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Family businesses up involvement in foundations

Family businesses are playing a greater role in family foundations, but more needs to be done to ensure family non-profits can become “fundamental and widespread” against a backdrop of increasing economic uncertainty, according to a report.

Family businesses are playing a greater role in family foundations, but more needs to be done to ensure family non-profits can become “fundamental and widespread” against a backdrop of increasing economic uncertainty, according to a report.

Cathy Pharaoh, co-author of the Family Foundation Giving Trends 2011 study, told CampdenFB that many British entrepreneurs and family business owners, such as James Dyson and Foyles, are supporting causes in the sectors they operate in – with the interests of family foundation often linked to the family’s business passions.

“This often goes beyond a narrow interest in promoting their current products, to a more general concern with building the fields of activity and development in which they have worked and where they see potential,” she said.

As well as inspiring innovation, family businesses often play a big role in funding British foundations, added Pharaoh.

“Family businesses have played a very large role in creating the wealth given to foundations as endowments, often topped up by major legacies when the original founder dies, and today often provide annual grant funding, as in the Pears Foundation for their foundation's activities,” she said.

For this reason, the sale of the family’s company can have a large impact on a foundation, added Pharaoh.

The study, produced by Pears Foundation and the ESRC Research Centre for Charitable Giving and Philanthropy at Cass Business School, found that family foundations in the UK have contributed £6.4 billion (€7.4 billion) to charitable causes in the past five years, increasing 27% over the period. At the same time, corporate giving grew just 7% and general public giving was down 0.4%.

The largest 100 British family foundations gave £1.3 billion to charitable causes in 2009/10, according to the research.

Pharaoh said charities, professional advisers and policymakers need to focus on supporting potential philanthropists and encouraging them to “share experiences and learning to ensure the bridge is crossed and more foundations are established”. 

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