Family office is a well-established niche sector in the financial management of advanced economies, but outside Western Europe and the United States this is a fairly new idea that has yet to take hold. In the future, family offices could be able to play a key role in the management of philanthropic activities of persons of high net worth (PHNW) in the Asia-Pacific region. However, how professional is the staff in these family offices? Unofficial research of family offices in Hong Kong sought to find out.rnThe International Association of Family Offices estimates that there are up to 3 million high net worth people in the region. Unfortunately, there are no reliable data on the number of family offices. Asians tend to conceal their family affairs and often fit their family offices into another company, managing fund, investment firm or within the company they manage, thus making it difficult to classify them separately.
rnAlthough the main function of the family office is managing family fortune, one of the supporting roles is to provide an environment that supports family philanthropic activities. In order to determine the way in which philanthropy is carried out in an environment of family offices and how family offices deal with challenging staffing tasks for charitable activities, the author conducted informal research that included over a dozen heads of family offices and persons in charge of philanthropy within family offices in Hong Kong.Although there are often professionals with relevant expertise working in a family office, that expertise does not always include philanthropy; family leaders can turn to trusted advisers who have no experience or knowledge about giving to charity. Sometimes giving to charity is in the job description of the Chief Executive Officer of a family office.It is not uncommon that one person is the entire philanthropic team - executive director, program and communications staff and the liaison with the head of family is embodied in one person. This person may be a family member, an older family adviser, a senior member of staff with a job description that includes a variety of professional responsibilities, or a donor.Take for example the family of S. J. S. (a member of the second generation) became responsible for the family charity with almost no participation of other family members. While recognizing the benefits of a professionally-run business, she has chosen to maintain an informal approach with a lot of active participation. One reason, she says, to find someone who would be a good fit is a major challenge. Further research showed that J. S. did not just talk about professional skills, but also about values, character and maturity. To be effective, and in touch with the latest developments, J.S. attends various forums, round tables and informal meetings.SPM is a multi-family office that takes care of the five branches of the family of C. Each branch has established its philanthropic activities with a different focus. Although all of them have organized "team of experts", more thorough observation revealed that only one of the five teams is made up of professional donors with active managing body. The reason again partly lies in the lack of a sufficient number of professional donors. However, it is also obvious that the family heads need to be better educated about the value of hiring a professional donor.Family office can be an effective mechanism for family philanthropic activities. One reason, according to the donors, for the lack of a formal giving to charity structure is that they enjoy the flexibility provided by the unstructured "program" of doing good, which allows them to operate without a formal governance or compliance with strict self-discipline. Instead of hiring professional donors, family offices prefer to resort to trusted advisers for help with philanthropic activities, although advisers may not understand enough about giving to charity or donations.For many family-initiated philanthropic activities, bringing professional donors is understood as a luxury rather than a necessity. Workplace of a professional in charge of philanthropy is not necessarily a place that anyone would envy, since giving to charity can be very personal and family dynamics can somewhat spoil the experience which is otherwise worth the effort for both family members and the expert staff.rnEducating donors and developing professional channels could be a key to a more mature philanthropic sector in the region.Wansheng Lee is president of the Foundation Zeshan (Hong Kong) and a senior fellow at Synergos
