Charitable Giving and Family Business


Philanthropy in the family enterprise model is distinct from other family based charitable giving programs.  What makes philanthropy planning for family-owned businesses and their successors is the relationships that the enterprise has with the family.  Over the next three weeks I will be sharing a series of posts about philanthropy in the family enterprise model, leading up to the Michael Shuman, Social Impact Investing summit that is being held in Calgary on April 18 and 19 as part of the REAP Calgary Down to Earth Week.

80% of Canada’s economy is built on small and medium sized businesses.  It is estimated that 90% of those are family owned.  What comes to mind when I say family business might be some of the larger names like McCain, Ford Automotive, Loblaws (Weston Family), Sobey’s, Wal-Mart, Cargill, and Shaw; but there are a number, lesser known or more localized family businesses that cover every possible industry in our country from automotive to agriculture, from retail to construction, from IT to the energy sector.  With such large market-share in our economy it’s a wonder that we don’t hear about the strength and values that family businesses bring to our economy, especially when things are turning downwards.

According to a study conducted by Harvard University in 2010, family-owned businesses have outperformed the market by 6% return and generated 10% more in profit compared to their non-family competitors.

This also means that as our economy faces some challenges, those who are involved with, have invested in, or are supported by family businesses have a greater chance of weathering the storm than those that don’t.  It’s called the “Family-ness Advantage.”

What is this advantage? 

  • Family values driving a culture of passion & commitment
  • Access to long-term knowledge and relationships of the business
  • Opportunity to extend succession and mentorship
  • Employee loyalty/low turnover
  • Long-term decisions & patient capital
  • Deploying unconventional strategies
  • Ownership-Management alignment
  • Customers have a sense of innate trust in a family businesses

How does this play out in a philanthropy context?

Family enterprises are made up of three interconnected circles.  Each circle represents the “hat” that people where when they are making critical decisions.Three Circle Model


These three circles have seven different stakeholder types interacting at any given moment.  The philanthropy program intersects with each of these circles at different stages of its evolution and is dependant up on the advisor, if the family hasn’t raised it as a priority, to bring it forward at the right time.

Ownership: How are the assets in the family foundation managed? Who sits on the board of directors of the board of trustees? Who is responsible for managing the strategic direction of the organization? 

Family: What is the purpose of having the foundation? Is this a testing ground for future generations’ engagement within the family business?  What happens when generations don’t see eye to eye about things?

Business: How is the money in the foundation being made? Are employees and others, like clients and vendors encourage to participate in the philanthropic initiatives of the business?

To help you get started or to deepen your understanding of social impact investing and impact asset allocation, on April 18th and 19th in partnership with REAP Calgary, Patti Dolan - Raymond James, NEI, Divest-Invest, Remarkable People, Cause and Effect and Big Change Consulting a summit on asset management in charitable funds will be held in Calgary at Hotel Arts.  To get the juices flowing, the summit starts with a panel discussion exploring the different perspectives of social impact investing.  Panelists include investment strategists, the McConnell Family Foundation, The Pembina Institute and energy sector strategists.  The following morning, brunch and keynote presenter, Michael Shuman – economist and expert in social impact investing will share some ideas and things to consider when building out an investment portfolio.  This is a unique opportunity for individuals, families, advisors and others who are interested in exploring social impact investing at a deeper level.  Space is limited, please RSVP

Special rates for CAFE, ABFI and IFEA members.


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