Ocorian is the company providing trust, administration, and fiduciary services. Its latest international study, with more than 130 family office professionals responsible for around USD 62.425 billion of assets under management, notices that 91% of family office professionals said charitable giving is set to increase over the next three years.
Take a different Approach
Philanthropy has seen significant change since the days of Rockefeller and Carnegie, two of the biggest donors in history worldwide. Today, younger generations are exploring a multitude of causes, including climate change, biodiversity loss, and gender equality. With this comes a range of approaches and tools, from blended finance to impact investing and venture philanthropy. Moreover, growing numbers of younger investors see philanthropic giving and impact investing as priorities over the long-term preservation of wealth.
Amy Collins, Head of Family Office at Ocorian, says: “With increasing wealth, many are becoming increasingly philanthropic and putting more emphasis on impact investing and sustainable business models. Some are working more closely with causes they care about, and others are using it as a way to engage with the next generation. Both succession planning and philanthropy can be extremely complex, and family offices must ensure they are accessing the right expert advice to make sure their hard-earned wealth is supporting the causes that are close to their hearts, in line with their tailored, personal, philanthropic strategies.”
Concentrate on the Family ´s Legacy
Firstly, when considering philanthropic efforts, it is good to consider the future and legacy that the family wants to leave behind. Philanthropy can play a pivotal role in succession planning and is the perfect place for the next generation to learn about shared values and the responsibility of stewarding the family’s wealth.
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Family offices must establish a philanthropic purpose aligned with the family’s beliefs, objectives, and resources. That may necessitate a conversation across generations to include every family member’s values and goals. It is not negligible that philanthropic activity can bring cohesion and a sense of unity to the family.
Set a measurable Impact
If the goal is too general, the results are hardly seen. In the modern world of pictures, social media presence, and self-promotion, it is inevitable to think about the resonance of philanthropy. Concerning the results, set a plan and stick to it. Family Offices should make time to regularly review the effects of the family giving strategy. The positive outcome will allow the Family Office to enjoy, together with the family, the results of giving.
Involve Family Members as Experts
Family offices can facilitate charitable causes by identifying opportunities for philanthropic activities. In parallel with this, family members’ particular skills, expertise, and experience in financial management, legal services, marketing, and communications can be employed in order to support charitable causes. In public, family prestige is higher if supported by the family´s expert opinion.
Family Offices might use their connections and networks to help philanthropic organisations. For example, they could collaborate on projects with other charitable groups and contributors. Or they can use their influence to promote issues that are important to them.
Build a good public Image
The benefits of philanthropy are not limited to individuals. Corporations that support charitable giving receive a wealth of offerings, including building a better public image, creating more vital brand awareness, and attracting new partners and talent who may be attracted to a company that contributes to charities.
In addition, employees who work for companies that give back to society are happier and contribute more to their jobs. And, because corporations are created to make money, a strong philanthropic streak often boosts sales and new customers.
New Challenges for the Family Offices
The new wave of family-driven philanthropy could fund untested, possibly radical new approaches to problems. It could find innovative ways of harnessing capital for social impact. It could move away from chequebook charity to a more engaged approach, which could lean towards social enterprises or private-public initiatives.
“Family offices have the power to shake up traditional philanthropy as they tend to be more agile and responsive compared to large foundations or corporate foundations, which are answerable to multiple stakeholders and layers of decision-makers. Secondly, family businesses tend to be built by entrepreneurs and disruptors, making them more open to new ways of doing things,” notices Catherine Loh, CEO at the Community Foundation of Singapore.
