Philanthropic initiatives lead by successful businessmen and entrepreneurs have been accelerating around the world in recent years. Philanthropy is a positive and much needed instrument for society as a whole, on account of the increasingly complex challenges to society which are sometimes neglected by the public sector.
As I think about these challenges that the world is encountering today, I have become more interested about social giving in its many different forms, not only personally but also professionally. It also impacts how I understand my role as a family business consultant and researcher.
Professionals in the field of family business are very privileged to work with families in businesses. They are an excellent vehicle for advancing shared prosperity, especially in terms of talent, values, business acumen, networking and their often considerable financial resources. Together, these assets make significant contributions to society and help management some of its more pressing and structural challenges, not only through their business initiatives but also through their philanthropic efforts.
Although we have long seen philanthropy connected with many family firms, today we are experiencing an acceleration of this practice, with many clients considering the institutionalization of their existing charitable activities, while others are considering shared giving for the first time.
Family business consultants and wealth advisors are typically engaged in many aspects of our clients’ decision-making for the future of the family, the business and their wealth. We must be able to read and connect with their social concerns, even if these are not fully developed or integrated into their thinking at that moment. I’m not suggesting that we all need to be experts on philanthropy — simply that we all need to be aware of its importance to our clients and be capable of supporting them during their early explorations into social giving. To do this, we need to be informed and knowledgeable, recognize why social giving is of such interest to the family, and understand its value to both the family and the business.
Based on my experience, the main dilemmas and concerns individuals and families face when turning to philanthropy are:
- Connecting their goals and motivations in order to engage in giving;
- Deciding whether to make philanthropy a family project, or to keep it as a project of a branch or an individual; and
- Deciding whether philanthropy is connected to the family business or carried out in different areas and by completely different structures
Other dilemmas are related to how to legally structure shared philanthropy, how to govern and lead these activities; how to properly define and align the role of values across philanthropy, family and business activities; and finally, how to accurately assess the social impact the family wishes to achieve, and as a consequence, how to focus the philanthropic work.
Last but not least, once we understand the charitable goals of our clients, we can help guide them toward some of the incredible resources and expertise (see here and here for a start) readily available to support families engaged in shared philanthropy.