Wealthy families are bringing fresh energy and innovation to philanthropy and impact investing in Asia. Their family offices are helping them find their purpose and pursue it in creative ways.
“It’s a good feeling when a farmer says you have helped them to live a better life — that they no longer have poison in their house and their family is safe. When you can help people like that, why wouldn’t you?”
With this sentiment, Arvind Narula, chairman of Urmatt Group, a major producer of organic jasmine rice in Thailand, sums up why wealthy families across Asia are increasingly focused on giving back to their communities.
Charitable giving has long been part of Asian culture, but new research from DBS Private Bank finds a growing wave of philanthropists and impact investors in the region. What sets them apart is the scale and urgency of their ambition and their willingness to try out innovative approaches.
For Narula, this activity is an integral part of running a responsible enterprise. “What we are doing is inclusive business,” he says. “It needs to be profitable and viable – profit with a conscience.” For others, the focus is on traditional grant-giving, on patient capital, or on establishing social enterprises.
“I have never seen so many people being willing to devote their time to meaningful work,” says Nanette Medved-Po, the founder of the HOPE and PCX Groups in the Philippines. “Recent years have brought out these pent-up feelings of wanting to do something for the world, to have purpose in life.”
Philanthropy for a better future
The new philanthropists are often driven by a desire to undo some of the harm that has been done to the environment in recent decades. Indeed, more than seven in 10 family office executives in DBS Private Bank’s research say that the well-being of future generations is a top priority for their families. Many are prioritising causes related to climate change and the planet, as well as those linked to childhood and youth development. As is clear from the research, their aspirations are substantial.
Thomas Riber Knudsen, a Director at Singapore’s Rumah Group, says that one of his inspirations has been a well-known philanthropist. “He said you should focus on an issue that you’re very passionate about or that makes you angry,” he recalls. “For us, our answers are the same: the ocean. I’ve been diving for 30 years and have seen plastic pollution, overfishing and marine degradation go up significantly.”
Different strategies for a single purpose
Philanthropists are using a blend of different strategies, including traditional financial donations and endowments as well as evolving methods such as impact investing. For Poman Lo, the founder of Hong Kong not-for-profits Bodhi Love Foundation and the Institute of Sustainability and Technology (IST), as well as AlphaTrio impact fund, her three organisations play different roles in support of one vision.
“I believe in the power of ecosystems of like-minded individuals,” she says. “AlphaTrio treats the symptoms of the environmental crisis by providing capital to green-tech ventures, but the real culprit is consumerist culture. If we appreciated the interconnected nature of all phenomena in life, and understood ourselves to be part of nature, we would not be causing damage to the environment.”
To tackle this deeper, less tangible challenge, her Bodhi Love Foundation nurtures mental well-being in children while IST develops ESG talent among executives. Unlike AlphaTrio, these are non-governmental organisations and less constrained by the need to demonstrate returns. “Sustainable well-being on a personal, social and planetary level calls for inner transformation,” she says. “And it’s easier to achieve that through a social venture.”
A shift in influence
In the research, there are signs that interest in philanthropy among Asia’s wealthy individuals and families will become even more pronounced as younger generations start to grow in influence.
More than six in 10 family offices have found that younger family members are more interested than the older generation in working directly with charitable causes. And they say that the personal interests of the younger generation have the largest influence on the causes that the family supports.
Nanette Medved-Po says she is hopeful about what the next generation will achieve. “They care about the world in a way that my generation didn't,” she explains. “When I was graduating, everybody wanted to work for Goldman Sachs or McKinsey. There’s nothing wrong with that, but the folks in college and internships we see today want to devote their time differently.”
There is a skills shortfall to overcome
Interest in philanthropy will inevitably translate into greater demand for specialist guidance from the family office, especially when it comes to impact investment strategies and governance around decision-making. But two out of three family offices in DBS Private Bank’s research currently struggle to secure reliable expertise in the causes that the client family wants to support. Around the same proportion say they need to get better at quantifying the impact of their philanthropic activity.
Developing skills in these areas should be a priority for family offices in the years ahead. In particular, they may want to build up their knowledge of initiatives focused on climate change and women and girls, which are the primary interests of the younger generation interviewed for the research.
Beyond the younger generation, family members of all ages are embracing philanthropy and seeking specialist advice. Family offices must be ready to give them their support.
