How Iconiq, the wealth firm backed by Mark Zuckerberg, brings ultra-rich philanthropists together

Philanthropy is facing a crisis with the tax-and-spending bill targeting wealthy donors and the social safety net

Iconiq, the wealth manager that counts Mark Zuckerberg as a client, gets entrepreneurs to band together to tackle global issues climate change

Meta CEO Mark Zuckerberg and Square CEO Jack Dorsey

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Even as tax changes may reduce giving by the wealthy, a leading investment firm is pioneering a new model of philanthropy that could spur big donors to act now

Iconiq Capital, which started in Silicon Valley with clients Mark Zuckerberg and Jack Dorsey, has created collaborative philanthropy funds to jump-start giving

These so-called co-labs pool clients' capital to make multiyear grants to a group of nonfits focused on causes climate equity and economic mobility

Iconiq Impact head Matti Navellou joined the San Francisco-based firm from UNICEF six years ago

She built the co-lab gram after hearing that clients wanted to learn philanthropy from their peers. "It is a really lonely journey, and it's hard to find peers at the same wealth level who are struggling with the same type of challenges," she said. "How do you navigate the amount of people constantly pitching you

And how do you know where to focus. "The nonfit sector's woes are compounded by President Donald Trump's tax bill, which reduces tax incentives for wealthy donors and makes steep cuts to social safety net grams

Nonfit groups, including the 30,000-member strong National Council of Nonfits, said charities will have fewer dollars at their disposal while their services are more needed

Navellou said charitable giving is more crucial than ever due to slashed federal funding. "There are so many areas where, truly, philanthropy can move the needle right now, and so this structure that has been set up is blematic because it doesn't actually incentivize accountability for spending that money for what it is designed for, which is funding nonfits," said Navellou. "We aim to influence the faster movement of dollars out the door. "Time is of the essence, but most Iconiq clients are busy founders who have little time to focus on philanthropy and have yet to build foundations, Navellou said

Foundations aren't necessarily built for speed either, she said, as they are only required to donate 5% a year

Donor-advised funds are a low-effort option, but they aren't obligated to disburse funds to charity

The co-labs allow clients to direct funds to charities quicker and with less effort

Iconiq develops a "portfolio" of charities in concert with clients after a series of in-person and Zoom gatherings with fellow funders and outside experts on causes of interest

After weeks of conversations, Iconiq develops the "portfolio" with the funders' blessing and takes care of the rest. "What this does is it enables them to just move money much faster when they are in that time period of their life running companies," Navellou said

Matti Navellou, head of ICONIQ Impact, speaks with donors at the Ocean Co-Lab Community Retreat in Monterey, CA

Courtesy of Matti NavellouGetting donors to trust not only Iconiq but also the charities, rather than micromanaging how the funds are allocated, is key to the cess, she said

The multiyear, unrestricted grants allow charity leaders to focus on the work rather than the fundraising, she added

Bill Smith, founder and CEO of grantee Inseparable, said flexible funding allows nonfits to adapt to a volatile policy climate

Inseparable is one of 25 nonfits in the youth mental health co-lab, receiving $1. 3 million a year for five years starting this past December. "One of the hardest things when you're running an organization, especially an advocacy organization, where we have changing circumstances with different administrations and what's going on in states all over the country — the flexibility of having unrestricted money lets us go where we need to go and do what we need to do without constraints from a funder," he said

Looking forward, Navellou said she wants to scale Iconiq Impact's giving, which is made easier with collaborative contributions

Donors who aren't Iconiq clients are welcome to participate in the co-labs, but funders are generally required to donate a single-digit million sum annually over three to five years, she said

After Iconiq's charity portfolios are designed, they are "open source," she said, meaning other donors can on with commitments of as little as $250,000 a year

It's convenient for younger entrepreneurs who want to dip their toes in philanthropy, she said

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The great wealth transfer may be mising for philanthropy, Navellou said

She has noticed that the young adult children of Iconiq clients are quicker to act and care more measurable impact rather than specific causes. "There's certainly a young cohort that do think philanthropy differently, and I would say, are much more impatient around changing things and leveraging that capital in different ways, including through impact," she said. "And I'd say they're also issue agnostic, which is really interesting

They often will ask questions around data and letting the data inform and guide what they do, rather than coming to the table and saying, 'I really want to move the needle on this issue. '"Women are expected to receive 70% of the $124 trillion that will pass down over the next 25 years, according to Cerulli Associates

This also bodes well for charitable giving, Navellou said. "What we've seen anecdotally, although there is data backing this as well, is that women tend to be more generous," she said. "One area that's really exciting is just a lot more female led philanthropy

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