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Grace Treston: Would you please share with our audience the mission of the Julius Baer Foundation?

Laura Hemrika: The Julius Baer Foundation is actually one of the oldest corporate foundations in Switzerland. It was founded in 1965 by Walter Baer as an extension, really, of the family’s own philanthropic traditions. Like many foundations, it was started focusing on a topic that is of personal interest, which was art at the beginning. But again, like other foundations, the Julius Baer Foundation has evolved over time where we no longer focus so much on art, we now really commit all of our resources to addressing pressing needs in society. And in particular, the need that we’ve identified is that of reducing inequalities and in particular, wealth inequality and education inequality. Today, the richest 1% of the world’s population own 38% of global wealth, and the poorest 50% only owns 2% of global wealth. And that kind of wealth inequality has been exasperated by things like Covid, through climate change, through, unfortunately, war and strife, and so inequality is relevant to all and important because such levels of inequality really trigger high risks of social instability, unrest, and lack of development. And what’s really important to us is our particular approach.

Grace Treston: And can you explain to listeners what philanthropy truly means as a concept and what modern philanthropy looks like?

Laura Hemrika: I find modern philanthropy a really exciting place to be. It’s not the same thing as your grandmother’s philanthropy, if you will, but let’s take a step back and think about what the meaning of philanthropy is. It comes from the Greek philanthropia, and the Greek philanthropia is philos, which means love, and anthropos, which means humanity. So really, that roughly translates to love for humanity. What is that really? It’s efforts that individuals or organisations undertake based on an altruistic desire to improve human welfare. Now, human welfare is dependent on the environment, on society, on what’s happening in communities, et cetera. So, philanthropy is active across many, many different topics and many, many sectors, and it involves those who are giving and those who are receiving.

And this is where I think modern philanthropy gets much more exciting, which is that it’s not just this one-way transaction. It’s rather much more about collaboration. It’s much more beyond the cheque. It’s much more about designing new solutions, innovating, looking at different models, whether it’s direct charity, whether it’s lending advice and expertise, whether it’s thinking of innovative new financial models in which grant money comes into play. There are so many ways now to have that positive impact on society through a very broad topic that we call philanthropy.

Grace Treston: So, listeners may be wondering, ‘Okay, I know what philanthropy is. I know it’s a good thing to do. But isn’t it something that big existing foundations already handle? And is it something I should really consider when I’m managing my own wealth?’ What would you say to those people who are wondering if they themselves can make a difference?

Laura Hemrika: Don’t be shy, I think is the first thing I would say. It’s true. The philanthropy that we hear most about is the Bill and Melinda Gates foundation, the MacArthur foundations, maybe here in Switzerland, we hear about the Schmidheiny, the Jacobs Foundation, and so forth. All of those foundations actually started with one individual, one person who said, what can I do to make a difference? Where am I going to leave an impact in a positive way? Where am I going to help address one issue, maybe multiple issues? Now, some of these people have more financial assets than you or I. Nevertheless, they one day said, okay, what is my North Star? Why did it make a difference that I was here on this earth? And what is my legacy going to be now on a day-to-day basis. It can be everything from small donations. It can be around volunteering. It can be around investing. Philanthropy is, in a way, not that different from mainstream financial investing. You have lots of different ways to invest your money. You also have lots of different ways to engage in philanthropy. Despite the amount of attention that maybe these large, famous foundations get, the reality is that the majority of foundations are actually quite small.

They don’t have big staff or any staff at all. A lot of philanthropy is actually very private, whether small or large volume philanthropy. And so, one should certainly not feel like there’s not an opportunity to get involved. Every little bit helps help clean the environment, to give someone else the opportunities that they might otherwise not have, or to make sure that someone has the food they need, the health care they need.

Grace Treston: And you mentioned there about a guiding star that someone might have in helping to shape their journey. What would you say are the guiding principles that shape your approach to philanthropy and guide the work of the foundation?

Laura Hemrika: At the Julius Baer Foundation, we really have three guiding principles to our work. The first one is really that we believe in the power of sharing and collaboration. As we said earlier, we know that there is no effective solution that does not involve collaboration across the wealth spectrum. And so, for this reason, we invest in projects that bring together the privileged and the disadvantaged in those solutions, and where we learn from each other, where we merge our networks, our social capital, and our knowledge to develop long term solutions. The second guiding principle for us is really courage. And that is remembering that philanthropy has the potential to experiment and drive change wherever we need to bridge the gap, right where public systems may not reach, where companies and economy are not addressing issues. And so having the courage to take on that responsibility, having the courage to test and try new things, some may not be successful, but also some may very well be that unique solution that we have not encountered yet. And for that, someone needs to fund it. And then the final principle, I think, is motivation. We really take an inspirational approach to collaborating with our partners and stakeholders on an equal footing and ensuring that there’s respect and partnership at eye level.

That motivation is really important to us to make sure that when we’re trying to address inequalities, we’re also in our work trying to overcome those inequalities as well.

Grace Treston: When it comes to choosing partners for philanthropic projects, what criteria do you consider to be the most crucial? And how can a high-net-worth individual use these criteria for themselves?

Laura Hemrika: For us, it’s really important to work with local partners. These are the organisations that know the communities best. They’re on the ground, they’re close to the action and they’re the best to implement the work. It’s crucial that nevertheless, we identify organisations that have a shared vision. We align on the kind of change and impact that we want to drive. And of course, trust is key and that comes with a lot of open communication, giving and receiving feedback, very regular communication. We’re very close to our partners and we consider our partnerships go beyond the cheque. And so we’re there also to support with any advice that we can provide, any access we can provide, any further connections to, whether our clients, whether the bank itself, whether other organisations in the field, anything that we can do to help our partners achieve their impact, and also everything that we could do to ensure that we do not add any extra or unnecessary burdens to them and to their processes. And so, finding the right partner, it’s a little bit like dating, it takes a little bit of time, and you want to make sure that you really find alignment on all of these factors.

Grace Treston: And in the world of philanthropy, of course, I’m sure impact measurement is essential. So how does the Julius Baer Foundation go about measuring the impact of its initiatives? And how can those who are considering their own families’ mark on the world also measure their impact?

Laura Hemrika: Impact is a topic that, I think for many, feels a little bit overwhelming. And yet it’s so important to measure the impact of your work; without doing that, you’re really leaving half of the impact on the table. And so, what we have adopted is a seven-step approach to measure outcomes that matter.

Step 1: And so how we go about that is in the first step, we establish a baseline. What’s the starting point?

Step 2: Then the second step is drawing what we call an impact canvas. So really a framework that summarises all of the activities that we plan to do together with our partners. Like a map. How are we going to get from a to b?

Step 3: The third step is turning the outcomes that we want to get to into KPIs, so that we’re measuring how our project is progressing. This is quantifiable, so that’s very helpful. On that note, I might add that we talk about outcome measurement and not impact measurement because we want to be really clear that we’re measuring the things that we have genuinely influenced and where you could attribute the outcomes to our work.

Step 4: Impact is one step further and it’s a lot harder to measure. And there’s a lot of debate about that topic. And so how do you get to that outcome measurement? Well, of course, you got to collect data, so that’s the fourth step.

Step 5: And then fifth step. Of course, data is nothing without the analysis that you do of that data. So that’s the next step.

Step 6: And then, of course, sharing results. So that’s a logical next step. But sharing results, both the wins and also the, let’s say, learning opportunities as well, because that’s so important for the rest of the sector, also to benefit from the work that you’re doing.

Step 7: And then last but not least, final step of this seven-step process is incorporating the takeaways, the ‘so what’ of all of this information. Now we know this did or didn’t work. This reached more or less children than expected. What does that mean going forward for the design of the next project, for how an organisation continues to do its work. And that’s really, of course, the most important part of this whole process.

Grace Treston: So, we know that there is more than one way a person can give themselves to philanthropy, and it’s not always financial. Can you share a specific project or an initiative that the foundation has been involved in that exemplifies this potential for different forms of philanthropy?

Laura Hemrika: We have a wonderful portfolio of projects, so it’s hard to select one. But let me tell you a little bit more about a project that we do in the Philippines with an organisation called CODESPA. And it’s a really interesting example of where philanthropic capital helps to really create a very positive and virtuous circle, really, of economic impact. Our partner, CODESPA, has been working in the Philippines to support local seaweed farmers with specific training and access to capital, while also helping them to work more collaboratively and join forces through the establishment of the Hinatuan Seaweed Producers Association. And so, working very closely with low-income seaweed farmers along the coast in the Philippines to improve the quality of the seaweed that they are growing, to ensure that the approach that they’re using is respectful of the environment, and also that they’re increasing the amount of seaweed that they’re able to produce. So that in and of itself, that’s where philanthropic capital came in. Super wonderful outcome. But where it got really exciting, actually, is where CEAMSA Asia, which is a leading seaweed processing company with operations in Manila, got involved in this work as well. The company’s top management visited the community multiple times, and they invited the farmers to visit the plants that they run.

And for most of these farmers, that was the first time leaving their community and travelling via aeroplane to a far-off place like this. And then through those visits and the exchanges, the farmers gained better insights into how to improve the quality of the seaweed. They got to understand, what does the next person in the chain need from me? And so, as a result of that, and CEAMSA was going to provide the demand for their product, if they were able to meet that demand. And so now CEAMSA is receiving top quality products. The seaweed that’s coming from this small community is some of the best seaweed in the market. That direct relationship, putting those two pieces of actually a supply chain in contact, meant that both players come out ahead, right, and cutting out also a middleman or an intermediary, where value gets lost often. So, the top quality and efficiency of the farmers led to higher prices being paid to them, which for them also resulted in better contractual conditions, more stability, more stable income means better life situations for those farmers. They can ensure school payments, they can ensure better quality food on their family’s tables, they can access health care when they need it, and so forth and so forth.

So CEAMSA was not originally part of the equation, and yet through this kind of open dialogue, by a little bit of thinking outside the box, we were able to really amplify the outcomes even further. And all of that started with one philanthropic grant focused on a community of seaweed farmers.

Grace Treston: Wow – so it’s really a win-win for everyone and it helps the community. That’s really great to hear. And given your experience, then, what trends and challenges do you see emerging in the world of philanthropy? And how is the foundation adapting to these changes? And is there anything that listeners should also keep in mind for their own philanthropic activities?

Laura Hemrika: It’s a very exciting time to engage in philanthropy, and there’s certainly a pressing need. But what makes it so exciting is that there are so many new approaches to philanthropy being tested and rolled out, and there are new collaborations happening between different kinds of actors, and there are also new impact models that are coming out as well. So, for instance, donors are looking at different approaches beyond traditional charitable giving, looking at supporting social enterprises, so businesses that are trying to have as much of a positive environmental or social impact, as well as a sound business approach. There are new models around blended finance, around impact investing, applying everything that we’ve learned from traditional investing to this space of social impact.

And so, we at the foundation also support projects like that, that look at, okay, how do we use investment capital through philanthropic work. And there are also interesting new approaches, whether it’s through strategic philanthropy, like we talked about, whether it’s funding incubators or accelerators similar to what you might see in the VC or angel investment space. We’re also looking at what is it that we can do beyond the financial investment? How do we, and or how do other philanthropists ensure that they can help organisations and individuals who are trying to move the needle through their knowledge, through their own network, through other resources that they might have from their experience, their profession, and of course, putting in their own mental equity as well.

Grace Treston: And like you said, there’s such a range of causes to support. So, I can imagine a lot of individuals might feel overwhelmed by this choice. So how would you recommend that they identify causes that might resonate with their values and interests? And also, when it comes to the family unit, can the process actually help families to come closer together or develop a shared purpose?

Laura Hemrika: It may seem complex, the philanthropy space, and that’s a fair first reaction. But it all starts with one first step, and we call that finding your north star. Let’s begin by understanding what are the causes or issues that resonate with you? What makes your heart beat faster? What can you get excited about? Because each one’s passion is going to be the driving force behind their philanthropy. And then it’s really important to take into consideration one’s personal, professional, or family history and experience. How can you apply that, and how does that also motivate you potentially? Where do you come from? What can you bring to the table? Where can you contribute the most in your own way? Everyone is different. Everyone has an opportunity to contribute. And the question of which cause and an approach to embrace really goes hand in hand. Also, with which legacy do I want to leave in this? You know, I often think, like, what is the difference between me being here and doing this and me not being here and doing this? What difference will that make? And so, for us, at the Julius Baer Foundation, we went through a similar process.

Our overall goal is to serve society at large. We then identified inequality as the key challenge of our time. We set our mission to work across the wealth divide to shape a world of equal opportunities. As a corporate foundation of a leading wealth manager, we also identified, we have the opportunity to engage directly with the privileged, the leaders, those who have the power and the means to drive change. So that’s our USP. And so, we want to then take that as the opportunity to work with and mobilise these individuals, these families, community, or business leaders, to act for change with us, alongside us. And as you can see, that taps into all of those things. It looks at our history. It looks at who we are, where we sit in society, in the economy, and who do we have access to and what are ways of having an impact for us, that’s applying strategic philanthropy, and that helps us give with purpose and direction, and it focuses our particular resources where they have the most impact. And I think individuals can have that same reasoning.

Grace Treston: And, Laura, that brings us to our last question. As we wrap up this episode, I always ask our guests to give us some of their key wealth insights on the topic at hand. So, what are some important key takeaways that you’d like our listeners to remember when it comes to philanthropy and the principles that guide it?

Laura Hemrika: As I said, I think it’s really exciting what’s happening right now in the philanthropy space. There’s so much energy. There are so many different groups who are interested in getting involved. And the other side of that is that the need is enormous. We know there are so many issues in this world right now. We’re not going to make our climate target. There’s more and more inequality, and that’s been exasperated by things like Covid. There are many societies where, very sadly, conflict is dramatically impacting the lives of individuals and communities. So, there is much to be done. And so, I encourage anyone to think about what is it that they can contribute in whatever small way. And again, it doesn’t have to be multimillions. Every little bit helps. So that’s one thing. It’s really this urge to get involved and to make a difference, and that every journey really starts with one first step. And so that’s maybe the biggest. It feels sometimes difficult to start, but one step, one step in the direction, one outreach, one maybe small donation to start. It doesn’t have to happen overnight. You don’t have to be the best philanthropist immediately.

It’s a learning journey as well. And philanthropy is very personal. And so, what works for one person may not be the best for the next person. You may have different passions than I do, you may have different skills and talents than I do, or you may come from a place that you care a lot about, where you want to make a difference, and that’ll be different for everybody. And what’s also different is how people prefer to get involved. Do they want to get involved with others, or would they rather start by themselves? Do they want to start small or go out with a big bang? Some people are very public in their philanthropy, but it doesn’t have to be. You can also be very private. Sometimes that’s a cultural factor as well. You can start in the short term and then evolve to the long term. Like many business ideas, you start with one plan, and it evolves to another. And there’s nothing wrong with that. You don’t need to get it perfectly right the first time. But I think the most important thing is to start and to get going. And for all of those sorts of things, that’s where an organisation also like the Julius Baer Foundation or other philanthropists come into play.

Because we’re very happy to engage in that dialogue with our clients, with other people seeking to have an impact, to share our thoughts on how we’ve approached some of these questions, how we’ve gone about it, which partners are out there who we know may be seeking similar impact, and who are looking for other partners. So please do reach out if someone would like to engage on that conversation.