This week’s The Provocateur welcomes guest blogger and colleague, Dr. Sharilyn Hale of Watermark Philanthropic Counsel based in Toronto, Ontario. In this second post of our three part series on Family Giving, Sharilyn shares her expertise and experience gained from a 20+ year career as well as her recent research on multi-generational families and philanthropy.

INCREASE YOUR FAMILY PHILANTHROPY SAVVY

Understanding How Families Give

Dr. Sharilyn Hale, Watermark Philanthropic
March 3rd 2020

There is nothing more personal than a person’s money and the intricacies of their family relationships. That is why I always feel such a great sense of privilege and responsibility in my work with generous families. For most of us, family philanthropy often seems like a black box. Curiosity led me to focus my doctoral research on how multi-generational families in Canada organize themselves for giving. Having pulled back the curtain, what I found was inspiring, instructive, and empowering. Certainly, for charitable organizations and their fundraisers, understanding how families give is instrumental to engaging them effectively.

FAMILIES AND FAMILY PHILANTHROPY

Families are important drivers of philanthropy in Canada. There are many challenges when trying to understand the position of family philanthropy within the overall Canadian giving data. But we do know that family businesses alone account for approximately 60 percent of Canada’s GDP (Pwc Canada, 2016 Global Family Business Survey: The missing middle, Saul Plener, 2016), which indicates families hold a considerable amount of financial and social capital. Add to this the current inter-generational transfer of wealth (Tal, 2018) happening within families, and their prominence within philanthropy surges.      

WHAT DO WE MEAN WHEN WE SAY ‘FAMILY’?

A family is an emotional unit or construct made up of a set of people related by blood or intention (Kerr, 2000). The Vanier Institute of the Family describes the caring, sharing of resources and socialization aspects of families that strengthen and reinforce these relational bonds (Battams, N. 2018. “A Snapshot of Family Diversity in Canada.” Statistical Snapshots. The Vanier Institute of the Family. Retrieved March 2020). Indeed, my study shows how early experiences of loving and being loved, having needs met and sharing, can build the foundation for future philanthropic inclination. 

FAMILIES ARE INCREASINGLY DIVERSE

In Canada today, families reflect various identities, structures, generational compositions and sizes (Battams, N. 2018. “A Snapshot of Family Diversity in Canada.” Statistical Snapshots. The Vanier Institute of the Family. Retrieved March 2020). Adhering to an exclusively traditional view of family – be it bloodline or structure – may lead us to miss seeing families as they are, or even miss seeing some families altogether. Further, family characteristics such as age, generational stage, complexity and geographic factors are key differentiators that inform choices about how families approach their giving, in ways that work and are right-sized for them.

CONNECTED BY PURPOSE

When people learn about my work with generous families, I commonly get an eye-roll and a laugh with a comment about how families can be dysfunctional (sometimes citing a personal anecdote about their own family!) and how it must be hard to get everyone to agree on things. While it is true some families have nurtured greater social capital than others to collaborate, communicate and find common ground, I’ve observed a shared sense of purpose is always core to success.

THE WHY(S)

One of the most important questions families ask about giving as a family is, why? What is our purpose for giving as a family? Indeed, many families view philanthropy as a way to create something special, strengthen family bonds and extend family values.

I was inspired by the generous families in my study who created a dual-mission for their giving, then crafted their giving approach in a way to fulfill it. First, they identified what they wanted their family philanthropy to make possible for the family, such as cohesion, unity in the face of geographic dispersion or after the sale of a family business, or the moral development and maturation of the next generation. Then they identified how their giving can meet identified needs in the wider community. Indeed, conversations about purpose open doors and hearts, and offer fertile ground for cultivating stronger and sustaining relationships.        

DIVERSE APPROACHES TO GIVING

Understanding the approaches and vehicles families may use to give and ‘do good’ is instructive about what is important to them, their objectives and how to engage them effectively. Private family foundations have long been the go-to vehicle for philanthropic families, and they remain popular in Canada. There are more than 5,500 private foundations (although not all are family foundations), which grant about $1 billion to charitable causes each year; although, nearly half of all foundations in Canada have assets of less than $1 million (Philanthropic Foundations Canada, A Portrait of Canadian Foundation Philanthropy, September 2017). Depending on asset size and history of development, they may be family-led or fully professionalized and staff-driven.

FOUNDATIONS YES, BUT THERE’S MUCH MORE

But don’t assume all families give through a foundation. By asset size, the donor advised fund (DAF) of one of the families in my study would be on the list of the top 20 largest foundations in the country. Families may use one or multiple vehicles and approaches. Notions of giving and “doing good” are expressed through family businesses, an annual giving budget, impact investing, and yes, the dramatic increase in the use of donor advised funds (DAFs). Generational differences in giving also see Millennial family members, for example, count crowdfunding, social enterprises, ethical consumerism and effective altruism as ways they make a difference (Generation Impact: How Next Gen Donors Are Revolutionizing Giving, Sharna Goldseker and Michael Moody, 2018). The giving vehicle or combination of vehicles a family may use will depend on their context, needs and objectives.     

ORGANIZING FAMILY PHILANTHROPY

Generous families think a lot about how to organize themselves for giving and may even seek outside advice to develop an approach that works for them. Some families use multiple vehicles for different giving strategies, like a private foundation for collective family giving and a DAF for next-gen or individual family member discretionary giving. Other families prioritize collective decision making where consensus on individual donations against set criteria is a top priority.

On the other end of the spectrum are families who use a more distributed approach where each family member has an allocated amount to give each year and can do so without restriction. One such family in my study valued family-ness so much they host an annual gathering where family members share about their philanthropic choices, rationale, what they learned, and what they achieved with their allocated budget. They may not make decisions together, but they have the opportunity to reconnect and learn about what is important to each other. Still, other families purposefully engage non-family members to participate in decision making to ensure the process is more objective and robust. Probing families about their structures, approaches and methods for gift decision-making demonstrates your desire to understand them and work with them effectively.  

HOW TO ENABLE FAMILY PHILANTHROPY

Engaging families who want to give is helping them solve a challenge – giving well, as a family. In fact, one of the empowering things I observed in my study, and in my work, is the importance of enablers to family philanthropy – charities, their fundraisers, community foundations, and advisors, all roles within the philanthropic eco-system in Canada. 

Generous families value and rely on the community expertise and data they receive from partners about intractable issues, immediate and systemic solutions, the associated barriers and challenges, and where they can make an impact. It helps them dig in, better understand, and care more. In this way, we serve as instrumental translators and sense-makers for those unable to be fully immersed.  As one family member in my study shared, “I learned way more about my community through my charitable involvement than I ever did as a businessperson.”

NAVIGATE RELATIONSHIPS SKILLFULLY

In addition to charitable organizations and their fundraisers, generous families may also have other enablers who help manage, navigate, negotiate and even curate what can be an overwhelming onslaught of philanthropic opportunities, requests and inquiries. These enablers may be a delegated family member, foundation employee, community foundation or other DAF sponsor, family office, or a philanthropy advisor. While you may or may not have a direct relationship with a family or family member, it is important to skillfully and graciously build relationships with these enabling partners – they are there to provide value for the family, not create undue barriers. Seek to understand their roles and ask for clarity on how to engage them relative to the family in ways that meet their needs.   

Of course, navigating the relationship with a family directly requires attention, professionalism and sensitivity. A person may be interested in your organization independently, or acting on behalf of other family members. There may or may not be consensus among the family about support for your organization, or differing perspectives on the degree of support. While it may go without saying, it is always best to avoid being drawn into any challenging family dynamics or gossip, as this does not serve the family or your organization. Rather, clarifying communication flows, variated preferences for engagement, information useful to support decision-making, and their desired philanthropic outcomes all support a family in their experience of giving. 

ENGAGE THE FUTURE

Succession and engagement of the next generation are always on the radar of families with wealth.  In industries such as wealth management, insurance and enterprise consulting, there is an increasing focus on engaging the whole family so that the spouse or children of the “client” have less reason to bolt for new advisors when succession happens.

For philanthropic families, and thanks to increasing life-spans, there can be as many as five generations participating at the giving table. In the charitable space, organizations that view themselves as “family philanthropy enablers” with the capacity to engage families – and multiple generations of families – meaningfully will be successful at earning their investment and support for the long term. A brilliant example is SickKids Hospital Foundation in Toronto, recently launching a year-long philanthropy education program for children of their supporters, where the children learn with their families (parents and grandparents) about charities and giving. What a wonderful way for a family to strengthen their bonds with each other, and the institution.

Generous families are important drivers of philanthropy in Canada. These families are diverse and multi-generational, share a philanthropic purpose, give through varied vehicles and approaches, and value expertise and strong relationships. Increasing your family philanthropy savvy will distinguish you and your organization as effective partners through which to make change. 

Inquiries and requests for additional information may be directed to:

Dr. Sharilyn Hale
416-567-3002
Sharilyn@watermarkpc.com
Twitter: @SharilynDH

Don’t miss the third blog in The Provocateur’s series on Family Giving to be published on Tuesday, March 10th. Tune in as Gena Rotstein of Karma & Cents Inc. shares her expertise on inter-generational wealth transfers and looking at family wealth through a social purpose lens. Gena has over 20 years of philanthropy management experience with a Masters in Non-Profit Management and Jewish Communal Service from Brandeis University and as a certified Family Enterprise Advisor through the University of Alberta. She also has received certification from 21/64 in Next Gen philanthropy, is a member of the Purposeful Planning Institute and part of Canada’s Pro-Bono Marketplace.

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ABOUT THE AUTHOR

Dr. Sharilyn Hale, C.Dir, President

Watermark Philanthropic Counsel

Sharilyn helps those who give, give well. She enables philanthropists and their families to unearth and achieve their philanthropic goals, and supports social purpose organizations to deepen their performance. With a 20+ year career in philanthropy, she draws on expertise in philanthropic strategy, family engagement, organizational development, and board governance.

Sharilyn is an advisor with the NYC-based 21/64 to support multi-generational family philanthropy, a Chartered Director, and a Board Source Certified Governance Trainer.  Author and educator, Sharilyn recently completed her doctoral dissertation on governance and family philanthropy, and was among a group of leaders to initiate Canada’s first graduate degree program in Philanthropy and Nonprofit Leadership at Carleton University, where she now serves on the Advisory Council.