Family Office -Philanthropy (2)
Family philanthropy is also capable of providing wealthy families with a mission of service to others. This mission often brings the family together and forces it to organize itself to do something larger and more transcendental than minding the financial wellbeing of its members. Much as in the Bill and Melinda Gates Foundation, family philanthropy often becomes the purpose that keeps bringing a family together, to work together. The Harris family, owners of the Display Company, ultimately decided to sell the family business. But they continued to meet as a family, in a family council, to do the work of the Harris Family Foundation.
This brings us to the way in which many enterprising families organize themselves to further their philanthropic objectives. Usually, philanthropy is an important subject in family council meetings. Here guidelines for giving, criteria for selecting gift recipients and policies for evaluating the effectiveness of the giving are developed. Gift decisions are then made. And the management of the work of the philanthropy is delegated either to a family member or to a foundation professional, depending on the size of the philanthropy and the complexity of its portfolio of charities. In many cases, families also launch a separate foundation board to oversee the work of the foundation and to reap the rewards of engaging, through the foundation, those family members who may be the least likely to be attracted to business matters.
Family philanthropy and family foundations, then, are part of the arsenal of governance mechanisms available to families in business, and to wealthy families in general. Not only do they help achieve important social goals that may be totally unrelated to the economic function of the family’s enterprise, but they also help nurture family unity by recognizing that non-economic goals also have a place at the family table. Family unity, after all, is good both for the family and for a family enterprise that thrives on patient family capital.
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