Of course, the main aim of philanthropy - giving part of one’s wealth to a public-interest cause - is to help others. But philanthropy can also be a powerful educational tool and a wonderful way of promoting cohesion across generations.
A common interest
For several years now, we have seen more families deciding to get involved together. “Whether they’re making an annual contribution to a charity or structuring their initiative in a foundation or private fund, the wealth that they devote to this effort gives them a common interest,” says Etienne Eichenberger, co-founder of WISE - philanthropy advisors. Philanthropy can also complement a family business and give a tangible aspect to financial wealth and family values.
Promoting family cohesion
Whether it is structured or not, philanthropy promotes cohesion between family members who are from different generations, or who live far apart. It encourages them to meet regularly to discuss, cooperate and finally come to a consensus around a common project that may not exist otherwise. For families in business, setting up a foundation is also a way of creating a role for family members who do not have, or no longer have, an operational position.
A training ground
Philanthropy also offers a space in which young people can learn about responsibility and the value of money. “We don’t necessarily need a lot to work with families on these issues,” explains Philippe Depoorter, a member of the Management Committee and Head of Philanthropy Services at Banque de Luxembourg. “A budget of 5,000 to 10,000 EUR may be enough. Each young person must consider the best way to allocate this money and the impact it can achieve. Everyone must outline their own project and then they must come to an agreement. By teaching them to make decisions together and establish their own rules, philanthropy can be a way of preparing young people for family governance.