Strategic Philanthropy in Family Business
4th July 2019
Family philanthropy is harder than it looks, but it can be immensely rewarding for the family, the business, and for society at large.
For many the bulk of their philanthropy is channeled through a family foundation. For most families, however, “philanthropy” takes many forms, including: corporate giving programs that stem directly from the family’s enterprise; value driven impact investing programs that flow out of a family office that are driven by hybrid of economic and philanthropic objectives; individual foundations; as well as personal giving by family members.
Many enterprising families start out giving to causes based on the founders’ or trustees’ personal interests, with little to no strategic plan or vision for their charitable practice. As their businesses and families grow, more family members with diverse interests become involved, and families are faced with the conundrum of evolving their giving practice to include the interests of next generations, while simultaneously preserving their family philanthropic legacy.
How do we begin?
The new Guide to Strategic Philanthropy in Family Businesses addresses the questions of how families can begin to have strategic conversations across the family enterprise, and how they can establish a strong foundation for long lasting philanthropic impact.
The guide offers a framework of questions that families should ask themselves when contemplating a more strategic approach to family business philanthropy.
Examining philanthropy comprehensively leads to such questions as: “Why we should give as a family?”, “What organizational guardrails and mechanisms do we need to orchestrate a complex portfolio of philanthropic activity?”, “What kind of impact do we expect from each effort and overall?”, and “What risks might we face with our philanthropic work?”.
While it is indeed true that every family business is unique, there are six universal key steps to launching strategic philanthropy in family business that have emerged from our research and advising experience with enterprising families.
Key steps include establishing a mandate for your family philanthropy task force and exploring different legal structures and paths through which to pursue your family’s philanthropic activities. These will give your family a roadmap, one that demands that philanthropy keeps to the same high standards of rigor and professionalism that are placed on operating businesses and family offices.
In our collaborative work with IFB, we heard from IFB members who shared some of their experience and challenges.
On November 6th, the IFB in collaboration with LGA are thrilled to be hosting a panel discussion at the Hoare Bank in London, where family businesses will come together in a safe space to share about their challenges and successes, ask questions and learn from each other.
In the meantime, this guide is a first step towards strategic family philanthropy. It is intended for families who are just beginning their philanthropic journey and for those who are already established and looking to take their giving to the next level.
We are convinced that by highlighting how families can become more strategic in their social endeavors, it will inspire others to consider this transformation – a transformation that can ultimately create greater impact and serve as a more engaging and unifying activity for all of your family members.
This blog is an extract from the full piece available on the LGA's website. You can access it here.