Developing a Philanthropic Strategy?

Most HNWI’s and UHNWI’s will have spent time, energy, and money in ensuring their investment strategy is the best as possible for them, their family and their business.  As their families grow, they may have either involved younger members or had them very clearly in mind whilst looking at succession planning for their business and their investment strategy will often reflect this.

Giving money away deserves the same level of thought as making and preserving funds.  Anyone who wants to solve a societal issue and wants to spend time and/or money doing so should be helped to make the same best choices which they made whilst making money.

Oddly however, philanthropy is often treated with much less vigour and concern and yet deserves much more thought and planning.

Advising about philanthropy is separate from advising about investment.  It should focus on the donor, his or her or their interests; what issues they want to address; where they want to address them and how they want to operate.  They need to decide whether their interests are solely theirs or can or should involve the entire family and whether they want their philanthropy to be personal to them or outlive them as a legacy.

A good philanthropy plan will include how the philanthropy will be delivered.  Should a charity be established or can existing charities fulfil the donors’ brief.  How much engagement does the donor want – a seat on a board, management, annual trips to view programmes, or just a copy of an annual report? Is the intent to make grants to worthwhile entities or does the philanthropist want a return on his funds through a social investment?  Rather than giving funds to recipients, would the philanthropist prefer to invest in social impact projects, social impact funds or other methods which give a helping hand rather than a handout.

Just as generations have different approaches to their wealth, age, who made the family money and how that generation was raised, so their view about philanthropy will change.  It is said that Millennials want to be more invested in their philanthropy and their philanthropy to be more investments rather than just giving.  But each person is different and each family similar only in their difference.

Crucial to most donors and sometimes impossible to provide is an assessment of the impact created by the donor’s philanthropy.  It is easier to count elephants saved than world visions altered.  It is straightforward to see how many kids have been taken off the street but more difficult to identify what happens to them in 5 years.  Yet it is valuable and worthwhile to attempt to determine the value of a philanthropic project, even if the impact is not always as easy to determine as a financial investment would be.

Finally, in the attempt to professionalise this field and deliver the best impact for philanthropy, we often forget the simple ‘thank you’ which is due to anyone who wants to do good, no matter how they do so.  Congratulations to each and every donor and philanthropist who wants to share their good fortune with the world.

This article is written by Nancy Bikson, Director and Founder at Chapel & York which is a philanthropy advisory based in the UK.  22/10/19