“Among our client base, our private foundations, privately operating foundations and public charities, most of them are accelerating their giving for the year, especially private foundations and privately operating foundations,” said Smith. “they are sharpening their mandates and very much focused on the Covid-affected elements of their existing mandates and missions.”
Most foundations also pivoted quickly to address the pandemic by converting programmatic grant dedicated to specific activities to general operating support, and assured grantees that multi-year commitments would persist, said Smith.
The firm is engaging on its own philanthropic efforts, said Tiedemann. Two years ago, it established a corporate charitable office, organized by location, which has already been used to aid relief and recovery efforts related to Hurricane Harvey’s flooding in Texas and the Camp Fire in the northern San Francisco Bay area.
“Across our offices, there’s been a history of contributing to local efforts, and we accelerated that part of our budget and encouraged our offices to go ahead and determine where they wanted to allocate, and also encouraged them to offer the opportunity to our clients if they wanted to go in and give along with our efforts,” said Tiedemann. “It was something we could control but also ultimately help with important assistance at a time when our communities are being devastated.”
A Changing World
While Tiedemann could theoretically function indefinitely while on lockdown, current plans are to reopen offices at the beginning of June, if possible.
But the industry it belongs to could take much longer to recover, and emerge looking very differently. Tiedemann believes that the consolidation trend in the industry will pause only temporarily, and then potentially accelerate again.
“I would expect that smaller firms continue to seek to join or be bought out by some other firms, but what will change is the way that buyers view valuations for the industry,” said Tiedemann. “Right now, we’re in a period of reflection. The acquisition environment got ahead of itself in the past year or two, from a valuation standpoint. That will now probably revert back to a more reasonable valuation level, and then there will be a resumption of activity.”
Smith said that because financial, investment and wealth management firms have all engaged in different responses to the crisis, with different ways of handling employees and clients, there’s likely to be an increase in people moving from firm to firm.
And in the high- and ultra-high-net-worth space, there’s been a steady increase in single-family offices being formed in recent years, according to Tiedemann. That growth is being driven by families seeking a more comprehensive range of financial services from a single source and wanting more direct control over their financial futures.
“In some form, family offices are evolving into multifamily offices, or firms that perhaps recognize tht they could use a partner firm like ours,” said Tiedemann. “That has become an area of recent growth for us. We recognize that we can expand their capabilities, save them money and offer them more opportunities to share with their clients.”