Understanding family business philantropy: insights from a Lebanese crisis context

Family businesses often engage in philanthropy: they donate to charities, set up their own foundation (for instance to provide scholarships), or donate directly to employees or customers in need. I focus on family business philanthropy in times of crisis. I start by systematically reviewing the literature, which is quite new and fragmented. There is no one best theory that explains the who, what, how and why of family businesses philanthropy. The literature suggests that the approach that works best is to integrate theories on the role of resource limitations, the interactions between stakeholders (the family and other shareholders, managers, employees, customers, suppliers, and beneficiaries), and socioemotional wealth (“non-financial aspects of the firm that meet the family's affective needs, such as identity, the ability to exercise family influence and the perpetuation of the family dynasty”). My approach is qualitative, and I theorize from a specific context: between 2020 and 2023, Lebanon was exposed to several crises simultaneously—a banking crisis, the COVID-19 pandemic, and the Beirut port explosion of August 4, 2020. I study this case using two research designs: semi-structured interviews with members of business families and some of their employees, and a focus group. I found that family businesses act as community organizations when they respond to the crises. They engage in entrepreneurial, informal, and collective types of philanthropy. The founder typically plays a key role. Despite their limited resources, family businesses use their philanthropic programs to become more resilient. They mainly rely on their socioemotional wealth and shared values, in particular trust. Owners prefer to practice philanthropy within the business, so that they can respond efficiently and effectively. My research also shows that family business philanthropy is transformative in the sense that it tends to change the relationship between stakeholders. For instance, a family business will expect some degree of reciprocity in the form of greater loyalty from a customer or employee who was the beneficiary of their philanthropy.

Keywords: Family Business, Philanthropy, Crisis Management, Qualitative, Multidisciplinary.