Unregulated giving leads to the diminishing and eventual collapse of even the most vibrant family business. FILE
By Peter Mutua
In Summary
- Prudent leaders of family firms embrace planned giving and make purposeful donations.
The generous man will be prosperous, and he who waters will himself be watered. - Proverbs 11:25 NASB
By May 1937, John D. Rockefeller, one of the
richest men in recent times had given away more than $530 million, $8.5
billion (Sh722 billion) in today’s currency.
The world’s first billionaire, who was at the time
of his death in 1937 worth $192 billion (1/65 of the GDP of America),
is the patriarch of one of the richest families in the USA and founder
of the Rockefeller Foundation which even today remains one of the
world’s largest funders of philanthropic projects.
Yet it is this same Rockefeller who carefully
pored over every restaurant bill the family incurred while on holiday,
calling the attention of proprietors to surcharges of a few cents for
food.
Rockefeller would not shy away from giving a
beggar a single penny if that is what he thought the beggar deserved;
his philosophy for philanthropy was “to give money away without making
paupers of those who receive it.”
Warren Buffett, a guru of modern investment
correctly says that “philanthropy is harder than business” since one is
attempting to tackle problems that people with intellect and cash have
failed to solve in the past.
As a result, one needs to be very careful with
philanthropic engagements since constructive giving is, contrary to
popular opinion, more difficult than making money.
Yet leaders of family businesses are surrounded by
those who would want to appeal to their generosity to give into various
causes.
Ranging from hangers-on who feel entitled to a
portion of the business largesse to charlatans who would not hesitate to
use religion as a tool to extract cash from leaders, the pulls on
businessperson’s heartstrings are many and varied.
Even fundraising cards are issued with designated
donations, insinuating that some gifts would be beneath the dignity of
an individual of a certain stature in society. Pressure to perform in
public is never ending.
Few leaders of family businesses have the
fortitude to hang on to cash when subjected to such pressure; even fewer
have deliberate strategies for giving into worthy.
Many either fall victim to sob stories or to
threats issued by “religious” preachers or soothsayers who pander either
to their fear of doom or greed for illicit gain.
Every leader of a family business would like to be
famous for generosity. However, to give in such a way as to endanger
the very fortune that makes such liberality possible is foolish and
dangerous.
One only needs to look at the losers of the 2013
General Election who contributed competitively to various projects to
see that there is only contempt for those who give themselves into
poverty even to the recipients of one’s generous donations.
Whereas it is good for the leader of a family
business to strive to be generous to all those who are in need, it is
even more important for such a leader to carefully examine the
motivation for such liberality.
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