How Morgan Stanley does philanthropy
Updates on the Jewish Future Pledge and values investing from Melanie Schnoll Begun
Melanie Schnoll Begun knows that most people don’t associate banks with philanthropy, and part of her job as the head of philanthropy management at Morgan Stanley is helping people understand how she connects the dots. It started more than 25 years ago after she had graduated from law school with a specialty in tax and was working at Smith Barney [now Morgan Stanley Wealth Management, after a series of mergers] as an associate doing estate planning. High-net-worth clients were starting to want “wealth advisors” who helped them think about their money more broadly — putting philanthropy on the same table as investing and estate planning. “I was right there at the beginning of that conversation,” Schnoll Begun told eJewishPhilanthropy.
This conversation has been condensed and edited.
Helen Chernikoff: When did you know you’d found your calling?
Melanie Schnoll Begun: I’m 23 years in and I’m still looking for my North Star. I had the benefit very early on in my law career to be working with our country’s wealthiest families, having this conversation about their philanthropic work even as I was drafting the trusts and setting up their foundations. We were talking about their kids and their families, but the bigger part of that conversation that I found most interesting was how they were giving to the world. I didn’t want to be a lawyer who took a document off the shelf and just put different names on it. So that listening was a beautiful part of my practice very early on in my career. When the conversation was turning from investment management to wealth management, and I had the opportunity to help people reshape the way they thought about their money, I said, “If we truly want to do this, we can’t let philanthropy be the red-headed stepchild.” Everyone thought, you plan for the family, and it was a nice add-on to talk about their philanthropy. So we made it deliberate and intentional, and that was the creation of our philanthropy management department, and that’s what I’ve had the privilege of leading for the past 18 years. We were leaders in this conversation, and I’m so proud that there were so many that followed. We were entrepreneurs in this. There was no job description.
HC: One of the more recent innovations in your work was the Jewish Future Pledge, and letting your clients know about it, in case it’s something they want to consider. Any updates on how that’s going?
MSB: We’ve had lots of queries from Jewish foundations, federations and families about how they can get engaged. Our clients and prospective clients just want to do more with their money. Our most recent conversations have been with large institutional entities who want to implement this in their endowment; we’re also talking with boards. So much of this is about nurturing this conversation with boards, getting them to move towards a 100% Jewish values portfolio. That’s going to take a lot of time.
HC: Are we talking about giving here, or also about how the endowment is invested?
MSB: Over the next five to 10 years, we’ll be looking at how they can activate parts of their portfolios, and getting toward aligning everything with their mission. It’s also about how they’re investing. The more information we put out there about it, the more clients and advisors are interested in educating boards. This is a process, and it starts at the leadership level. Our clients are doing well in the markets today. Returns look good. Portfolios look good. We can say to ourselves, “If we don’t have to give up portfolio return, let’s include this deeper conversation about investing our portfolio in a mission-aligned way.” That means it’s rooted in human values through a lens that studies Torah and Talmud. It gives us guidance on taking care of the elderly, on taking care of our planet. Mission alignment is not only about investing the assets that are sitting inside your retirement plan, it’s about activating portfolios by doing grant-making that looks like investing. For example: in social enterprises that are not typical investments, not public markets, necessarily. Or there are “revocable grants,” where the money isn’t donated, it’s loaned. That’s another way to invest in nonprofit organizations. I recently hired someone on our team to help lead this conversation around faith-based investment and mission alignment. We started around Jewish values with the intention of expanding it to other faiths.
HC: How do you find people who might be interested in this kind of investing, whether it’s the Jewish Future Pledge or something else?
MSB: A lot of work happens in donor communities. Our client who started the Jewish Future Pledge [Michael Leven] is ready to lead with his co-founder Amy [Holtz], but others aren’t ready to lead, so they are ready to learn. We create donor ‘collaboratives,’ where clients at all giving levels can learn about how to do this well, how they can make sure that their 401K, their IRA, that they are starting to invest with a Jewish values lens. We will be doing a webcast on faith and philanthropy at the end of April, asking what are the values that faith gives us? That will be the first opportunity for this donor collaborative to gather. We’ll give this invitation to donors who came to three Jewish consortiums we held on faith and giving, but we’ll also expand it. We’re in conversation with some headliners who are close to Morgan Stanley’s work, too.
HC: Does your faith inform your work?
MSB: I do the same thing that I ask my clients to do. I ask them to dig deep into their pasts, I ask them to dig deep into who they are, and where their values were created. The same is absolutely true for my work. I am an avid entrepreneur. My faith is incredibly important to me and my health is incredibly important to me. When I look at the programming that has come to fruition in the past 20 years, my fingerprints are all over it. I celebrated by Zoom my youngest son’s bar mitzvah. It was beautiful, and it was more special than what we might have done with 200 people together in a venue. A year and a half ago, as a Jewish mother, we reserved an amazing venue, and my son began his long preparation, and two weeks ago he led our virtual congregation. My son is an athlete. He’s a very talented ping-pong player, and there’s a beautiful nonprofit that he selected to support. It works with children who have all kinds of challenges, and the sport of ping-pong helps them. It’s not a Jewish nonprofit, but that’s totally a Jewish value.
HC: And does being Jewish play a role in your personal giving?
MSB: My husband and I were very intentional in our own estate plan. We give toward our important causes, and we even have a plan that heavily considers philanthropy if, God forbid, our children do not survive us. I’ve served on boards, like the Juvenile Diabetes Research Foundation. That was my entrée into my deep passion for healthcare. I want to find a cure for that autoimmune disease. I live with that autoimmune disease [Type 1 diabetes]. I’m very active in philanthropy and investment in that sector. Entrepreneurship is also very important to me. Students need the tools to understand how to become owners and creators, and use that entrepreneurial spirit to create industry.