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Family philanthropy: How do you compare?

Last month, Families in Business conducted an online reader survey to uncover the biggest challenges that philanthropists are currently facing. Read through the results to see what we uncovered. Click here to read the main article.

Campden Research is now embarking on a global study on family attitudes to philanthropy. This ground-breaking study will help families better understand their giving practices. To help us with this vital research, click here.

Profile of a family philanthropist
The average philanthropist surveyed has been involved in personal philanthropy for more than 10 years. Their giving is more often than not a mixture of local, national and international causes. The biggest challenges they face are selecting projects and charities and measuring the impact of their giving.

Where does the family's philanthropy predominantly take place:
The family business/corporate                                  28.6%
Personal/family philanthropy (eg, foundation)        71.4%

How long have family members been involved in philanthropy?
Just starting out                   14.7%
1-2 years                              14.7%
3-5 years                              11.8%
6-10 years                            20.6%
10+ years                             38.2%

Where is the philanthropy focused?

Locally                           29.4%
Nationally                      26.5%
Internationally                 8.8%
Mixture of the above    35.3%

Which of the following do families find is the biggest challenge to giving?
Selecting projects and charities                                                                30.3%
Measuring impact                                                                                        30.3%
Creating a lasting legacy and involving the next generation              27.3%
Identifying relevant advisors                                                                      12.1%

Project Selection
Respondents categorised their approach to project selection as strategic and feel a project that meets specified philanthropic objectives is vitally important. A lack of communication between the donor and the recipient is the principal reason for a project to fail.

How do families describe their approach to project selection?
Strategic (selecting a project that fits into a wider philanthropic objective)     42.9%
Specific (selecting a specific charity)                                                                      17.9%
Portfolio (selecting a range charities that are given to on a regular basis)        7.1%
Combination of approaches                                                                                     32.1%

Some more insights:    

"We moved from selecting project and charities on an annual basis to more sustainable relations with specific charities, each focused on one country/region."  

"Based on our documented strategic mission statement, we give through other agencies for global initiatives and give directly to local initiatives, but always in areas where others are reluctant to explore."

Which of the following is most important when selecting a project?
It meets our philanthropic objectives                                                               64.3%
Good communication between donor and recipient before funding        21.4%
Availability of feedback on how the money is being used                         14.3%
A defined exit-point from the project                                                                0.0%

Some more insights:    

"We have set up specific guidelines for selecting projects, and regularly review them over time."     

"It's never just one of these factors. Most likely to be the top three."     

"We grant to passionate people who will collaborate and effect community change; it often helps to have an exit strategy but it is not always strictly followed."

What causes families to withdraw support from specific projects?
A lack of communication between donor and recipient        46.2%   
It doesn't deliver on its objectives                                             38.5%   
Defined exit-point arrives                                                           11.5%   
It fails                                                                                               3.8%   

Some more insight:    

"Non-delivery of metrics that had been agreed. Any type of mismanagement."     

Every respondent felt feedback was either "very important" or "important", yet a majority do not set benchmarks for feedback they receive. Exactly half prefer face-to-face dialogue.

How important is receiving feedback about projects?
Very important        78.6%   
Important                 21.4%   
Unimportant             0.0%   

What type of benchmarks do families set for feedback?
Don't set benchmarks                         34.6%   
Draw on past experience                   30.8%   
Similar to the ones in the business    23.1%   
Benchmarks set by other people        11.5%   

Some more insights:    

"I feel each opportunity has its own set of criteria and should be treated as a distinct example."     

"I think of benchmarks as expectations being met or outcomes achieved and these can be tight or loose, as appropriate."

"We set different benchmarks for different projects."

Best way to receive feedback:
Face-to-face dialogue with charity/project        50.0%
Reports tailored specifically to the family          34.6%
General/annual reports                                        15.4%

Some more insights:    

"Tailored reports require extra attention and thus cost, so in some cases annual/general report are enough for us.     

"In different situations, all of the above. It depends greatly on the charity, the amount of the grant and depth of the relationship."

"Face-to-face and personal reports, but nothing overwhelming that smacks of compliance rather than collaborating."     

Advisors and advice
A clear majority do not actively seek advice regarding their philanthropic endeavours, but of those that do, independent philanthropy advisors/institutions are regarded as being the most worthy.

Seeks advice to help with philanthropy?
Yes        40.7%
No         59.3%

Who are the most worthy advisors?
Independent philanthropy advisors/institutions      59.1%   
Family office executive                                                18.2%   
Peer                                                                                 18.2%   
Family member                                                               4.5%
Some more insights:   

"A mix of family members, newspapers, websites, (business) partners and seminars."     

"A combination of our family business advisor and independent philanthropy advisors."

"People knowledgeable in field of philanthropy we are given to donate to."     

"Our board of directors, corporates doing CSR etc."

Advice for other people engaging in philanthropy:

"Just get started and be willing to make a few mistakes along the way. I find it is not too different to starting a new business - find a niche and serve it to the best of your ability. Discover your mistakes and regroup."

"Join a network of advisors. Ad hoc giving is wasteful."     

"Take your time to learn, take your time to involve others family members. Develop your own objectives and guidelines and stick to them."     

"Define your principles, find projects/charities that fit, and give more to fewer places so that you can have greater impact."     

"It is very hard work and a very rewarding experience. It's about prevention not intervention. It's more than writing cheques It's about staying abreast of developments in our programme areas. Philanthropy requires professionalism whereas charity does not."     

"Set goals and limits and then follow your heart."

"Make sure you know what you are giving to and that every dollar is being spent wisely. Know what you goals are."     

"You need compassion, dedication, deligence."

"Set clear objectives and directions. Get regular feedback."     

"This is a debt which we repay to the society. Any such activity must impact the under-privileged and improve their living. Make a difference not a buck."     

"Be specific and precise on the objective and results."

Campden Research global philanthropy study
Campden Research is currently undertaking a comprehensive, cross-continental research project to analyse the opinions and attitudes of wealthy global families towards philanthropy.

It is the first study of its kind to involve participants from Europe, the Americas, the Middle East and Asia.

In association with Archimede, a Changing Our World company, the survey will explore the attitudes that drive the decisions and management of charitable giving within affluent families.

Click here to participate in the survey. 

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