Purpose in Family Offices

Family offices have been around for decades, but their number has exploded in recent years. According to research by Deloitte, “There are an estimated 8,030 single family offices in the world today —a 31% increase from 6,130 in 2019.” The term is broad and used in many different ways, so much so that there is an industry maxim: “If you have seen one family office, you have seen one family office.” Despite this variance in form and function, a significant number of family offices have been created to address a specific type of situation, which is to help families to invest the wealth generated by a liquidity event (e.g., sale of a company). 

At the foundation of success for this burgeoning form of organization is a clear and compelling purpose. Purpose answers the “why” question, as in, “why does this organization exist?” All family enterprises – really, all enterprises – need a strong sense of purpose to be successful. Even asking the question about why a family enterprise exists is important, since it focuses on the importance of choice. Families should only own assets together if there is a convincing reason to do so, not because of a sense of obligation to previous generations. Purpose provides a north star, one that helps define what success means for the family. It can also help to attract, retain, and engage the family and non-family talent an enterprise needs to thrive. Finally, purpose is vital to managing conflict. There is always a tension between the value of collective endeavors and each person’s emphasis on “what’s in it for me?” Absent effort to reinvigorate it, the rationale for making the compromises and sacrifices that joint ownership requires tends to decline over time. 

When the center of gravity of a family enterprise migrates from operating companies to investing in them, purpose takes on a distinct form. In some ways, it’s easier. There are multiple potential touch points for family members to connect to. Some may be passionate about real estate, others about impact investing or private equity. There is also less need for cohesion, since portfolios can be customized and fewer collective decisions need to be made. On the other hand, sustaining purpose can become more challenging. Ownership can become more abstract, captured on spreadsheets rather than factories and stores. The family may not have any emotional attachment to those investments. Meanwhile, there is always the credible alternative that individuals or branches can take their assets to the myriad of wealth managers and multi-family offices. 

Building a family office to last takes effort and planning (see this article for more on how). A strong sense of purpose is a vital part of positioning it to endure.

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Josh Baron is a Senior Lecturer of Business Administration at Harvard Business School and a part of the Strategy Unit.

This blog is based on a discussion held at the 2026 IESE-ECGI Corporate Governance Conference Family Firms: Purpose, Economic Performance and Social Impact. Visit the event page to explore more conference-related blogs.

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