The passionate generosity of countless American families has inspired – and continues to inspire – extraordinary gifts. Indeed, we may know many of these families more by their philanthropy than by the business successes that made their largesse possible. What is most remarkable is the very phenomenon of American family philanthropy itself. An astonishing number of families make record-setting, private contributions and volunteer countless hours on behalf of the causes and communities they care deeply about. Many have done so over multiple generations. They have enriched the lives of millions not only in this country but around the world.
Yet, precious little is known about the value private family philanthropy represents in our society and the essential role it plays in our democracy. It would be easy to dismiss this as just one more thing that the media or Congress doesn’t understand. But the fact is that the contributions and potential of family philanthropy are not well understood even by many of those engaged in the practice or by the millions and millions of Americans who benefit from charitable gifts.
There are obvious consequences to this lack of awareness. In the absence of understanding, many question the value, even the legitimacy, of family control of philanthropic wealth. They ask whether public policy should encourage private giving. While these consequences deserve attention and action, a little-noticed but potentially tragic consequence may well be that many who might be inspired to give, don’t, and many worthy organizations that might be supported, are not.
Since 2007, the National Center for Family Philanthropy has held 15 regional and national discussions and conducted a major study to more clearly articulate the value of family philanthropy – both for families themselves, as well as for our nation’s philanthropic tradition. Our study did not overlook the many difficult and challenging questions inherent in family giving. Indeed, by articulating these challenges and identifying distinguishing assets, the study reveals a more nuanced, richer portrait of family philanthropy than ever before created.
What is family philanthropy?
Given the confusion sometimes associated with this seemingly simple question, let’s be clear about just what family philanthropy is. For purposes of the National Center’s work and our latest study, family philanthropy is less a matter of wealth than of a family’s choice to organize and focus some or all of its giving. Most family members who make that choice have been personally charitable for some time. They have been writing checks directly to nonprofit organizations and are often active volunteers. Over the course of these experiences, they develop personal charitable interests, values and hopes. Grounded in these same values and guided by those interests and hopes, they decide to establish a structure for their giving.
The qualities of an effective grantmaking family don’t necessarily differ from those that make any other trustee group highly functioning. But the way family members commit to the stewardship responsibilities of grantmaking and the way they may be perceived in the community are wholly different and add to the need for special preparation. This may include greater orientation to the family’s history of grantmaking, more open discussion of family goals, clear articulation of expectations, and sensitivity to the implications of family participation on the grantmaking process. Understanding that much is a good beginning, but it is also insufficient.
Participating in the value of family in philanthropy study were family foundations, donor advised funds, charitable gifts funds, family office givers, and those with a variety of other formal giving structures. Most if not all of the themes that emerged are relevant to philanthropic families regardless of vehicle. We asked participants what family participation adds to philanthropy and what participation in the family philanthropic process has meant to those who serve as donors, family members, trustees and advisors. The questions provoked extraordinarily moving conversations as many of those we engaged – most for the very first time – considered what inspired and sustains their own commitment and their pursuit of meaningful giving.
In this issue of Family Giving News we’re pleased to preview a section of the book including quotes, in italics, from family philanthropists interviewed for this study.
What Does Family Add to the Practice of Philanthropy?
The ‘family’ aspect of family philanthropy cannot be understood solely by looking at family dynamics. All of us can cite patterns of behavior in our own family that irritate or amuse, are predictable, yet confounding.
It is essential that families choosing to work together in any enterprise – business or philanthropy – learn to manage the dynamics inherent in the responsibilities and tasks at hand. But, focusing solely on negative dynamics obscures underlying inspirations for giving, the complexity of the experience, and the desire to sustain charitable commitment over time.
“I don’t know of any behavior that is more intertwined with people’s fundamental definition of themselves than family philanthropy because it is learned in the intimate relationships between parents and children and among family.”
The Power to Produce Wonders study uncovered a clear set of interconnected qualities of family philanthropy in action experienced and exhibited in various but nearly always provocative degrees. Some of these qualities include:
Over dozens of interviews and symposia, only one distinguishing quality of family giving was raised in all: the passion of a donor and philanthropic family for the work they are doing.
“I don’t do this – and I’m not sure I could – for a salary. And, while I respect my family responsibilities, I couldn’t give it all I do for duty alone. Our priorities are part of our family history – my philanthropic inheritance – but I, personally, am passionate about the issues we’re working on. And I know my family members are too. It’s very much a personal stake in something’s success. I don’t know I feel about anything else quite the same way.”
Family philanthropy is inextricably rooted in the family experience and those roots – geographical and experiential – drive giving interests and style. Roots can be ancestral, dependant on the telling and retelling of family stories. Many families grew their wealth over generations and, no matter how far their business interests extended, often remained based in the same hometown. Hometown was both the family’s sense of place and commitment.
“I really admire those family philanthropies that have a sense of place – a commitment to a place. That is very empowering especially to low income organizations that are place based. Where there is a really strong family foundation that works with humility and as a partner, community development organizations do so much better.”
Commitment and Continuity
The ongoing participation of family generally means the ongoing commitment to specific causes and organizations. Donors speak of the loyalty they feel toward long-supported organizations. They report a willingness to stick with grantees over a longer period of time – even when times are tough – than other grantmakers might consider doing.
“We stick with certain principles for a lot longer. You understand the stories – written or oral – that talk about the genesis of the work you are engaged in. These stories are very powerful and make you committed to what you are doing. You may tweak it and make it relevant for today — to better relate to the world of nonprofits. But, when you have a heartfelt connection to why you are doing something, you connect to the work more intimately.”
The Power of the Name (and the Utility of Power)
Modesty may make some families reticent, but others point to the potential for good in the family name and reputation. Many families have learned to take explicit advantage of what can be a useful grantmaking tool. The family name can garner respect, or at least attention. It can act as an imprimatur of sorts, particularly when the family encourages grantees to let others know they fund them.
“The instinct to be modest is a mistake. Modesty and anonymity are not synonymous. The name can add to the impact of the giving.
When a family is engaged, particularly when the family is identified with that work, there is a great deal of interest in doing that work well. It is seen as part of the family’s reputation.”
Responsiveness and Flexibility
The freedom philanthropic families often demonstrate – to act quickly when needed, to act on convictions and to act on new knowledge – can be one of its greatest strengths and gifts. But, several members of philanthropic families also expressed a due regard for stability as a counter-balancing consideration. Flexibility, unchecked, can have devastating consequences on the mission and focus of the giving.
“Family foundations – particularly if they are working close to home – should have a good understanding of what the needs are and be practical about how to approach them. Seize opportunities, break the rules; follow your heart and intuition and know when to be focused within a plan and strategy. Therein comes the wisdom; when to do one or the other.”
An Entrepreneurial Spirit
The entrepreneurial spirit that led to the creation of wealth can also drive the donor’s philanthropy and, occasionally, the grantmaking of subsequent generations. Those who made fortunes in the late twentieth century are proof of that possibility. As some went on to become donors, they enthusiastically endorsed a grantmaking agenda that included investing in ideas and people, a willingness to fund back office activities, risk taking, and clear expectations regarding the evaluation of progress and impact.
“The challenge of family philanthropy is to find the “sweet spot” that honors the legacy of grantmaking and the innovation of the founder and yet finds a focus that works for making a difference today. It is harder and harder to do as generations go by.”
The Team Approach
Families come to their giving with an understanding of how the family works well together – and when it doesn’t. They know the role each plays in the family system, the interests and strengths of each member and, when group decision making is called for, what it takes to reach a decision. They have been brokering those roles for years.
“There is a misperception that family boards think and act in unison; that they have the same politics, religions, interests, and perspectives. That has never been my experience… You get what you get with our family and you learn to accommodate, agitate, all the while working toward consensus and, ultimately, a functioning team.”
For philanthropic families, the values that inspired the charitable impulse and the subsequent decisions to organize their giving also tend to guide the grantmaking and management decisions. These stated and, from time to time, reaffirmed family values tend to guide, sustain and energize the philanthropic tradition.
“The notion that there is a binding element of values, responsibilities, and character inside an organization is refreshing… you can have a genuine sense of community that comes from the family’s relationships and values. That is something most of us hunger for, and we hunger for it in places other than our homes.”
Legacy and Renewal
The choice to involve one’s family in philanthropy is grounded in legacy. It affirms the continuity of family, of seeing yourself as part of a continuum. It may begin with an intention to honor ones parents and grandparents – a desire that continues to inspire future generations.
“Legacy is a powerful tool that plays out in family giving. Where Mom and Dad have been driving the philanthropic activities, they look to their children when it comes to how that legacy will be continued. In the end, we all want to believe that our lives have mattered, and we will leave behind a footprint. And why not leave our legacy in the hands of those who knew and loved us the most – our family?”
Inspiration and Models
Family philanthropy’s value extends far beyond the organizations funded. Its power to inspire and encourage others is incalculable. So too is the power to inspire other families to give.
“There is something meaningful to the recipient communities that this is a family philanthropy – something very resonant with the people who receive the benefits of the philanthropy. It is like a family’s loving arms embracing a larger group of people. You can’t underestimate the love part of the family philanthropy. It’s the best part.”