In this webinar, we heard from a panel of experts on the benefits of involving younger generations in their families’ philanthropic endeavours.
SEONADH JOHNSON:
Good morning. You are all very welcome to J.P. Morgan Private Bank's first webinar dedicated to Irish families and their advisors.
For those of you whom I haven't met yet, my name is Seonadh Johnson and I've been with J.P. Morgan for 15 years. My role involves working with Irish families, helping them find solutions to address their long and short term objectives across both sides of their balance sheet.
Initial conversations with new clients often focus first on establishing their intent when it comes to managing their wealth. Questions come up in conversations, such as "how much is needed to fund their lifestyle?" "Is the remainder then designated for the next generation or, indeed, generations?" "What percentage is going to be given away?" And the answers to these questions are complex and not immediately obvious to most people.
So in helping clients articulate their goals, I'd like to introduce our first panellist today, Maya Prabhu.
So I partner with Maya, who leads our wealth advisory practice across the UK, Europe and the Middle East. Maya helps families craft their own strategies for the meaning and purpose of their wealth and their family business, and in creating the right structures for asset protection that reflect the family's vision and values.
Our second panellist here today is Sheryl Fofaria, who leads our Philanthropy Advisory team in Europe and the Middle East. Essentially, Sheryl's our resident in-house philanthropy coach at the Private Bank. She helps families and family business owners alike be more effective and impactful in their giving.
And Eilis Murray I'm delighted to be joined by. Eilis is the CEO of Philanthropy Ireland, and for those of you who don't know, Philanthropy Ireland is the independent representative organisation for donors, individual family and institutional donors providing voice and space for donor needs.
So today we're here to address why is it important to be strategy in your approach to giving back. What are the benefits of getting the next generation involved? And most importantly, how? How do parents and grandparents even start conversations about that taboo word - money?
I'm going to put a series of questions to our esteemed panellists here today, and I would invite you to do the same by emailing your questions to me so that I can bring them up at the end.
So Maya, we speak with many families and family business owners about different matters relating to their wealth management, and we're actually now seeing an increase in the number of requests from clients looking to incorporate philanthropy into their overall financial goals and, indeed, aligning their family values with their corporate philanthropy. So Maya, why is this?
MAYA PRABHU:
Thank you, Seonadh, and a very good morning to you all and a very warm welcome to this webinar on my behalf. It's a real honour for me to be here, to address you and also in the role that I perform with families in helping them think about what they wish to be the intended consequences of their wealth and family business.
And Seonadh, that's a very good question. What has philanthropy got to do with a family's wealth or family business strategy? And, indeed, why are more and more families including philanthropy as a centrepiece to their wealth strategy?
And experience really shows us that there are some common practices of successful families, and by that I mean families that are looking to pass their wealth and business into the next generation, the second, the third, fourth, who wish their wealth to just last for two or three generations or one generation, or even those that are 100 year old family businesses.
And here's what some of them do. Firstly, I'd like to talk about what is success. I mentioned the word successful families, what do we mean by success? Essentially, if we can move to the next slide please, Mohesh. It means that individuals - and the next one please. Thank you. I wanted to show you this picture which is just going to come up. Perfect.
So what do we mean by success and how do successful families view their wealth? So the first is that the individual within the family feels fulfilled and has a sense of purpose and feels valued. The second measure of success is that family relationships are really good and healthy. And the third is, of course, that the wealth lasts, the family business is growing and doing well.
So what do these families do? And that is, as this picture shows, they consider their wealth in three dimensions, and they work on three things simultaneously. The first is, obviously, their financial capital, which could be their family business, looking to grow it, develop it. It could be their investments, it could be their cash, it could be their property. So, essentially, their financial assets and how they grow and develop it.
The second most crucial point is that they invest a lot of time in the people of the family. So nurturing every individual's dreams and passions, building family glue and connection rather than any competition between family members. Building collaborative skills in decision making, and really helping family members to learn the financial skills and to learn to be a good shareholder if, indeed, they're going to be shareholders of their family business.
And the third aspect is how to help them connect with society because, of course, we don't live in a vacuum. Our businesses don't exist in a vacuum. And so how do we connect with society?
I just wanted to share a couple of examples, if I may, on how families then really focus, what are some of the practical things that people do when I say they engage their next generation and they prepare their families and focus on the individuals within the families.
So just a few example. For many grandparents and parents with young children, start with the old style, but super relevant, three jars for their pocket money. A jar for spending, a jar to save and a jar to share. To share with your friends, to share with your siblings, to share with society, to share when you go to church, whatever it is that they define as sharing. But it's interesting, that's a very sort of sensible way to think about how you manage your cashflow, even as an adult. And this starts at a young age.
Another is around focusing on role modelling family values, and I'm sure we're going to talk a lot more as we go through this session around talking about it and living values.
And the third really practical thing that people do is they develop more sort of collaborative decision making. And I'm thinking about three examples here. For instance, a family that I worked with, they had three sons in their 20s, they were all big personalities, and they wanted to encourage their sons to really work together. And so they set aside a sum of money for them to invest together. And the point was not that they invest separately, but the point was that they invested together.
And you had one brother that wanted to take a lot of risk and said put everything on Bitcoin. And then you had another brother who said no, we must be very sensible and very cautious. And of course, the answer was somewhere in between. And the point was for them to find a shared process and for them to collaborate on what their decision would be. So this is great practice for what they would do then later on in life.
I'm thinking about another example of a brother and sister who their parents kindly bought them a flat in Central London and they lived there together, it was their responsibility to look after the maintenance, to pay part of the mortgage and generally look after the property and pay the bills. So again, they had to learn to work together and to share the responsibilities between them.
And finally, on philanthropy, I'm thinking about a fourth generation UK family business, and they gave 10 members of their fourth generation a pot of money for a philanthropic project or two. They gave them a budget and said amongst the ten of you sort of figure out and decide how you might wish to spend this.
So in this way, ultimately, our clients want, families want that their life's work is a source of opportunity for their families, potentially for generations. And in order to achieve that what successful families show us is that it needs clarity on roles and responsibilities. It needs preparation all in age appropriate ways that can be phased over time.
SEONADH JOHNSON:
That's a wonderful answer, and thanks for all the examples and insights, Maya. I think the anecdotes of real family situations really brings this to life for us.
On your slide there I see next gen at the centre of the Venn diagram on slide 3, however, according to the Williams Group Wealth Consultancy in the US, 70% of wealthy families lose their wealth by their second generation, and a stunning 90% by the third. Thankfully, this statistic can improve greatly with communication, however, communication is often a challenge in itself.
One of our colleagues has made the very valid point that there is one thing scarier than talking to children about wealth and that is somebody else doing it for you.
So before I put the next question to Maya, I'll invite Eilis to comment on this with an Irish context.
EILIS MURRAY:
Thanks Seonadh. And again, just echoing Maya's comments there, thank you so much for the opportunity to be a part of this and it's great, great to be here.
Yeah, I think in terms of - I think it's possible a particularly Irish problem. We don't like to talk about money. We don't feel comfortable with it. It's not something, you know, quite apart from wealth, it's just not something that we're necessarily at ease with talking about money in any context, you know, whether it's paying for the bill or whether it's actually philanthropy. We're just not kind of good at it.
And I suppose just in the context of that point that you raised there about even talking about kind of somebody else talking about it before the family talked to the next gen about it, it's brought to mind a conversation I had with a particular family where their children were very young, they were very much into play space giving, so what I mean by that is within their own community. And they would have been a family that were very much resourcing a lot of what was happening within that community.
And the reason the conversation started with us was around our children are getting that little bit older, they're in school now locally, benefitting also from projects that we have actually funded, but they don't realise that that's where the funding came from, but they're going to find out soon because they're going to be part of a conversation within the community. But we need to start talking about it with them before they find out from others. So I just - you know, it's very real for people and it's very real for families. And I think set alongside to the fact of the difficulty of just even opening conversations about money, per se, I think there may come realisations whereby you want to be in control and lead that conversation before somebody else does.
SEONADH JOHNSON:
Thanks for that insight, that's really helpful.
So Maya, how can families get around broaching the tricky subject of talking about money?
MAYA PRABHU:
Just to add to what Eilis was saying - thank you, Seonadh - and Eilis I totally agree with your remarks there. The only thing I would add is I have the great privilege of working with clients around Europe and also the Middle East. I was with some Italian clients yesterday on a similar sort of webinar and they said in Italy we don't talk about money, we don't like to talk about money. I have talked to families in Switzerland and they say oh, in Switzerland we definitely don't talk about money.
So I think that it's quite a European thing, we see it across the region. And the reason for that is it can be considered a little bit vulgar in many ways. That's one of the sort of barriers. The other barrier is a sort of what to say and at what point do you say it? And then there are these fears that people have, which are very valid and very real, which is if we talk about money do we burden our children, instead of them just letting - you know, enjoying their lives and pursuing the work they wish to pursue, does talking about this sort of create a burden for them?
Or on the other hand, on the flip side, or are we creating sort of expectations amongst them that they can relax and do nothing because they might benefit in some way from the family wealth?
At the same time, the next generation have their own sets of, I guess, fears. One is that if you've got a successful parent it's a really tough act to follow, and that places a huge - can place a huge burden sometimes on the next gen in terms of how they live up to that. And sometimes they want to know, because they want to be prepared, but they feel that if they raise that subject to their parents they might appear as though they're a bit sort of greedy or they don't want to do anything, or they're a bit money minded, which that's not their intention at all, but they don't want to appear that way.
And so because of these things... You see, it's never just about the money, it's about these sorts of, I guess, hopes and fears that everyone has that sort of restricts, that makes it difficult to talk about it.
So where do you start? Where do you start? So one is that we did some, a bit of research, and in my experience of working with families there are four sort of main archetypes of philosophies that I typically come across. And if we can move to slide 5, please, I'll be able to show you a picture of them so you can see what they're all about.
Perfect, thank you.
So the first is spenders. Sometimes people say, do you know, actually, I want my children just to have a great life and if they spend all the money that's absolutely fine. My children, my grandchildren, let them just enjoy themselves. Not very much, I might add, in my experience, but it does, it does come up.
The second category are sort of quite tough minded, and they say actually, you know, we want our family, our children to have their own sense of purpose, we want them to be really grounded. And for very successful business people they say the best part was the journey of work and, actually, we would love for our children to have a similar journey.
The third category are people who say most of the money's going to be given away as part of their philanthropy. And the fourth category are people who say, actually, we see every generation in our family not as a beneficiary, but as a steward. And stewardship is a very active thing. So you don't just take, but you develop, you nurture, and you pass it on to the next generation.
So how to talk about this? I mean this is a bit light-hearted. Sometimes in families we start with this and say okay, where do we think we are as a family? Every family will have a combination of these four philosophies, but where is our emphasis as a family? And it's a great conversation started. You can see this, these numbers on the side, and sometimes we ask everyone in the family to individually say how important, or what importance would they give for them individually to each of these categories? And it's a great conversation starter in a light-hearted way, and a way to learn about how everyone is thinking.
I might add, actually, that in my experience of working with many families the next generation very rarely, very rarely, individually, on their own account, every put spender as high, which is what the greatest fear is of parents. So often, but not always.
So the second way to start the conversation is philanthropy. It is a great entry point. Because starting with talking about philanthropy and the causes you want to support is about your values, is about things that the family cares about. So it's a wonderful conversation starter. It also means that you can start to talk about what is the purpose of our wealth. It is for us to do certain things, it is for us to invest in certain things, it's for us to enjoy to a certain extent as well, and it is also for us to share with others. So it's a great conversation starter, again, to talk about the meaning and purpose of one's wealth.
SEONADH JOHNSON:
Thank you, Maya, that's really helpful.
So I'm going to go back to Eilis now and just ask you to share some examples of how families in Ireland have succeeded in getting the younger generations involved in the family's philanthropy strategy.
EILIS MURRAY:
Delighted to, Seonadh. And I suppose what I would say at the outset is that there is no one way and there's no right way. I think very similar to what Maya was outlining there in terms of the mix of approaches, you know, there's a mix of ways that one can do it. And there in my experience there have been varying approaches depending on the family and the make up of the family. I suppose also depending on the age, you know, kind of, you know, what age groups are within the family at the time the conversation starts or whatever.
But even going back to where Maya spoke at the opening about kind of the pots of money, the save, spend, the give-away, that is often a huge starting point, you know, to kind of to use it as the leverage for getting the conversation going and getting them involved in terms of kind of the giving away, what are you actually giving it to, and starting a conversation at an early age in relation to that.
The thinking of other families that may be their children are older at the time when they want to kind of get them involved. I've seen various ways. One would be by engaging them in experiences of causes, for example, you know, introducing them to or exposing them to particular causes or to particular experiences about events in life or things that are happening in order to start a conversation about those before ever getting to a conversation about kind of well, is there something that we can do to support that?
The other way that is quite common and I've seen it with a couple of families, would be whereby they would allocate, again, kind of using the initial, the three parts, but in a different way or in a more detailed way, allocating various amounts to the various members of the family, whether it's the children or, indeed, any of the wider family. But deciding that they're setting aside sums and saying have a think about how you would give that away or why you would. So it could start as a quite a small sum, a very small, but again, it's about kind of building that experience and building that engagement and that involvement with it.
And then just another way that that is quite interesting, and I suppose it's a combination of kind of the parts and taking it to another level, would be where one family they equally have particular causes. Because they could never decide on, you know, the particular causes of interest in relation to what they might give you or how they might kind of set aside specific amounts for various areas, each member of the family had their own pot to work out of. But also what they did was they annually did a family get-together whereby there was an overall family pot that could be provided for a cause. It was not necessarily huge, it was quite small. It was very much, again, going back to what Maya mentioned there about it's not about the money or the wealth, it's about kind of opening the conversations in other ways. So they wanted to kind of discuss, you know, about values, et cetera.
So each family member had to come back at that annual event and say I know something about whatever it might be that was of a passion or an interest to them, and they pitched for it. "I would like you as my family members to support this cause for this, this and this reason, or to support this interest for this, this and this reason." So it brought conversations about in a different way and it really prompted that communication, and it's the communication that's really important because it opens up avenues in so many other ways.
And just a final one that actually kind of comes to mind, and that is in relation to family who quite recently... You know, the next generation what they did was they brought them in in the set-up. They were formalising the structure on their giving and they brought the next generation, a particular member of the next generation, in as a board member, as a trustee on the project. And via that next generation person really got that person to lead with other members of the family at that level to communicate what was happening and to draw them in. So almost like kind of a peer-to-peer, which can often work very, very well. So if it's not kind of one generation to another, but within your own generation level, if you like, of actually doing the communicating or opening the conversation it can work quite well.
So I think ultimately, Seonadh, what I would say is there's no one way. You will find ways of opening the conversations with them, but I think it ultimately comes down to finding a way to having that communication. And you can use various mechanisms to do that.
SEONADH JOHNSON:
Thanks Eilis, that's really wonderful.
So over to Sheryl. So Sheryl, as head of our Philanthropy Centre in Europe you have the privilege of partnering with our clients at different stages of their philanthropic journeys, from identifying the causes that matter most to them right at the inception, to helping them set up family foundations, and to help them benefit from on-going education and learning, to be as effective and impactful as they can possibly be.
Could you maybe tell us a little bit more about how as families you work with approach working together on their philanthropy. And it would also be great if you could share some practical tips on how to integrate new family members into an existing philanthropic initiative.
SHERYL FOFARIA:
Thank you. And I love all the examples. They bring so much colour and tangibility to the discussion. So thank you to Maya and Eilis and Seonadh too.
And in answer to your question, yes. Over time we've worked with a lot of families, a number of them who, again, have all developed very, very different ways of working successfully together on their philanthropy, and I would echo exactly what Eilis said, there's no one way and there is no right way. There's no, you know, right or wrong, but the models often may need to be revisited or adapted for a new set of circumstance that the family suddenly finds itself in. But, you know, above that there is still probably one central principle that I've found to be very key in developing an effective strategy for family giving that keeps everybody in a nice balance.
So what is that key? If I can just direct you to slide 7, Mohesh. And as much as possible that key is that you want to enable all family members to really feel as if they are contributing towards a shared vision that binds the family together, whilst at the same time having the freedom and the flexibility to really explore their own passions and interests which is what ultimately will drive the family forward in their philanthropy and their impact. And that I think holds true whether you're at the start of the journey or if you already have an existing way of working in your family's philanthropy.
And just coming back to your question around practical tips on how to engage others in family philanthropy, new faces, new family members, I'm actually going to go through two situations. One - because I think dynamics are probably quite different in both. One is where the family is very new to sort of bringing the family together in philanthropy, and the second is where you have already got an existing way of working, maybe it's been a few generations already in the making and you're trying to integrate newer members of the family into it.
So just moving on to slide 8 for the moment actually, what are the first things that you would put in place if you were just starting to bring your family together around philanthropy? Well, firstly, it may not be clear to everyone why this is important and even why they should be individually involved. So again, the key is communication, over-communication probably, but really sort of thinking about sitting together down on a table, formally or informally, really just to discuss why it's important. And once you have that buy-in from the family the next goal is try to get to a point where you can all articulate your values and your interests individually and as a family so that you can ultimately try to tie these altogether into a sort of robust and rigorous philanthropic strategy.
So in order to do that we've used a couple of different approaches with families in tandem, and it works quite well in tandem. And if I move you to slide - we are on slide 8, that's great. The first is really to ask family members individually to answer a series of questions. And they look like they're simply questions but, believe me, I've tried and sat down several times and it takes me ages to figure out some of the answers on a personal level. But these questions are really aimed at drawing out things like if you could fast-forward 5 or 10 years then what would you want to achieve, what would you want, what's your end game? And where have you spent time and money in the past? And this is my favourite one, what makes you angry about the world right now? And I know probably in this day and age it probably feels like lots of things make us angry, but it does give you - that question gives you a real sense for what you want to change.
And just simply having a discussion around a family table and trying to understand each other better on those questions I think is important as a first step.
We tend to combine those questions with an exercise called 'Picture Your Legacy'. So if I flick you to slide 9, really the idea behind this is that you sit through, you sit on the table and you go through a set of cards and you choose which ones resonate most with you. You want to really go for kind of gut instinct reactions. Then again, the idea is very much to just listen just very carefully to one another's commentary so that you can start to build a picture of where you have overlaps and common interests, and where you may have differences that you want to think about and how to address.
And I know that family meetings are hard, and a lot depends on families' cultures and personalities, but it's very important here to sort of lay the ground rules and be very respectful of one another's views and communicate to make sure everyone feels involved.
So the second situation - Seonadh, did you want to come in?
SEONADH JOHNSON:
Quick question. So on your point about overlapping themes, I think that's really interesting, because we had this example where there was an interest from one sibling in education and another who was really focused on the arts, so kind of moving in slightly different directions. But the conversation was around okay, you can go and have two separate focus areas and that's absolutely fine, or you can look at ways of collaborating both of the causes that you care about, whether it's enhancing creativity in young people or the other way around, supporting young people in the arts to fulfil their potential.
SHERYL FOFARIA:
Yeah, I think that's right. I mean there really is no right or wrong way, and you could take a number of different pathways with this. You could decide that, actually, education and the arts in terms of sort of the detail behind why different siblings are so interested in both of those areas really does necessitate, possibly, the pie being split into. And actually sort of people's families have done that that we've worked with where one sibling has kind of supervised, let's say, one area that is completely different to what another sibling is very passionate about. And it works totally fine, because both learn from each other. And then we've seen situations where the children of those respective siblings will go and intern in a different country with the other sibling, so their aunt or uncle, and that's quite a nice way for everybody to appreciate their differences and what they can add to the family and the aggregate.
But I think you're right, there are also ways of combining them, if you'd like to do that, and you might end up having a shared overlapping area that tries to harness both education and arts to be able to involve both parties. So thank you, thank you for that.
Now on that second situation of when, you know, a family has an existing philanthropic set up and maybe a foundation, there are some really tangible practical ways that we've actually learned all of these from clients. And they're ways really just to encourage and integrate newcomers into the mix. You don't need to be necessarily a next gen, it could be anyone who wants to just get a little bit more involved in their family's existing philanthropy.
I'll just pick one or two examples that stand out as just sensible things to do in all different aspects of a family's foundation, whether it's governance or investments or grant making, maybe it's advocacy and communication around what the family's focused on. And maybe it's well, actually, a very important part of this is just how to involve everybody in on-going education. The more that you can become an expert in the area that you care about the better funder you're going to be.
So, for example, in that first category, I'm going to move to slide 10 here, you know, sort of I guess before we really start it's very useful sometimes to revisit the family's history of philanthropy, because not everyone will be aware of the details. And in any case, things change, people change their views over time as well. So it's always very useful to have someone new come in and bring a fresh pair of eyes, try and revisit themes, make sure that they understand where the family were coming from when these were decided.
With respect to learning about governance, have them attend family foundation board meetings. Just as Eilis was saying, that can be an incredibly good way of learning board responsibilities. And do allow them to ask critical questions about the policies and frameworks for decision making because I think it's quite easy to get stuck in the mix, but these can be incredibly useful to challenge the status quo.
In terms of investments, think about helping them meet with your investment managers and learning more about the policy, about strategy if they're invested in sustainable, you know, if that's an area of interest. We're seeing a lot of the next generation particularly are very interested in integrating better environmental, social and governance practices into their investments. So that has been a big thing for a lot of families we work with.
And then when it comes to grant making, and I want to revisit Eilis's point, but engaging newcomers into experiences is incredibly important. Encouraging volunteering especially at the younger ages can be a brilliant way for the family also to do something together with a shared kind of experience that lets you - you know, really does open the door to genuine and very kind of authentic conversation about philanthropy and why it's important. So you could also sort of engage them much more with foundation staff, conducting due diligence, you know, going on site visits. Any kind of experience that will help them under the issues much, much better at a sort of academic and practical level.
And then in terms of on-going education, I mean there's a lot in this, but many of our sort of younger generation clients, especially in their sort of 20s and 30s, kind of come to us really asking advice around how they can keep learning about philanthropy as a discipline, as a practice in and of its own right, and are there networks that they can join so they can learn from peers. And thankfully, it's a really great developed ecosystem. So we've heard brilliant feedback from those who've attended academic courses that are laying the foundations of what international development looks like.
And then at the same time I'd love actually, you know, to sort of really think about the networks that exist in Ireland, which I'm sure Eilis can also tell us a little bit more about.
So the key, again, just to emphasise is really just to help everybody share a common goal that brings the family together whilst also allowing them to explore their own interests.
SEONADH JOHNSON:
That's really helpful from an international point of view and all the different families we work with. It's true, a lot of these programmes are based in the UK.
But Eilis, are you aware of any such programmes, philanthropy related training programmes in Ireland?
EILIS MURRAY:
I suppose probably it would be safer to say that there are... I think the whole network idea, Sheryl, would 100% agree kind of, you know, the ability to tap into that, and to engage with others that are in the same space or are at the same stage or, you know, just even kind of those sharing of experiences. But the networks would be less formal in Ireland, I would say, rather than in the UK. So although they're here they're not... I mean I would be very aware of kind of the more structured networks that are there in the UK, and be collaborative through many others, type of thing.
But we do have networks here in Ireland and I think that that is probably one of the things that Philanthropy Ireland would see as its role, is to facilitate those connections, to facilitate those networks and to facilitate those experiences. Because I would 100% agree that it's the peer-to-peer connection can make it a massive difference in any families learning about philanthropy. So what I mean by that is, for example, we do an annual donor symposium, which is literally just about bringing people together, to just connect with each other, but also maybe to hear some insights and experiences from people who have been down that road. Because although similar to, you know as Sheryl was saying there, you know, in our conversations here today any of the points that we're raising we're raising from experience of families that we've worked with. So they are real life experiences, but at the same time there's nothing quite like that peer-to-peer piece whereby, you know, you can fully identify, or two families can fully identify or generations within a family, you know, whether it's the younger generation or the older generation, whatever it might be, you know, that they can identify with each other.
So similar to the donor's symposium we've done, we would do events whereby we have done panel discussions amongst young people, you know, around, you know, kind of that next gen kind of, you know, and what they're experiencing. And really to kind of just give them a voice as well, and for them to hear their voice, be able to sort of kind of say you do have a voice about this.
So I think ultimately, Seonadh, what I would say is that they're less formal in the Irish context, even our own Remember organisation. And I don't know whether it might be useful to even kind of go to slide 12 and 13 there to give you a sense of what Philanthropy Ireland is about. But where we have those various kind of dimensions, if you like, kind of from family philanthropy foundations to individual donors, to, you know, what I would call - kind of call the institutional philanthropies, so even some of the fundraising philanthropy organisations. We have various models that are there, and we bring them together for various purposes at various times and according to their own areas of interest. And that is probably our key role is around that convening and sharing of information and knowledge.
So less formal networks. I mean the slide there gives you a sense that, you know, of who. The giving circles would be another side, and then you've got the others who would be very interested in social investments, for example.
So we bring them together based on kind of what the area of interest would be. And also, you know, even if it wasn't about kind of bringing somebody into it it's about facilitating a connection, you know. So if there was somebody that wanted to connect with somebody else that had a particular area of experience we would make that connection and step back and let them link with each other. Very much driven by peer-to-peer.
SEONADH JOHNSON:
That's a really helpful context. Thank you both for that detail.
So it seems fair to say that there are quite a few different pathways that families can take. Some families choose to keep things separate through the generations, creating their own philanthropic legacies whilst guiding the next generation to go their own way. But on the other hand, you have those who want to see the next generation continue the family's existing philanthropic legacy.
So Sheryl, what are the different models that you've seen, and why have people gone down those different paths?
SHERYL FOFARIA:
Yes, I think well, it's a good point actually. I mean, you know, there are many different examples, but I think broadly speaking we tend to find, you know, really these sort of models kind of fit into three very, very broad buckets along a spectrum. So at the one extreme you've got families like the Sainsburys who have, you know, 17 independent grant-making trusts established by three different generations and they all have separate boards. They're led by separate family members who have their own interests and complete autonomy over pursuing whatever that is and however extreme it is, you know, sort of extremely different to each other.
And then on the other extreme you've got families who are extremely tight-knit and they work very well together and successfully, but on a very narrow range of issues that have sort of existed and been carried through the generations over a long period of time. And they're very sort of integrated in their approach and how they've been brought up to believe that this is this one thing, it's very important. And sometimes, well, quite often, that is sort of also a legacy thing. Maybe it's honouring an older family member who has potentially - you know, who has set the whole thing up in the first place and has now since passed on.
And then, of course, in the middle of that spectrum you have a lot of different models. Some divvy up the pie into completely separate issue areas, like we were talking about with the two siblings before with their arts and education, and really just one sibling looks after one and one looks after the other and they share learnings together. And then we worked with other families where, you know, for example, it's taken a while, but the newer generation have had to really kind of deliberately and intentionally...
So I'm thinking of a family where the historical focus for two generations in the family foundation was healthcare and religious giving mainly. But the granddaughter comes in, she's sort of now in her early 20s, she cares deeply about addiction, and she's really good at it. You know, she's taken a lot of time and effort to be exceptionally kind of good at thinking about philanthropy when it comes to addiction.
So she took her time, but she went on her own learning journeys and over time kind of kept on bringing her family into the loop of her learning, really in an effort to try and persuade them actually this could be and is a very important part of her life and should be an important part of also putting into the family foundation. So she now works full-time in the foundation as a programme manager for this newly created area, because they all recognise that there are overlaps with what the traditional focus was.
But it took a lot of time and a lot of communication, and I think that's really the key sort of finalised messages from me is really to try and be kind of deliberate and strategic about it, but also to put a lot of emphasis on that communication and to make sure that everybody really does feel like their own sort of passions there are being looked after as well as the shared family vision.
SEONADH JOHNSON:
Thank you, Sheryl, that's great. I've got a couple of questions coming in from outside, and I'm mindful of time, so we'll try and weave those in in the next 10 minutes or so if that's okay.
But before I do that is there anything that we haven't already covered that families can do to involve new members of the next generation and their advisors. Because we partner a lot with their tax and legal advisors as well, so I think it's important to acknowledge how they - how the service they provide can be complemented by what all of us here today can do.
So I'll start with Sheryl. Was there anything else that you wanted to mention?
SHERYL FOFARIA:
No, I think really, actually, from my perspective, and we spend a lot of time working with advisors, but also foundation heads to make sure that sort of everybody's on the same page as in terms of sort of the learning and the strategic work that we're doing with the family, because of course that's going to guide the overall direction of where we're heading. And really, I guess the key is just to make sure that everybody is in the loop. It can be extremely helpful actually to be on the journey and learning together with both the foundation's sort of advisor or head as well as the family, because quite often they work just like this.
SEONADH JOHNSON:
Great. Eilis, anything that you'd like to add, and particularly about how Philanthropy Ireland can complement the professional advisor's work with families?
EILIS MURRAY:
Yeah, I think obviously professional advisors they're, you know, any family's trusted advisors and know intimately the needs, et cetera. And initial needs are so much more important than, you know, kind of before you even get to philanthropy. But I think you're very well positioned to open conversations with families in relation to it. And I suppose one of the unique things in Ireland is that our system in Ireland means that there is no hook there necessarily for advisors to open a conversation with families. So what I mean by that is that, you know, our infrastructure, our physical supports are not there to incentivise or to stimulate philanthropy in any way. So it can be difficult for them to open that conversation.
So for advisors I would sort of say please don't let that be a deterrent, and we would advise advisors in terms of how to open that conversation as well. But similarly, I would say to families don't be afraid to bring it up with your advisor, of sort of say well, I would like to consider this and if there anybody else we can talk to in relation to it. You know, because that is something that we would see as being a complementary role that we can play with advisors. Because I fully agree with Sheryl, it needs to be everybody within the mix. It's the broader space of conversations that are there. But we can certainly support advisors by bringing in knowledge of kind of what philanthropy looks like in Ireland to the table, and who's out there and maybe even connect them with other people along the way.
But I suppose one thing I would kind of add into that is that, you know - and Sheryl and Maya probably very kind of would readily identify with this term, the philanthropy journey, you know, that it's not something that just kind of suddenly starts. It's something that, you know, any families they learn from experience, they grow it. They might go one direction then discover that's not for them and redirect. And that's all great, because it's from experience and it's from the heart and I think that's where, you know, I would say to any families reach out and find out what else is being done, where, by whom, connect. The conversations are not going to kind of cost anything, except in terms of time, but they can be quite enriching.
SEONADH JOHNSON:
Thank you. And then Maya, did you have any wrap-up comments before I move on to the Q&A, which we may run slightly over on?
MAYA PRABHU:
Thank you. Yeah, so I think there's never been a more exciting time I think to get involved with philanthropy. It used to be, I mean when I first started my career I'm afraid to say several years ago, you know, you had philanthropy on one side and you had investing on the other and you had business on the third. And there was no connection between them. And what is really exciting about now is that we are drawing these really important connections, and there are, you know, three important levers through which you can make a difference as a family. You can make a difference through your business, through the employment you provide, through the way you work, through how you work with your suppliers and so on and so forth.
You can make a difference through your investments in choosing to use environmental, social and governance factors and sustainable investing, which is one of the very growing trends to make a difference. And you can make a difference through your philanthropy.
And actually, in the family conversation around each of these areas it's a great way to start conversations around what is the meaning and purpose of our wealth, because there are different ways in which we can express that. There's no one right way, there are several ways. And it's a great way for each family to really bring meaning to their assets as they think about the future.
SEONADH JOHNSON:
Brilliant. Lovely sum up there, Maya. Thank you. And actually, you touched on investing, and one of the questions that we've received relates to the lines between philanthropy and impact investing. And so there's been, to your point, a lot more interest in everything that is really being considered about our investments. And so can you talk about any change in the appetite for philanthropy given the focus on impact investing and ESG investing as well?
MAYA PRABHU:
I think so the first thing I'd say is that these things all sit beside each other in a super complementary way. So there are some causes that can only ever be served by grant making. So for instance, I'm trying to think about if you were campaigning for the rights of disabled children you can't really turn that into a business model, because there is an intrinsic importance in the work that you do around advocacy that can't be converted into a business model. So I think there are some things that can only be supported through philanthropy, through grant making and that's fantastic.
Sitting alongside that you have complementary ways that you may decide to open a cafe, for instance, that employs disabled children. Now that could be a mix model investing where, of course, your primary driver is social, you want to make a difference, but it is a for-profit business, a cafe is a for-profit business, so you can combine things this way. And this can extend all the way through to how you invest your main funds. So I think these things all sit in a complementary way. And it's important for your point to not see them as competing with each other, and most people do both.
SEONADH JOHNSON:
And I would just say that what's incredibly exciting as well is we're seeing a lot more interest from our clients in blended finance initiatives. So we're seeing some brilliant innovation which is using philanthropy potentially to derisk a layer of the investment and then asking others to come in at a slightly more commercial investment level so that they can sort of - you know, the entire structure kind of combines philanthropists and investors, but still towards the same sort of social or environmental cause.
EILIS MURRAY:
And I think, Seonadh, just to add a point in relation to that, I think I would echo the points from Maya and Sheryl there, but also the whole area of social investment, social innovation, social enterprise is certainly something that is growing at a huge rate in Ireland in terms of interest in it. And I think in addition, I would fully agree with Maya in relation to, you know, there are particular ones that are grant making and those that are investment. But I think on the investment side the other additional feature that can be brought to bear is that it's not just for those types of projects, it's not just necessarily financial investment, but quite often it would be the donor's experience of, you know, business structures and/or influence or, you know, their own networks et cetera. So they can be very much part of almost seeing something grow in addition to, you know, investing in it. And that's something that kind of can be hugely attractive in terms of any kind of philanthropy or any donor's philanthropy.
SEONADH JOHNSON:
That's super helpful. Thank you, Eilis.
Unfortunately, we're out of time. We've covered a lot in the last hour, so thank you all to our three panellists and to you for attending, listeners. We'd love any feedback that you have.
But to wrap-up, here are my key take-aways from today. So there's no one right way to make a difference and to give back. Communication is key. There are many transferable skills that the next generation can learn from this whole process that we've talked about, whether it's communication, whether it's money management, whether it's asset allocation when it gets to that stage.
And it's okay if you can't reach a consensus. There are many ways to reach a compromise, but the important thing is to do it together.
So for help with your next steps on your philanthropy journey, you can go to Eilis for more information on Philanthropy in Ireland, as well as access to networks and support available to donors and other families who are willing to participate in peer-to-peer mentoring.
You can go to Sheryl for advise around strategy, governance, grant making, impact measurement, which is quite a hot topic right now, and succession and legacy planning as it relates to the philanthropy strategy.
And often in partnership with your tax and legal advisors, Maya can help with key considerations when implementing, say, a family constitution or providing general information on the merits of different structures, particularly in the early stages of reviewing your options, perhaps looking at family foundations versus personal holding companies, for example.
So it's been our absolute pleasure to host this event today. I hope that you found it helpful. Thank you and best of luck with however you choose to take this forward.
PANEL:
Thank you.
END
SEONADH JOHNSON:
Good morning. You are all very welcome to J.P. Morgan Private Bank's first webinar dedicated to Irish families and their advisors.
For those of you whom I haven't met yet, my name is Seonadh Johnson and I've been with J.P. Morgan for 15 years. My role involves working with Irish families, helping them find solutions to address their long and short term objectives across both sides of their balance sheet.
Initial conversations with new clients often focus first on establishing their intent when it comes to managing their wealth. Questions come up in conversations, such as "how much is needed to fund their lifestyle?" "Is the remainder then designated for the next generation or, indeed, generations?" "What percentage is going to be given away?" And the answers to these questions are complex and not immediately obvious to most people.
So in helping clients articulate their goals, I'd like to introduce our first panellist today, Maya Prabhu.
So I partner with Maya, who leads our wealth advisory practice across the UK, Europe and the Middle East. Maya helps families craft their own strategies for the meaning and purpose of their wealth and their family business, and in creating the right structures for asset protection that reflect the family's vision and values.
Our second panellist here today is Sheryl Fofaria, who leads our Philanthropy Advisory team in Europe and the Middle East. Essentially, Sheryl's our resident in-house philanthropy coach at the Private Bank. She helps families and family business owners alike be more effective and impactful in their giving.
And Eilis Murray I'm delighted to be joined by. Eilis is the CEO of Philanthropy Ireland, and for those of you who don't know, Philanthropy Ireland is the independent representative organisation for donors, individual family and institutional donors providing voice and space for donor needs.
So today we're here to address why is it important to be strategy in your approach to giving back. What are the benefits of getting the next generation involved? And most importantly, how? How do parents and grandparents even start conversations about that taboo word - money?
I'm going to put a series of questions to our esteemed panellists here today, and I would invite you to do the same by emailing your questions to me so that I can bring them up at the end.
So Maya, we speak with many families and family business owners about different matters relating to their wealth management, and we're actually now seeing an increase in the number of requests from clients looking to incorporate philanthropy into their overall financial goals and, indeed, aligning their family values with their corporate philanthropy. So Maya, why is this?
MAYA PRABHU:
Thank you, Seonadh, and a very good morning to you all and a very warm welcome to this webinar on my behalf. It's a real honour for me to be here, to address you and also in the role that I perform with families in helping them think about what they wish to be the intended consequences of their wealth and family business.
And Seonadh, that's a very good question. What has philanthropy got to do with a family's wealth or family business strategy? And, indeed, why are more and more families including philanthropy as a centrepiece to their wealth strategy?
And experience really shows us that there are some common practices of successful families, and by that I mean families that are looking to pass their wealth and business into the next generation, the second, the third, fourth, who wish their wealth to just last for two or three generations or one generation, or even those that are 100 year old family businesses.
And here's what some of them do. Firstly, I'd like to talk about what is success. I mentioned the word successful families, what do we mean by success? Essentially, if we can move to the next slide please, Mohesh. It means that individuals - and the next one please. Thank you. I wanted to show you this picture which is just going to come up. Perfect.
So what do we mean by success and how do successful families view their wealth? So the first is that the individual within the family feels fulfilled and has a sense of purpose and feels valued. The second measure of success is that family relationships are really good and healthy. And the third is, of course, that the wealth lasts, the family business is growing and doing well.
So what do these families do? And that is, as this picture shows, they consider their wealth in three dimensions, and they work on three things simultaneously. The first is, obviously, their financial capital, which could be their family business, looking to grow it, develop it. It could be their investments, it could be their cash, it could be their property. So, essentially, their financial assets and how they grow and develop it.
The second most crucial point is that they invest a lot of time in the people of the family. So nurturing every individual's dreams and passions, building family glue and connection rather than any competition between family members. Building collaborative skills in decision making, and really helping family members to learn the financial skills and to learn to be a good shareholder if, indeed, they're going to be shareholders of their family business.
And the third aspect is how to help them connect with society because, of course, we don't live in a vacuum. Our businesses don't exist in a vacuum. And so how do we connect with society?
I just wanted to share a couple of examples, if I may, on how families then really focus, what are some of the practical things that people do when I say they engage their next generation and they prepare their families and focus on the individuals within the families.
So just a few example. For many grandparents and parents with young children, start with the old style, but super relevant, three jars for their pocket money. A jar for spending, a jar to save and a jar to share. To share with your friends, to share with your siblings, to share with society, to share when you go to church, whatever it is that they define as sharing. But it's interesting, that's a very sort of sensible way to think about how you manage your cashflow, even as an adult. And this starts at a young age.
Another is around focusing on role modelling family values, and I'm sure we're going to talk a lot more as we go through this session around talking about it and living values.
And the third really practical thing that people do is they develop more sort of collaborative decision making. And I'm thinking about three examples here. For instance, a family that I worked with, they had three sons in their 20s, they were all big personalities, and they wanted to encourage their sons to really work together. And so they set aside a sum of money for them to invest together. And the point was not that they invest separately, but the point was that they invested together.
And you had one brother that wanted to take a lot of risk and said put everything on Bitcoin. And then you had another brother who said no, we must be very sensible and very cautious. And of course, the answer was somewhere in between. And the point was for them to find a shared process and for them to collaborate on what their decision would be. So this is great practice for what they would do then later on in life.
I'm thinking about another example of a brother and sister who their parents kindly bought them a flat in Central London and they lived there together, it was their responsibility to look after the maintenance, to pay part of the mortgage and generally look after the property and pay the bills. So again, they had to learn to work together and to share the responsibilities between them.
And finally, on philanthropy, I'm thinking about a fourth generation UK family business, and they gave 10 members of their fourth generation a pot of money for a philanthropic project or two. They gave them a budget and said amongst the ten of you sort of figure out and decide how you might wish to spend this.
So in this way, ultimately, our clients want, families want that their life's work is a source of opportunity for their families, potentially for generations. And in order to achieve that what successful families show us is that it needs clarity on roles and responsibilities. It needs preparation all in age appropriate ways that can be phased over time.
SEONADH JOHNSON:
That's a wonderful answer, and thanks for all the examples and insights, Maya. I think the anecdotes of real family situations really brings this to life for us.
On your slide there I see next gen at the centre of the Venn diagram on slide 3, however, according to the Williams Group Wealth Consultancy in the US, 70% of wealthy families lose their wealth by their second generation, and a stunning 90% by the third. Thankfully, this statistic can improve greatly with communication, however, communication is often a challenge in itself.
One of our colleagues has made the very valid point that there is one thing scarier than talking to children about wealth and that is somebody else doing it for you.
So before I put the next question to Maya, I'll invite Eilis to comment on this with an Irish context.
EILIS MURRAY:
Thanks Seonadh. And again, just echoing Maya's comments there, thank you so much for the opportunity to be a part of this and it's great, great to be here.
Yeah, I think in terms of - I think it's possible a particularly Irish problem. We don't like to talk about money. We don't feel comfortable with it. It's not something, you know, quite apart from wealth, it's just not something that we're necessarily at ease with talking about money in any context, you know, whether it's paying for the bill or whether it's actually philanthropy. We're just not kind of good at it.
And I suppose just in the context of that point that you raised there about even talking about kind of somebody else talking about it before the family talked to the next gen about it, it's brought to mind a conversation I had with a particular family where their children were very young, they were very much into play space giving, so what I mean by that is within their own community. And they would have been a family that were very much resourcing a lot of what was happening within that community.
And the reason the conversation started with us was around our children are getting that little bit older, they're in school now locally, benefitting also from projects that we have actually funded, but they don't realise that that's where the funding came from, but they're going to find out soon because they're going to be part of a conversation within the community. But we need to start talking about it with them before they find out from others. So I just - you know, it's very real for people and it's very real for families. And I think set alongside to the fact of the difficulty of just even opening conversations about money, per se, I think there may come realisations whereby you want to be in control and lead that conversation before somebody else does.
SEONADH JOHNSON:
Thanks for that insight, that's really helpful.
So Maya, how can families get around broaching the tricky subject of talking about money?
MAYA PRABHU:
Just to add to what Eilis was saying - thank you, Seonadh - and Eilis I totally agree with your remarks there. The only thing I would add is I have the great privilege of working with clients around Europe and also the Middle East. I was with some Italian clients yesterday on a similar sort of webinar and they said in Italy we don't talk about money, we don't like to talk about money. I have talked to families in Switzerland and they say oh, in Switzerland we definitely don't talk about money.
So I think that it's quite a European thing, we see it across the region. And the reason for that is it can be considered a little bit vulgar in many ways. That's one of the sort of barriers. The other barrier is a sort of what to say and at what point do you say it? And then there are these fears that people have, which are very valid and very real, which is if we talk about money do we burden our children, instead of them just letting - you know, enjoying their lives and pursuing the work they wish to pursue, does talking about this sort of create a burden for them?
Or on the other hand, on the flip side, or are we creating sort of expectations amongst them that they can relax and do nothing because they might benefit in some way from the family wealth?
At the same time, the next generation have their own sets of, I guess, fears. One is that if you've got a successful parent it's a really tough act to follow, and that places a huge - can place a huge burden sometimes on the next gen in terms of how they live up to that. And sometimes they want to know, because they want to be prepared, but they feel that if they raise that subject to their parents they might appear as though they're a bit sort of greedy or they don't want to do anything, or they're a bit money minded, which that's not their intention at all, but they don't want to appear that way.
And so because of these things... You see, it's never just about the money, it's about these sorts of, I guess, hopes and fears that everyone has that sort of restricts, that makes it difficult to talk about it.
So where do you start? Where do you start? So one is that we did some, a bit of research, and in my experience of working with families there are four sort of main archetypes of philosophies that I typically come across. And if we can move to slide 5, please, I'll be able to show you a picture of them so you can see what they're all about.
Perfect, thank you.
So the first is spenders. Sometimes people say, do you know, actually, I want my children just to have a great life and if they spend all the money that's absolutely fine. My children, my grandchildren, let them just enjoy themselves. Not very much, I might add, in my experience, but it does, it does come up.
The second category are sort of quite tough minded, and they say actually, you know, we want our family, our children to have their own sense of purpose, we want them to be really grounded. And for very successful business people they say the best part was the journey of work and, actually, we would love for our children to have a similar journey.
The third category are people who say most of the money's going to be given away as part of their philanthropy. And the fourth category are people who say, actually, we see every generation in our family not as a beneficiary, but as a steward. And stewardship is a very active thing. So you don't just take, but you develop, you nurture, and you pass it on to the next generation.
So how to talk about this? I mean this is a bit light-hearted. Sometimes in families we start with this and say okay, where do we think we are as a family? Every family will have a combination of these four philosophies, but where is our emphasis as a family? And it's a great conversation started. You can see this, these numbers on the side, and sometimes we ask everyone in the family to individually say how important, or what importance would they give for them individually to each of these categories? And it's a great conversation starter in a light-hearted way, and a way to learn about how everyone is thinking.
I might add, actually, that in my experience of working with many families the next generation very rarely, very rarely, individually, on their own account, every put spender as high, which is what the greatest fear is of parents. So often, but not always.
So the second way to start the conversation is philanthropy. It is a great entry point. Because starting with talking about philanthropy and the causes you want to support is about your values, is about things that the family cares about. So it's a wonderful conversation starter. It also means that you can start to talk about what is the purpose of our wealth. It is for us to do certain things, it is for us to invest in certain things, it's for us to enjoy to a certain extent as well, and it is also for us to share with others. So it's a great conversation starter, again, to talk about the meaning and purpose of one's wealth.
SEONADH JOHNSON:
Thank you, Maya, that's really helpful.
So I'm going to go back to Eilis now and just ask you to share some examples of how families in Ireland have succeeded in getting the younger generations involved in the family's philanthropy strategy.
EILIS MURRAY:
Delighted to, Seonadh. And I suppose what I would say at the outset is that there is no one way and there's no right way. I think very similar to what Maya was outlining there in terms of the mix of approaches, you know, there's a mix of ways that one can do it. And there in my experience there have been varying approaches depending on the family and the make up of the family. I suppose also depending on the age, you know, kind of, you know, what age groups are within the family at the time the conversation starts or whatever.
But even going back to where Maya spoke at the opening about kind of the pots of money, the save, spend, the give-away, that is often a huge starting point, you know, to kind of to use it as the leverage for getting the conversation going and getting them involved in terms of kind of the giving away, what are you actually giving it to, and starting a conversation at an early age in relation to that.
The thinking of other families that may be their children are older at the time when they want to kind of get them involved. I've seen various ways. One would be by engaging them in experiences of causes, for example, you know, introducing them to or exposing them to particular causes or to particular experiences about events in life or things that are happening in order to start a conversation about those before ever getting to a conversation about kind of well, is there something that we can do to support that?
The other way that is quite common and I've seen it with a couple of families, would be whereby they would allocate, again, kind of using the initial, the three parts, but in a different way or in a more detailed way, allocating various amounts to the various members of the family, whether it's the children or, indeed, any of the wider family. But deciding that they're setting aside sums and saying have a think about how you would give that away or why you would. So it could start as a quite a small sum, a very small, but again, it's about kind of building that experience and building that engagement and that involvement with it.
And then just another way that that is quite interesting, and I suppose it's a combination of kind of the parts and taking it to another level, would be where one family they equally have particular causes. Because they could never decide on, you know, the particular causes of interest in relation to what they might give you or how they might kind of set aside specific amounts for various areas, each member of the family had their own pot to work out of. But also what they did was they annually did a family get-together whereby there was an overall family pot that could be provided for a cause. It was not necessarily huge, it was quite small. It was very much, again, going back to what Maya mentioned there about it's not about the money or the wealth, it's about kind of opening the conversations in other ways. So they wanted to kind of discuss, you know, about values, et cetera.
So each family member had to come back at that annual event and say I know something about whatever it might be that was of a passion or an interest to them, and they pitched for it. "I would like you as my family members to support this cause for this, this and this reason, or to support this interest for this, this and this reason." So it brought conversations about in a different way and it really prompted that communication, and it's the communication that's really important because it opens up avenues in so many other ways.
And just a final one that actually kind of comes to mind, and that is in relation to family who quite recently... You know, the next generation what they did was they brought them in in the set-up. They were formalising the structure on their giving and they brought the next generation, a particular member of the next generation, in as a board member, as a trustee on the project. And via that next generation person really got that person to lead with other members of the family at that level to communicate what was happening and to draw them in. So almost like kind of a peer-to-peer, which can often work very, very well. So if it's not kind of one generation to another, but within your own generation level, if you like, of actually doing the communicating or opening the conversation it can work quite well.
So I think ultimately, Seonadh, what I would say is there's no one way. You will find ways of opening the conversations with them, but I think it ultimately comes down to finding a way to having that communication. And you can use various mechanisms to do that.
SEONADH JOHNSON:
Thanks Eilis, that's really wonderful.
So over to Sheryl. So Sheryl, as head of our Philanthropy Centre in Europe you have the privilege of partnering with our clients at different stages of their philanthropic journeys, from identifying the causes that matter most to them right at the inception, to helping them set up family foundations, and to help them benefit from on-going education and learning, to be as effective and impactful as they can possibly be.
Could you maybe tell us a little bit more about how as families you work with approach working together on their philanthropy. And it would also be great if you could share some practical tips on how to integrate new family members into an existing philanthropic initiative.
SHERYL FOFARIA:
Thank you. And I love all the examples. They bring so much colour and tangibility to the discussion. So thank you to Maya and Eilis and Seonadh too.
And in answer to your question, yes. Over time we've worked with a lot of families, a number of them who, again, have all developed very, very different ways of working successfully together on their philanthropy, and I would echo exactly what Eilis said, there's no one way and there is no right way. There's no, you know, right or wrong, but the models often may need to be revisited or adapted for a new set of circumstance that the family suddenly finds itself in. But, you know, above that there is still probably one central principle that I've found to be very key in developing an effective strategy for family giving that keeps everybody in a nice balance.
So what is that key? If I can just direct you to slide 7, Mohesh. And as much as possible that key is that you want to enable all family members to really feel as if they are contributing towards a shared vision that binds the family together, whilst at the same time having the freedom and the flexibility to really explore their own passions and interests which is what ultimately will drive the family forward in their philanthropy and their impact. And that I think holds true whether you're at the start of the journey or if you already have an existing way of working in your family's philanthropy.
And just coming back to your question around practical tips on how to engage others in family philanthropy, new faces, new family members, I'm actually going to go through two situations. One - because I think dynamics are probably quite different in both. One is where the family is very new to sort of bringing the family together in philanthropy, and the second is where you have already got an existing way of working, maybe it's been a few generations already in the making and you're trying to integrate newer members of the family into it.
So just moving on to slide 8 for the moment actually, what are the first things that you would put in place if you were just starting to bring your family together around philanthropy? Well, firstly, it may not be clear to everyone why this is important and even why they should be individually involved. So again, the key is communication, over-communication probably, but really sort of thinking about sitting together down on a table, formally or informally, really just to discuss why it's important. And once you have that buy-in from the family the next goal is try to get to a point where you can all articulate your values and your interests individually and as a family so that you can ultimately try to tie these altogether into a sort of robust and rigorous philanthropic strategy.
So in order to do that we've used a couple of different approaches with families in tandem, and it works quite well in tandem. And if I move you to slide - we are on slide 8, that's great. The first is really to ask family members individually to answer a series of questions. And they look like they're simply questions but, believe me, I've tried and sat down several times and it takes me ages to figure out some of the answers on a personal level. But these questions are really aimed at drawing out things like if you could fast-forward 5 or 10 years then what would you want to achieve, what would you want, what's your end game? And where have you spent time and money in the past? And this is my favourite one, what makes you angry about the world right now? And I know probably in this day and age it probably feels like lots of things make us angry, but it does give you - that question gives you a real sense for what you want to change.
And just simply having a discussion around a family table and trying to understand each other better on those questions I think is important as a first step.
We tend to combine those questions with an exercise called 'Picture Your Legacy'. So if I flick you to slide 9, really the idea behind this is that you sit through, you sit on the table and you go through a set of cards and you choose which ones resonate most with you. You want to really go for kind of gut instinct reactions. Then again, the idea is very much to just listen just very carefully to one another's commentary so that you can start to build a picture of where you have overlaps and common interests, and where you may have differences that you want to think about and how to address.
And I know that family meetings are hard, and a lot depends on families' cultures and personalities, but it's very important here to sort of lay the ground rules and be very respectful of one another's views and communicate to make sure everyone feels involved.
So the second situation - Seonadh, did you want to come in?
SEONADH JOHNSON:
Quick question. So on your point about overlapping themes, I think that's really interesting, because we had this example where there was an interest from one sibling in education and another who was really focused on the arts, so kind of moving in slightly different directions. But the conversation was around okay, you can go and have two separate focus areas and that's absolutely fine, or you can look at ways of collaborating both of the causes that you care about, whether it's enhancing creativity in young people or the other way around, supporting young people in the arts to fulfil their potential.
SHERYL FOFARIA:
Yeah, I think that's right. I mean there really is no right or wrong way, and you could take a number of different pathways with this. You could decide that, actually, education and the arts in terms of sort of the detail behind why different siblings are so interested in both of those areas really does necessitate, possibly, the pie being split into. And actually sort of people's families have done that that we've worked with where one sibling has kind of supervised, let's say, one area that is completely different to what another sibling is very passionate about. And it works totally fine, because both learn from each other. And then we've seen situations where the children of those respective siblings will go and intern in a different country with the other sibling, so their aunt or uncle, and that's quite a nice way for everybody to appreciate their differences and what they can add to the family and the aggregate.
But I think you're right, there are also ways of combining them, if you'd like to do that, and you might end up having a shared overlapping area that tries to harness both education and arts to be able to involve both parties. So thank you, thank you for that.
Now on that second situation of when, you know, a family has an existing philanthropic set up and maybe a foundation, there are some really tangible practical ways that we've actually learned all of these from clients. And they're ways really just to encourage and integrate newcomers into the mix. You don't need to be necessarily a next gen, it could be anyone who wants to just get a little bit more involved in their family's existing philanthropy.
I'll just pick one or two examples that stand out as just sensible things to do in all different aspects of a family's foundation, whether it's governance or investments or grant making, maybe it's advocacy and communication around what the family's focused on. And maybe it's well, actually, a very important part of this is just how to involve everybody in on-going education. The more that you can become an expert in the area that you care about the better funder you're going to be.
So, for example, in that first category, I'm going to move to slide 10 here, you know, sort of I guess before we really start it's very useful sometimes to revisit the family's history of philanthropy, because not everyone will be aware of the details. And in any case, things change, people change their views over time as well. So it's always very useful to have someone new come in and bring a fresh pair of eyes, try and revisit themes, make sure that they understand where the family were coming from when these were decided.
With respect to learning about governance, have them attend family foundation board meetings. Just as Eilis was saying, that can be an incredibly good way of learning board responsibilities. And do allow them to ask critical questions about the policies and frameworks for decision making because I think it's quite easy to get stuck in the mix, but these can be incredibly useful to challenge the status quo.
In terms of investments, think about helping them meet with your investment managers and learning more about the policy, about strategy if they're invested in sustainable, you know, if that's an area of interest. We're seeing a lot of the next generation particularly are very interested in integrating better environmental, social and governance practices into their investments. So that has been a big thing for a lot of families we work with.
And then when it comes to grant making, and I want to revisit Eilis's point, but engaging newcomers into experiences is incredibly important. Encouraging volunteering especially at the younger ages can be a brilliant way for the family also to do something together with a shared kind of experience that lets you - you know, really does open the door to genuine and very kind of authentic conversation about philanthropy and why it's important. So you could also sort of engage them much more with foundation staff, conducting due diligence, you know, going on site visits. Any kind of experience that will help them under the issues much, much better at a sort of academic and practical level.
And then in terms of on-going education, I mean there's a lot in this, but many of our sort of younger generation clients, especially in their sort of 20s and 30s, kind of come to us really asking advice around how they can keep learning about philanthropy as a discipline, as a practice in and of its own right, and are there networks that they can join so they can learn from peers. And thankfully, it's a really great developed ecosystem. So we've heard brilliant feedback from those who've attended academic courses that are laying the foundations of what international development looks like.
And then at the same time I'd love actually, you know, to sort of really think about the networks that exist in Ireland, which I'm sure Eilis can also tell us a little bit more about.
So the key, again, just to emphasise is really just to help everybody share a common goal that brings the family together whilst also allowing them to explore their own interests.
SEONADH JOHNSON:
That's really helpful from an international point of view and all the different families we work with. It's true, a lot of these programmes are based in the UK.
But Eilis, are you aware of any such programmes, philanthropy related training programmes in Ireland?
EILIS MURRAY:
I suppose probably it would be safer to say that there are... I think the whole network idea, Sheryl, would 100% agree kind of, you know, the ability to tap into that, and to engage with others that are in the same space or are at the same stage or, you know, just even kind of those sharing of experiences. But the networks would be less formal in Ireland, I would say, rather than in the UK. So although they're here they're not... I mean I would be very aware of kind of the more structured networks that are there in the UK, and be collaborative through many others, type of thing.
But we do have networks here in Ireland and I think that that is probably one of the things that Philanthropy Ireland would see as its role, is to facilitate those connections, to facilitate those networks and to facilitate those experiences. Because I would 100% agree that it's the peer-to-peer connection can make it a massive difference in any families learning about philanthropy. So what I mean by that is, for example, we do an annual donor symposium, which is literally just about bringing people together, to just connect with each other, but also maybe to hear some insights and experiences from people who have been down that road. Because although similar to, you know as Sheryl was saying there, you know, in our conversations here today any of the points that we're raising we're raising from experience of families that we've worked with. So they are real life experiences, but at the same time there's nothing quite like that peer-to-peer piece whereby, you know, you can fully identify, or two families can fully identify or generations within a family, you know, whether it's the younger generation or the older generation, whatever it might be, you know, that they can identify with each other.
So similar to the donor's symposium we've done, we would do events whereby we have done panel discussions amongst young people, you know, around, you know, kind of that next gen kind of, you know, and what they're experiencing. And really to kind of just give them a voice as well, and for them to hear their voice, be able to sort of kind of say you do have a voice about this.
So I think ultimately, Seonadh, what I would say is that they're less formal in the Irish context, even our own Remember organisation. And I don't know whether it might be useful to even kind of go to slide 12 and 13 there to give you a sense of what Philanthropy Ireland is about. But where we have those various kind of dimensions, if you like, kind of from family philanthropy foundations to individual donors, to, you know, what I would call - kind of call the institutional philanthropies, so even some of the fundraising philanthropy organisations. We have various models that are there, and we bring them together for various purposes at various times and according to their own areas of interest. And that is probably our key role is around that convening and sharing of information and knowledge.
So less formal networks. I mean the slide there gives you a sense that, you know, of who. The giving circles would be another side, and then you've got the others who would be very interested in social investments, for example.
So we bring them together based on kind of what the area of interest would be. And also, you know, even if it wasn't about kind of bringing somebody into it it's about facilitating a connection, you know. So if there was somebody that wanted to connect with somebody else that had a particular area of experience we would make that connection and step back and let them link with each other. Very much driven by peer-to-peer.
SEONADH JOHNSON:
That's a really helpful context. Thank you both for that detail.
So it seems fair to say that there are quite a few different pathways that families can take. Some families choose to keep things separate through the generations, creating their own philanthropic legacies whilst guiding the next generation to go their own way. But on the other hand, you have those who want to see the next generation continue the family's existing philanthropic legacy.
So Sheryl, what are the different models that you've seen, and why have people gone down those different paths?
SHERYL FOFARIA:
Yes, I think well, it's a good point actually. I mean, you know, there are many different examples, but I think broadly speaking we tend to find, you know, really these sort of models kind of fit into three very, very broad buckets along a spectrum. So at the one extreme you've got families like the Sainsburys who have, you know, 17 independent grant-making trusts established by three different generations and they all have separate boards. They're led by separate family members who have their own interests and complete autonomy over pursuing whatever that is and however extreme it is, you know, sort of extremely different to each other.
And then on the other extreme you've got families who are extremely tight-knit and they work very well together and successfully, but on a very narrow range of issues that have sort of existed and been carried through the generations over a long period of time. And they're very sort of integrated in their approach and how they've been brought up to believe that this is this one thing, it's very important. And sometimes, well, quite often, that is sort of also a legacy thing. Maybe it's honouring an older family member who has potentially - you know, who has set the whole thing up in the first place and has now since passed on.
And then, of course, in the middle of that spectrum you have a lot of different models. Some divvy up the pie into completely separate issue areas, like we were talking about with the two siblings before with their arts and education, and really just one sibling looks after one and one looks after the other and they share learnings together. And then we worked with other families where, you know, for example, it's taken a while, but the newer generation have had to really kind of deliberately and intentionally...
So I'm thinking of a family where the historical focus for two generations in the family foundation was healthcare and religious giving mainly. But the granddaughter comes in, she's sort of now in her early 20s, she cares deeply about addiction, and she's really good at it. You know, she's taken a lot of time and effort to be exceptionally kind of good at thinking about philanthropy when it comes to addiction.
So she took her time, but she went on her own learning journeys and over time kind of kept on bringing her family into the loop of her learning, really in an effort to try and persuade them actually this could be and is a very important part of her life and should be an important part of also putting into the family foundation. So she now works full-time in the foundation as a programme manager for this newly created area, because they all recognise that there are overlaps with what the traditional focus was.
But it took a lot of time and a lot of communication, and I think that's really the key sort of finalised messages from me is really to try and be kind of deliberate and strategic about it, but also to put a lot of emphasis on that communication and to make sure that everybody really does feel like their own sort of passions there are being looked after as well as the shared family vision.
SEONADH JOHNSON:
Thank you, Sheryl, that's great. I've got a couple of questions coming in from outside, and I'm mindful of time, so we'll try and weave those in in the next 10 minutes or so if that's okay.
But before I do that is there anything that we haven't already covered that families can do to involve new members of the next generation and their advisors. Because we partner a lot with their tax and legal advisors as well, so I think it's important to acknowledge how they - how the service they provide can be complemented by what all of us here today can do.
So I'll start with Sheryl. Was there anything else that you wanted to mention?
SHERYL FOFARIA:
No, I think really, actually, from my perspective, and we spend a lot of time working with advisors, but also foundation heads to make sure that sort of everybody's on the same page as in terms of sort of the learning and the strategic work that we're doing with the family, because of course that's going to guide the overall direction of where we're heading. And really, I guess the key is just to make sure that everybody is in the loop. It can be extremely helpful actually to be on the journey and learning together with both the foundation's sort of advisor or head as well as the family, because quite often they work just like this.
SEONADH JOHNSON:
Great. Eilis, anything that you'd like to add, and particularly about how Philanthropy Ireland can complement the professional advisor's work with families?
EILIS MURRAY:
Yeah, I think obviously professional advisors they're, you know, any family's trusted advisors and know intimately the needs, et cetera. And initial needs are so much more important than, you know, kind of before you even get to philanthropy. But I think you're very well positioned to open conversations with families in relation to it. And I suppose one of the unique things in Ireland is that our system in Ireland means that there is no hook there necessarily for advisors to open a conversation with families. So what I mean by that is that, you know, our infrastructure, our physical supports are not there to incentivise or to stimulate philanthropy in any way. So it can be difficult for them to open that conversation.
So for advisors I would sort of say please don't let that be a deterrent, and we would advise advisors in terms of how to open that conversation as well. But similarly, I would say to families don't be afraid to bring it up with your advisor, of sort of say well, I would like to consider this and if there anybody else we can talk to in relation to it. You know, because that is something that we would see as being a complementary role that we can play with advisors. Because I fully agree with Sheryl, it needs to be everybody within the mix. It's the broader space of conversations that are there. But we can certainly support advisors by bringing in knowledge of kind of what philanthropy looks like in Ireland to the table, and who's out there and maybe even connect them with other people along the way.
But I suppose one thing I would kind of add into that is that, you know - and Sheryl and Maya probably very kind of would readily identify with this term, the philanthropy journey, you know, that it's not something that just kind of suddenly starts. It's something that, you know, any families they learn from experience, they grow it. They might go one direction then discover that's not for them and redirect. And that's all great, because it's from experience and it's from the heart and I think that's where, you know, I would say to any families reach out and find out what else is being done, where, by whom, connect. The conversations are not going to kind of cost anything, except in terms of time, but they can be quite enriching.
SEONADH JOHNSON:
Thank you. And then Maya, did you have any wrap-up comments before I move on to the Q&A, which we may run slightly over on?
MAYA PRABHU:
Thank you. Yeah, so I think there's never been a more exciting time I think to get involved with philanthropy. It used to be, I mean when I first started my career I'm afraid to say several years ago, you know, you had philanthropy on one side and you had investing on the other and you had business on the third. And there was no connection between them. And what is really exciting about now is that we are drawing these really important connections, and there are, you know, three important levers through which you can make a difference as a family. You can make a difference through your business, through the employment you provide, through the way you work, through how you work with your suppliers and so on and so forth.
You can make a difference through your investments in choosing to use environmental, social and governance factors and sustainable investing, which is one of the very growing trends to make a difference. And you can make a difference through your philanthropy.
And actually, in the family conversation around each of these areas it's a great way to start conversations around what is the meaning and purpose of our wealth, because there are different ways in which we can express that. There's no one right way, there are several ways. And it's a great way for each family to really bring meaning to their assets as they think about the future.
SEONADH JOHNSON:
Brilliant. Lovely sum up there, Maya. Thank you. And actually, you touched on investing, and one of the questions that we've received relates to the lines between philanthropy and impact investing. And so there's been, to your point, a lot more interest in everything that is really being considered about our investments. And so can you talk about any change in the appetite for philanthropy given the focus on impact investing and ESG investing as well?
MAYA PRABHU:
I think so the first thing I'd say is that these things all sit beside each other in a super complementary way. So there are some causes that can only ever be served by grant making. So for instance, I'm trying to think about if you were campaigning for the rights of disabled children you can't really turn that into a business model, because there is an intrinsic importance in the work that you do around advocacy that can't be converted into a business model. So I think there are some things that can only be supported through philanthropy, through grant making and that's fantastic.
Sitting alongside that you have complementary ways that you may decide to open a cafe, for instance, that employs disabled children. Now that could be a mix model investing where, of course, your primary driver is social, you want to make a difference, but it is a for-profit business, a cafe is a for-profit business, so you can combine things this way. And this can extend all the way through to how you invest your main funds. So I think these things all sit in a complementary way. And it's important for your point to not see them as competing with each other, and most people do both.
SEONADH JOHNSON:
And I would just say that what's incredibly exciting as well is we're seeing a lot more interest from our clients in blended finance initiatives. So we're seeing some brilliant innovation which is using philanthropy potentially to derisk a layer of the investment and then asking others to come in at a slightly more commercial investment level so that they can sort of - you know, the entire structure kind of combines philanthropists and investors, but still towards the same sort of social or environmental cause.
EILIS MURRAY:
And I think, Seonadh, just to add a point in relation to that, I think I would echo the points from Maya and Sheryl there, but also the whole area of social investment, social innovation, social enterprise is certainly something that is growing at a huge rate in Ireland in terms of interest in it. And I think in addition, I would fully agree with Maya in relation to, you know, there are particular ones that are grant making and those that are investment. But I think on the investment side the other additional feature that can be brought to bear is that it's not just for those types of projects, it's not just necessarily financial investment, but quite often it would be the donor's experience of, you know, business structures and/or influence or, you know, their own networks et cetera. So they can be very much part of almost seeing something grow in addition to, you know, investing in it. And that's something that kind of can be hugely attractive in terms of any kind of philanthropy or any donor's philanthropy.
SEONADH JOHNSON:
That's super helpful. Thank you, Eilis.
Unfortunately, we're out of time. We've covered a lot in the last hour, so thank you all to our three panellists and to you for attending, listeners. We'd love any feedback that you have.
But to wrap-up, here are my key take-aways from today. So there's no one right way to make a difference and to give back. Communication is key. There are many transferable skills that the next generation can learn from this whole process that we've talked about, whether it's communication, whether it's money management, whether it's asset allocation when it gets to that stage.
And it's okay if you can't reach a consensus. There are many ways to reach a compromise, but the important thing is to do it together.
So for help with your next steps on your philanthropy journey, you can go to Eilis for more information on Philanthropy in Ireland, as well as access to networks and support available to donors and other families who are willing to participate in peer-to-peer mentoring.
You can go to Sheryl for advise around strategy, governance, grant making, impact measurement, which is quite a hot topic right now, and succession and legacy planning as it relates to the philanthropy strategy.
And often in partnership with your tax and legal advisors, Maya can help with key considerations when implementing, say, a family constitution or providing general information on the merits of different structures, particularly in the early stages of reviewing your options, perhaps looking at family foundations versus personal holding companies, for example.
So it's been our absolute pleasure to host this event today. I hope that you found it helpful. Thank you and best of luck with however you choose to take this forward.
PANEL:
Thank you.
END
