Many high-net-worth (HNW) families and individuals around the world place philanthropy at the heart of their values. And many of their endeavours are creating a remarkable legacy.
As new wealth has been generated globally, the focus on charitable giving and philanthropy has increased in recent years: More and more people want to give to causes that matter to them – and a number of opportunities have presented themselves, such as the COVID-19 pandemic, the climate crisis and a series of natural disasters. In 2021, larger private foundations in the U.S. increased their giving by nearly 21 percent
High-net-worth individuals and families looking to make a difference want to be more directly involved with philanthropic projects. “We’re seeing a real shift,” explains Michelle Lau, a wealth planner at RBC Wealth Management in Asia. “Individuals and families seem to be moving away from just donating money to organizations and are looking to be more hands-on and targeted in their projects, thereby having an impact that is self-sustaining.”
This is very much true for Asifur Chowdhury, founder and managing director of Seatrek Trans. While Chowdury had typically supported philanthropic initiatives on an ad hoc basis, after a health scare during the COVID-19 pandemic he shifted his focus and a sizeable part of his wealth to philanthropic projects close to his heart.
“I’ve been living what I call my ‘second life’ since I was ill,” he explains. “I started to think that maybe it’s time for me to do something different, something structured that my family can take forward when I’m not here. I didn’t want to just give money away – I wanted to play a proper role and ensure the money is going exactly where I want it to.”
Choosing which causes to be involved in
For anyone relatively new to philanthropy and charitable giving, deciding which projects to get involved in, and at what level, are key starting points. Do you want to give financial support to existing organizations or would you rather establish your own foundation?
In many cases, the initiatives high-net-worth individuals choose have personal resonance. Chowdhury was born in Bangladesh, and moved to Singapore in 1993 to establish his father’s branch office after completing his higher education in the U.S. and the UK. Both his experiences as a child and wanting to make a difference in his new home have influenced the projects he has become involved in.
“When I was young, I saw my mum and dad providing for poorer relatives, and in some cases inviting them to live in our home,” he says. “So, when I started thinking about causes, I found myself drawn to helping the underprivileged in society, of which there are, sadly, a large number in Singapore.”
Chowdhury’s first initiative was aimed at helping migrant workers in the city-state, by providing free bus travel from their dormitories to the city every Sunday to spend their leisure time. He built on this by donating rice cookers, fans and other items for their dormitories.
A second initiative, which started during the pandemic, provides free lunches every Saturday to impoverished, mostly lower-income elderly people living in subsidised public housing. Chowdhury often helps deliver the meals, alongside his team of volunteers.
Since then, his projects have broadened to include ones based in Bangladesh, for example, supporting a school that assesses children with autism and creates appropriate training for them. His long-term goal is to help expand the campus to include boarding facilities which can provide a suitable environment to support both parents and their children on the autism spectrum.
Structuring to create legacy
When deciding to become involved in philanthropy, it’s essential to consider exactly how you are going to structure your giving so that it will have a real impact and create a lasting legacy.
“There are a variety of structures that can be used, such as foundations, trusts and companies,” explains Lau. “It’s really important to think about how you want your money to be used now, but also how it will be used in the future. And there are also factors such as how much control you want to have and how much flexibility the structure needs to offer.”
Such decisions might involve choosing where to establish the structures for philanthropic projects, because the rules and regulations, as well as any local incentives, can vary from one jurisdiction to another.
The more complex your philanthropic endeavours are, the more complex the planning needs to be, including the need for external trusted advisors, lawyers, banks, investment managers, accountants, board directors and the like. This makes it all the more critical that structures are set up properly in order to ensure longevity.
Bringing in the next generation
For many wealthy families, nurturing and guiding the next generation is a key focus. Traditionally, there was an expectation that younger family members would join the family business. These days, they are increasingly being allowed (or even encouraged) to find their own way.
While this may involve setting up their own companies, there is a real appetite for philanthropy among a next generation who are arguably more socially aware than their parents – and more set on making a difference, often on matters that have global significance.
In Chowdhury’s case, his son has expressed an interest in philanthropy as opposed to joining the family shipping business. He has already helped sponsor a boys’ football team in Koh Samui, an island in the gulf of Thiland, with the goal of giving the kids purpose and keeping them off the street.
Father and son are also working together on a number of initiatives in Singapore, including a pilot project in which residents in public housing will use compost as fertilizer to grow vegetables on their rooftops, with the goal of being self-sustaining.
Multi-generational involvement in philanthropy can help crystalize a family’s broader purpose, which can be codified in a family constitution, creating an enduring commitment to specific values and legacy.
Paying it forward
With the rise in global philanthropy, there is increasing opportunity for individuals and families to have a real and meaningful impact not only on the world’s most pressing challenges, but also on local issues that matter most to them and affect the communities in which they live.
It’s important, however, to ensure that philanthropic projects are set up in the most effective way and, where possible, involve younger family members, so that they can continue to make a difference in the years ahead.
For Chowdhury, creating a legacy through philanthropy is far more important than establishing a legacy in the commercial sector. He explains that while the next generation may continue to run a family-owned business, they may be motivated to do it out of respect and responsibility rather than wanting to take the legacy forward. “Encouraging charity work, on the other hand, can really be worthwhile and continue long into the future,” says Chowdhury.
His ultimate advice for anyone considering the first step on their philanthropic journey? “Do it now, because you never know whether you’re going to wake up tomorrow morning.”
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