Philanthropy in Family Offices in Latin America: Balancing the Impact of Giving Now

Philanthropy has emerged as a keystone of family office strategies, reflecting the values, legacy, and long-term vision of the families they serve. In Latin America, where the socio-political and economic landscape is plagued with challenges, philanthropy is an opportunity to give back and a tool for driving meaningful change. Family offices are increasingly positioning philanthropy as a strategic priority, aligning resources, networks, and expertise to foster social impact while helping ensure financial sustainability.

| THE ROLE OF PHILANTHROPY IN FAMILY OFFICES

When philanthropy is placed at the center of family office strategy, it promotes a sense of unity and purpose across generations. Beyond financial contributions, families leverage their networks and influence to drive impactful initiatives, align investments with social goals, and explore innovative approaches to giving. Philanthropy becomes a vehicle not only for strengthening family bonds but also for reinforcing their role as stewards of positive societal change.

According to a recent JPMorgan survey, 82% of global family offices are actively engaged in philanthropic efforts, underlining the growing momentum for impact-driven giving. This momentum has been particularly evident in Latin America over the past five years as families recognize the urgent need to address systemic issues like poverty, education, healthcare, and environmental risk.

| THE CATALYST FOR PHILANTHROPIC GROWTH IN LATIN AMERICA

Latin America’s socio-economic challenges have always fueled social tensions, but it is the effect of globalization that has triggered a philanthropic growth in the region. The exposure and closeness of many entrepreneurial family offices to peers around the world have brought pressing issues to the forefront. In response, these families have embraced philanthropy as a means to influence and address these challenges. This shift represents a significant evolution, as family offices in the region, historically focused on wealth preservation and intergenerational transfer, are now considering their broader role in society.

“Beyond financial contributions, families leverage their networks and influence to drive impactful initiatives, align investments with social goals, and explore innovative approaches to giving”

The central question these families face is whether to focus on immediate impact—addressing the urgent social problems of today—or to build structures designed for perpetual impact, ensuring lasting change over generations. Both approaches have merit, but they require careful consideration of trade-offs and alignment with family values.

| TWO MODELS OF PHILANTHROPY: GIVE NOW VS. GIVE IN PERPETUITY

The Give Now Approach

This model prioritizes deploying resources over a defined period to address pressing social issues without the binds of having to preserve the capital over time. Whether funding disaster relief, pandemic responses, or educational initiatives, the Give Now approach delivers quick, tangible results and fosters trust within communities by funding the changes the system needs that typically require an upfront investment to actually effect change. It allows families to dynamically respond to evolving needs, demonstrating immediate accountability and impact within a lifespan.

However, the downside lies in its limitations to give the space for the future generations to engage. The Give Now approach prioritizes the initiatives that the current generation wants to participate in, and does not consider the family in the future.

The Perpetual Model

The perpetual model focuses on creating longer term giving structures through endowments, or self sustaining vehicles that provide dividends to support a foundation. By investing capital and using only the returns for philanthropic activities, this type of structure ensures perpetuity. This model aligns with a long-term vision, providing a financial framework for addressing both immediate and long-term needs over generations.

Perpetual endowments also offer resilience against economic and political volatility, making them particularly relevant in Latin America. However, they require a substantial upfront funding, robust governance, sophisticated financial management, and a commitment to long-term planning, which may not address urgent social challenges.

“Perpetual endowments also offer resilience against economic and political volatility, making them particularly relevant in Latin America. However, they require a substantial upfront funding, robust governance, sophisticated financial management, and a commitment to long-term planning”

| THE CASE FOR PHILANTHROPY IN LATIN AMERICA: CONTEXT AND CHALLENGES

Latin America presents a unique context for philanthropy, where social tensions, inequality, and governance gaps create an urgent need for action. Family offices must balance:

● Urgency vs Foresight

Giving now or over a defined period of time addresses current challenges, while perpetuity provides capital for issues of the future.

● Governance

Establishing robust structures to manage philanthropic efforts is critical in a region with underdeveloped regulatory frameworks. The need for balance between rigidity and flexibility will be key in ensuring that families can effectively invest in philanthropic initiatives that both align with their values and what they deem to be the issues of any particular time.

● Values Alignment

Families often prioritize perpetuity hoping to provide a space for future generations to connect with common mission and vision, but this might not always be the case as values and social priorities change over time.

| A HYBRID APPROACH: COMBINING IMMEDIATE AND LONG-TERM IMPACT

Philanthropy in Latin America is at a crossroads. Families are increasingly recognizing their role as agents of change, driven by a new generation eager to create a better world. As younger generations bring fresh perspectives and priorities, family offices must adapt to ensure their philanthropic strategies remain impactful and aligned with evolving values. Whether focusing on immediate action or building for perpetuity, Latin American family offices have the opportunity to redefine philanthropy. By fostering collaboration between the private and non-profit sectors, leveraging their resources, and adopting innovative approaches, they can drive systemic change and leave a lasting legacy.

For many of these family offices, a hybrid approach may provide the best solution. Such an approach offers the flexibility of distributing funds for a defined lifespan, while also allocating resources for perpetual philanthropic efforts. By allocating resources to both immediate-impact initiatives and endowments, families can address urgent needs while building for the future. This balance ensures philanthropy remains relevant, flexible, and sustainable. Establishing clear structures to align with family values and ensure accountability, adopting diversified strategies to maximize returns and manage risks, and balancing short-term distributions with long-term growth to address both immediate and systemic challenges are key strategies for implementing a hybrid approach.

| CONCLUSION: ALIGNING PHILANTHROPY WITH LEGACY

Latin America’s family offices face a profound opportunity to shape the region’s future through philanthropy. The choice is subtle. It is giving in a responsive and ad-hoc manner, or giving in with a strategy and clear guidelines within an endowment. If the latter is the case, the key will be to define the time period or if it is at perpetuity. Regardless of the approach, philanthropy serves as a powerful tool for engineering social change.

As families navigate this journey, they are not just preserving wealth—they are building legacies. In a world increasingly driven by social consciousness, their philanthropic efforts will leave a strong mark, shaping the trajectory of their communities and the future of the region.