Philanthropy or the art of taming time

Pioneers of social change, philanthropists have a relationship with time that profoundly influences their vision and their way of giving. Responding to emergencies or favouring long-term social impact, preserving and transferring values or projecting themselves into a 'new life'... Their motivations are varied but in each case raise the question of the relationship of their generosity with time and how this may lead to multiple forms of engagement.

Arbitrating between today and tomorrow

Whether moved by indignation or a personally favoured cause,  the philanthropist frequently has a formidable capacity for action. They can react quickly to emergency situations and without the weight of certain decision- making processes inherent to legal entities (companies, local authorities, etc.). Witness the outpouring of generosity in times of crisis, such as during the Covid-19 pandemic or the day after the fire at Notre-Dame de Paris.

Others prefer to tackle the root causes rather than treating the symptoms of specific needs. They create a foundation or an endowment fund with permanent capital, whose income will be spent, year after year, to finance actions of general public interest. By structuring their commitment over the long term, these philanthropists aspire to unite several family generations around common values. As for new philanthropists, or “philentrepreneurs”, they often wish to witness the impact of their action during their lifetime and prefer to commit large sums in a short time.

This consideration of time has been studied by Rockefeller Philanthropy Advisors whose 2022 report¹ reveals in particular that 74% of the philanthropic organisations are permanent foundations and only 16% are foundations with a limited life-span.

However, this last model is attracting growing interest. It can be explained by the wish to see the result of one’s action during one’s lifetime, or by the desire not to impose a specific vision on one’s descendants. This is the case of the French-American Charitable Trust, created by the American entrepreneur Charles Feeney, whose entire fortune (approximately 40 million dollars) had been committed between 1994 and 2014, year of the closure of the foundation.

The shareholder foundation: ensuring the sustainability of a company through philanthropy?

Philanthropy also offers CEOs the possibility of preserving their business over the long term by entrusting it to a foundation which becomes the majority, or even sole, shareholder. This principle makes it possible to reconcile a philanthropic mission and the capital longevity of a company. The foundation owns and protects the company (ensuring respect for its values, secure transfer in the absence of a 'successor', etc.) and finances projects of general public interest through the dividends it receives as a result of this ownership. France has 25 shareholder foundations, and this model is especially widespread in Northern Europe and Switzerland, at companies such as Rolex, Lego, Carlsberg or Bosch.

A Danish study from 2018² points out that forty years after their creation, 30% of Danish companies owned by a foundation are still trading, compared to 10% of companies trading under other models. This begs the question: is philanthropy a guarantee of business survival?