According to latest Stonehage Fleming Four Pillars of Capital research, 85% of wealthy families consider philanthropy a central part of their purpose and values, yet only 22% have a formal process for strategy and grant making. However, failing to employ a more structured approach to philanthropy is a missed opportunity for families, according to Priyanka Hindocha, Director in our UK Family Office division.
“From what we see, a family's philanthropic giving is much more effective when there is some structure to it and you can measure success,” she told guests at our 2023 Family Investment Conference held at our offices earlier this month.
The first step in putting together a structured approach to philanthropy, Priyanka added, is getting to the bottom of what the family wants to achieve, collectively. “When we first talk to families about philanthropy, we often start by asking about their purpose; what is their motivation here. After that, we can move on to devising a strategy to help them get there.”
Once the high level concepts have been discussed as to the family’s goals, she explained, the detail can be filled in. “With the main objectives in mind, we are then able to move on to the practical considerations of where to allocate the capital: which sector or sectors you want to support, who do you want to give to, how much to you want to give and how often. Only then, can my team and I start to put in place the structures to make that happen, which could be via a trust or foundation. .”
For Priyanka, measuring impact is a crucial element of any philanthropic strategy. “Critically, the plan should include a way of measuring success,” she said. “We ask our clients to think about and establish what success looks like for them. Then we can help with putting those KPIs in place.”