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  • Service: Enterprise, Family business
  • Type: Business and industry issue
  • Date: 7/26/2013

When philanthropy is at the heart of Family Business 

Philanthropy at the heart
In a number of previous posts we have discussed how the philanthropic agenda of the family business may or may not translate across the generations. In an article published by The New York Times, author Charles Paikert talks to Eliot Orton, tracing back his family business’ interest in philanthropy.

A commitment to “civic duty”

Orton’s family own and run the Vermont Country Stores. He traces back their interest in philanthropy to a discussion at his grandfather’s small store in the Green Mountains. According to Orton, the family and their neighbours were discussing the things that needed to be done in the community, playing into the “strong sense of civic duty” held by people in Vermont.


While constrained by the limited resources of their tiny store in Weston, Vermont, the Orton family proceeded with donating time and money to their local charitable causes. Today, the “store has become a 15,000-square-foot tourist destination,” with the family business enjoying a thriving national business, bringing in an annual average of $100 million dollars in sales.


Engaging employees in philanthropic activities

The family’s commitment to philanthropy has not faded with the business’ success. Orton estimates that the company dedicates around 10% of their annual profit, along with hundreds of hours of time.


All 500 employees of the business are encouraged to be involved in the charitable causes supported by Vermont Country Stores. The employees are encouraged to submit their ideas for charitable work undertaken by the company, and are invited to be part of any philanthropic decisions.

Our employees developed an online farmers market to help local farms in Rutland,” he said. “They signed up farmers to bring their goods to a distribution center, then sorted things out and put the inventory online. All the money went back to help the farmers in an innovative way.


Philanthropy as a cornerstone to family-owned business

Increasingly, family-owned businesses are placing an emphasis on their role in the community, engaging in philanthropic activities and planning. According to Betsy Brill, president of Strategic Philanthropy:


Businesses that are owned or controlled by families are using philanthropy as part of a business strategy and aligning the family’s core values with the company’s.


It makes sense and can also be extremely beneficial to business objectives such as attracting and retaining great employees and improving the company’s reputation as a good corporate citizen with its customers, community and vendors and suppliers.


Kelin Gersick, a principal with Lansberg, Gersick & Associates, reiterated the sentiments shared by Brill, saying that the benefits of family business involvement in philanthropic activities can be immense. He said:


It creates a much stronger and diversified connection between the family ownership group and operations,” he said, referring to management.


It also creates a connection to the company for employees, customers and the supply chain not only through what the company makes or sells, but through what it does by improving quality of life.


Establishing a philanthropic program

In closing, Paikert notes that families wanting to institute a philanthropic program should prepare a detailed plan, a committee to define goals should be set up, and management and staff should be assigned to support carrying out the plan. It is key that the family business acknowledge the resources available, whether a time commitment or financial one. Orton suggests:


Anyone can write a check, but the closer you are to the philanthropy, the more it means to you.

 

For the full article, check out More Family Firms Make Philanthropy Their Business

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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