Ten percent allotments like Cedar Cove’s might seem daunting to smaller firms that are fledglings in the giving space. But they shouldn’t be put off by the percentages, Wanous said. Cedar Cove didn’t start with that much, after all.

“They didn’t start at 10%, they arrived there. Each firm has its own journey.”

Whatever the starting point, he suggested that firms first put money into a “generosity fund,” where deployment is a team effort. Many firms in the early stages of their giving choose four or five organizations in their community where they see their clients have interest, such as in disaster relief, women’s shelters or children’s services. But taking suggestions from staff is equally important.

“This gives the opportunity for more junior people to pitch the causes that are important to them, where they volunteer,” he said.

Firms looking to create a legacy and generate goodwill in their cities will be attractive to recruits, said Jessica Dunham, vice president of programs at Invest in Others, a nonprofit based in Andover, Mass., that attempts to channel philanthropy and volunteerism in the finance industry.

“It’s become more and more of a given that people and companies are giving back. Especially with the younger workforce,” she said. “Millennials really value giving back, and now that most of us are well into our careers and workforce, we’re able to model our interest and our passions to younger employees. A giving program is not a shiny new thing. It’s a given.”

A Nonprofit’s Parallel Growth
Invest in Others started life as an LPL Financial program. (The nonprofit’s name was taken from the theme of LPL’s annual conference in 2006.)

“They sent a Winnebago out to stop at their various advisors’ offices and get a firsthand look at how their advisors were giving back to the community,” she said.

The findings were so inspiring that the following year Invest in Others became a special LPL program, and it created its own Community Leadership Awards, which were open to any advisor in the industry, not just to LPL’s. In 2014, the same year Dunham joined, Invest in Others was spun off from LPL entirely and became an independent nonprofit.

“The bylaws started with six board members, and five were from LPL,” she said. “Now we have 40 board members, and they’re broker-dealers, wirehouses, big firms like UBS and Merrill Lynch, fund companies and tech firms. We have grown to really embrace the entirety of the industry.” (Louis Diamond’s mother, Mindy Diamond, founder and CEO of Diamond Consultants, used to sit on Invest in Others’ board.)

The highlight of the organization’s year is its Invest in Others Awards, open to all financial advisors. Invest in Others takes nominations in five categories: There are awards for lifetime achievement, for community service, and for volunteer of the year, as well as an award for “emerging impact” (presented to an advisor age 45 or younger making an impact in their community) and for a category called “catalyst” (presented to an advisor who has displayed entrepreneurial vision and leadership to a nonprofit for at least three years). There are three finalists in each category, and the winner in each is announced at Invest in Others’ annual gala in Boston (this year it will be held September 29). The two runners-up in each category can direct $25,000 to their charities of choice. Four of the winners can direct $50,000 to charity, while the lifetime achievement recipient can direct $75,000.

“We rely primarily on corporate sponsorships, and 90% of our budget comes from the larger firms in the industry,” Dunham said. “We raise money from the big companies and distribute to nonprofits around the country. Most of the charities the advisors are involved with are small, some founded or co-founded by the advisor. They’ve not had a national platform, so the awards that we give go a long way.”