David Werdiger, Technology Entrepreneur and Strategic Advisor, a speaker at the marcus evans Private Wealth Management APAC Summit 2015, discusses why family offices should look into philanthropic opportunities with Luzdary Hammad, Press Manager, marcus evans, Summits Division .
“These days, the next generation in family offices is often interested in making investments not just for financial returns, but to make the world a better place. There are family offices that are averse to investing in companies that although very profitable, do things that are not good for the world, such as cigarettes or arms manufacturers. Common family values are a way to bridge generations,” suggests David Werdiger, Technology Entrepreneur and Strategic Advisor.
What additional risks do family offices encounter?
Every investment has standard risks that need to be investigated, but an additional risk to consider when investing as a family is the relationship risk. When an investor makes an investment with someone and that person rips them off, the investor will not only have lost money, but have also damaged and most often lost their relationship with that person. If that person is a stranger the investor may not care about the loss of that relationship, but if the investment cuts across family relationships then there is an extra overlay of risk. An investor may make money by going into business with their family members, but if their investment leads to continuous fighting; it is not worth the relationship risk. Alternatively, the investor may lose money with a family member and cause immense damage to a family relationship.
What is strategic philanthropy?
Strategic philanthropy is having a plan on how and where to direct philanthropic money bearing in mind what you want to accomplish with your donation. Family offices should not be impulsive and donate to everything and anything. They need to think deeper about what they want to achieve with their donations and therefore look at their philanthropy as not just a onetime thing, but as a series of gifts made in a particular area of interest with particular goals in mind. With goals in mind, they can monitor the achievement or lack of achievement of their donations. Family offices should not conduct chequebook philanthropy, for example they decide they want to put their name on a hospital and write the hospital a big fat cheque. Instead they need to think about what they want to achieve by putting their name on that hospital and know what the money will go to, and regularly monitor the grant recipient to see if they are accountable for what they promised.
Why should family offices consider strategic philanthropy?
Philanthropy is a great way to bring a family together, by exploring their shared values between generations and using those to direct money to philanthropic causes. Families have a culture and values that are important, and they can continue the family legacy not just by creating more and more wealth, but by looking back and saying this is what we have achieved in making the world a better place. Philanthropy is something that can transmit strongly through generations and also link diverse generations together.
Werdiger is a speaker at the marcus evans Private Wealth Management APAC Summit 2015, taking place in Kuala Lumpur, Malaysia, 2 – 4 November.
About the Private Wealth Management APAC Summit 2015
The sixth annual Private Wealth Management APAC Summit is the premium forum bringing elite buyers and sellers together. The summit offers regional SFOs, MFOs, wealth advisors, and international fund managers and consultants an intimate environment for a focused discussion of key new drivers shaping wealth preservation and investment strategy. Taking place at the Hilton Kuala Lumpur Hotel, Kuala Lumpur, Malaysia, 2 – 4 November 2015, the Summit includes presentations on exploring a wide range of asset classes to balance up portfolio distribution for wealth preservation in the current volatile market, investigating the winning collaboration framework for strategic FO alliances to increase capital, mitigate risk and seize cross-border opportunities, and equipping successors with practical corporate exposure.
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