Many families, in one way or another, are eager to pass down a legacy. It is human nature to want to make a mark on this world. As for philanthropists, they stamp their legacies on to an issue they care deeply about, and family philanthropy builds an entire tradition of giving, so legacies can live on .
Family foundations pass down an understanding that a family’s goals surpasses the needs of the individual member. Family philanthropy utilizes the power of legacy and network to create a long-lasting tradition of impact. Making your mark as a family philanthropist is saying, “I am here to help, and so is my family.” By activating donors in their foundation, family philanthropists are becoming more involved in the family practice of philanthropy.
Giving together creates spaces for collaboration and engaged focus on one giving mission and opens the door to multi-generational learning between older and younger members of the family.
The influence of family philanthropy should not be ignored. In 2014 -- the year with the most recent data available -- there were more than 42,000 family foundations in the U.S. Collectively, more than $25 billion was given away.
Additionally, being part of a family foundation opens up opportunities to strengthen bonds between family members: Passing on knowledge about impact giving to the next generation creates structures of support and instills traits such as generosity and kindness.
Family philanthropists are also in a unique position to cultivate the next leaders in philanthropy. There are a variety of ways family foundations are constantly deepening relationships, fostering leadership and making the sector stronger through:
Family philanthropy is evolving. As new ideas surface, new approaches are needed. In 2015, The National Center for Family Philanthropy, in partnership with the Urban Institute, published the first study of its kinds that focused on trends in family foundations. Several themes emerged: The next generation’s involvement in family philanthropy, how funding approaches are changing and the role of relationships.
While some trends from the 2015 study have remained constant, family philanthropy has evolved. According to the National Center for Family Philanthropy, family foundations in 2018 are looking for new models of success. Additionally, as natural disasters increase, family foundations are providing the necessary aid for long-term recovery in their communities. Finally, more family philanthropists are embracing public policy advocacy efforts, initially spurred by the 2017 tax reform.
But not everything is different: Foundations are still spending their endowments and choosing limited life span. This trend demonstrates that family philanthropists are following their core beliefs when it comes to their giving, and not just embarking on the traditional paths of family foundations as their predecessors have.
While there is a wide range of causes family foundations can direct their attention and dollars to, certain issue areas have been elevated in recent years.
Disaster Relief and Recovery
According to Foundation Center, in 2015 -- the most recent year with available data -- 34 percent of disaster giving was allocated to response and relief whereas resilience, risk reduction and mitigation accounted for just 17 percent of disaster assistance giving. The remaining dollars were set aside for preparedness, reconstruction and recovery and unspecified costs. In the same year, large family foundations -- Bill and Melinda Gates Foundation, Rockefeller Foundation and The Paul G. Allen Foundation -- ranked as the top three funders.[vc_progress_bar values="%5B%7B%22label%22%3A%22Response%20and%20Relief%22%2C%22value%22%3A%2234%22%2C%22color%22%3A%22green%22%7D%2C%7B%22label%22%3A%22Resilience%2C%20Risk%20and%20Mitigation%22%2C%22value%22%3A%2217%22%7D%5D" units="%"]But, it appears giving strategies are changing. 2017 was the most expensive year in history for natural disasters in the U.S. and sadly, an increase in natural disasters is likely to continue. Family philanthropists are at the forefront of charitable giving to address disaster recovery. Family foundations are focusing specifically on sustainable partnerships that are meant to go beyond the immediate needs after a natural disaster occurs.
The United States is the largest donor to global health initiatives, according to the Henry J. Kaiser Family Foundation. While global health funding increased from 2001 to 2010, it has remained stagnant in recent years, despite the push for more attention from funders and policy makers to address both infectious and noncommunicable diseases.
The Bill and Melinda Gates Foundation has brought some attention to global health funding, with a focus on polio eradication and family planning. Its Polo Eradication Fund has more than $600 million in commitments and is one of the world’s largest donor collaboratives.
Meanwhile, other family foundations have focused their attention on the leading cause of death around the world. Bloomberg Philanthropies, the Chan Zuckerberg Initiative, and the Gates Foundation launched a five-year program called Resolve in 2017 that centralizes around preventative care of heart attacks and strokes for individuals residing in low to middle income countries.
One foundation working to enhance education and highlighted by Exponent Philanthropy is the Potts Family Foundation. It believes in strengthening the future workforce of Oklahoma by investing in early literacy programs such as OK25by25, a coalition of 60 organization members involved in early childhood programs to strengthen tomorrow’s youth. The foundation catalyzes change by bringing together experts in the field and advancing particular legislation around best practices to deal with childhood trauma.
Michael Bloomberg, founder of Bloomberg Philanthropies, calls education a local, political and polarizing issue. To address the challenges, he believes investments need to be funneled into cities and states and there should be an emphasis on advocacy and campaign movement. Lastly, he believes ideologies about education should be kept out of investment strategies.
The foundation recently announced it will invest $375 million over five years in order to enhance the U.S education system and will strive to build comprehensive education policy reform focusing on strengthening the education system.
According to a report from the Center on Wealth and Philanthropy at Boston College, $59 trillion will be transferred to the next generation between 2007 and 2061, the largest wealth transfer in U.S. history. While 90 percent of family organizations say that family dynamics are not an issue, multigenerational collaboration can lead to certain challenges, such as ownership and control and differing interest areas. Here's a look at some of the other obstacles that family foundations might face:
Fundamental differences in core beliefs
Developing a decision-making structure is one solution; Stanford Social Innovation Review offers these pointers for resolution.
Foundations also need to be concerned about transparency in their relationships with grantees which helps create fluidity between networks and can advance progress through trust-building in order to reach the same goals. Funders need to be thoroughly engaged with their grantees, not just operate as checkwriters, and recognize the collaborative partnership that can yield great results.
Lastly, family foundations should consider including outside perspectives to the board. Board diversity is a key component of stronger, more effective organizations and the success of many foundations relies on providing board opportunities beyond just the family, and including important experts or shareholders to help guide philanthropic activity. Building a junior board that is not isolated from everyone, but is made up of the younger generation of family philanthropists, can also help foundations thrive. 21/64 is a main resource that focuses specifically on multigenerational advising for family foundations and can help fill in gaps for family foundations struggling with coordinating an effective board.
These organizations, which are featured in articles on Giving Compass, are some of the major players who are influencing and supporting philanthropy.
There are a number of ways you can get involved with family philanthropy. Below you'll find suggestions on how to get started.
Family philanthropists alike want to make a difference, and they stepped into a legacy of giving, of resources, of time and charitable dollars. Maintaining this legacy is part of their promise to society, and they are working hard to build a better future for everyone, and build better philanthropists in the process.
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