In this issue
Few would argue that vision and discipline are essential to make money in a family business. The same ingenuity is needed to donate money in a way that feels right to all family members.
As family businesses achieve significant wealth for their owners, philanthropy tends to become increasingly important to the family. Many factors spark the interest, including a desire to give back to the community that supported the business, passion for a particular cause and the hope of doing meaningful work together as a family.
Philanthropy may keep family members engaged in the family business (including those not otherwise working in it) and can promote family values. Even so, the unique circumstances of business families can raise some challenges for effective giving.
When J. Mark Baiada turned 70 in 2016, he had more to celebrate than just a big birthday. Bayada Home Health Care, the business he had founded in 1975, was generating more than $1 billion in annual revenues. The Moorestown, N.J., company had become the U.S.’s 10th-largest home health agency, with 310 offices in 22 states and 23,000 employees serving 150,000 patients.
In just one generation, Cascade Engineering has achieved considerable business success, while also striving to make a positive impact on society and the environment. Fred P. Keller, who founded the company with six employees in Grand Rapids, Mich., in 1973, says the business now generates about $350 million in annual revenues, up from $250 million in 2011. The enterprise, primarily engaged in designing, engineering and injection molding of large plastic parts, employs some 1,600 people and serves customers worldwide.
During the credit crisis of the last decade, John C.L. Darby, like many real estate developers, had his share of sit-downs with jittery lenders.
But while other developers recount stories of painful reckonings with bankers during the worst housing downturn since the Great Depression, Darby, 55, noticed lenders seemed to breathe a bit easier when he told them how his family business is governed. “You could see their facial expressions change,” Darby says.
Port Blakely, in its fifth generation of family ownership, grows and markets renewable forest products around the globe. The company, acquired by the Eddy family in 1903, is based in Seattle.
In the past few months, the subject of women and wealth has come up frequently in my conversations with friends and colleagues. This is a timely topic indeed. According to Diane Doolin of the Doolin Group at Morgan Stanley, “The greatest wealth transfer in history is under way, and research tells us that women will control 70% of the nation’s wealth by 2030.” In keeping with the Girl Scout motto, “Be prepared,” women must educate themselves about the challenges they will face.
Management literature has developed a slew of three-letter acronyms to refer to considering societal benefits as part of the assessment of business results. There’s CSR (corporate social responsibility), TBL (the “triple bottom line,” referring to social, environmental and financial performance) and the latest label of choice for public companies, ESG (environmental, social and governance concerns).