Natural Philanthropists: philanthropy in family businesses

I’ve just written a report on philanthropy in family businesses, it’s called ‘Natural Philanthropists’ and is free to download here

The report is based on focus groups and interviews with family business owners, and it argues that the unique features of family businesses – especially the presence of family values in the workplace, commitment to long-term stewardship and the necessity to transmit values to the next generation – all help to support a strong philanthropic culture within family firms.

I’ll blog another time about the lessons for charities who want to get support from family businesses and the overall recommendations addressed to government, charities and the family business sector itself. But here are the key conclusions:

1. Family business owners are ‘natural philanthropists’.  The presence of family values in the business setting appears to encourage a more responsible or ethical approach to business and creates an environment that encourages philanthropy. In family businesses there’s no distinction between an owner’s ‘real self’ and their ‘work self’, so values don’t get “checked at the door”.

 2. Family businesses are largely local heroes. They often tend to have strong roots in local areas and want to be (and be seen to be) a good neighbour. They also have a strong desire to give back to the communities in which their staff, suppliers and customers live, in recognition of the role they played in generating their wealth.

 3. Informality is the rule but some degree of formality is the ideal. Philanthropic activity in family businesses tends to be informal and ad hoc, particularly in smaller organisations. But those family businesses that take a more strategic and systematic approach, without letting bureaucracy squeeze out family values, appear to make more effective and impactful contributions. 

 4. Philanthropy strengthens family businesses and strengthens business families. Not all family members want to play a day-to-day role in the running of the business, but do want to be involved in some way with the family firm. Grant-making and other types of community involvement creates opportunities for family members to engage with non-operational aspects of the business. It also raises morale within the company, helps to recruit and retain the best staff and meets the need of those employees who demand more from the workplace than the pursuit of profit.

 5. The following factors can increase the chance of family business philanthropy being an effective and enjoyable experience:

·      Being clear about family and business values
·      Identifying experienced leadership within the family and the company
·      Seeking external advice from philanthropic advisers and intermediaries
·      Setting up proportionate governance arrangements
·      Involving teenagers, retirees & those not involved in running the business

There’s a lot more information and in this report, so do have a look at the full version here 


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