Philanthropy fosters family bonds, ensures business longevity, and provides a deeper sense of purpose beyond mere altruism.
Mahatma Gandhi once said, “The best way to find yourself is to lose yourself in the service of others.” In our experience, those words ring true, as nearly all successful people have one thing in common: the urge to make an impact, often through philanthropy. From young professionals to founders and other executives at thriving businesses, we find that there are three main drivers of those who seek the path of philanthropy:
- Altruism, or a selfless desire to do good for the world
- Legacy, which involves thinking about how they want to be remembered and utilizing philanthropy to help build that legacy
- Financial incentives, which include tax benefits
Sometimes all three are present, and sometimes one motivation outweighs the others. Nevertheless, a commitment to philanthropy can also offer other advantages that are perhaps more subtle but equally powerful.
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Family Engagement
Well-planned and executed philanthropy can foster values-based, enduring engagement with immediate and, in some cases, extended family members. When family members collaboratively engage in philanthropy around shared values, it is an opportunity to come together and express those shared values as a family unit, preferably around a unified philanthropic vision that can be extended across generations. In this sense, when all members and generations of a family are fully engaged, philanthropy can act as the glue that tightens and secures the bonds among them.
Embeddedness
Martin Reeves, chairman of the BCG Henderson Institute, explores business insights from sometimes untraditional sources. For example, in a popular TED talk, “How to Build a Business that Lasts 100 Years,” Reeves demonstrates how businesses can employ the factors that make the human immune system highly efficient, including what Reeves calls embeddedness.
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As Reeves points out, the immune system thrives only when the broader ecosystem in which it is embedded (our bodies) thrives. The same is arguably true for philanthropy and its practitioners. In fact, according to the Rush University Medical Center, “working to improve others’ lives may improve—and lengthen—your own.”
Fulfillment
When we talk to clients about philanthropy, we are mindful of the “Advice Value Stack,” a creation of Fidelity Investments. The pyramidal configuration of the Advice Value Stack consists of four levels of client expectations, with “Managing the Money” at the base and “Achieving Goals,” finding “Peace of Mind,” and attaining “Fulfillment” as the next three levels, in order, of client wants and needs.
All clients expect their money to be well managed, but many clients want more, often much more, and those wants are usually centered around achieving financial and other goals, peace of mind, and fulfillment. For many, philanthropy can be a key to these three additional areas of want and need.
Philanthropy will always be about altruism, legacy, and good financial and tax planning. Yet, for those who are open to a broader perspective, it can also offer greater ties to family members and communities, along with deeper planning opportunities and immeasurable peace of mind and fulfillment.
