New role: Philanthropy moves to the family office

Today, a growing number of legacy-minded families are relocating their charitable giving efforts inside their family offices.

The result: Emergence of an integrated operating model that combines financial management with the family’s shared values and legacy goals.

For many family offices making this transformation, adopting a set of best practices recommended by The Philanthropy Centre at J.P. Morgan provides an effective starting point.

• Create an overarching vision for charitable activities: Clarify philanthropy goals, identify priority giving areas and set measurable objectives to track progress
• Engage the next generation: Create structured programs that educate and empower younger family members
• Establish governance guidelines: Develop clear reporting relationships and detail decision-making procedures
• Define and implement grantmaking policies: Put processes in place to ensure consistency and impact
• Leverage resident expertise: Build on the skills, talents and insights of family office specialists to expand charitable giving efforts beyond the realm of grantmaking

Case study: The Dalio Family Office

For more than two decades, the Dalio Family Office has been guiding the family’s notable achievements in the areas of education, economic empowerment, ocean science, health and wellness, and arts and community.

Janine Racanelli, CEO of the Dalio Family Office, attended a recent J.P. Morgan client event to discuss the family’s distinctive approach to philanthropy. Below are highlights of that conversation.

A deep commitment to helping others

In 2003, Ray Dalio, Founder of Bridgewater Associates, a Connecticut-based investment firm, his wife, Barbara, and their children established the Dalio Foundation, which later became part of Dalio Philanthropies. In 2011, Ray and Barbara deepened their philanthropic commitment and signed the Giving Pledge, committing to give away the majority of their wealth to charitable causes. The family integrated its charitable efforts with the ongoing operations of its family office.

Q:  What distinguishes the Dalio family’s approach to giving?

A: Their aim is to be disruptive, innovative and flexible. They believe the best way to optimize their efforts is to align their philanthropic goals and their financial management strategies, and to create partnerships with people and organizations that share their values. In these endeavors, they leverage the expertise and resources of their family office (e.g., in the areas of legal, financial and strategic advice). To facilitate this approach, the Dalio Foundation and the Dalio Family Office operate under the guidance of a single board of directors.

Q: How is this put into practice?

A: The family prioritizes learning by doing. This allows them to adapt quickly to new opportunities and challenges, and to experiment with diverse giving structures and strategies. We believe the key to being responsive—and getting results—is to be open to change and willing to pivot when necessary.

Q. How does this approach impact the structures used for giving?

A: Ray Dalio never focused on the vehicle being used—he focused on outcomes and impact. Today, when the family office becomes involved, we consider a range of giving approaches—private capital investments, grants, partnerships—to find the structure that will best align our goals and values with the results we want to achieve. We want our approach to be innovative and creative.

Q: How do individual family members become engaged?

A: The first and second generations play active roles in the family’s philanthropic efforts—and find ways to involve and educate the third generation.

Ray greatly believes in learning, failing and critical feedback loops. Each individual’s personal growth and participation are viewed as essential to sustaining the family’s legacy—and, importantly, no one is compelled to participate in something in which they’re not interested.¹

To cultivate participation, each family member receives giving guidelines based on their respective ages and levels of experience. Members are encouraged to pursue their own philanthropic passions and interests—and to share their efforts with one another. For younger members, the starting point generally is in grantmaking. They get involved in operating projects when they have gained more experience.

Q. Why are partnerships central to the family’s philanthropy?

A. Collaboration enables scale and efficiency, and increases the potential impact of an initiative. So rather than creating multiple projects from scratch, we look for amazing people, institutions and initiatives to support. This leads us to partnerships with educational institutions, non-governmental organizations (NGOs) and governments on large-scale initiatives.

For example, the family is committed to ensuring healthier oceans, and collaborates with educational institutions, scientists, philanthropists and governments to drive impactful, sustainable decision making.

Q. How are results measured?

A: We leave it up to individual family members to curate their own projects and determine how they will measure success. As a result, some family members take a data-driven approach, while others choose to trust the organizations they support to do good work without excessive measurement demands.

Q: Has the family derived other benefits from this operating model?

A: Yes. It’s allowed us to optimize our resources, which has led to cost savings and streamlined operations; enhanced oversight and governance; and more coordinated and effective program management. All of which support the family’s legacy goals and vision.

Learn more

Ask your J.P. Morgan team for more information about The Philanthropy Centre at J.P. Morgan and the many ways it can help your family advance a wide range of charitable giving goals.

¹According to the J.P. Morgan 2024 Global Family Office Report, 39% of global family offices engage the next generation through philanthropy, making it the top method for involving younger family members in family office activities.