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Philanthropy: The shift to professionalisation

Francois Debiesse is not surprised that just 2.9% of respondents to the BNP Paribas/Campden Research Global Philanthropy Report, Giving through the generations, said they relied on banks for philanthropic advice. 

As CEO of BNP Paribas Wealth Management, Debiesse has played an integral role in the France-based group's move into the philanthropic advisory sphere. He has managed the banking business for 15 years but initiated a complete philanthropy offering to wealthy clients in 2007, which is based on two main pillars: the "Fondation de l'Orangerie for individual philanthropy", a vehicle designed to collect their wealthiest clients' donations and allot them efficiently to rigorous, transparent and original projects; and a tailor-made personal advisory service. 

"I'm not surprised by this figure [of 2.9%] because this type of advice is pretty new for banks," he tells Campden FB. "I think that this will change, but it has to be part of the global stable of advice that banks give to clients with regard to strategic asset allocation."

He is aware that philanthropy remains a deeply personal affair – 72.9% of respondents see their philanthropy as part of the legacy they will leave to their family – and says many of his clients, wherever they come from in the world, are dedicated to giving back part of the wealth they have created.

However, Debiesse is keen that service providers begin to fulfil a role in the professionalisation of family philanthropy. Such a movement has been led by entrepreneurs and next generation family members who are planning their philanthropy in a more strategic fashion – as cited by a quarter of respondents – than their elder peers. It essentially means that philanthropy is no longer about writing a cheque and moving on, it is about managing the philanthropic process in much the same way as a business or investment opportunity.

An example is the 16% who take a portfolio approach to philanthropy; in essence they select charities and projects that fit in with their wider objectives in much the same way as they select equities, bonds and funds.

Debiesse is cogniscent of this shift and says such a focus is more important now than ever. "The current economic climate means you risk losing a significant part of your philanthropic giving if there are inefficiencies in how you give. By implementing more rigorous processes and by incorporating the expertise of third parties then the potential for improvement is huge."

The good news, in Debiesse's experience, is that families appear to be more committed now to their philanthropy than ever before. "It is clear that some of the wealthiest people have been significantly affected by the financial crisis but many of them have also become more conscious of the major issues that our world currently faces. My feeling is that we will see a deeper, greater commitment from the wealthy to play a part in finding solutions to these issues," he says.

According to the report, although 40% allocate more than 5% of their wealth to philanthropic causes (30% of families with a net worth in excess of $1 billion allocate more than 15%), the majority give less. However, Debiesse believes that the most important figure is how much you give year on year. "The sustainability of the gift is absolutely key and it's usually better to give 5% or less year on year than 8% in one shot. At the end of the day, if family philanthropists are giving 4-5% of their wealth year after year, it's a good level," he says.

One of the most significant findings of the survey is the desire for collaboration between families on philanthropy. Crucially, collaboration allows families to get the best bang for their buck – a real bonus when there is an increasingly professional, strategic framework around their giving.

"When you address very complex issues such as the environment or deep-seated social problems, creating networks becomes very important," says Debiesse. "Networks that include other families, associations and governments will bring together people who are not only potentially very knowledgeable about issues you are concerned with, but who will enable you to become more efficient as well."

When it comes to the types of projects that families support, local causes outweigh national/international ones and children's issues are by far those that philanthropists feel are most important. When the data is broken down by age, gender and geography there are some real distinctions.

In particular, Debiesse is interested by the views of next generation members. "The way young family members approach their wealth is very different. They are very interested in philanthropy and will, I believe, develop a deeper commitment than their parent's generation. In terms of specific issues, in my experience they are more focused on social responsibility and the environment."

Evidently, Debiesse is keen to work more closely with next generation members to support their more strategic and professional philanthropic approach. However, as the report highlighted, philanthropy remains a tightly controlled family affair.

"We offer a very professional philanthropic advisory service to families. The problem is that many of them prefer to keep everything in-house, not give any visibility to what they are doing and keep communication with external people to an absolute minimum," he explains.

Such introversion is seemingly at odds with what philanthropists in the report suggested was their biggest challenge: measuring the impact of their giving. According to Debiesse, the solution to this problem is complex.

"The easy answer is professionalism but it's much more complex that that. It is difficult to be fully professional on your own, so it is better to build partnerships and create synergies. However, I believe the potential to improve the results of family philanthropy is huge and I remain confident that, despite the current difficulties, it will remain a very important part of what wealthy families are about." 

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