The COVID-19 pandemic has highlighted more than ever, the importance of philanthropy as an effective vehicle for addressing pertinent global issues. Here, Executive Director, Richard Joynt identifies key trends driving change within the sector.
When setting out to create a successful philanthropic outcome, a desire to help or "give back" to a community is rarely enough.
Rather, families and their advisers should fully engage and form an in-depth understanding of the context and specifics of the projects they have chosen. They should then run the project with the same rigour that they would apply as if it were a family business, and be prepared to make difficult decisions if the project starts to drift away from its original mission. Now, confronted with a truly global pandemic, philanthropy is entering a new phase of modernisation and growth.
The changing demographic of philanthropists
Undoubtedly, the last 10 years have seen a change in the way that wealthy individuals see their role in the world, and philanthropy is a big part of that change. There has been a large shift towards ESG investing, which is a strong indicator that wealth goes hand in hand with behaving responsibly and progressively.
In our family office business, we see wealthy families setting aside large amounts of money which are devoted to improving the lives of those in need. From improving public health in developing countries, to providing urgent funding for care and research for those affected by COVID-19, wealthy families are seeing a need and responding accordingly. However, it is my experience that American clients are still giving more than European clients, and that there is almost a reverse correlation between age and level of giving - the younger the patriarch is, the more likely that philanthropy will be hard-wired into the ethos of the family.
There are of course exceptions to every rule, and the responsiveness from European clients to the COVID-19 call to action has been remarkable. This may represent a shift in European mindsets as a result of this unprecedented crisis.
The role of technology in driving, scaling and tracking philanthropy
I believe technology is the main reason that the lines between "investment" and "philanthropy" have become blurred (in a helpful way). Philanthropists now see that if they can embrace new ways of resolving issues for groups of disadvantaged people via technological solutions, the technology itself can become both a driver of change, and something to invest in. Any such investment can produce future efficiencies and reduce the need for injections of future cash - in this way such an investment actually frees up the philanthropist from having to write cheques in future! It's a win-win all round.
Accommodating changing philanthropic priorities between generations
The families that we see doing this the best are those who involve their children in the decision making from an early age. On the one hand it is about building philanthropic aims as being part of the family ethos, but it is also about taking the first step in involving younger members of the family in financial decision making. This way they can see it has a real impact and can therefore get excited about it. However, it is also really helpful in "setting the tone" about how communication within the family works, and how family governance is respected and upheld. Those families who operate a true roundtable decision making mentality in family philanthropy are typically those who raise financially "fit" heirs.
Purpose driven pursuits
The vision for long term change amongst some of our family office clients is remarkable. They see that there are aspects of the world that need real change and they look for innovative, long-lasting solutions to those problems, delivered via cutting edge technology.
Supporting your ambitions
From occasional targeted distributions from wider structures to bespoke and focused philanthropic missions, we have extensive experience across a range of causes and approaches to philanthropy. We understand social investment and cross-border giving, and know how to ensure you as the benefactor get the most from your gifts.
Originally published 12 August, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
