August 30th, 2012
Preparing for a series of international presentations, I recently updated [and de-Americanized] a number of my most popular case studies. To my mind, there is no doubt that the process of philanthropy decision-making is cross-cultural and generic, but the context for making those decisions is heavily influenced by local laws and regional culture. A challenge for those of us who work and speak internationally is to help our clients and audiences understand which is which.
But what struck me in taking this fresh look at these well-worn and proven cases was how frequently I used family examples to illustrate the points to be made. Why?
Of course, the most obvious answer is the numbers. Of the approx 80,000 private foundations in the USA, the overwhelming number are fully run and governed by family members. If one wishes to find the most generic examples, “family funders” is the place to start. Independent and corporate private foundations play a very important role, but are a small fraction of the total cohort.
It is hardly surprising that smaller to midsize family foundations would full reflect the name, personality, and priorities of the founding family. Yet, in recent months I have had occasion to teach and advise a number of very large and well-known foundations. These are foundations with large numbers of professional staff, most of whom have a highly specialized expertise. They were hired to bring a level of knowledge to the grantmaking process which the families didn’t have. Interestingly, in virtually every case, no matter the size, it didn’t take long for the name, personality, and priorities of the family funders to enter the discussion at these places as well.
All of this underscores the centrality of family philanthropy in setting the style, agenda, and landscape of the private philanthropy world. It doesn’t matter whether the vehicle is a checkbook, a donor advised fund, or a private foundation. Indeed, often there is simply a technical line between a family funder and a foundation which bears his/her name. In other cases, the family foundation may be professionally run, in a second, third, or fourth generation and have outside-non family trustees. Sometimes, family giving is sophisticated and strategic; other times, it is idiosyncratic and socially driven. In every case, it matters.
It matters because family philanthropy fosters a family’s expression of altruism and socially responsible behavior. It is often a way in which core values are transmitted from generation to generation. Writ large, it is the way in which society manifests its commitment to cultural values, compassion, and identity. And, because thoughtful philanthropy alerts a giver to the larger environment of social need, interest, and solutions, family philanthropy is a frequent influence on public policy.
Long time readers may recall that several years ago I was invited to conduct a workshop on inter-generational philanthropy for 100 leading philanthropists from around the world. No one from the USA [except me] was invited, and I was explicitly told to avoid American examples. the moderator of the day was a prominent philanthropist from South Africa. At the end of the day, in his concluding remarks, he expressed his surprise at the generic nature of the issues. “What this fellow [referring to me] talked about was exactly what is happening in my family!” I suspect he found it liberating to know that his was not unique.
Similarly, when I speak at conferences for family funders or work directly with family foundations, I try hard to help them see that, in most cases, what they may have perceived as unique family personality constructs, or inter-generational obstructions are more typically generic issues which most families face. [True, some do it better than others, and sometimes there really are challenging family issues – but in most cases, families are dealing with very representative issues.] Here too I have found that discovering this is liberating for most families: it de-personalizes differing opinions of style and priority, and can provide an openness to learn from each other and other families how matters which may seem stubbornly intractable can be resolved.
From a macro perspective, family philanthropists are the freest to take risks, to experiment, to think and act outside the box. Our field not only needs to honor and defend that kind of freedom, it requires it. This historic vision of the risk capital role of private philanthropy still applies. Today that manifests itself in funding innovation, start-ups, politically sensitive initiatives, as well as more traditional new projects of established organizations. Family funders may be willing to explore new kinds of philanthropic investments, program and socially responsible investments, hybrid funding models even while they are in their infancy. [Frankly, most of us know that not all of these ideas will succeed, but none of us really knows which ones might.]
Those of us who teach and advise funders have an important role in helping families learn how to do what they want to do better, more effectively, and in a more satisfying way. But we also have to be careful not to, en passant, straitjacket those very foundations and funders from testing limits and reaching beyond their grasp. All of us, in the families, in our field, and in our communities, all of us need to have a commitment to do no less. It matters.