Series of thought leadership papers launched by Deloitte and UBS 

Summary:

Family philanthropy has long been perceived as a cornerstone of preserving family legacy, creating a continuation of family spirit and enhancing family engagement and identity. Deloitte collaborates with UBS to launch this paper Carrying the Torch - Passing on a lasting family legacy to future generations through family philanthropy, which focuses on the family philanthropy practices in the Asia Pacific region, and explores how these wealthy families, especially the younger generations, are leading their family foundations to create a lasting social impact while helping to preserve family legacy. This paper is a part of the family office report series launched by Deloitte and UBS, which explores the trends and outlook of family offices, with topics ranging from family succession, family governance, and the roles of next generation to sustainable investing.

Over the past few decades, Asia has amassed one-third of the world's wealth while witnessing incredible progress in areas such as education, life expectancy and infrastructure. Yet, the region remains home to two-thirds of the world's poor. Pressing global challenges such as the pandemic, natural disaster, and economic and social inequalities remain, together with the accumulation of private wealth, persistent economic inequalities, and a heightened awareness of social impact have all contributed to the rapid growth of charitable giving in the region.

Given the shifting landscape of global wealth, the role of the next generation continues to expand as they help this space evolve beyond traditional practices to create more lasting impact on their philanthropic efforts, while carrying on their family values, vision and sense of responsibility in giving back to society.

We have summarized a few key takeaways from the white paper for your reference and considerations. For more information, please refer to the white paper.

Key Takeaways:

1. The charitable giving sector has seen robust growth in recent years, but the environment for private social investment in the three major regional economies – Singapore, Hong Kong and Mainland China, are each at their own respective stage of development
   Among the three economies experiencing substantial growth in ultra-wealthy individuals, government plays a central role in laying out infrastructure and funding social delivery organizations in Singapore and Mainland China, whereas the Hong Kong government embraces a relatively laissez-faire approach to social services, giving rise to home-grown philanthropy and citizen-led efforts. Singapore provides favorable enabling conditions that are conducive to philanthropy while the philanthropic ecosystem in Mainland China is relatively nascent. Family philanthropy in Mainland China, however, leads in the scale and speed of development in the region.
2. In developed markets like Singapore and Hong Kong, the next generation family members are leading the efforts to professionalize family philanthropy practices and adopt a systematic, impact-oriented approach
   Philanthropy can serve as a learning or testing ground for next generation family members who are passionate about social services, as well as a way to connect family members of all generations and provide a source of motivation for younger generations to carry the torch of their family's legacy. Unlike their predecessors who tend to make grants, many younger generation of wealthy families have the ambition to build professional charitable organizations that create lasting social impact. With a goal of becoming engaged philanthropists, they are leading family foundations into a stage of professional management and capacity building. Their philanthropy approaches also constantly evolve in order to meet changing social needs.
3. Compared to developed markets, philanthropy in Mainland China have taken on more diverse and expansive forms of giving, exemplifying growing efforts to maximize impact
   There has been widespread consensus among Mainland Chinese first generation wealth creators that giving back to society is an essential part of preserving a family's legacy. Although the ecosystem for private philanthropy activities has yet to mature, a few alternative methods, such as strategic philanthropy, impact investing and corporate social responsibility campaigns, are gaining popularity. During the pandemic response, there has also been a trend of a more diverse and expansive form of giving as well as increased global donations to more developing countries.
4. Family strategies are critical to the outcomes and impact of family philanthropy
   Wealthy families looking to engage in philanthropy are advised to consider the following practices, 1) define or refine their family strategies and long-term goals based on their own mission and legacy; 2) deploy professional structures to ensure sustainable and efficient operations of family philanthropic activities; and 3) use philanthropic activities as a stepping stone for the next generation to participate in family decision-making.