The Impact of Community Involvement in a Sustainable Family Firm

The current president of the Ramon Aboitiz Foundation, Inc (RAFI), Amaya Cristina Aboitiz-Fansler, gave us an insider’s perspective of the true significance and benefit of philanthropic advocacies among families in business. Their family foundation based in Cebu, Philippines, have done a lot good work in diverse needs and sectors in society for the past 55 years. As a member of the Aboitiz Family Council, she has a clear and deep understanding, appreciation, and insight of the impact of charitable commitment to both family, business and more:

It benefited the community – many communities. RAFI has grown in reach and range of activity over the years. It has built communities and supported advocacies generously. This is the most obvious impact of charity. What makes RAFI different is that it is a sustained commitment over the years by institutionalizing philanthropic aspirations. Ramon Aboitiz, Amaya’s great grandfather, wanted to carry on his personal work and commitment to helping the people in the Cebuano community even beyond his death.

It has a role in the individual development of family members. Involvement and participation of family members in RAFI, even in the early years, has broaden Amaya’s perspective. The engagement with people from different walks of life checks their others wise constrained sense reality if they simply mingled within their natural circles. Furthermore, awareness of different situations and challenges in life makes an individual understand and appreciate how decisions are to made in complex situations. The range of activities in RAFI enabled family members to build relationships with people based on trust and for the common the good. This is an important life and business skill. Lastly, participation in the family foundation allowed family members not involved in the family business to contribute to the family legacy in a unique way. Since not all family members are working in the family business, RAFI was the main channel for different family members to be positive forces in the family enterprise.

It has a role in maintaining healthy family dynamics. The family foundation is source of strength for internal bonds, trust levels and a sense of unity. It has been playing a key role in keeping the different branches of the family together. RAFI engages the different family members and of different generations in a meaningful way. It has become a locus that allows diverse family members to have conversations with different perspectives for a common cause and learn more about each other. Working in RAFI gave the family a sense of shared responsibility and trust. Furthermore, since the growing family members are geographically spread out in its 7th generation already, RAFI activities calendars the family’s time together. It challenges the family to remain connected. The family foundation has strengthened family connections.

It brings value to the family business. The good done by the family in RAFI redounds in building a good reputation for the business as well. It is source of pride for the family and the business. The business success finds its unique significance when it has an impact to community development too. But much more than this, Amaya sees the establishment of RAFI as one of the vital ingredients to the “secret sauce” that contributed to the family staying together for so many years and keeping the family business longevity.

Amaya’s reflections are very insightful. As a 5th generation of the Aboitiz family, her family business experience is worthy of study and emulation. With family business roots traced in the 1870s to Paulino Aboitiz establishing a trade in the Philippines, their family learnings are compelling, if not authoritative. Aboitiz Equity Ventures has evolved significantly and exponentially since its formal inception in 1920. However, their sense of family remained the steadfast to this date. Amaya attributes this family success to a certain extent to the family foundation commitment.

Amaya’s insinuations are not far from the truth. John Ward, Denis Jaffe, and Professor Toshio Goto couldn’t agree more. These three family business experts discovered the same trend as they studied long-lived family firms.

Professor Toshio Goto of Japan researched extensively on the century-old family firms in Japan. Japan has the highest concentration of century-old family firms in the world. In fact, 98 percent of businesses in Japan are family enterprises. He saw that at the center of century-old firm in Japan is a sense of altruism – of being relevant and helpful to the community.

Dr. Denis Jaffe has researched, interviewed, and studied 100 Global Families who are century-old. His findings on this were published in a book in May 2018: Resilience of 100-Year Family Enterprises. One of the key common themes among century-old family businesses is shared social commitment in the family. The family business feels connection to the wider community.

John Ward has a unique take on family philanthropy. In his book, Perpetuating the Family Business: The Ultimate Management Challenge, lesson 14 and 44 elucidates on this. Investing and creating good will in your community is investing in Social Capital. This is done by providing social benefit to their community. Good will in the society helps protect and sustain them through external changes, such as shifts in government. A positive reputation that comes back to them in terms of being able to attract employees and customers. It does indeed become a sense of pride for the company to create visible, positive difference in their environment.

John Ward further pointed out that philanthropic interest touches a wider percentage of the family members than business interests do. “Giving back” is a fundamental part of the value system of most families. It becomes an expression of appreciation for the privilege and abundance they have enjoyed as the family business succeeded and thrived through the years.

Ramon Aboitiz was a man ahead of his times when he saw the necessity of investing and committing the family to community development and work in 1966. His words and his belief continue to echo in every RAFI undertaking to this date:

The dignity of man is best respected by helping him realize his hope and by sharing with him the burden of his fears

The nature and purpose of family business is beyond finance. It has an inherent business to make a difference and make the world a better place.