“To whom much is given, much is expected.”

- Luke 12:48

Establishing a Timeless, Purpose-Driven Legacy

Creating a legacy that resonates with family values and strengthens familial bonds is a core goal for many family offices. The synergy between philanthropy and family offices has deep historical roots, exemplified by the world's first family office: the Rockefeller Family Office. This pioneering institution set a precedent with its numerous charitable foundations and initiatives, leaving a significant mark on society. This trend persists among many historic families around the globe.

In the past two decades, new wealth has surged, particularly from developing markets in Asia. Many Asian families are now navigating transitions to second or third-generation leadership, demonstrating increasing sophistication not only in wealth creation but also in nurturing family values, identity, and purpose.

For contemporary family offices, philanthropy has evolved from an afterthought to a cornerstone of their mission. Integrating philanthropy into their operations enables wealthy families to leverage corporate governance structures and manage resources to achieve meaningful social impact, thus establishing a lasting legacy.

Mission and Strategy

Understanding the motivation behind charitable giving is essential in the philanthropy journey. Family offices need to define a philanthropic mission that aligns with the family’s beliefs, objectives, and resources. This often requires cross-generational discussions to incorporate the values and goals of every family member.

Once the family’s values and objectives are clear, it's essential to identify specific target areas and issues. While broad goals like eliminating global poverty can seem overwhelming, focused initiatives, such as supporting a local child nutrition program, can yield measurable impacts.

Considering Legacy

When planning philanthropic efforts, considering the legacy the family wishes to leave is vital. Philanthropy can play a significant role in succession planning, offering an excellent opportunity for the next generation to learn about shared values and the responsibility of managing the family’s wealth. While not a solution for all family challenges, philanthropic activities can foster cohesion and unity within the family.

A well-structured family foundation can engage family members working outside the family business, allowing them to embrace common values and work towards shared goals.

The 5 Ts of Philanthropy

While financial contributions are invaluable, wealthy families can give back in numerous ways. The 5 Ts of philanthropy provide a comprehensive approach to managing philanthropic activities effectively:

  • Family members can volunteer their time and expertise to support charitable causes. Family offices can identify volunteering opportunities and provide resources and support for those who wish to get involved.

  • Contributing unique skills and knowledge can sometimes have a greater impact than financial donations. Family offices can leverage family members’ expertise in areas like financial management, legal services, or marketing to support philanthropic causes.

  • This refers to the financial resources donated to support charitable causes, including one-time or recurring donations. Family offices can facilitate giving to organisations that align with their values and engage in planned giving through wills, trusts, or other estate-planning vehicles.

  • Family offices can use their connections and networks to assist philanthropic organisations by collaborating on projects or promoting important issues.

  • Honouring the experiences of those facing hardships and sharing their stories can raise awareness and inspire action. For example, a family member’s battle with mental illness or substance abuse can be a powerful foundation for a family office’s philanthropic endeavours.

Strategic Tools for Modern Philanthropy

Family offices have various options for leveraging modern tools and technologies to enhance their philanthropic impact. Here are some of the latest trends and strategic approaches:

AI: The Family Office’s New Ally

AI can automate administrative tasks such as legal document analysis and expense management, saving time and reducing errors. This enhances efficiency and cost-effectiveness, allowing family offices to allocate more resources to strategic initiatives. AI also provides data-driven insights and identifies hidden patterns, enabling more informed and nuanced decision-making, leading to better outcomes.

DAFs: Empowering Impact

Donor-advised funds (DAFs) have become a popular vehicle in modern philanthropy. They offer benefits such as customisable gift structures (e.g., loans vs. grants), asset flexibility, tax advantages, and opportunities for strategic societal and environmental impact. Tailored approaches for utilising DAFs include:

  • DAFs can invest in socially responsible enterprises or projects using impact investing platforms. Philanthropists can also use data analytics to track the effectiveness of their contributions.

  • Collaborating with other philanthropic organisations, NGOs, government agencies, and corporate partners can amplify the impact of DAFs. Pooling resources and expertise helps address complex social issues more effectively.

  • DAFs can fund research and policy advocacy to raise awareness and drive systemic change on important social issues. Supporting initiatives focused on promoting diversity, equity, and inclusion within funded organisations is also beneficial.

By leveraging DAFs, family offices can maximise their impact and contribute to positive social change in a meaningful and sustainable way.

Vehicles for Philanthropy

Family offices have several vehicles to choose from based on their philanthropic goals, desired level of control over a charity, and tax implications in different jurisdictions. These vehicles include:

  • Ideal for family offices seeking high control over their charitable giving, private foundations are typically non-profit entities funded by the family business. The family retains control over the foundation and can make grants to charities.

  • These are tax-efficient and transferable to family members. Family offices can invest assets and generate income for charitable purposes through charitable trusts.

  • This involves making charitable donations directly to non-profit organisations. It offers flexibility and can be particularly effective for family offices wanting to support specific causes.

Reach Out to Enhance Your Family's Philanthropic Activities

If you have or are planning to set up a family office and are looking to enhance your family's philanthropic endeavours, we can assist. Through specialised research, convenings, advisory services, and educational resources, we help family offices stay informed about the latest trends and best practices in philanthropy and develop effective strategies to achieve their philanthropic goals.

Note: Our advice is general and tailored based on Singapore, Australia and certain European/US jurisdictions, and may not be suitable for all regions. Please note that this information may be updated without notice as legislations may change over time.