When Impact Investing Stays Local
Tuesday, July 21, 2015
By the mid-1990s, the Houghton family, whose wealth is derived from the glass and ceramic material manufacturer Corning, was into its sixth generation. Many of the cousins felt they had lost touch and were drifting away from the family.
An adviser suggested that they come together around philanthropy, specifically giving money to organizations around Corning, N.Y., the place that helped their family become wealthy. The cousins embraced the idea, said James D. Houghton, a family member who was in his 20s at the time. And they focused what would become known as the Triangle Fund on family, community and schools to help children in the three struggling counties around Corning.
“It’s giving to these rural organizations where the funding is limited,” Mr. Houghton said. “It’s not about replicability or getting Gates Foundation money. It’s about helping these kids and providing a hot meal.”
The Houghtons are not the only wealthy family giving back to the very places that gave to them — places that are often far less prosperous than they were when the families’ businesses started there. In doing so, they are purposely eschewing the global search for the best and most effective use of their philanthropic dollars, a quest that drives many philanthropists today.
Sophisticated families are being just as rigorous in their local philanthropy as those who cast their net wider, said Frederic J. Marx, a partner at Hemenway & Barnes, a law firm in Boston. Many are engaging in the same type of impact investing — meaning that they measure what their dollars accomplish — that is at the heart of much global giving. And thinking in those terms, even using that phrase, is keeping younger family members engaged.
“Just helping out schools, while very commendable, doesn’t have sex appeal to it,” Mr. Marx said. “That’s why impact investing is getting a lot of discussion.”