According to Forbes magazine, we are currently living in an era commonly referred to as the "Golden Age of Philanthropy."
The number of family foundations ─ those who use individual family wealth to finance the initiatives of various philanthropic enterprises ─ has exploded in the last decade. According to the Foundation Center in Washington, DC, 3,200 family foundations distributed $6.8 billion in 2001; there are now more than 40,000 family foundations, which annually give more than $21 billion to grantees.
The United States sits at the forefront of this trend, followed by the United Kingdom with between 5,000 and 10,000 family foundations. European foundations are also well represented by families in Italy, Germany and France (France features just 300 family foundations, but the country's largest ones collectively distribute more than €10 million each year). And, in the last few years, we have seen the emergence of significant philanthropic initiatives led by powerful families in Asia, Latin America and Africa.
The reasons that often prompt families to start private foundations typically trace back to impactful family milestones, such as honoring a recently deceased matriarch or patriarch, a major career move or the inheritance of a fortune. What sets family foundations apart from their corporate counterparts is the freedom they have to implement their personal missions with limited restrictions.
For this "Golden Age" to continue, though, it is essential the individuals who are due to inherit a collective family wealth of many trillions of dollars over the next 50 years learn to become active participants in their families' philanthropy endeavors. They must learn ─ at a very early age ─ the foundation's mission and goals, as well as the values of sharing wealth with grantees.
Older generations should mentor younger generations in order to develop a full understanding of every aspect of their family's generosity. This prepares the younger members of the family for the responsibility that accompanies great wealth and allows for greater flexibility within the realm of the philanthropic initiatives the family may be eager to pursue. Moreover, active engagement can compel younger generations to put their privilege into context and to view it as a resource to help make the world a better place.
Exemplary models of family philanthropy include:
•Warren Buffett, who along with Bill and Melinda Gates, started The Giving Pledge to encourage other wealthy individual and families to commit to giving most of their wealth to philanthropic efforts. His sister, Doris founded the Sunshine Lady Foundation, which has awarded more than $100 million to grantees since 1996;
•Wallis Annenberg, who since assuming the leadership of her father, Walter's, foundation in 2009, has given away more than a billion dollars to more than 500 organizations through the Annenberg Foundation; and
•The Lauder family, who has followed the example initiated by matriarch, cosmetics queen, Estée. Son Leonard, an avid art collector, recently bequeathed his collection of modern art - at an estimated worth of $1 billion - to New York's Metropolitan Museum of Art. Granddaughter Aerin, a New York businesswoman, gives generously to various education and social causes.
Some of the more prominent European philanthropic foundations that use their recognizable names for the greater good include:
•The Rothschild Foundation, which maximizes the family's philanthropic reach and impact by supporting artistic and cultural institutions across the U.K.;
•The Pirzio-Biroli Family of Belgium, who have financed ventures ranging from start-up technology companies to the infrastructure of developing countries; and
•France's Mérieux Family Foundation, which is dedicated to eradicating infectious diseases across the globe.
Some skeptics may argue that family foundations and family philanthropy as a whole benefit only the families themselves (considering the tax advantages) and that they don't contribute to large scale social impact and innovation. In response to such criticism, some philanthropic families have banded together with the goal of increasing the impact of their activities, allowing them to become more effective social investors by offering opportunities for learning and collaboration.
Perhaps the best example of this new collaboration is The Global Philanthropists Circle (GPC), founded by Peggy Dulany and her father, David Rockefeller. A network of leading philanthropic families from across the globe, GPC is committed to using members' time, influence and resources to fight global poverty and social injustice. The GPC consists of more than 85 families, including about 250 individual philanthropists from more than 25 countries.
But no matter the country or continent, one thing remains constant: Truly committed family philanthropists can help to change the world, and it is critical for all generations to uphold the legacy of their ancestors while remaining open to the ideas and practices of younger generations.
elpis is a consulting company focused on helping philanthropists, donors, and foundations develop and implement sustainable, efficient programs that build capacity, and bring together like-minded entities to solve social and economic problems. Primarily focused on issues in Greece, Southern Europe, the Balkans and the Middle East, elpis works with leading organizations around the world.