Philanthropy Mini Series – Part Two: The Evolution of Philanthropic Giving: Who, What, Why and How

In this second chapter on the topic of philanthropy, we consider the who, what, why and how.

Philanthropic and charitable giving have evolved significantly in recent years, reflecting changes in societal values, economic shifts and corporate responsibility. Understanding these transformations is essential to maximising impact and ensuring sustainability. This evolution can be examined through four key aspects:

Who is Giving?

• Younger generations are engaging in philanthropy earlier than before, supported financially by older generations, but also contributing time and skills when financial resources are limited
• There is a growing trend of more focused and strategic giving at a younger age. Many families encourage younger members to pitch causes they support, presenting business plans and impact measurement strategies
• While philanthropy is not about generating profit, donors increasingly seek to maximise the return on investment in terms of social impact

What is Being Given?

• Traditional causes such as emergency aid, healthcare and education continue to receive substantial support
• Environmental philanthropy is on the rise, reflecting increased awareness of climate change
• More targeted giving is directed toward projects promoting social justice and equality

Why Are People Giving?

• Greater awareness and understanding of climate change and sustainability drive more environmentally conscious donations
• The rising economic influence of women has expanded charitable contributions. Historically, women have focused on community-based giving, and as their financial power has grown, they continue to support philanthropic causes both monetarily and through advocacy

How Are Businesses Giving?

• Businesses increasingly integrate Corporate Social Responsibility (CSR) into their core strategies rather than treating it as a peripheral activity
• There is a growing integration of philanthropy and sustainable investing, creating a “double upside”. This integration ensures social responsibility is aligned with business objectives and leads to more sustainable and impactful initiatives with positive social or environmental impac
• Firms benchmark their policies against global standards such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB)
• Companies collaborate with non-profits, governments and community organisations to tackle social and environmental issues, leveraging the strengths of each sector – resources and scalability of corporations  – and the specialised knowledge and community connections of non-profits, leading to more effective and comprehensive solutions.
• Employee-led initiatives empower workers, fostering community engagement, well-being and talent retention
• Consumers are more socially and environmentally conscious, using CSR as a benchmark for distinguishing ethical brands from less responsible ones

• This collaboration both internal and external often leads to new products and sometimes the creation of whole new markets

• CSR has taken matters to a new level, creating a strategic imperative that affects how businesses operate and interact with their stakeholders

Business First, Charity Second?

Simple answer – no. While CSR and philanthropy can complement each other, they remain distinct. Businesses are under increasing pressure to be sustainable and ethically minded, providing fertile ground for philanthropic initiatives. For families and companies, aligning business values with charitable giving helps create a structured and meaningful impac

The Source Matters

The way profits are generated matters just as much as how they are given away. Ethical business practices enhance the credibility of charitable giving. Benefits of aligning business and philanthropy include:

• Establishing measurable frameworks for benchmarking charitable contributions
• Enhancing investment appeal through strong CSR policies, potentially increasing overall profitability and philanthropic funds
• Encouraging employee-driven giving initiatives, broadening the scope of philanthropic impac
• Combining personal wealth with corporate giving for greater impact
• Leveraging tax incentives to increase the resources available for charitable donations.

However, there are challenges. Opening the floor to grassroots contributions can lead to an overwhelming number of personal giving requests, which may strain professional relationships. Establishing clear CSR guidelines can prevent these issues by setting firm policies on what types of giving are considered.

Good Governance Equals Good Giving

Philanthropy should not be a mere compliance exercise or a way to gain tax benefits—it requires strategic oversight. Effective governance ensures funds are directed to legitimate and impactful causes. Organisations should:

• Invest in infrastructure and personnel to oversee donations
• Assess charitable organisations to ensure alignment with reputational and ethical considerations
• Learn from past examples where donations to controversial organizations raised reputational concerns

Cylindrical Cycles

While CSR and ESG (Environmental, Social, and Governance) goals may align with philanthropy, they serve different purposes:

• Sustainable investments are designed to generate profit
• Philanthropy is a financial one-way street, aimed solely at social good
• Sustainable investments can fund philanthropic efforts, providing a “cleaner” source of funds that aligns with modern ethical considerations

How to Instil Good Governance?

• Engage advisers specialising in sustainable investments to ensure real impact and avoid greenwashing
• Encourage family members to have a say in investment and philanthropy decisions
• Hold regular family meetings (quarterly or biannually) involving key advisers—trustees, investment specialists and philanthropic experts—to align objectives
• Establish clear protocols for both investment strategies and charitable giving

Consensus is Key

Ultimately, successful philanthropic endeavours require ongoing dialogue and agreement among stakeholders. By engaging multiple generations, preserving family business values, and adapting to contemporary challenges, philanthropy can be sustained and enhanced for generations to come.