The Changing Face of Philanthropy in Family Firms

Paul Hawkins of the University of Portland, recently said the following:

“When asked if I am pessimistic or optimistic about the future, my answer is always the same: If you look at the science about what is happening on earth and aren’t pessimistic, you don’t understand data. But if you meet the people who are working to restore the earth and the lives of the poor, and you aren’t optimistic, you haven’t got a pulse”.

In providing support for the communities in which they provide employment, manage supply chains and enjoy a customer base, family firms have demonstrated an extraordinary willingness to give back. Much of this is connected to their values which include the need to support the wider “societies” in which they operate.

However, increasingly, giving monies is insufficient for family firms. They want to get involved in the causes they support in a hands-on way. Some are beginning to treat their philanthropic support and donations as they would any other investment. Family firms are beginning to measure their ROI in emotional, spiritual, political, commercial and social terms.

A group in the UK called “Achieving Impact”, run by James Plunket, works with families to align their values to the political, social and environmental needs of those to whom they give. Families treat their investment in land/machinery/people in the same way they treat their investment into charities. They work to build KPIs that help them to measure the impact they are having. Performance measurement becomes a key element in the philanthropic endeavours of family firms. Some families ask:

  • are we collaborating with other providers (social and political) for the greater good?
  • to what extent are we proactive in our giving vs. reactive?
  • do we combine with institutional investors who are ethical?

 Are we seeing this trend elsewhere in the world?

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