Philanthropy: beyond the act of giving (part two)

Our head of private offices, James Wilcox, leads on Philanthropy.  He is highly involved in our clients’ philanthropic endeavours and serves on the boards of a number of charities, he is also actively involved with his local church.  

In a recent discussion with industry peer's PKF, James shares his thoughts on this specialised topic.   Following part one of this three-part series, James delves further to explore best practice when setting up a structure to support a family's mission and touches upon how the next generation are responding.

Engaging the next generation

In my experience, parents in their fifties or sixties do talk to their children about their philanthropy, however the children are typically in their teens or early twenties, and it can often be at a point of their life where they have less interest in these sorts of things; there are of course exceptions. 

We have gone through some cataclysmic times following Brexit, COVID, Ukraine, global instability, and more recently conflicts in the Middle East. However young people’s focus remains as you would expect on their schooling, university, their jobs, and careers.

Climate change matters

I don’t think we can have a conversation about philanthropy without talking about climate change, it is such a key part of the next generation. Many of the next generation families – actually, I would say, all of them – have a family member that raises with us the issue of climate change, sustainability, and impact. There are usually one or more members of the family who are really, really committed and driven by it, much more than in my generation.

We also work with a charity called AmazoniAlerta, which started out as an app to support the indigenous peoples and tribes of the Amazon in Brazil to report illegal logging and illegal activities but has now morphed into a small group of forest rangers, who provide support to the indigenous communities and locals, to stop the illegal activities. 

While this links to climate change, it also looks at what can we do to support fundamental human rights. Through a well-known, leading hedge fund - who kindly supported an event recently and made a very generous donation - we’re going to educate young indigenous people through a Brazilian university so they can become human rights lawyers to protect their own heritage, the Amazon.

A framework to support the vision

I think everyone is very careful about their philanthropic giving which is why I always come back to the importance of having the right structure and framework in place at the beginning. If you have a registered English charity, a Scottish charity, or a Swiss Foundation, then a bit like in your business life, you’re protecting your legacy and brand with a framework that can then deliver the mission and the values.

Families should consider getting involved with philanthropy that supports existing business. It sometimes comes down to the sector in which the family made their money, whether it’s industrial, real estate, or manufacturing, and then look to support related areas. Each family is different in terms of what they want to achieve as a mission. We try to encourage them to limit their areas of activity because otherwise it’s too broad brush. There needs to be a focus. 

This is important because the trustees need to understand what they can spend each year and donate to specific charities. In some cases, the trustees only spend a proportion of the annual income generated from the endowment. So, they are not dissipating the capital, they are merely spending the income.

Read part three of this series