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Insights

Family foundations have a long history and extensive social influences worldwide. Compared with other charitable foundations, family foundations are more flexible due to the relatively low transparency requirement, few administrative constraints, and resistance against economic fluctuations. Therefore, family foundations are more capable of taking risks and being patient when seeking for solutions to social and environmental problems.

International family foundations strategically emphasize on the long-term building of social impact value chain (including research, pilot, capacity building, and advocacy), and take a systematic approach to tackle bigger problems. The Rockefeller Foundation is a typical example of this. It focuses on the frontier, cutting-edge topics by using its capital patiently to reach for long-term impact. For instance, it established an international agricultural research organization to help developing countries with the application of advanced agricultural technology. It also developed improved varieties, combined with fertilizer, pesticides, irrigation, expanded the use of the irrigation, and ultimately led to the “green revolution”. Also, through its funding of WHO (World Health Organization), the Rockefeller Foundation supported a holistic medical and health project to reduce the gaps of health level and life expectancy worldwide. The project helped poorer countries to establish and improve the health care system, strengthen health related publicity and education, and enhance drug research and development for commonly encountered diseases among the poor.

Thus nearly a decade later, and after some soul searching, Dr. Judith Rodin, President of the Rockefeller Foundation talked about the new era of the Rockefeller Foundation: “I believe philanthropy has found its identity once again, as a convener, a risk-taker, a piloter of good ideas, and a partner in bringing those ideas to scale.”

The engagement of more entrepreneurs in the charitable sector has stimulated new funding mechanisms such as venture philanthropy and impact investment. Many leading foundations are actively exploring and promoting this brand new field.For example,

• Rockefeller Foundation is one major force in promoting the development of global impact investment. Its strategic focuses are platform, infrastructure, research and advocacy, catalyst for related service organizations. In the meanwhile, it also organizes forums in Asia, Africa and Latin America to boost sector development at local level.
• Rockefeller Brothers Fund (RBF) formally joined the Impact Investment Action initiated by the White House in 2014, with other more than 20 organizations. RBF has pledged to spend 10% of the fund, i.e., 84 million US dollars, on impact investment.
• Li Ka Shing Foundation focuses on projects in tech innovation: man-made eggs, medical filtering tech on cancers, genetic optimization of corps, waste water treatment, biodegradable packaging, LED lights and big data application, etc. They already invested in man-made eggs and 3D beef printing company through its affiliated VC fund, Horizons Venture.

The Gates Foundation once said, “Don’t just go for safe projects. Take on the really tough problems. Some of the projects we fund will fail. We not only accept that, we expect it—because we think an essential role of philanthropy is to make bets on promising solutions that governments and businesses can’t afford to make.” It is the patient, risk-taking nature of these family foundations that makes them endure in history and serve as pioneers of modern philanthropy.