Family businesses in Gulf Cooperation Council (GCC) countries are the region’s largest contributors to social and charitable causes, but they have yet to unlock the full potential of their philanthropic activity. The annual philanthropic capital of only 100 of the largest GCC family businesses is estimated at a minimum of US$7 billion. However, most of these businesses rely primarily on ad hoc donations and grant-making. Globally, leading family businesses are behind some of the largest philanthropic institutions, conducting major social and health initiatives. Like these giants, GCC family businesses could have a significant impact on their community, business, and family by transforming the way they practice philanthropy.
For family businesses to make the transition to “impact philanthropy,” they would need to acquire advanced capabilities that allow them to continue “doing good” while also “doing well.”
First, they need to institutionalize their philanthropic activity to improve strategic decision-making and better define the scope of work. The benefits of this would include reinforced family cohesion and enhanced core organizational capabilities in philanthropic focus areas.
Second, they should take a proactive approach to philanthropy by using innovative financing tools as well as non-financial products and services. This would improve efficiency, maximizing the value of each dollar spent and possibly generating financial returns to sustain their philanthropic activity.
Third, they should implement clear assessment frameworks to measure the outcomes of their projects.
The transition to impact philanthropy can help GCC family businesses achieve a greater impact in their community. Taking their cue from global leaders, GCC family businesses must transform the way they “do good,” by taking a formal, proactive, and sustainable approach to philanthropy, capable of achieving social change with higher impact and visibility.
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