Despite tough economy, advisers are still giving

As soon as he heard that 13-year-old Margaret Hurt was in danger of losing the horse she had been riding since becoming sick with leukemia two years ago, Preston Byers agreed to donate $6,000 to help her buy Hoochie.

As soon as he heard that 13-year-old Margaret Hurt was in danger of losing the horse she had been riding since becoming sick with leukemia two years ago, Preston Byers agreed to donate $6,000 to help her buy Hoochie.

“Every kid dreams of having a horse, and how often do you have a chance to make it happen?” said Mr. Byers, founder of ClearBridge Wealth Management.”This has been one of my proudest moments here at the firm.”

Mr. Byers, who had already made a donation to the Make-A-Wish Foundation when the charity asked him to pitch in to help save Hoochie, is not alone.

Despite the lackluster economy, advisory firms remain committed to donating to charities. An online InvestmentNews survey late last month of more than 1,000 financial planners, advisers and brokers found that 84.6% of firms made charitable donations in 2009. Of those that donated, 79% gave the same amount or more than the previous year; just 21.1% gave less.

Of those respondents that said their firms had made a charitable donation, 28% said they gave more than $20,000, while 30% gave between $5,000 and $19,999, and 42% gave less than $5,000.

Better yet, most firms plan to give again this year. Eighty-five percent of respondents said they intend to make a charitable donation in 2010. And in terms of dollar value, nearly 50% of those firms said they plan to give the same amount, while 45% said they’ll likely give more.

It’s no surprise that advisory firms are committed to charitable giving, even in a down economy, said Lon Dolber, president and chief executive of American Portfolios, a consulting firm to advisers. This year, Mr. Dolber’s firm used most of the $20,000 it would have spent on a party to donate to non-profit groups.

“The advisers notice what we’re doing, and it filters to their communities,” he said. “If everyone thinks social responsibility is important, it hits a chord with everyone.”

In Mr. Byers’ case, he earmarks $25,000 each year for specific causes, instead of spending that money on marketing for the firm, which manages $120 million in assets. He was approached by Make-A-Wish about buying the horse last fall.

The pitch was straightforward. After being diagnosed with leukemia at 11, Ms. Hurt began visiting the Equestrian Reserve in Alpharetta, Ga., to ride Hoochie. Even when she was too sick from the chemotherapy treatments, she visited the horse every day.

“She’d come to the barn on these cold miserable days, and she’d lost almost 25% of her body weight,” said Donna Romeu, owner of the equestrian facility. “You never saw anyone so pale. She’d come and just want to be in the barn.”

Ms. Romeu was leasing Hoochie, a five-year-old American quarter horse, for one year, and at the end of the lease, the owners planned to sell her. As that deadline approached, Margaret’s health improved, and she was able to ride Hoochie again.

That’s when the Make-A-Wish Foundation approached Mr. Byers about buying the horse.

Mr. Byers said he was thrilled to see Ms. Hurt’s dream become a reality, and his colleagues were also there when he presented her with Hoochie.

“We even gave extra money, because when I showed up, her boots were taped together at the bottom with duct tape,” he said.

His clients also seem to appreciate his efforts, he said.

“This is good for business. But we don’t do it for that reason; we do it because we care about the cause. But our clients love this.”

Industry experts say that when advisers donate to charitable organizations in their community, it helps improve relationships with clients. It can even help them get new clients. But advisers must be sincere.

“Advisers have to want to do this from their heart,” said Maureen Wilke, founder of consulting firm Wilke & Associates Inc. “Clients will pick up on it right away if they’re doing it for business.”

Jonathan Smith’s volunteer activities with his family extend to his firm, Jonathan Smith & Co. Investment Counsel of Greensboro, N.C. (He declined to disclose his firm’s assets under management.) Thirteen years ago, his family began making lighted Christmas balls that hang outside their house.

They became so popular that each year he hosts a workshop on how to make them. His entire staff is part of these workshops. Participants in the workshop are encouraged to donate money or canned goods to two local chairities in the Greensboro area.

By mid-December, Mr. Smith and his staff had raised $6,200.

A trailer for canned-goods donations also sits in front of Mr. Smith’s house, and people who drive by his neighborhood to view the lights can drop off donations. His goal was to collect 10,000 pounds of canned goods by early this month.

Another firm, Austin Asset Management Co. of Austin, Texas, which manages $300 million, decided to scale back on its holiday party and help local families instead.

The firm divided its 17 employees into three teams and gave each team $250. The challenge: raise funds and get donations to help one family per team. The teams got Wal-Mart Inc. to donate gift cards, and it also donated a stove, and a washer and a dryer. In total, it donated goods worth about $5,000.

Everyone really appreciated all of the hard work that went into it,” said Alexander B. Yeager, a certified financial planner with Austin Asset Management. “This is really life-changing for all of the families.”

Lon T. Dolber’s firm also decided that rather than spending $20,000 for an expensive party for 74 employees and their spouses, it would donate the bulk of the savings to charities. The Holbrook, N.Y. firm also collected 1,500 cans of food. Mr. Dolber is president and chief executive of American Portfolios, a broker-dealer with $11 billion in assets.

“We started talking about what’s the purpose of the holiday party when the holiday should be about giving,” he said.

For the first time, David McManus, a financial planner and managing director of Cooper McManus of Irvine, Calif., said his staff decided to collect canned goods this holiday season. He said they had considered collecting toys, but when they called local organizations, they all wanted food. Cooper McManus manages more than $200 million in assets.

“It’s really telling how bad the situation is, when more people want food than toys,” he said.

E-mail Lisa Shidler at [email protected].