Vanguard Charitable President Jane Greenfield: “Why financial advisors should help clients improve their financial literacy”

I had the pleasure to interview Jane Greenfield. Jane is the president of Vanguard Charitable, a national donor-advised fund and one of the nation’s top grantmakers. Prior to joining Vanguard Charitable in 2015, Jane held a number of positions as a principal at Vanguard in the Institutional, Retail, and Financial divisions.

Thank you so much for joining us Jane. Can you tell us the “backstory” about what brought you to the Banking/Finance field?

Growing up, I wanted to be a lawyer because I enjoyed writing and debating and thought it would be interesting. I was a bit of a history nerd in high school (I liked the connection between law and American History) and went to William & Mary in Colonial Williamsburg VA.

At William & Mary, I became interested in economics, finance, investing and accounting. I was always a bit of a math geek, too, since math was actually my strongest subject growing up. The economics and finance courses just made sense to me, so I became an economics major, which caused me to think about applying my learning in a business setting.

As I interviewed with various types of companies, I honed in on banking for my initial career path — and I loved it. I was able to use my analytical skills as I learned about various companies and worked with them to finance their goals. I really enjoyed the work I was doing and spent the first 16 years of my career in banking. From there, I moved to Vanguard and worked with both institutions on the 401(k) side of the business and high-net-worth individuals — all with a focus on helping people to meet their retirement and other financial goals. Particularly as I worked with high-net-worth individuals, I heard how important charitable giving was to them; they felt a responsibility to give back.

Now, as I lead Vanguard Charitable, a leading U.S. nonprofit organization that seeks to increase charitable giving through its donor-advised fund, I have this wonderful opportunity to help people meet their philanthropic goals.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or takeaway you took out of that story?

Early in my career, I had what I thought could be a big idea, and I shared it at a staff meeting. My manager and peers loved it, and a lot of discussion ensued with many of my peers weighing in and adding thoughts to make the idea even better. At the end of the meeting, my manager said to one of my peers (we’ll call him “Bob”), “Great idea, Bob!” Interestingly, Bob said, “Thank you!”

I left the meeting upset, feeling overlooked by my manager and betrayed by Bob and my peers. Why didn’t anyone stand up for me and set the record straight? But instead of remaining upset and angry, I thought through what I might have done differently. Nothing came to me; all I knew was that my manager and my peers had always been great colleagues and friends, so I must have done (or not done) something that resulted in everyone forgetting that I put the idea on the table.

I decided to ask Bob for help. I met with him, and as I reminded him of the way the meeting unfolded, he was incredibly apologetic and indicated that he forgot the role I played. As he had added to the idea in a meaningful way, he felt good about his contribution and thanked our manager for the positive comment, not realizing he took credit for an idea that was mine. As he apologized profusely, he indicated he would set the record straight with our manager. I told Bob that, while I really appreciated the offer, there was no need to do so — what I really needed was his help.

I needed to learn from this situation, so I asked him what happened — how was it that everyone forgot the idea was mine? He told me that after I put the idea on the table, I disappeared. I sparked the discussion but did not add meaningful follow-up to it, thus everyone honestly forgot my role completely. Bob agreed to coach me so I wouldn’t disappear again, and he promised to be more aware so he didn’t inadvertently take credit from others again.

Since this situation does tend to happen to women, I told him if he paid attention to this and ensured women got the credit that was due, he would likely have many talented women vying to be on his team — and that’s exactly what happened. His reputation for being fair, setting the record straight and giving credit where it is due became well known. With Bob’s help, I learned how to ensure I had greater impact in a group discussion. It was a great lesson that’s helped me as I’ve moved forward in my career.

But the overarching lesson was this: I learned to never assume everyone is out to get you! If something happens that surprises and concerns you and you feel betrayed by your colleagues, assume innocence. Instead of being angry, be curious. Ask questions as to why it happened, ask for feedback and ask for coaching to improve your performance. This can be the difference between turning what could be a negative moment that impacts your relationships with your colleagues into a catalyst moment where you grow and learn.

Are you working on any exciting new projects now? How do you think that will help people?

My role at Vanguard Charitable is to steer the organization toward our mission of increasing charitable giving. Currently, we are working on several projects, including enhancing our granting capabilities (domestically and internationally) and expanding our ability to accept a wide array of complex assets beyond cash and publicly traded stock. We have also just launched a huge refresh of our public website and donor portal, improving navigability and usability to help philanthropists meet their charitable giving goals. We have also expanded our investment options to include ESGs — a move that appears to be meeting our clients’ needs. In all cases, we’re innovating based on our clients’ evolving priorities.

At the same time, we continue to invest in our systems, enhance our processes and support our employees. We are doing something new with our employees –proactively and definitively pushing decisions down — and it is one of the things I am most excited about right now. We are shifting to a more agile way of working where employees better understand how work is prioritized and where they are empowered to identify problems and solutions and ensure we are addressing the right ones. We have tremendous talent at Vanguard Charitable — and we want to leverage them to an even greater extent moving forward.

These projects and evolutions will not only improve our clients’ ability to meet their goals, but it should also have a positive impact on the careers and engagement of everyone who works at Vanguard Charitable.

What do you think makes your company stand out? Can you share a story?

Vanguard Charitable is a leading U.S. nonprofit organization and top grantmaker that fulfills its mission to increase philanthropic giving by offering donors a tax-effective, flexible, low-cost charitable giving tool. Overall, our goal is to help donors increase their charitable impact. We provide our donors with excellent service and best-in-class investments, all at the lowest all-in price.

Beyond our offering, and our unique approach to provide the highest value at the lowest all-in price, it’s our people who make us stand out. They truly bring both head and heart to the table — and it’s not just luck. We seek talented people who care deeply about our mission (the heart). But we also require them to be smart driven business professionals who push us to think differently, and who smartly prioritize how best to meet our clients’ current and future needs (the head). In addition to being strong business professionals with a deep connection to our mission, we focus on bringing together a group of people who put their egos to the back of the room, and collaborate to not only set and accomplish lofty goals, but do so while making each other better. To be successful at Vanguard Charitable, you need to not only do good work, but you need to work well with others, and invest in the success of others. You need to authentically care about your fellow employees, and want them to succeed. This creates a supportive, friendly, productive and exciting place to work — one that people love to be a part of.

A quick example of who we are, and how much we value the perspectives of our colleagues, is our weekly “aisle meeting.” Each week, we hold a 15-minute companywide meeting that’s led by the staff (not senior leaders). Everyone is given the opportunity to not only provide important updates, but also share stories of the difference donors and charities make and insights into what they need to further impact the community. We have passionate talent at Vanguard Charitable, and we listen to voices at every level.

Wall Street and Finance used to be an “all-white boys club.” This has changed a lot recently. In your opinion, what caused this change?

This change is due to the race for talent and the recognition that talent is not limited to one group. If you want the best and the brightest, cutting out 50 percent of the workforce makes no sense — women need to be included. The same goes for people of different racial backgrounds. The world has become more and more competitive, and organizations need top talent to figure out how to meet the evolving needs of their clients…and actually how to stay one step ahead. To make matters more complex, the talent we are seeking is more mobile. Today, organizations are competing on a global front for talent, not just locally or nationally. Managers need to focus on getting the best talent available and recognizing that talent does not always look like them.

I am thrilled to see greater diversity represented now than in the past, and not just because I’m a woman. Greater diversity in finance means there is greater acceptance of and appetite for diverse thought, and diverse thought born from teams with different backgrounds and different perspectives can breed better results.

Of course, despite the progress, we still have a lot more work to do to achieve parity. According to this report in CNBC, less than 17 percent of senior positions in investment banks are held by women. In your opinion or experience, what 3 things can be done by a) individuals b) companies and/or c) society to support this movement going forward?

It’s a great question, particularly as it takes all three — individuals, companies and society — for us to make additional progress.

For individuals, I have separate advice for men and women.

For women — Know what you want, and go after it. Do so with passion, curiosity and intent. If you hit obstacles or have a moment where you doubt your ability to succeed, reach out to mentors and friends who you trust and ask for their help. Don’t do it alone; build your base of support and ask them to help you as you drive to meet your goals.

For men — Proactively help women succeed. There are a lot of talented women who need your help, either because they don’t recognize they are ready for the next challenge, or they are challenged in managing their responsibilities at work and beyond. Engage them, and be an advocate who pushes them further than they are pushing themselves. Ask them what they need, and be ready to jump in and help. They will ask for help in a different way — perhaps at times a less direct way — than your male colleagues. Don’t miss the signs.

For companies — Engage female colleagues, and find out from them what they need from the company in order to progress. Organizations that not only listen to their female talent, but also flex to meet their needs, will retain top women and create an environment that attracts others. Organizations that are relentless in thinking through how to propel women forward, and understand the power of having both women and men at senior levels, will figure it out. These are the companies that will consistently command talent — and I would put my bet on those companies any day of the week.

For society — Celebrate the woman who achieves success in business, and don’t assume her family is less important to her. Help her, and thank her for paving the way for you, your daughters and your sisters. When my kids were young, I had the great fortune of having incredibly supportive family and friends. One friend I like to highlight was a stay-at-home-mom whose daughter was in my daughter’s class at school. On snow days, she would call me and offer to take both my daughter and son for the day. As it turned out, I never ended up having to take her up on her offer, but the stress relief of her consistent support was, well, priceless. She is an example of a strong woman helping other women, and I am truly grateful for her friendship.

According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers? If you had the power to make a change, what 3 things would you recommend to improve these numbers?

I believe people often shy away from finance and investing because it can feel overwhelmingly complex. They don’t even know the first step to increase their literacy, so they don’t take any step at all. Whether you have a great deal of wealth or just a little, the basics are important to know.

When it comes to investing, many decide that it would be more productive to hire a financial advisor than to become an expert themselves. And that is a great decision. But in order to evaluate financial advisors so that you can hire one that you trust, having some basic knowledge is helpful. Once you’ve hired your financial advisor, a lack of knowledge can impact the depth and value of your conversation and your overall experience with that advisor. So while it is a great idea to take that step, I don’t believe it takes the need to build some level of financial literacy off the table.

There are three relatively easy steps that help people improve their financial literacy:

(1) Financial advisors could not only help clients meet their financial goals but also provide education and resources to help improve their financial literacy. Each time they talk to their client, the financial advisor could take a few minutes upfront to review some of the basics. This would not only result in a better experience for the client, but should also help advisors to better understand their clients’ needs.

(2) As companies usually offer retirement benefits to their employees, they too can play a role in improving the financial literacy of their employees. Employers could share easy-to-understand books, articles and podcasts to provide the basics, and then host sessions and brown bags to further discuss the resources. Vanguard has free podcasts and articles that are incredibly helpful and are delivered in a way anyone can understand and retain. They could be easily leveraged in this setting.

(3) Finally, high schools should offer courses to their students to give them insight into the fundamentals — from setting a budget and balancing their checkbook, to understanding the downside of debt, to investing basics (what is a stock, a bond, a mutual fund — and how do they work.) If these fundamentals are taught and reinforced in high school, then building on that foundation will seem less daunting in the future.

You are a “finance insider.” If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each.

A few years ago, I spoke at my all-girls high school alma mater about the important principles of investing. During the lecture, I gave them a scenario: “You are graduating high school in June, and your parents have given you $10,000 because they are so proud of you. The only stipulation is that you have to invest the $10,000 wisely; you can’t spend it.” I gave them two options on how to invest their money: (1) Research a bunch of stocks, pick the one they believed was best and invest their $10,000; or (2) Research mutual funds, find a low-cost option that has both stocks and bonds, and invest in it for the long-term.

Most of the girls wanted to invest in just one stock, because they thought they could double or triple their money if they picked the right stock. I realized so many of them did not understand the importance of diversification. Most people have heard stories of people who made a concentrated bet and won big, but they don’t always hear all the stories of people who bet the farm and lost. I realized that the girls really needed help (as so many people do) in understanding the key elements that contribute to investing success. Smart investing is not intuitive.

Here are five essentials for smart investing –

1. Goals: Start by understanding and articulating your financial goals and thinking through your risk tolerance (how much volatility you can “stomach”). You can’t determine how to invest without knowing this information upfront.
2. Asset Allocation: Recognize that asset allocation is the most important factor in determining your investing outcome. Experts seem to all agree on this, and research bears it out. Asset allocation refers to the way you allocate your money across asset classes (stocks, bonds, cash). Allocating across asset classes allows you to meet your goals while mitigating risk. A higher percentage in stocks would be appropriate if your goals were long-term and your risk tolerance was higher, whereas a higher percentage in bonds or cash would be appropriate if your goals were short-term and your risk tolerance was low. Research shows that choosing how to allocate your money across asset classes is more important than the investments you choose within those asset classes.
3. Diversification: You’ve heard the phrase “Don’t put all your eggs in one basket.” Diversification is essential to long-term investing success. Choosing an appropriate asset allocation is step one to having a diversified portfolio, but that is not the only step. In addition to being diversified across asset classes, you also need to be diversified within asset classes. To accomplish this, move away from “stock picking” and toward mutual funds/ETFs. The more diversified you are, the more you mitigate the risk associated with one investment losing value.
4. Fees: Make sure you know how much you are paying in fees. Let’s face it — you can’t control the markets, but you can control what you choose to pay in fees. Cost matters, because the less you pay, the more you keep.
5. Discipline: The final essential is good old-fashioned discipline! If you’ve thought through your financial goals, and invested in a low-cost diversified portfolio with an appropriate asset allocation, then that approach will serve you well in all markets. For example, if markets get hot, or markets tank, stay the course! Rebalancing to stick with your asset allocation works well; trading in an attempt to time the market and “win” in volatile times is a losing strategy.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

I’ve been very lucky because I have had a number of talented leaders who helped me along the way.

The most impactful leader in the first 10 years of my career taught me so many lessons that I reflect on to this day. It’s hard to pick just one lesson he taught me, but I will share the story that speaks to who he is and what he believes in. Years ago, this individual called me the same day he received a huge promotion. Before I could congratulate him, he told me he thought a great deal about why he got the promotion, and his conclusion was that it was because he had surrounded himself with smart people. So, he thanked me for his promotion!

Honestly, it was clear to me and all those around him exactly why he got the big promotion — he was incredibly talented and had a long track record of outstanding results. However, that was not his perspective. He honestly felt it was because of the contributions of others that he arrived at this promotion. This conversation had a big impact on me, and I took a key lesson away from this moment. There is nothing more important than building a high-performing team. When you surround yourself with top talent and set the right environment so they can work together toward shared goals, that team can post amazing results. I have kept that top of mind ever since, and it has been one of the best lessons of my professional career.

Can you please give us your favorite “Life Lesson Quote?” Can you share how that was relevant to you in your life?

Unfortunately for my two kids, I value many life lessons, and they have heard them all! I’ll choose one of my favorite life lessons for my professional life — “Seek first to understand.”

As people, we naturally default to seeing the world through our own lens, and we forget we have blind spots. We can sometimes forget that others’ perspectives might just be more valuable and relevant than our own. Seeking first to understand the perspective of others requires curiosity and an open mind, and it leads to great conversations and debate, and better solutions. When I have done this well, I have avoided big mistakes and posted better results. It’s just that simple.

If everyone in the world took this life lesson to heart, there would be less judgment and more understanding, less anger and more empathy. It certainly is a life lesson that applies beyond the business setting.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger.

The movement I hope to continue to inspire is the power of thoughtful, strategic philanthropy. All giving is good, but giving with impact requires proactive planning.

Personally, as I have evolved as a philanthropist, I have moved from what I would call a “scattered giver” in my twenties (i.e. small amounts of money given to many different organizations in reaction to requests, but without a clear plan) to a more “focused giver” (with a short list of identified causes that matter to me, and a budget to fund charities that are moving the dial in those causes). I still ensure that I have some money put aside to be “nimble” in my giving (to fund disaster relief, or help a friend with a fundraising campaign that is important to them), but I am disciplined in focusing the lion’s share of my giving so that I can have greater impact.

If you are thoughtful and strategic in your giving, you not only know which charities you want to support, but you also have a good feel for how much money you need to budget to reach your giving goals. It is near impossible to do this as a reactive scattered giver! I recommend structuring your budget to (a) fund your goals for the specific charities you want to support (a focused list that are important to you), and (b) have a bit extra so you can support disaster victims or other causes in-the-moment.

I have seen how powerful donations from a few can be in helping many. There is no doubt that a movement to think proactively and commit to funding charitable giving goals seems like the right idea to activate. At Vanguard Charitable, our Donors are doing just that. They are planning for what to give today, tomorrow and in the future, and they are making a big difference. Like most things in life, having a plan of action gives you a better chance of achieving great results.