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February 2023 < Back

Family Philanthropy

The central purpose of a focused family philanthropic fund/initiative is to reinforce the family’s values– especially the value of giving back. Families try to establish or continue traditions that bring their members together through social causes and enhance the family’s legacy. Philanthropy can be viewed as a way to help younger family members become more financially strong, generous and kind. The rationale for family philanthropy tends to be deeply personal and is often shaped by a parent or grandparent (or mentor) and/or your own life experiences.

Incorporating discussions about philanthropy and giving it your family's daily life helps in raising young generation to value and appreciate the true spirit of "giving"

The younger family members see the family working together–and can learn from it. They get a chance to see that the family’s entire identity is much more than just the business. This grooms them to feel more comfortable about their decision on joining the business when the time comes. It enables the family to spend quality time together, share experiences, and develop family traditions.

Family philanthropy can be a part of the broader process of teaching children about money: from learning how to spend and save responsibly, to evaluating the financial health of non-profit grantees, and to managing an investment portfolio

Some Illustrations

A matriarch of a highly reputed family business regularly meets her children and grandchildren over dinner to share insights about her life, philanthropy, and business interests. She focuses on what’s going well, and what’s not working. Recently, she set aside a pool of money for her grandchildren to fund their own charitable interests. As a condition, they must collectively determine how they will use the money, (formally presenting their ideas to the matriarch), followed by regularly reporting back on results. Most importantly, the youngsters used this experience to guide their respective families’ philanthropy efforts—which also satisfied the matriarch’s aim: that her grandchildren should learn to put their money to good purpose.
One family directs its efforts toward entrepreneurship programs for young people in memory of their grandfather, the founder of the business.
Another family gives its funds to research on workplace safety because of the nature of its business.
Several families give their foundation funds for scholarships of employees’ children as a way to show appreciation to the people who have made their success possible. Such philanthropy not only makes a particular, focused difference, but can also create side benefits for the business itself.

The key factor is to consider directing family philanthropy towards the celebration of something special about the business’ founding, its customers, its industry, its employees, and its community.

The family foundation can serve as a glue for building harmony by bringing together family members who are not involved in the business, those who have retired from the business, and younger family members all at the same time reinforcing the family’s common purpose and values.

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Thank you for your interest in PFBI Connect. Each month you'll receive a concise rundown of tips, trends and analytics on topics that can leverage the best of both family and business.