Looking Back with Ron Brown: Part I
(Added 9/3/2013)
Establishing a code of ethics for gift planners was not easy. On his new website, Ron Brown, the senior director of gift planning at Fordham University and a long-time veteran of planned giving, devotes an essay to the origins of the Model Standards, the ethics code developed by the National Committee for Planned Giving (today, the National Association of Charitable Gift Planners). This month's question for Brown: Why was the project so difficult to get off the ground?
"It was not clear in 1990 that NCPG had the support of its members for issuing an ethical code intended for all gift planners – those working for charities as well as people like financial services professionals. The first policy initiative for NCPG, a national training and certification program, had been soundly rejected." At the second annual conference, in 1989, Alice Pinsley, another long-time and highly regarded gift planner, laid out a detailed proposal. Its intentions were good: to elevate planned giving to a new professional discipline, which meant demonstrating technical competence in specific areas as well as the ability and a willingness to adhere to ethical guidelines. "But," says Brown, "many people at that conference felt strongly that an organization set up to be a grass-roots federation of councils had no business proposing a long and expensive training and certification program controlled by NCPG, when they had no input in the planning process."
Brown describes how an Ethics Committee tried unsuccessfully from 1984 to 1989 to develop an effective and politically acceptable code of professional conduct. "Before the Model Standards, too many financial planners as well as charities were over-emphasizing the financial benefits of gifts, and not giving enough importance to charitable motivation. So we needed guidelines."
In the late 1980s there was sharp disagreement about whether it was ethical for charities to pay finders fees, and whether prohibiting those commissions constituted illegal restraint of trade. Brown reports that "the NCPG Ethics Committee drafted principles in 1990 that were too abstract" to be useful as a practical guide. "The policy breakthrough came about in response to a crisis over abuse of charitable remainder trusts as tax shelters. When people started selling charitable trusts as tax shelters, the community was forced to take a stand." Enough was enough. Brown says, "It took the CANARAS group, a member council of NCPG, to jump into the breach and say, ‘This is totally unacceptable.'"
NCPG established a new Ethics Committee in 1992 and its chair was Joseph Schreiber, who at the time was at Claremont McKenna College. He immediately ran into difficulties. Brown says, "The NCPG Board did not provide his committee with a clear mandate. Initially the Standards were completely voluntary, but within a year NCPG decided that all its councils had to subscribe to them." Most councils quickly adopted the Standards, but when Schreiber notified the Inland Empire Gift Planning Forum in California that it must subscribe to the Standards, "a group of for-profit financial planners there simply said they weren't going to do it. That led the NCPG Board to disaffiliate the Forum." (Inland Empire re-affiliated with NCPG in 1996.)
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In next month's column, we'll look at the role of the CANARAS group and the impact of the Model Standards.