Working in philanthropy provides you with a scope as global as many international businesses. You meet donors from all over the world, and find that the range of their philanthropic interests is almost as diverse as their nations of origin. And so it is you welcome people from the US, UK, Australia, Canada, China, France, Lebanon, Nigeria, Sweden and Saudi Arabia - people who are passionate about women’s education, child poverty, microfinance and conservation.
At first – and probably second – glance, it might seem many of these individuals have nothing in common. But, in the course of an increasingly broad conversation with them, a familiar thread will begin to emerge. You will hear of their plans for their giving, whether tentative or being realised, and you will hear of the values that drive them. And, perhaps most importantly, you will almost certainly hear about their families.
Many of the donors you encounter in philanthropy have children of their own or come from families with long and proud histories of community involvement. In these cases, the key question becomes one of legacy; that is to say, how best to uphold or pass down the family’s values and traditions in a way that benefits them and the wider society? The question is a crucial one, too, for the charities they may choose to support.
Research (New Philanthropy Capital, 2007) has shown foundations are the most popular vehicle for philanthropic giving among the wealthiest donors and that significant growth in family foundation charitable spending is taking place.
Understandably, the hard numbers are also compelling. In the US and UK alone, family foundation spending between 2006 and 2007 (in terms of real growth) had risen by 33.5% and 10% respectively, equating to well over £3.8billion and £1.8billion being distributed in each country.
There are benefits for all involved in doing family philanthropy well. Family foundations can be hugely beneficial as a constructive and engaging ‘real-life operation,’ particularly for younger members keen to practice and develop responsibility and accountability. These strategic skills, once learnt, are as applicable to future leadership roles as they are to effective philanthropy, as both require skilled communication, problem-solving and an understanding of delegation. They can become microcosms of the larger business world and a safe, resource-rich place in which “tomorrow’s donors” can develop core competencies, honing their skills for future leadership while making an impact on the wider world.
To work out how best a family can achieve effective philanthropy, we should return to a welcome cliché, that the most important assets of a family foundation are its individual members. It is vital all of them feel involved and accountable as the grant-making process moves forward and, most importantly, that they enjoy themselves.
Philanthropy can bring members of a family great satisfaction, since it is an opportunity for them to come together to express their shared values, all in the pursuit of benefit to wider society. Yet, for the same reason, it can also bring them great frustration. Families who give face the unique challenge of reconciling the views of different generations, who are often some way apart in outlook, experience and aspiration.
To negotiate such a dynamic successfully, though difficult, is deeply rewarding.
So we propose three tips to make this process easier:
One: Define the Mission
The first and most obvious step is for family members to define their mission.
Though no simple feat, it should be an enjoyable one as it presents an opportunity for them to examine the world and to find the intersection between need, opportunity and their interests, shared goals and competencies. This strengthens the message and the quality of a family foundation’s output, creates an umbrella of ‘shared ownership’ and can help to safeguard the
‘essence’ and future stewardship of the model. A family retreat, where everyone is gathered, can serve as the ideal place for such a discussion; most families who pursue this route speak of the benefit of using outside facilitators.
Two: Encourage the Next Generation
Following the agreement of a common mission, the work is only beginning. Members of the younger generation often benefit from being eased into the grant-making process, since the sudden responsibility of allocating significant funds can be overwhelming, even disempowering. Therefore, families might wish to consider creating a junior board, or “next-generation committee” (with smaller financial resources and lower stakes) within the family’s philanthropic model. This can be an effective way of engaging the younger generation in the family’s philanthropic mission - providing newcomers with first-hand, practical grant-making experience before they move up into the broader governance process.
Three: Set a Sum Aside
Finally, it is important to remember individual family members may have funding interests which may sit somewhere outside their chosen issue areas. In such cases, it may be prudent to set aside additional funding outside the ‘collective pot’ so they can explore their own particular philanthropic interests. This can be a useful way to accommodate personal growth within the umbrella of the family model, which in turn can strengthen the core of the family’s giving.
The challenges of family philanthropy are many. However, these challenges can – with a little creativity and a great deal of enthusiasm – be readily addressed to the great benefit of donors, their families, and the wider world.
