Family impact investing

Impact Investing for Families

Philanthropy brings family values to life and helps secure your family’s legacy. Establishing a family office offers strong impact investment opportunities that can drive meaningful social change and enable your family to exercise a long-term commitment to positive causes.

Family offices are private organizations established to manage the financial and personal affairs of wealthy families and individuals. Family offices can deploy various kinds of philanthropic investments on behalf of their clients, making up a philanthropic portfolio.

According to research from global family office management company Ocorian, family offices continuously grow worldwide due to increasing wealth. With the rise in wealth, many family offices focus more on philanthropy by investing in impactful and sustainable business models.

Some are working closely with causes they care about or using it to engage with the next generation. The objective is to have secure and effective succession plans to safeguard assets and income for intended beneficiaries and ensure the longevity and legacy of their family office.

Impact Investment with Positive Returns

More family offices are engaging in social impact investing, intending to generate both financial returns and positive social or environmental outcomes. To do this, families must deeply understand available opportunities across various sectors, geographies, and risk profiles to align their investments with their social impact goals.

Moreover, impact investing is not a standalone activity. Still, it can be integrated into the overall investment strategy of the family office by aligning investment criteria, risk management, and portfolio construction with impact goals. Collaborating with specialized impact funds or managers can enhance the effectiveness and scale of impact investing.

Impact Investing Structures

There are a variety of ways that individuals and organizations can facilitate philanthropy and social impact activities. Family offices, for example, often establish or utilize family foundations to manage their philanthropic efforts. These foundations provide a formal structure, governance, and tax benefits, which can enhance the effectiveness and transparency of their giving.

Another option is to use Donor-Advised Funds (DAFs), which offer flexibility and efficiency in managing charitable giving. With DAFs, donors can make contributions, receive tax benefits, and retain advisory privileges over the distribution of funds.

Finally, investing in or creating impact funds can help family offices pool resources and expertise with other investors to achieve larger-scale impact.

The World Economic Forum developed a primer on structuring a single-family investment office to achieve family objectives and societal value.

Embracing best practices for the philanthropy function in the family office will help families amplify their philanthropic efforts, produce other intangible benefits, and strengthen the family’s charitable impact and desired legacy. While there isn’t a one-size-fits-all model for family offices to execute philanthropic strategies, successful family offices adapt their practices to increase the charitable impact.

Mite has a portfolio of charitable projects for your next impact investment. Our transparent feedback loops make measuring outcomes easy. We are here to help you! Please get in touch to discuss your philanthropic strategies.