by Lenka Setkova, Director of Philanthropy Services, Coutts Institute
- Family philanthropy can take many forms.
- Getting off on the right foot is key to ensuring that family philanthropy is effective and rewarding.
- Engaging the younger generation in philanthropy can bring real benefits.
In many countries around the world there is a long history of family philanthropy and its legacy is significant. In the UK alone, the total giving of the largest 100 UK family foundations was £1.33 billion in 2010/11
Giving as a family can be very rewarding. If done well it can bring the family closer together by instilling a sense of pride and belonging. It also provides people with the opportunity to do something enjoyable together as a family.
Family philanthropy can take many forms. It can be quite informal, with families meeting on an ad-hoc basis to discuss which organisations to support. The family foundation model provides a more formal structure for grantmaking and is often adopted by families whose philanthropy is significant in scale and longevity. A family business may choose to establish a corporate philanthropy programme, which in some cases may reflect not only the interests of the family but also other stakeholders such as staff. Some families establish endowments for their family foundation and others establish family funds, such as a donor advised fund within a specialist intermediary like a community foundation. In some cases families adopt more than one model.
Getting off on the right foot is key to ensuring that family philanthropy is effective and rewarding. Steps to take might include:
- Clearly articulating reasons for philanthropy and for working together as a family.
- Establishing clarity of expectations.
- Ensuring that people are invited to participate as appropriate, have freedom to enter and leave the process, and that they are able to draw upon their respective skills, experiences or interests.
- Understanding that giving together should be an enjoyable experience.
- Recognising that each family member will have individual interests, but that the overall goals of the family’s philanthropy should reflect shared values, interests and goals. Establishing discretionary funds for family members is one way of allowing each person to fulfil their own philanthropic interests while also participating in shared family goals.
- Assuming that all family members have something to learn.
- Clarifying how decisions will be made and how inevitable differences in opinion might be handled.
There is no right or wrong way to go about family philanthropy. Unique and very personal interests are reflected in the many different models and approaches that each family adopts. But key steps in the development of family philanthropy often include:
- Exploring what are the family’s shared values, passions and interests.
- Identifying shared goals or ambitions and a shared ‘dream’.
- Developing a philanthropy strategy.
- Establishing the mechanisms and processes for philanthropy, including grant guidelines, application processes etc.
- Sustaining the philanthropy for the longer term. This may include: engaging the next generation; recruiting professional staff or advisers; establishing an endowment; inviting non-family members to join the board etc.
Many families choose to engage the younger generation in their philanthropy from a very early age, and there can be real benefits from this. It can:
- Preserve the family legacy.
- Bring the family together around shared values, interests, passions or concerns.
- Give young people a focus, a sense of purpose and a wider understanding of the world around them.
- Provide a good training ground for young people (especially when they are able to join the board), helping to build skills associated with financial planning, governance, conflict management, decision-making and leadership.
- Provide an opportunity for the family to learn.
- Lead to better decision-making.
- Aid the intergenerational transfer of wealth.
Many Coutts Philanthropy Publications include case studies of family philanthropy. Examples include:
- Coutts Million Pound Donors Report (first produced in 2008).
- Inspiring Local Philanthropy
Publications can be downloaded at www.coutts.com/philanthropy
Other useful resources on Family Philanthropy include:
Family Philanthropy Giving Trends 2012 (UK): www.cgap.org.uk/uploads/reports/FFGT_2012.pdf
National Centre for Family Philanthropy (US):www.ncfp.org
Coutts provides customised solutions for clients' private banking and wealth management needs. Headquartered in London, Coutts is the wealth division of Royal Bank of Scotland Group, partnering with clients from over 40 offices in key financial centres across Europe, the Middle East and Asia. For further information visit www.coutts.com
Coutts was the first private bank in the UK to establish a specialist dedicated philanthropy team. Today the Coutts Institute focuses on the governance of wealth – helping family businesses succeed, helping clients fulfil ambitions for their philanthropy and providing advice on wealth succession. To learn more about the Coutts Institute and the Philanthropy Services go to www.coutts.com/private-banking/coutts-institute
About Lenka Setkova, Director, Philanthropy Services
Lenka joined Coutts in 2011, bringing over 15 years of experience working in the fields of philanthropy and international development.
Her career began in Central and Eastern Europe working with the Foreign and Commonwealth Office/Overseas Development Agency at the British Embassy in Prague. Lenka then joined the Charles Stewart Mott Foundation, a private American Foundation, where she was responsible for developing the grants portfolio in Romania and Bulgaria. Since relocating back to the UK, Lenka has worked as a Grants Officer with the Tudor Trust, as a Research Analyst at New Philanthropy and, prior to joining Coutts, as Director of the Carnegie UK Trust’s Democracy and Civil Society Programme.
Lenka holds a BA (Hons) in Contemporary East European Studies, an MBA and an MSc in Development Management.
 Family Foundations Giving Trends 2012