community funding, like “Gemeenschapsfondes Wij in Wijdemeren and Gemeenschapsfonds Urk. Organisations like Rabobank help them in getting funding or by looking for community members to join the management board, for example, in case some clients want to set up a Community Fund, but prefer to avoid much personal involvement or simply increase involvement from the community they serve with this Community Fund.
Evaluation of charities is another exciting challenge for the Charity Manager. After all: how do you measure impact? Can one say that good charities have an operating cost lower than 5% of the money they get? How do you compare this with organisations that deal with debt problems that cause a 30% cost for every euro they receive but work with thousands of volunteers?
Guus: “Impact measurement is critical. But also, we tell our clients that every project should have an exit strategy, impact and continuity”.
These kinds of sessions are a real inspiration for me, and likely for many more, as it explains how relevant, purposeful and complex banking can be. By being there when customers wish to share their wealth and sharing their knowledge, banks become partners of impact to the clients that want to share with others.
“We translate the emotions of our clients in a rational process to create a personalised Charity Plan that they can use in their charity and legacy planning”, said Guus, and that is a very noble thing to do, in my opinion.