Many family offices find that by having strong philanthropy practices they get to ensure they make a difference to the world they live in and the causes that are center to their families, as well as benefit from tax benefits.
When Fiscal Solutions manages the foundation administration for family offices, they do so knowing that the importance of this practice is often at the core of the families values and needs to be treated accordingly.
The areas that the family office cover include record keeping, reporting, fulfilling legal and taxation compliance and working seamlessly with external taxation firms to ensure the tax strategy is prioritized.
Many family members tend to take a hands-on approach to philanthropic endeavors and are strategically ensuring that when they donate, they do so with impact.
Sitting on boards and committees are often key roles that family members take in, along with actively participating in events and activities. Additional support may be required from the family office to ensure that all commitments are fulfilled in a timely manner. Additional reporting on impact may be required from the family so that they can continually evaluate the impact of their philanthropy.
Many families provide sizeable donations and with that may come naming rights, signage, or other more public displays of the philanthropic endeavors. This is also popular when families seek to leave a legacy for future generations.
When do you get started with philanthropic endeavors?
This is a great question because in most cases, larger donations are made by family patriarchs or matriarchs is they reach middle age or older. While this is the rule of thumb, it is not the case for every family office and therefore accommodations for various donations are required.
Getting involved in charitable causes early on in your career and bringing this core value to other family members can be rewarding and set the family up for notable impact.
Guidelines for family giving.
No two families are the same. Giving guidelines really center on the strategy that any family has for philanthropy.
It also may fall into consideration of tax-exemption for non-profits with this varying from country to country.
Key guidelines that many family offices consider are:
- Cause-related:Your family may see eliminating poverty or hunger as the main cause that you would like to support. It may be around health, education, environment or social issues. Whatever the cause, setting boundaries around where donations are made can help your family make greater impact in the areas that you care most for.
- Geographic regions:Deciding on whether your causes would be local, national or international are key to selecting non-profits to support.
- Size of donations or gifts:Setting a criteria around size of donations and gifts can help put your money where it makes the most impact rather than smaller amounts that are spread thin.
Many family offices facilitate annual meetings with families on their philanthropic activities reporting on successes, expenditure and future endeavors. This ensures that everyone is on the same page and working towards the same mission.
Areas that are discussed include planning, family governance, impact assessment and any challenges or changes.
Philanthropic planning:
- Setting a documented strategy in place for philanthropic commitments and direction with key guidelines, boundaries etc.
- Ensuring that everyone in the family is on the same page in relation to the promotion of philanthropic donations. Many families like to keep their donations confidential, while others see it as an opportunity to promote a cause and drive new donors to the non-profit by name association.
- Set in place how each donation or gift will be managed, monitored or reported on.
- Identifying tax advantages where possible.
Implementation of philanthropic plan
- Identify causes and sign relevant contracts and agreements required around donation.
- Ensure that each cause has been thoroughly investigated and fits the criteria for donations. For sizeable donations, ensuring that the donation is going to where you expect for it to go may take further investigation and transparency.
Being philanthropic is not only great for the family, but it’s also good for business. Many families that are in business benefit from strong employee morale when making sizeable donations and supporting causes that are important to your team.
