Does giving back build on the family legacy?

Philanthropy - part of the DNA of family businesses

Blog
3 minute read
April 25, 2024

Family businesses have always been eager to give back to their communities and support a greater purpose. This was confirmed by the final finding in the Julius Baer and PwC Family Barometer 2023 report, as it was the fifth most discussed topic within family businesses.

Philanthropy not only allows family businesses to make a positive impact but also serves as a powerful tool for bringing generations together. By involving family members in charitable endeavors, businesses can foster a sense of shared purpose and reinforce the family's core values. A collaborative approach to philanthropy helps to strengthen family bonds and instill pride, responsibility and identification with their family values to ensure that the family legacy lives on. Aligning family values and family vision is key for the success and survival of the family and the business.

Philanthropy can be done through multiple different avenues. Some families focus on one specific area of giving back such as an education. Other families give on an ad-hoc basis as they are approached and asked by institutions and people. Others allow each family member to select a charity or institution they would like to support. While each family business may approach philanthropy differently, the act of giving itself is what truly matters. Regardless of the chosen approach, the goal remains the same: building a lasting, positive legacy and making an impact in their community.

Interestingly, philanthropy can also be a powerful agent of development change. We are living in a less predictable world – careful long-term planning and structuring is more important than ever, as is highlighted in the Family Barometer report. In order for philanthropy to achieve its desired purpose it needs to be done in a sustainable manner which is not only beneficial in the short term but creates long-lasting impact and aligns with the broader goals of sustainable development. The OECD’s Network of Foundations Working for Development (netFWD) identifies a fresh way for HNIs to think about it by partnering with Governments on the promise of sustainable development goals. The process of planning, sitting around the table and discussing the future of the family and the business is an ongoing journey – not a once-off exercise. Inviting the family members in to join in on the discussion can allow them to creatively contribute and enable the family to draft a long term plan of giving back and making a lasting impact – not only in the current generation of their communities, but also those generations yet to come.

These discussions can be demanding on families and their business. Looking ahead and facing the unknown risks is never an easy task for corporations or family businesses alike. However, the strength of a family business lies in the shared values and unwavering support of its members. By facing these challenges together, families can not only mitigate potential losses but also unlock significant opportunities for growth and positive change.

At PwC, we understand the unique dynamics and challenges faced by family businesses. If any of the findings from the Julius Baer and PwC Family Barometer 2023 report resonate with you, we encourage you to reach out to us. Our team of experts is ready to provide guidance and support as you build an enduring legacy for your family business.