food being handed out at community kitchen

Some philanthropists are born into families of modest means, while others inherit their wealth. But one thing seems to unite them—giving away money for charitable purposes isn't as easy as it might first appear.

Take, for instance, Sir Tom Hunter, sports goods entrepreneur and philanthropist. He retired at the tender age of 37 after the sale of his business. “I had a very large cheque in the bank and nothing to do,” he says. “Thankfully, my wife is the one with the common sense in the family.” Together they came up with a plan to give away a lot of their wealth. “We didn't want to be the richest people in the graveyard,” he says.

Hunter's father taught him to give back to the small Scottish coal mining community in which he grew up. But still, he didn't give much thought to philanthropy until he sold his business. It was then that the hard questions started. “Looking back, it was a bit bewildering,” he says. Most of Hunter's philanthropic journey has been a learn-by-doing exercise, he says.

Choose a cause to focus your giving

Just like most entrepreneurs, Hunter didn't wait for people to come to him with ideas. Instead, he decided to focus his efforts in three areas. The first was the power of entrepreneurship, including social entrepreneurs. “[They] create jobs which means they create wealth for a country,” he says. “Especially now, we believe it will be entrepreneurs who will get us through this pandemic from a business point of view because they are the most agile.”

Hunter is also interested in education and leadership. Education is the foundation for positive change in society, he says. With that in mind, he's partnered with the Scottish government to provide extra training for headteachers. He also believes leadership is essential for change because, in the end, someone has to take on the task of making it happen. Those two things—leadership and education—have worked hand-in-hand with Hunter's foundation helping put every headteacher through a leadership academy.

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Philanthropic power in a pandemic

During the COVID-19 pandemic, Hunter saw the power of entrepreneurship at work in providing food for the needy. Donations to food banks fell as people started hoarding, while at the same time, the demand for food from those in need increased. “Entrepreneurs were straight on it,” Hunter says, and he helped fund the building of a kitchen to get people the food they needed. At its height, the operation was producing 20,000 meals a week. “These social entrepreneurs were on the front line and we could help them straight away,” he says.

Hunter says he usually funds projects in the same way a venture capitalist would. That's to say, he'd ask what the people want to achieve, how long it would take, and what they'd need to do it. Then if the project was approved, money would be drip-fed to the enterprise based on certain pre-determined milestones being achieved. Along the way, Hunter and his foundation would make judgments about whether to give more money. “Sometimes the hardest judgment is to say no.”

Philanthropy by inheritance

While Hunter built his own fortune to give away, others inherit it. For instance, one such person is Fran Perrin OBE , daughter of Lord Sainsbury, himself a philanthropist and heir to the Sainsbury supermarket fortune. Perrin's parents encouraged her to do charitable work long before they introduced her to philanthropy. “It was only later that I discovered I had the capacity to do anything about it,” she says. That happened shortly after her 18th birthday when the family lawyer took her to lunch and told her she was inheriting a fortune. “The sums involved were large and seemed ridiculous,” she says.

But given the way she'd been brought up, it never occurred to Perrin to do anything but give away the money. So she immediately asked the lawyer to set up a foundation, which would add to the existing 17 other family foundations associated with the Sainsbury family.

Don't panic - be strategic in your charitable giving

When she became a trustee of her own foundation, that didn't make being a philanthropist any easier for Perrin. “I became panic-stricken that anybody else given the same amount of money would be making better decisions,” she says. At the same time, it seemed other philanthropists she met seemed utterly confident they knew what they were doing.

The thing that helped rid Perrin of the panic was discovering there were people who could teach her how to be a philanthropist. “The main transformative experience which helped me become confident as a philanthropist was doing something called the Philanthropy Workshop, which works with high-net-worth individuals,” she explains. She likens the programme to a mini executive MBA focused on strategic philanthropy. The programme allowed her to meet peers from different backgrounds, ages and nationalities.

One vital thing Perrin learned was that she'd make a better donor if she understood her subject and was passionate about it. “I am a nerd and a tech obsessive,” she says. “That's when I realised I could apply that knowledge.”

Perrin has used these early learnings to fuel more successful philanthropic projects, championing strategic philanthropy and supporting others to do the same. She was recently awarded an OBE in recognition of her charitable initiatives and founding 360Giving, which has transformed data sharing by philanthropists and foundations in the UK, leading to a change in government policy and improving collaborative philanthropy.

Encouraging others to get into philanthropy is also important to Perrin. “By showing them that with a peer network, good advisors and by just asking good questions it can become one of the most satisfying things you can do with your life,” she says.