Posted on March 22, 2018
Windfall gains can be defined as an unexpected income or profit; forms include the sale of a company, lottery winnings, return on investments or unexpected inheritance. Windfall gains are important within the philanthropy sector as individuals and families start to think about how they can use this income to give back to the community or to particular social issues.
Mergers and acquisitions activity is up significantly in recent years and indications are of continued activity in 2018. While the headline figures include international sales of Irish headquartered multinationals what is noteworthy is the increased number of sales of Irish owned companies. These include a variety of family businesses, technology and start-ups. Many are being sold for significant amounts and individuals and families are looking at ways to use this windfall gain in an impactful way.
“Windfall gains following a company sale are often a catalyst for people to give more to charity. The current increase in company sales is likely to help increase the level of philanthropy in Ireland. At least five of the funds at The Community Foundation for Ireland were established on foot of windfall gains” said Tina Roche, Chief Executive, The Community Foundation for Ireland.
The community foundation concept was developed in Cleveland, Ohio over 100 years ago and since then there are now over 1,800 worldwide linking donors to their communities and a range of charities. Community foundations can be found from Silicon Valley to India. The Community Foundation for Ireland is part of this global movement and is one of Ireland’s leading philanthropy organisations. It was established in 2000 to support and facilitate philanthropy in Ireland and to date has given out over €37 million in grants and has €45 million on endowment.
Donors at The Community Foundation for Ireland who have set up their funds after a company sale have generally chosen to remain anonymous. Giving away money in a strategic way is not as easy as it may first appear. Setting up a dedicated charitable or philanthropic fund vehicle through which to channel one’s giving can be a start – but it still has to be administered and governance is an increasing issue within the charity sector. Setting up a Donor Advised Fund under the infrastructure of a community foundation provides donors with all the benefits of its governance. Community foundations manage grant making and provide peace of mind through the selection of great grant opportunities and follow up to ensure good project implementation and reporting. Donors at The Community Foundation for Ireland get great pleasure and peace of mind in knowing their money is making a real difference and the community groups and charities get donations from engaged, thoughtful donors.
Looking ahead strategically for Ireland, the country needs more philanthropy. Ireland has very few foundations, a situation exacerbated by the recent closure of Chuck Feeney’s Atlantic Philanthropies. While we are a generous nation, our donations per head are also below our near neighbours in the UK and many other countries. With an increasingly ageing population, significant environmental concerns and social issues such as mental health and women’s issues on the rise philanthropy needs to be at the forefront, creating a fair, caring and vibrant Ireland for now and the future.