Insights
By: Kate Boswell
The Stonehage Fleming View: Philanthropy
Philanthropy holds a central place in the philosophy of many of the families with whom we work. Many are motivated by a desire to give back to their communities in which they live – understanding the importance of social capital in communities, particularly given the well documented reduction in state support in many key areas.
Others are motivated by the desire to make a difference in the world more broadly – whether by tackling ingrained social problems or focusing on long-term environmental challenges. All are aware of the fact that wealth, often combined with specific family expertise, has the ability to effect significant change.
Taking time to understand and properly define each family’s motivation is essential to ensuring that committing capital – whether financial or intellectual – to a philanthropic cause is fulfilling and impactful for both the family and charity alike. Going through the process of understanding individual motivations can help families achieve a deeper understanding of their individual and collective identity, purpose, and values more broadly, contributing to more profound discussions about their overall mission.
Involving the Next Generation in charitable decision-making can be particularly rewarding for the whole family. Philanthropy has the power to foster more effective communication and demonstrate family values ‘in action’, both beneficial to a family more broadly and the Next Generation in particular.
In our experience, a solid philanthropic strategy typically includes a number of elements:
A well-defined and shared family purpose. A durable philanthropic strategy hinges on a shared understanding of a family’s wealth and its purpose. This doesn’t mean that there isn’t room for a divergence of views – rather that these differences are identified and discussed opening and sensibly in order for a shared set of principles to emerge.
A broad understanding of what philanthropy involves. For many families, philanthropy involves not only contributing financial resources, but time, knowledge, and experience – sharing the family’s intellectual as well as its financial capital.
Clarity on philanthropic objectives. Understanding the impact a family wants to make with their philanthropy and ensuring that they are able to measure this in partnership with the charities that they choose to support.
Fostering long-term, constructive relationships with chosen charities. Research shows that working in genuine partnership with charitable partners produces
better long-term results. It’s important for philanthropists to remember that the charity, as an expert in its field, is often best placed to advise how resources (both financial and non financial) are utilised.
Not being afraid to fail. The worst outcomes in philanthropy can often be not to do anything for fear of getting it wrong. Being brave enough to try is a hugely important part of the journey.
Ongoing governance, measurement and communications. We observe that establishing a framework, understanding impact, and continuous and transparent communication, are the pillars that lead to a successful and sustainable philanthropic strategy.
Find out more about Stonehage Fleming's Philanthropy
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