Five Challenges of Family Philanthropy

If you sometimes feel the joy of giving is eluding you, you are not alone. Over the past 20 years, we’ve had the opportunity to interact with hundreds of individuals couples and families in working with the issues that affect their philanthropy. While each individual and family’s situation is unique, we have found the following five challenges to be almost universal. Discuss it with your family and see what response you get.
TIME: The source of the most frustration for giving families is the lack of time to commit to the giving process. Good giving is work and takes a commitment of time and energy. Most donors have not given their philanthropy much thought and do not know what their focus needs to be. As well, because of this lack of direction and the time to create it many opt to simply give reactively to a wide assortment of ministries and organizations or succumb to pressure from friends, business relationships or family members.
FAMILY TAX: Everyone knows the family pays a price for business success and yet everyone is surprised by having to work through those issues before they can begin to give effectively. Oftentimes, the spouse and children feel they were not as important as the business and are not as excited about the new business (the foundation) as the donor. Many times the donor wants to run the family foundation as an autocrat with only one vote counting. When this is the case, the rest of the family bows out emotionally.
COMMUNICATION AND TRUST: Typically, the spouse and children do not know the full extent of the family wealth and are at a disadvantage initially in making decisions about giving. Moreover, there are always a number of unresolved family issues that keep complicating the giving until things are on the table and talked through. Finally, the donor assumptions about the children and grandchildren’s values are not always correct and it’s the shared values that make family foundations work.
LOOKING LIKE AN AMATEUR: Extraordinary competence created the wealth and nothing is as painful to competent people as looking like an amateur or making obvious (and visible) mistakes. Sometimes, making serious errors in judgment about people and organizations early on destroys their confidence and keeps them from persevering. One option many use is to find key foundations and learn the ropes from their giving strategies until they find their own way.
RELATIONSHIPS: Families want to be taken seriously by organizations and to be accepted as “players”. However, sometimes they are unaware or resentful of how long it takes to earn influence and respect based on something other than being a donor.
1. Fear of Exploitation
2. Fear of Personal Financial loss
3. Fear of the Next Generations Values
4. Fear of Family Fights
5. Fear of Failure

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