Peter Vogel is Director of the Global Family Business Center and holder of the Debiopharm Chair for Family Philanthropy at IMD (International Institute for Management Development) in Lausanne, Switzerland. Recognised as a leading family business expert, Peter has directed “The Philanthropy Navigator” research project which will come out as a book in November with a view to guiding enterprising families in their giving journeys. Working with family businesses globally on key issues such as talent development, succession, governance and change management, Peter will moderate the panel discussion “Family business for good: getting involved in the crisis effort” and lead a workshop on philanthropy during The Family Business Summit on 1 and 2 October.
Is there a family business specificity when it comes to philanthropy ?
Over 80% of enterprising families are philanthropically active. When you think about philanthropy in the public sphere, some individuals and families are more prominent and come naturally to your mind. Oftentimes, as a Westerner, it’s very centred on the United States and Europe because so many mega-donors come from there. And we don’t necessarily think about all the other families around the world that are philanthropically active. However, philanthropy has always been an integral part of the range of activities enterprising families have. For example, they always have been very much involved and implicated in their local communities in the countries and the regions in which they operate. It’s just that some families haven’t been as vocal and public about it as others. Just like they have often decided to be more private about their wealth. So, in short, philanthropy is an inherent element of enterprising families and they are incredibly important in the charity ecosystem, as they can help tackle the world’s big challenges.
Is there an ideal way for enterprising families to structure their philanthropic actions?
There are as many ways of doing philanthropy as philanthropists. It is one of those things where there is not one best approach to giving. You can, from a governance point of view, embed your philanthropic giving more in the family or more in the business. It can be more or less formalised. It can be managed through a foundation, supported through a family office or other vehicles. It can be just about giving money personally or it can be a much more structured approach. In the end, it very much depends on the purpose of the giving. If the family wants to address a cause that is very close to the line of their business then it might make sense to do it more as a corporate activity. If it’s something that the family really cares about on a personal level – the family is passionate about a cause for a specific reason – then it will likely rather be structured as family philanthropy. In the research project on philanthropic identities and patterns, we realized that there are almost as many ways of doing philanthropy as there are philanthropists, and that is also the beauty about philanthropy. There are many trade-offs to be made on all aspects of your giving. Our new book The Family Philanthropy Navigator, helps you go through these in a step-by-step approach.
How did you get started working on the Family Philanthropy Navigator?
I joined IMD in September 2017, the same year Debiopharm Group endowed a chair on family philanthropy with the idea to help families who are philanthropically active to share more, learn more from each other and ultimately become better and more professional philanthropists. As I’ve been working a lot with the Business Model Canvas (1) on entrepreneurship, I thought about creating a simple toolkit that families and philanthropy advisors could use in their work to structure their philanthropic journey more easily. That was really the birth of it. So we created a prototype of it that we then tested in a number of workshops with families and they really liked it. Together with my two co-authors we then launched the research project and started gathering case studies interviewing over 70 families around the world on their philanthropic giving.
So what do you propose in this book to enterprising families who want to give?
We propose a framework and a path to philanthropy. Why are you giving? Who are you giving to? What are the causes you support? What is your level of ambition and who do you interact with inside the family and in your ecosystem to make it happen? How do you organise things? How do you stand out? How do you resource it? How do you fund it from a legal and structural point of view? How do you measure your impact? It’s a very complex interconnected element. On completion of the Family Philanthropy Navigator, you will: 1) Have gained a deeper insight into the world of family philanthropy and how is has changed and transformed. 2) The important role that philanthropy plays for enterprising families and how families can leverage philanthropy as an integral part of their range of activities. 3) Have understood the motivation, focus and ambitions of your giving, and the importance of these elements in shaping your philanthropic journey. 4) Have chosen the people and organizations you will need to support your journey, from family members to on-the-ground experts. 5) Have decided what resources, structures and processes are required to fit your circumstances and to achieve your desired impact. 6) Have explored real-life stories and examples from various philanthropists around the world to inspire and inform your giving. 7) Be ready to begin your own philanthropic journey with confidence or to change direction to optimize your giving as an already active philanthropist.
How can enterprising families ensure that their actions have a long-term impact?
First of all, they need to define what success means to them and what will be their key performance indicators (KPIs). Answering this question is of course linked to what their motivation is. Are they motivated to bring together the family? Are they motivated to eradicate Ebola? Are they motivated to build the reputation of their business and boost employees’ engagement in the company? Whatever it is, they then need to define the KPIs. How broad is the scope of their giving? Ultimately, in order to measure the impact of their giving they need to define a process to monitor their performance.
So, it’s a very clear process in the sense of collecting data, reviewing data, evaluating the performance of what they do. Sometimes they want to have immediate results from their actions. Sometimes they want a long-term sustainable impact. They can give people food or they can train them to work. Let’s take the example of a specific medicine or a vaccination. Take Bill and Melinda Gates, they are trying to eradicate Ebola. So, their KPI is to get to zero Ebola cases per year. Another example could be that they commit to supporting specific areas like Alzheimer’s disease. They can support organisations that raise the awareness about Alzheimer’s in developing countries. In that case, their KPI is not as straightforward as in the Ebola case. They could, for example, measure the number of indviduals they reached with their initiatives. So, before taking action they have to be aware if their KPIs are going to be quantitative or qualitative. There are a lot of ways to, in a very business-like manner, measure and quantify the impact of their giving.
Are there regional specificities in terms of philanthropy ?
Yes. For example, while in some parts of the world philanthropists can be publicly visible, this is not possible in other parts of the world. For security reasons, wealthy families oftentimes have to keep a low profile. They don’t want to display themselves in public as being a very wealthy family. As a result, if they are philanthropically active, the last thing they want is to draw attention to themselves. So they may give $100m but nobody knows about it. In the Middle
East and North Africa, as a good Muslim, it’s culturally expected that you give. Religiously, you don’t have to talk about it because everybody does it. There are a lot of regional differences and that is also why philanthropy is so complex and interesting.
Are there specificities to African family philanthropists compared to family philanthropists on other continents?
Philanthropy is a very diverse subject and you cannot compare philanthropy in Europe to the US in or Africa to Asia in every dimension. Africa is such a big continent with a huge amount of variety, but also blooming business ecosystems, that it’s almost impossible to generalise. What I can share with you is an anecdote. A while ago, I was working on the subject of youth unemployment and one of my good friends in this endeavour was running the South African Development Community Youth Forum. He is from Zimbabwe but lives in London. So, we were pitching to African ministries and universities our framework on youth employment and even though my friend was originally from Zimbabwe, we got pushed back in a sense that we were told ‘this needs to be a local solution’, ‘we need this to be a homegrown solution’. What I mean is, I see African ecosystem players wanting problems to be solved by themselves, in-house instead of solutions being provided from the outside. A trend which I look at very positively, because it means that the African philanthropic sector is evolving and gaining importance. You still do see a lot of Western philanthropists trying to tackle some of the issues on the ground in Africa around education, around access to healthcare, etc. But the more time passes by, the more you see homegrown philanthropy going on in Africa.
(1) A tool to help design your business model.