• Service: Enterprise, Family business
  • Type: Business and industry issue
  • Date: 2/26/2013

Approaching philanthropy with a business mindset 

Approaching philanthropy
In days gone by, philanthropy simply meant giving money away to chosen charity foundations or trusts, for them to use it as they saw fit. Some years ago, this old-fashioned notion of philanthropy was turned on its head by software entrepreneur and one of the world’s richest men, Bill Gates.

Gates insists that doing good needs to be both cost-effective and performance-checked against metrics; in other words philanthropy needs to be approached with a business mindset…

The business approach

This philosophy drives Gates’ charity, The Bill and Melinda Gates Foundation, and it’s wise to bring this ‘creative capitalism’ thinking to your own family charitable trust. Take a leaf from your business’ book and cut unnecessary expenditure where possible to channel the funds saved to where it counts.

You only recruit top candidates to positions at your business. Why? To get the best results, of course! Apply the same principle when it comes to recruiting both paid and volunteer staff to your charitable trust.

Remember, too, that cutting excess expenditure means that it’s even more imperative to attract top talent – rather emphasize quality over quantity and make a lean charity work by attracting the best people with decent salary packages.

Monitor performance and measure results

You wouldn’t pump money into a business venture which showed consistently poor results, so why do the same with a charity?

Ensure that you’re as rigorous with monitoring both the results of the various projects in which your charitable foundation is involved and its financials. Don’t be afraid to close unsustainable projects or to aim for profitability – a charity operating on a surplus is far more effective in achieving its goals and doing its good work than a charity floundering with financial woes. And keep a firm hand on cash flow – it’s the lifeblood of businesses and charities, alike.

Remember that applying business-like thinking to a charity’s finances is not ruthless, it’s merely pragmatic – hard to help the homeless, when you’re keeping the wolves from the door, yourself!

Some people may incorrectly see working for a charity as a hobby. The staff and volunteers at your charitable organisation need to realise that they’re there to work and make a difference. Accordingly, they are responsible for everything which goes on in their department or realm of work. This doesn’t mean riding rough-shod over them, though; it means respecting them and their skills and expertise – allowing them to contribute and implement their own ideas will encourage them to make a greater investment in their work and will, in turn, foster a sense of greater accountability.

Reward efforts

The people who work at your charitable organisation may be paid well, or may be volunteering out of the goodness of their hearts – but that doesn’t mean that efforts should go unnoticed. Quite the contrary – make a concerted effort to acknowledge the good work which they’re doing.

Performance-related bonuses may be in order; however, monetary rewards aren’t the only way to acknowledge staff achievements. Other ideas include giving out Certificates of Achievement, meal or movie vouchers, or even flowers and handwritten notes of thanks.

For inspiration, have a look at these charitable foundations which are organised and managed with strong business principles:

Christophe Bernard

Christophe Bernard
I am a KPMG partner based in the French firm’s Paris office, responsible for encouraging the growth of our firms’ middle markets practice across Europe, Middle East and Africa, a majority of that market comprises of family businesses.

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