Centre for Sustainable Finance and Private Wealth (Singapore)  ◈

Juliana Koh¹ ◈

In the evolving landscape of Sustainable Finance, Impact Investing and Philanthropy, adopting a 5Ps mindset of Personalized and Purpose-driven, Philanthropic, Phronesis, whole- Person and Participatory offers an integrative approach to nurture desire for aligning wealth with impact. This encourages wealth holders to explore the values and virtues that shape their families’ relationships with money and philosophy towards impact, fostering sustainable legacies that bridge family, business, and societal ecosystems.

1. Personalized and Purpose-Driven Mindset: Identity and Values

A personalized approach in wealth management begins with introspection, asking foundational questions about the purpose of wealth. Multigenerational families must consider their values, identity, and ethical priorities. By aligning these with impact goals, families can design wealth strategies that reflect their unique aspirations.

Personalized wealth management is rooted in understanding what wealth represents beyond financial gains. Questions on values such as “What about your family values? How are these values form, communicated, lived and pass on to the next generation? Why are they important to you and your family?” are key foundations and guiding lights for shaping a family philosophy.

Following on, reflect on the purpose of your wealth and the meaning of impact like “What does wealth mean to your family?”, “What impact/benefits do you want it to have on you and your family, on your community e.g., in healthcare, climate or education?” and “How can your resources contribute to social and environmental change?”

These will form the cornerstone of a purposeful approach, and help ensure investments resonate with your family’s identity, collective vision and value system.

For multigenerational families, creating a shared philosophy of wealth ensures alignment across generations. Engage the next gen to identify core and shared values, goals and impact areas of interest. Dialogue can help build inclusivity of various generations of family members, reconcile differences in perspectives, create an overarching family purpose and impact legacy, and get family buy in on impact and impact investing initiatives.

2. Philanthropic Mindset: Building A Legacy of Good

According to Merriam -Webster dictionary, the Greek root word of “philanthropy” stems from “loving people”, which translates in moderns time to goodwill towards others and efforts to promote their welfare.

We often hear of the 6Ts of giving. In cultivating this philanthropic mindset, giving is not constrained to only monetary gifts, but one may give time, talent, trust, treasures, testimony, and ties. This multi-capital approach considers your total wealth, and leverages your financial intellectual, human, social, and political capital, to activate the influence of your networks, relationships, knowledge, work and education experience, and policy influence, achieving your desired impact.

As wealth holders, reflect deeper on your philanthropic desire for impact. Consider:

• The Meaning of Impact: What does impact mean to you? Where and how does it play out in life and living in one’s personal life, family and broader society?

• Motivations to Your Giving: What motivates your giving? Is it for the “warm glow” to feel good about doing good and being able to help others or is it a strategic altruism of good for family and business reputation, network and future business opportunities? Or are you motivated by leveraging financial risks and tax returns, or a genuine unrestricted giving like in philanthropy?

• Creating Impact and Legacy of Impact: How are you currently doing impact – impact through your family, through your business and business management, through your family office, through your investments, through philanthropy? How were these various types of multi-capital being deployed for impact? How do you build a sensible strategy across your assets, investments, business and ways of creating impact? What is the legacy of impact you are looking to leave behind?

3. Phronesis: Balancing Choices in Impact Investing

Derived from Aristotle’s concept of practical wisdom, phronesis involves prudence and good judgement in making decisions when faced with competing goods. In impact investing, this principle is crucial for navigating trade-offs between financial returns and social impact, and in thinking of portfolio construction.

Impact investing often requires choosing between multiple worthy causes or balancing immediate returns with long-term benefits.

In putting phronesis in practice, ask yourself, how can you balance competing priorities to ensure your investments reflect both practical wisdom and ethical integrity?
Start by reviewing the key aspects influencing your sustainable investing portfolio:

• Purpose of Your Wealth: How you would like to reflect your family values and legacy and the impact you want.

• Philosophy of Your Impact: The vision, purpose, mission and philosophy of your impact.

• Your Impact “Theory of Change”: The way (places, product and services, process, behaviour) your investment is looking to create social and environmental impact.

• The Themes for Investment: Themes and sectors identified to bring the impact and benefits you want it to have for you and your family, your community and the environmental and social goals that that are important to you.

To meet your investment objectives and impact needs, align your constraints, your risk profile and your needs for returns vs impact trade-offs, and time horizons with your impact goals. In addition to selecting the asset classes and sustainable investing approaches, assess quality and actuality of your impact.

• The ethical implications of your impact investments.
• Differentiate investor vs. company impact.
• The additionality of your impact (vs. impact that would have been there anyway with or without your investment).
• The potential fruition and sustainability of your impact.

Recognizing the interconnectedness of financial, social, and environmental goals, effective application of phronesis mindset will give you peace of mind to help you balance weighing long-term consequences of your investments with the courage to embrace uncertainty and commitment to ethical outcomes.

4. Whole-Person Mindset: Cradle to Grave

By viewing wealth as an interconnected ecosystem, families can ensure their investments reflect a commitment to both immediate and future impact.

The whole-person mindset takes a systems perspective to consider the individual, family, business, and its relations with both internal and external broader ecosystems in a holistic manner. Reflect on: How can we integrate the dreams and goals of all family members into a sustainable wealth strategy? How can we integrate our business, wealth, with social needs into an impact strategy?

The whole-person mindset aims for inclusive, long-term stewardship for future generations and broader society. This is achieved through the below:

• Inclusive and Integrative: Being mindful of dreams and life goals of different family member. Aligning personal dreams, family goals, and societal responsibilities. Incorporate multigenerational family perspectives in decision making.

• Continuity: Adopting a long-term outlook of legacy building for the family and cultivating sustainable practices in business and wealth management across generations.

• Responsibility: Educate next gen to managing and growing wealth responsibly.

• Collaborative: Engage stakeholders within and beyond the family.

Family dynamics play a pivotal role in shaping wealth and impact strategies. To navigate multi-generational differences in values, priorities, and attitudes toward risk and impact, it is important to:

• Establish open communication channels.
• Encourage intergenerational dialogues to align goals and embrace diversity.
• Emphasize shared values to build consensus.
• Build a collective, intergenerational shared family purpose, values, mission and vision for impact legacy.
• Trust the next generation to take the lead on some impact initiatives, or ear mark funds for that purpose.

5. Participatory Mindset: Collaboration for Greater Impact

A participatory approach emphasizes collective action, bringing together public and private sectors, industries, and families to achieve systemic change.

Collaboration empowers the individual to scale and amplifies your impact. Collaborative partnerships with governments, NGOs and private entities enable cross cross-pollination of ideas in working across industries for innovation and scalable solutions. It integrates resources and lowers capital costs to provide systems and subsidies by combining blended finance, concessionary philanthropic capital, and impact investing to tackle global challenges.

Collaboration requires the power of network and systemic thinking.

• Networks: Impact companies and funds are just one part of a wider ecosystem. Networks play an essential role in distributing opportunities and driving changes to the culture and practice of business and finance. Reflect on how does your family/ family office support impact ecosystems? Are you part of any networks? In what ways do you/your family support the impact investment ecosystem?

• Systemic Impact: Investing in systems that outlive you can create lasting changes. Systemic Investment the nexus of impact investing, philanthropy and sustainable finance. It drives systemic change and has long-term effects. Consider: How do you want your investments to have a systematic impact? What is the system, ecosystem, and connections for this impact?

• Multi-Capital: Driving systemic change requires more than financial capital. A systemic perspective adopts a multi-capital approach and examine the interconnectedness of financial, human, intellectual, and social capital. By identifying leverage points for turn keys, Families and businesses can leverage their unique strengths to create outsize impact from small investing, through Systemic Investing.

Be it whether is it impact investing for better financial returns, or for generating real impact or, aligning to one’s values, the 5Ps mindset empowers wealth holders to align their financial decisions with their values and aspirations. Impact investing, when approached through the lens of the 5Ps, becomes more than a financial strategy; it evolves into a holistic philosophy that integrates personal aspirations, family unity, and societal good. By embracing this model, wealth holders can ensure their resources drive sustainable for generations to come.

¹Juliana Koh is the Head of Research, at the Centre for Sustainable Finance and Private Wealth (Singapore)