Tackling the challenges of today through philanthropy

    Tackling the challenges of today through philanthropy

    Philanthropy is becoming professionalised

    This shift has been driven by an understanding that good works can also adhere to fundamental principles of added value and financial efficiency. In short, philanthropy is becoming professionalised.

    At Lombard Odier, we are experts in philanthropic advice. It sits alongside our leading position in impact investing and responsible portfolio management, and we apply to philanthropy the same rigour as when seeking financial profits for clients. We set up innovative philanthropic methodologies and tools, which enable them to allocate their assets in an efficient manner designed to generate the positive outcomes they desire.

    The Lombard Odier Group has two separate foundations: Fondation Lombard Odier manages the philanthropic activities of the Bank and its current and former Partners; Fondation Philanthropia is dedicated to the philanthropic projects of our clients.

    How has Fondation Philanthropia changed over the past ten years?

    Denis Pittet (DP): Fondation Philanthropia has grown enormously since it was founded in 2008. Here are a few figures to illustrate this: within ten years, the foundation has received over CHF 116 million in donations and has invested a total of CHF 60 million. We have supported over 100 organisations across the world thanks to the generosity of our clients.

    This growth is down to our simple structure, rapid implementation of projects – within a matter of weeks – and pooled portfolio management and administration costs.

    By conferring legal and administrative responsibility to the Foundation Board, donors have the freedom and time to put their energy and passion into running their project.

    This strong spirit of philanthropy encourages us to continue to offer this model, as it fulfils donors' needs for wealth planning as well as the wishes of younger generations to become actively involved in tackling humanitarian, social and environmental challenges.

    What potential for growth do you see in the umbrella foundation model?

    DP: There is significant growth potential and we are likely just at the beginning of a "philanthropic tsunami" in the umbrella foundation sector.

    The flexibility of the model can accommodate all donor profiles: active or passive; trust-funded funds; funds with their own capital; as well as funds run by a living donor or as part of a bequest.

    Proximity plays an important role in Lombard Odier's growth model. Like a family doctor, we have regular contact with our client regarding a whole range of topics, from wealth management to family governance. As part of this privileged relationship of trust, Philanthropia provides clients with technical and professional support from philanthropy experts.

    New donations are needed to feed this potential for growth. The priority of Fondation Philanthropia is to implement its donors' wishes, not to accumulate wealth. Why wait for many years before distributing the funds when the social and humanitarian impact would be greater in the short term?

    At Philanthropia, the average annual distribution rate is around 10% of capital, which is well above the figures of other Swiss donor foundations. In 2017, it was at 18%.

    How have donors' needs changed?

    DP: Fondation Philanthropia breathes life into philanthropic initiatives. It is a platform where people can experiment and learn as they pour their passion into a project. Philanthropia is therefore an incubator in which projects can grow in line with the wishes of donors.

    It is also a support platform for autonomous foundations in need of a second wind. These foundations are then integrated under the umbrella of Fondation Philanthropia, giving them a new lease of life and removing the administrative burden. This model was used, for example, to launch Fonds Gustaaf Hamburger, which supports people with Parkinson's disease. This foundation is under the Philanthropia umbrella in line with the wishes of its founder, without any change to the articles of association or the name.

    At a time when everyone is talking about social media and online communities, the umbrella foundation offers donors a platform for discussion to help them avoid becoming isolated – something that unfortunately still affects many independent donor foundations. Networking and the sharing of best practices are the vehicles for learning that donors want. Building up this expertise is only possible if donors compare experiences for their mutual benefit. As Robert Louis Stevenson said: "Don't judge each day by the harvest you reap but by the seeds that you plant."

    Fondation Philanthropia

    Fondation Philanthropia, which was set up in 2008 and is registered in Switzerland, is an umbrella foundation1. Its purpose is to help donors fulfil their philanthropic goals based on simple, secure and tailored solutions. It receives donations from clients, while the Foundation Board acts as a trustee, with responsibility for implementing donors' wishes.

    There are two options for investing: thematic funds (humanitarian and social causes, medical and scientific research, art and culture, education and training, environment and sustainable development) and sheltered funds (serving donors' own causes). Clients have the choice of either donating money to support Fondation Philanthropia's general objectives or supporting a specific issue that is close to their heart, in the form of a personal fund. This could, for example, be a prize awarded each year in the area chosen by the donor family.

    1 Umbrella foundations are independent structures that offer administrative support and professional philanthropic advice tailored to donors based on their personal interests and needs.

    Fondation Lombard Odier

    Fondation Lombard Odier is a corporate foundation whose main priorities are education and humanitarianism. It aims to promote dialogue between stakeholders in the field of philanthropy and takes part in exchange platforms such as SwissFoundations, the European Foundation Centre and the European Venture Philanthropy Association.

    In autumn 2017, Fondation Lombard Odier supported the launch of the Geneva Centre for Philanthropy, an interdisciplinary academic research and teaching centre at Geneva University. Its aim is to encourage academic training and research in the field of philanthropy, and to disseminate knowledge acquired in the sector in the broader community. The Centre operates independently and has its own team. Its mission is to examine complex issues in philanthropy and address the themes that have emerged in this area, particularly in management, law, finance, economics and ethics.

    Important information

    This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

    Read more.


    let's talk.