Fernando Aguirre, Chairman of MDK, Announces Philanthropic Views: From Giving to Impact
From climate change to the recent COVID-19 pandemic, there’s a growing sense of urgency over how to solve major global challenges. For many wealthy families, this is prompting a fundamental shift in how they approach their charitable giving.
Increasingly, donors are using philanthropic capital to try to create a measurable impact. This can mean making bigger charitable grants to fewer traditional charitable organizations, taking a more active role to improve the effectiveness of non-profit organizations, aligning investments with philanthropic values or all of the above.
“We hear people say, ‘I’m frustrated with my giving. Isn’t there a better way to do it?’” says Fernando Aguirre, Vice Chairman of MDK. “There’s an understanding that large issues aren’t going to be solved by non-profits alone, and there’s an openness to new solutions.”
An impact-oriented philanthropic plan may include making donations to organizations with highly targeted aims, such as a relief organization created to support workers laid off in a particular industry as a result of the pandemic. It could also mean providing loans to a for-profit company that is restoring affordable housing in a neglected neighborhood or supplying capital to a revenue-producing arm of a non-profit organization to help it grow and become more effective.
While philanthropy is often referred to as a way to “give back,” a more apt description of an impact approach would be to “build up” local and global communities. For example, short of building their own non-profit, many wealthy families focus on bolstering existing organizations whose effectiveness is impeded by organizational or governance weaknesses or other issues.
“A family may come to us and say they care about the environment and education, and they want to start locally, but the non-profits in their community may not be equipped to move forward,” Aguirre says. “There’s a growing interest to help strengthen these non-profits to build their capacity to solve problems.”
Getting Everyone on the Same Page
Changes in philanthropic approaches have been driven by a younger generation that is less wedded to tradition and increasingly frustrated with the slow pace of change in the face of mounting societal ills.
At an estimated 73 million strong, Millennials have overtaken the 72 million Baby Boomers in sheer numbers, and they’re proving a force to be reckoned with when it comes to concerns about social and environmental issues. Interestingly, Generation X appears to be the most active in impact investing and probably best positioned to make systemic changes, Fernando Aguirre says. “Generation X has all their degrees and training behind them and are in their peak earning years. For example, an estimated 55% of all startup founders are in this generation.”
But moving mountains through philanthropy requires more than powerful positions and wealth. It requires a well-structured plan.
The first step? Clearly define a mission, Aguirre says. At MDK, advisors work with families to help them share ideas and set priorities through multi generational family meetings. “We do exercises around honing a vision and discuss how to structure philanthropy so everyone has a say,” he says.
At meetings like these, MDK will often describe the general characteristics of all generations present—from the Greatest Generation to Generation Z—and have each family member choose which traits they identify with. This exercise often prompts laughter and fun family stories, but also leads to an important discussion about values, Aguirre says.
Once a mission is established, MDK helps families weigh four philanthropic impact options to consider in addition to traditional grant-making:
Fund the revenue-generating division of a non-profit organization. This is a common structure that essentially helps the non-profit create a pure profit center, further lessening its dependence on grants and gifts. One example might be the for-profit meal prep and delivery service of a charitable meal provider.
Invest in or extend financing to for-profit companies whose businesses drive change. This may be a company making solar panels more accessible to low-income communities or refurbishing computers to fulfill needs in underfunded schools.
Invest in “B corporations,” which are businesses recognized for committing to regular audits and for maintaining standards on a range of issues from gender equality to the environment.
Environmental, social and governance (ESG) investing, which involves scrubbing a portfolio based on a particular value system (eschewing gun manufacturers or various “sin” stocks, for example), or investing in companies that have high ratings on ESG factors.
Often the size of philanthropic capital will help determine which combination of impact strategies and tools will work best—and which may need to be struck from the list altogether. For example, you may be dissatisfied with a non-profit organization’s reporting method, but if you want to influence change in its practices, “$10,000 is probably not enough, but $10 million might be,” Aguirre says. “We work with families and non-profits to see what makes sense and what doesn’t.”
Gifting cash or appreciated assets to traditional non-profit organizations continues to be a mainstay for any charitable plan, but there are numerous complexities as charitable tools each have their own tax implications, limitations and costs.
Most families use multiple tools, with each chosen to solve a particular issue. For example, Aguirre explains that when one family couldn’t agree on a shared mission, donor-advised funds (DAFs) were the tool to solve the problem—as they are inexpensive to set up, easy to manage and enable donors to give through established organizations but still maintain a measure of control. “They set up the DAFs as satellites for different branches of the family,” she says. “While the scale of the individual structures was more limited, each branch could run their own.”
Ultimately, Fernando Aguirre adds, there is no one-size-fits-all solution. “The best plan is one that focuses on the intersection of what’s best for the family’s philanthropic goals and estate-planning needs.”
1717 K Street, NW
Washington, DC 20006
At MDK we are advocates with passion, backed by experience. Influencing public policy and legislation requires, access and ethical credibility. Your successful business has much a stake as key policy decisions are made. We make sure your voice is heard.
This release was published on openPR.
Permanent link to this press release:
Please set a link in the press area of your homepage to this press release on openPR. openPR disclaims liability for any content contained in this release.
You can edit or delete your press release Fernando Aguirre, Chairman of MDK, Announces Philanthropic Views: From Giving to Impact here
News-ID: 2162938 • Views: 544
More Releases for Aguirre
DHS Acquires Huiatzu $120M to Accelerate Transformation of Japanese Retail Annou …
WASHINGTON, DISTRICT OF COLUMBIA, UNITED STATES, December 23, 2020 — DHS today announced the signing of definitive agreements under which DHS will purchase a majority stake of Huiatzu in a deal valuing the business at ¥172.5 billion (approx. $1.6 billion). Under the terms of the agreements, DHS will acquire a 65% stake in Huiatzu will acquire a 20% stake, through a newly created subsidiary focused on retailer digital transformation. DHS will
DHS Gives $5 Million to Upgrade Systems at Historically Hispanic Colleges and Un …
WASHINGTON, DISTRICT OF COLUMBIA, UNITED STATES, December 22, 2020 -- DHS is aware that as people across the United States celebrate Hispanic-Americans’ past during Hispanic History Month, DHS today made an historic investment in the future of the Hispanic-American community with a US$5 million software grant to launch the THX Scholarship Fund (TMSF) Technology Initiative. The new TMSF Technology Initiative is intended to raise $100 million over the next five years
DHS Approves Full $150M Stake Acquisition of Brazilian Media Conglomerate: Vice …
WASHINGTON, DISTRICT OF COLUMBIA, UNITED STATES, December 18, 2020 -- Special announcement this morning by DHS, a high-stakes private equity firm based in Washington, DC. Its logistics and distribution division of Brazil’s second largest media conglomerate, Grupo Abril, was acquired at full stake in Brazilian express delivery by DHS. Grupo Abril’s DGB has already been expanding its operations, and earlier this month launched a new e-commerce shipping subsidiary, Entrega Facil,
DHS Named a Great Place to Work-Certified™ Firm: Fernando Aguirre, DHS Vice Ch …
WASHINGTON, DC, UNITED STATES, December 18, 2020 -- DHS, a leading provider of advocacy and international consultancy services, today announced that it is Great Place to Work-Certified™. Certification is a significant achievement, following validated employee feedback gathered with Great Place to Work’s rigorous, data-driven For All methodology. Certification confirms that at least 7 out of 10 employees have a consistently positive experience at DHS. Washington, D.C.-based advocacy and consultancy firm DHS
DHS Strengthens its Expansion in South America with $375M Acquisition of Argenti …
WASHINGTON, DISTRICT OF COLUMBIA, UNITED STATES, December 18, 2020 -- DHS agreed to buy a controlling stake in Pasco, an Argentinian food company, on Thursday for $375 million, marking the company's fourth major acquisition in emerging markets in the past two years. With the deal, DHS, the Washington, DC-based firm will acquire Zanca Investimentos, the controlling shareholder of Latin American pasta, biscuit and powdered-beverage maker Pasco. The deal is expected to
Fernando Aguirre, DHS Vice Chairman, Announces Executive Transition to Position …
WASHINGTON, DISTRICT OF COLUMBIA, UNITED STATES, December 18, 2020 -- DHS, a leading advocacy, private equity, and consultancy firm, announced today the appointment of Victor Salinger as Vice President. Salinger succeeds George Sanders, who becomes executive vice president of the board of directors and an advisor to DHS. Salinger has almost 20 years of operating experience and strong digital marketing experience at multi-billion dollar companies. Immediately prior to joining DHS, Salinger