Tonika Hirdman (Fondation de Luxembourg): Philanthropy is not the same as Charity
Tonika Hirdman, Director General, showcases how the Fondation de Luxembourg assists philanthropists, many of them successful entrepreneurs, in overcoming the surprising obstacles to giving away their wealth through long-term, structured investments in people and their lives.
Giving Begins at Home
The Fondation de Luxembourg is a public utility foundation created by the Luxembourg State and the Oeuvre National de Secours Grande-Duchesse Charlotte. It sees its mission as facilitating long-term philanthropic giving on the basis of a structured approach. Tonika Hirdman says, “To me, philanthropy is about being mindful of the needs of others. It is an investment in people and lives.” However, 2020 proved a special year with a greater need for emergency philanthropy, particularly in the health and research sectors. There has been a 10% increase in spending as a consequence of the Covid-19 pandemic. The Fondation de Luxembourg launched the Covid-19 Foundation at the onset of the health crisis, and it has so far received nearly €1.4 million in donations from private donors and companies in Luxembourg and other European companies. Channeling these funds to local and international beneficiaries, the Covid-19 Foundation has been able to respond to urgent and longer-term needs, such as the delivery of protective equipment, emergency air transport for patients and support for drug users, the homeless and victims of domestic violence.
“To me, philanthropy is about being mindful of the needs of others. It is an investment in people and lives”
Tonika Hirdman, Director General, Fondation de Luxembourg.
The “Why” of Giving
Ms. Hirdman says there are different reasons for why people engage in philanthropy. For example, the foundation has seen an increase among entrepreneurs who wish to give back to the community by giving others the same opportunities they themselves have had. Others see it as sharing a passion, like opening their art collection to the public so that others may enjoy it. For many philanthropists, it can be a question of leaving a legacy, a footprint that will last beyond their own lifetime. Such legacies can include transmitting family values and teaching their children to become socially aware. And why Luxembourg? While tax incentives are not the main reason why someone engages in philanthropy, they do enable people to give more. Luxembourg enjoys a fiscally-friendly, stable economic and political environment, and provides a strong base for the long-term endeavor of engaging in philanthropy.
You Can’t Take It with You
The US tycoon, Andrew Carnegie, sought to give away his astonishing fortune before he died. But he underestimated the challenges he would encounter, claiming, “It is more difficult to give money away intelligently than it is to earn it in the first place.” However, Tonika Hirdman says there are a few key principles that can guide those determined to give away their wealth. She says they need to know and understand the causes and organisations with which they wish to become involved. Evaluating the governance of such bodies and their capacity to execute projects with the available funding is also important. Philanthropists should understand the impact of their giving and be aware of the outcomes they want to achieve while measuring progress in relation to these goals. Aligning the philanthropists’ interests and motivations with the most needy causes is also important to make the engagement more relevant.