Philanthropy: the right questions to ask yourself
Most aspiring philanthropists approach their project from a structural point of view, or by investigating its tax implications. Banque de Luxembourg takes a different approach: For us, philanthropy depends above all on the intentions, goals and the means that will be contributed to fulfil personal or family wishes.
A human venture rather than a legal matter
When our clients embark on a philanthropic project, the first question they ask us is usually, “Should I set up a foundation or a private fund?” We generally reply that we will start by helping them to ask themselves the right questions, as the right legal structure will be found anyway,” explains Philippe Depoorter, a member of the Management Committee and Head of Philanthropy Services at Banque de Luxembourg. We have also found that aspiring philanthropists often have no idea how they want to get involved, beyond a desire to do good. But philanthropy is a matter of choice. There are many causes to get behind and many ways to support them. To help clients to define their projects more fully, we enlisted the help of WISE - philanthropy advisors to establish a methodology for determining a donor’s profile.
The preparation phase is vital
The questions addressed in this phase are extremely diverse:
- Why give/get involved?
- What sector should I get involved in?
- Who should I support?
- What can I contribute, how much and when?
- Who else should I involve?
- What impact do I want to make and how can it be measured?
It is only when you fully understand the answers to these questions that we can develop a roadmap, which will then be used by the Bank’s experts or third-party advisers. “We realise that many people ignore this preparation phase. But it is vital and can take a long time; many adjustments are made in this phase to align the project with your wishes and those of your family. Let’s not forget that all philanthropists are actually dealing with two sensitive issues: giving up a portion of their wealth forever and confronting their own mortality,” says Philippe Depoorter.