Category Archives: Philanthropy

Learning from the Wealthy

Jennifer Pendergast
Jennifer Pendergast

History is full of examples of leading business families who have used their wealth to make the world a better place.  Witness the contributions of the Rockefellers, who have had a family foundation since 1913.  You will find this description on their website, “ In the years since John D. Rockefeller inaugurated the first global US foundation, scientists, scholars, economists, and grassroots leaders supported by the Foundation have spearheaded the search for solutions to some of the world’s most challenging problems. Through their efforts, plagues such as hookworm and malaria have been brought under control; food production for the hungry in many parts of the world has been increased; and minds, hearts, and spirits have been lifted by the work of Foundation-assisted filmmakers, artists, writers, dancers, and composers.”  Similar examples can be found in reading about the Ford Foundation, where a recent headline states, “Ford Foundation grants $6 million to 7 organizations to reshape the global human rights movement”.  Or, a more recent entrant, The Bill and Melinda Gates Foundation, where the Global Health Division, one of four focus areas, aims to harness advances in science and technology to save lives in developing countries.  Regardless of where you stand on issues these families have chosen to tackle, it’s hard to deny that they have set their sights high and aspire to make a meaningful difference in the world. 

While the scope of these endeavors may be out of reach for most of us, every family, regardless of its wealth, has an opportunity to make a difference.  And, business owning families are in a prime position to do so, given their visibility in their communities and relationships with other well-connected people.

At your next family gathering, be it at the dinner table, conference table, or large family meeting, ask yourselves the question “What can we do together as a family to make a difference?” Think about the unique assets your family has that it can bring to bear to address an unsolved problem.  Often, creative use of assets at your disposal, scrap materials, distribution networks, excess warehouse capacity, can have much greater impact than writing a check. Regardless of the financial resources at your disposal, your family can make a difference. And, in doing so, you will find yourselves in good company.


Good Luck!

David Ransburg

I enjoy finding nuggets of family business wisdom in unusual places. Recently, I found one such gem while watching a video of Michael Lewis (the author of popular books such as “The Big Short” and “Moneyball”) giving the commencement address at Princeton University this past June.  In particular, one comment he offered to the graduates stood out to me: “Above all, recognize that if you’ve had success, you’ve also had luck. And, with luck comes obligation.”

In my experience, successful family businesses embody Mr. Lewis’s words. They are very aware that their current success is built upon the foundation laid by their ancestors’ hard work and good fortune. Rather than believing their accident of birth entitles them to continued success, the best family business leaders see the obligation that comes with this legacy.  For example, strong and lasting family businesses are typically very involved in their communities, as Mr. Lewis encouraged this year’s Princeton graduates to be.

My only quibble with Mr. Lewis is that giving back – especially when viewed from the perspective of most family businesses – is not an obligation. It’s an honor.

Highlights of Mr. Lewis’s speech can be found here:


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?


Trends in Giving for Young Professionals

Stephanie Brun de Pontet
Stephanie Brun de Pontet

The ‘personal finance’ columnist at US News & World Report, Kimberly Palmer recently wrote a book titled: “Generation Earn: The Young Professional’s Guide to Spending, Investing, and Giving Back” (Ten Speed Press).  In this book she cites an impressive statistic from the Center for Philanthropy at Indiana University that on average, people under 40 donate about $1,200 a year.  While that is a healthy amount for the average person, ms. Palmer indicates that young adults are giving back differently.  In particular, she point out that a lot of young people today like to start their own charities.  This is in keeping with my recent post, that there is a trend towards wanting to be more hands-on and contribute time as well as money.   Families with strong entrepreneurial genes may enjoy the challenge that comes with setting up a charity for a cause in which a number of them share a passion.

If you are looking for something a little less labor-intensive, ms. Palmer also speaks about ‘Giving Circles’ that pool the funds of a group of friends who want to take the time to research charities and ensure their donations are being well used.  These are not too dissimilar to the investing clubs that were popular in the 1980s and 1990s (where people got together to research companies in which they wanted to invest in to make a profit).  This strikes me as a great model that families could emulate for next generation groups who are eager to give back in their communities, and also want to practice decision-making skills and learn how to differentiate between different uses of money (relevant when evaluating the merits of a for-profit or non-profit investment choice).  If your family is not ready to start their own circle, interested family members can find a giving circle ( is the website where these can be found) that already exists in their area, and join themselves to learn and hopefully bring the model back to the family for consideration.


Families in Business Embrace Philanthropy in Many Ways

Stephanie Brun de Pontet
Stephanie Brun de Pontet

There has been a lot of buzz in the press of late around the ‘Giving Pledge’ launched by Warren Buffett and Bill and Melinda Gates, as an effort to encourage billionaires around the world to donate the majority of their wealth to charity.  According to a recent article in Daily Finance (See full article at: over 40 well-known figures have signed up for this pledge, such as CNN founder Ted Turner, Ronald Perlman, designer Diane von Furstenberg, to name but a few.  Members are expected to make a public statement about their gift, explaining their decision.  Buffett describes the effort as follows:

“At its core, the Giving Pledge is about asking wealthy families to have important conversations about their wealth and how it will be used. We’re delighted that so many people are doing just that — and that so many have decided to not only take this pledge but also to commit to sums far greater than the 50% minimum level.”

While obviously the huge philanthropic commitment being pursued through this Giving Pledge is to be lauded, we know families that own businesses might not have the ability to make the commitment that is being encouraged on this platform, but remain among the most philanthropic and high-contributing members of society nonetheless.  The reality for a family that aspires to see its business vision carried into the next generation is that transitioning a capital-intensive business to the next generation while funding ‘Uncle Sam’s’ cut will tie up the resources of even the most generously-minded soul!

In an informal poll among our family business advisors I heard a number of comments around trends and approach to giving among our family business clients.  Chris Eckrich offered the following series of examples:

“The biggest trend I see with clients is getting actively involved in their giving.  Visiting Africa’s micro businesses, walking in fundraising walks to which they contribute, touring hospital wings that have been donated by the family, serving on boards for causes they feel strongly about, helping build buildings, and many site visits to recipients of grants are examples.

Those who seem to enjoy active involvement with today’s dollars…as opposed to future dollars at death, show great vibrancy in their foundations.”

Others mention the frequent family time devoted to service projects such as a building a ‘habitat for humanity’ home as a project undertaken by the ownership group.  These efforts of going beyond writing a check, and getting involved in person demonstrates a genuine connectedness that provides a strong example to the broad community, employees as well as to future generations of owners.

John Ward also underscores the importance of choosing to keep a family business private (rather than selling and creating cash that can then be given away).  Many closely-held businesses are run very ethically and provide value to their customers, and an excellent work opportunity for hundreds or even thousands of employees – staying the course in this case represents another important way of contributing to society.  These business-owning families are often deeply connected to their communities and also contribute tirelessly to local charities and community development (which is always enhanced by the presence of stable, well-paying jobs).

Finally, Jennifer Pendergast underscores the importance of a family having an intentional conversation about the purpose of their wealth.  Most families with whom we work have philanthropy and giving of funds as one of their shared purposes as a family – but many also choose to reinvest funds into new ventures, contributing to society through business innovations and employment. 

It would be great to share how different families have found meaningful ways to contribute – as community-minded families are eager to hear of new approaches to stimulate their own family’s thinking.  To quote John Ward: “different approaches for different people is the American way.”  Feel free to share your ideas or comments as we are always eager to learn about the many ways that families fulfill their ‘obligation’ to be generous and engaged members of the community.