Three Ideas to Advise Philanthropic Family Business Owners
More than half of the country’s GDP is generated by family-owned businesses. Profits aren’t the only priority for most family businesses; indeed, the vast majority of family business owners report that other factors, such as culture, community, charity, and values, are also important to the business. Although it is not surprising that philanthropy is a vital part of the family business fabric, setting up the right structure to leave a legacy is not a cakewalk. As you advise a business-owner client, consider sharing questions that might help your client create or grow an effective corporate philanthropy program within the family enterprise.
Does the company have a strategy or system for prioritizing sponsorship requests, charity event invitations, and requests for donations? Is the strategy based on the owners’ values, along with employee input? Could a corporate donor-advised fund at the community foundation help streamline administrative load? Is there a corporate foundation in place and if so could it be streamlined into a corporate donor-advised fund to save administration hassles and better leverage tax strategies?
Getting employees engaged
If the company has a community engagement program, how popular is it? For example, is there a matching gifts program and is that program being utilized as expected? Are there opportunities for employees to volunteer together at local nonprofits? Contact your community foundation for ways to help your community.
Getting the word out
How is the company letting employees and other stakeholders know about its community commitments? Could they partner with the community foundation on local community initiatives?
Helping your clients ask the right questions can make a big difference in the success of their corporate philanthropy programs.
Related, and importantly, it is wise to remind your clients that the sale of a closely-held business creates strong opportunities for tax-savvy charitable giving–and that it is critical for the business owner to plan ahead.
As always, the team at the Hudson Community Foundation (HCF) is here to help you serve your family business clients by setting up a corporate donor-advised fund, creating donor-advised funds for employees, collaborating on a philanthropic component of a business sale, and more.
The team at HCF is a resource as you serve your philanthropic clients. We understand the charitable side of the equation and are happy to serve as a secondary source as you manage the primary relationship with your clients. This blog is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.