• Potential Philanthropic Reading for Families
  • “What follows are some probing questions about family money and family philanthropy. There are no single or right answers. Asking the question and hearing how other family members respond are more important than the answers.
    • What challenges do we face regarding our family and our money?
    • What is our vision for our family’s future?
    • What is our family’s definition of success?
    • What is an appropriate financial inheritance for our children?
    • What principles will guide our decisions about estate allocations?
    • What has been our experience of working together as a family?
    • How do we prepare our children to steward a financial inheritance?
    • Should we bring our son-in-law or daughter-in-law into financial and philanthropic conversations?
    • What are our core philanthropic interests and how did these come to be important to us?
    • How may we enable the next generation to create a shared dream with a family foundation while also fulfilling the founder’s mission?
    • How do we promote a sense of togetherness in our family while also encouraging each person’s individuality?” Wealth in Families Third Edition (Charles W. Collier) Page 1-2
    • “Monica McGoldrick writes about the priority of family stories in her book, You Can Go Home Again: Reconnecting with your family.’We are born not just into our family, but into our family’s stories, which both nourish and sometimes cripple us. And when we die, the stories of our lives become part of our family’s web of meaning. Family stories tend to be told to remind members of the family’s cherished beliefs. We sing of the heroes and even the villains whose daring the family admires. Taping or writing down the stories of older family members can bring a richness to our search for perspective on family that cannot be achieved in any other way.” Wealth in Families Third Edition (Charles W. Collier) Page 2-3
    • “All families exhibit two strong emotional forces: one pushes us toward togetherness, while the other pulls us toward individuality.” Wealth in Families Third Edition (Charles W. Collier) Page 3
    • “Family philanthropy can function as an activity promoting genuine family togetherness. The next generation may, however, also experience it as a pressure to conform. How then can a family negotiate a succession plan that respects the wishes of the foundation’s original donor while striving to enhance the individuality of the next generation?” Wealth in Families Third Edition (Charles W. Collier) Page 3
  • “Consider these questions:
      • What is really important to your family?
      • What are your family’s true assets?
      • What should you do to guide and support the life journey of each family member over time?
      • How wealthy do you want your children to be?
      • Do you feel you have a responsibility to society?  These are the deeper questions families ought to ask themselves today- and on a continuing  basis.” Wealth in Families Third Edition (Charles W. Collier) Page 5
  • “What kind of family do you want to be? What do you want to accomplish-or help others to accomplish? What legacy do you want to leave your children and society? Deciding where to go with your financial success and why you want to meet those goals are the strategic questions that you should ask first. Determining how to get there and which legal arrangements to use are secondary tactical decisions.” Wealth in Families Third Edition (Charles W. Collier) Page 5
  • “I define a successful family as one that knows who it is, what it stands for, and where it is going. Successful families manage themselves deliberately. There is much at stake for your individual family members, for your family as a whole, and for society at large. If you and your family can define “what’s important” before deciding “what to do,” then your children will thrive, your family will flourish, and society will benefit.” Wealth in Families Third Edition (Charles W. Collier) Page 5
  • How, then, should you think about the deeper issues around wealth? Begin by asking your family four simple questions drawn from a business model for strategic planning taught at Harvard Business School:
    1. What is your family’s vision for its future?
    2. Can your family members work together?
    3. Can your family make joint decisions around money, philanthropy, and legacy?
    4. How should your family make decisions together?”  Wealth in Families Third Edition (Charles W. Collier) Page 6
  • “To undertake effective succession planning, you may want to define a family vision and mission, create a structure for decision making appropriate to your family, foster open communication, and encourage the growth and development of all your family members.” Wealth in Families Third Edition (Charles W. Collier) Page 7 (Wealth in Families, Succession Planning, Family Foundation)
  • ““What drives all successions is a vision of the future, hammered out over time, that embraces the aspirations of both the senior and junior generations as well as those of their forebears,” writes Ivan Lansberg, a family business consultant in Connecticut. In his book, Succeeding Generations, he says, “This vision-which I call a Shared Dream-generates the excitement and energy that every family must have to do the hard work of succession planning.” Wealth in Families Third Edition (Charles W. Collier) Page 7
  • “Your approach to wealth is a statement to your family of what you stand for. You and your family do stand for something, even if it is never articulated. What core values and principles does your family agree on-for example, achievement, knowledge, diversity, hard work, generosity, creativity, compassion, spirituality, justice, integrity, honesty, service, respect, or love?”Wealth in Families Third Edition (Charles W. Collier) Page 7
  • “Another key question focuses on the meaning and purpose of your family’s financial wealth? Is its highest and best use to spend it, to provide a higher standard of living for family members, to enable family members to choose careers based on factors other than economics, to fund new family businesses, to provide a comfortable retirement, to provide for family emergencies, to provide resources for philanthropy, or a combination of all these?” Wealth in Families Third Edition (Charles W. Collier) Page 7
  • “Money can express your core values and expand your family members’ pursuit of their life calling. A discussion that articulates your family’s values and vision, while respecting individual differences, can strengthen your family.” Wealth in Families Third Edition (Charles W. Collier) Page 8  (Wealth in Families, Wealth, Family Foundation,
  • “First of all, recognize that grown children are going to make their own decisions anyway. The real question is” How do wealth holders help create the circumstances for their children to make wise decisions? For example, around the family philanthropic process, you might say, “what are your passions and how do you want to support them?” You have to allow them to give to the causes they care about and in ways and amounts that they decide.” Wealth in Families Third Edition (Charles W. Collier) Page 22-23
  • ““Turn around the government’s default plan,” Englund adds, “and you decide, in consultation with your children, how to organize your family’s financial wealth. A wonderful part of this whole approach is that your children talk to one another. The expression of this concept will vary from family to family, but what a powerful dialogue. What an opportunity for your family!”” Wealth in Families Third Edition (Charles W. Collier) Page 32
  • “In every culture that I’ve encountered-in China, Latin America, and Europe, for example-I run into the same proverb. In China, rice paddy to rice paddy; in Ireland, clogs to clogs.  It appears that financial wealth is destined to disappear in three or four generations. The proverb means that the first generation makes the money, the second generation preserves it, the third generation spends it, and the fourth generation must re-create it. I prefer the rice paddy idiom; for example, imagine a poor couple in China wearing torn clothing. They pull rice every day and make a financial fortune. They don’t leave their home or change their way of life. The second generation moves to the city, joins the opera board, and becomes significant members of society. The third generation, having no experience of work, spends the money, and the fourth generation goes back to working in the rice paddy.” Wealth in Families Third Edition (Charles W. Collier) Page 35-36
  • “Another challenge in raising children in the context of wealth is how to give them a balanced sense of the role of money in their lives, ensuring that they make the connection between work and reward-that is, the value of money. “If affluent parents do not actively instill within their children a sense of value and respect for money and the effort earning it requires,” asserts Hausner in Children of Paradise, “the result can be a child who not only believes there is an endless supply of capital but one who consequently abuses it.”” Wealth in Families Third Edition (Charles W. Collier) Page 42
  • “Generally, foundations make grants. But increasingly they are becoming more entrepreneurial by investing in organizations that advance the mission of the foundation. With a program-related investment (PRI) a foundation invests its principal in advancing its mission. PRIs include loans, loan guarantees, linked deposits, and even equity investments in charitable organizations or in commercial ventures for civic purposes. For the recipient, PRIs provide access to capital at lower than market rates. For the foundation, the benefit is that the repayment of the note, or return of equity, can be recycled to meet another charitable purpose.”  A DONOR FRIENDLY OVERVIEW OF CHARITABLE TOOLS.  Phil Cubeta, CLU, ChFC, MSFS, CAP, The Sallie B. and William B. Wallace Chair in Philanthropy at The American College.  Page 5.
  • “One-third of family foundations were created just in the past decade, and inflation-adjusted family foundation giving has more than doubled since 1998. In 2007, there were more than 37,000 family foundations. Together, they gave more than $18 billion in grants. By comparison, in 2002, there were more than 29,700 family foundations, which together had total giving of $12.5 billion.”  NCFP, “The Value of Family in Philanthropy” (Family Foundations
  • “Private Foundation: the vehicle that allows the greatest personal control over the giving, the private foundation is often endowed either upon establishment or upon the death of the donor(s). Many foundations payout grants basedon the earnings of the corpus, allowing lifelong, even perpetual, giving. Others choose to payout more as needs andprogram goals dictate.Family Foundation: is not a legal term but refers to a private foundation where the donor and relatives play an active role in the governance of the foundation.”  NCFP, “The Value of Family in Philanthropy“
  • “Family philanthropy offers family the chance to feed itself – to develop leadership, to develop links across generations that mean something. There just aren’t that many places where you can add to the social interaction of the family relationship a piece of work. Work adds meaning and intensity to the family’s relationships that nothing else can – not being, not playing, not talking together. There is a wholly legitimate purpose to philanthropy as a source of meaning to a donor and a family. This is essential to the continued vitality of the American philanthropy experience.”  NCFP, “The Value of Family in Philanthropy
  • “Philanthropic families have the chance to turn their life experiences to empathy and concern for community issues. But you may be drawn to the issue by that empathy and quickly realize you need knowledge. That may prompt you to set up a learning process for family members and be open to it: the community will teach you; their proposals willteach you; the experts in the fields of interest will teach you. You end up with a tremendous opportunity to do it well and, over time, you begin to realize that ongoing learning is a very important component – and benefit – of the process.”  NCFP, “The Value of Family in Philanthropy
  • “Participation in the grantmaking process offers families the distinct privilege of learning about needs and issues from those most impassioned and most involved – the community leaders they fund. They build nonprofit skills and experiences they likely would not have otherwise; among them, experience with volunteers, board and staff relationships, financial management, development, and evaluation. And, it has given them the chance to return thosegifts to society – as more enlightened, engaged nonprofit volunteers.”  NCFP, “The Value of Family in Philanthropy
  • “When it goes well in a family, there can be this discovery – an appreciation of other family members that can be really inspiring. I have talked to a lot of family members who are surprised and moved by the caring and the investment and commitment that other family members feel toward the foundation’s work. It is a real discovery of other family members. This can be especially true if other relationships are more of the business world or are more strained. When they see how caring they can be, it opens up a different way of looking at one’s relatives. And that can lead to a real positive feedback loop about doing more of this together.”  NCFP, “The Value of Family in Philanthropy
  • “Family philanthropy has strengthened our family culture. It has added richness and experience to the family work. It becomes more than an activity; it is a life mission or calling.”  NCFP, “The Value of Family in Philanthropy
  • “The successful multi-generational family philanthropy of the future is not one that passes the baton successfully but one that learns to share it – valuing the perspectives, the leadership, and participation of all.”  NCFP, “The Value of Family in Philanthropy
  • “The financial resources of most philanthropic families mean children may have all the opportunities and experiences their parents dream of providing. Some of those opportunities – private schools, luxury vacations, elite extracurricular activities – may (intentionally or not) offer a narrow view of the world. Further, beyond the safe haven family and school provide, concern – even fear – for their safety may mean further shielding them from life’s harsher realities and dangers. Philanthropy introduces social needs and solutions in constructive, inspiring ways.”  NCFP, “The Value of Family in Philanthropy
  • “Family foundations and funds often are safe places in which to make sense of the swirl of modern life. They usually begin with a nuclear family – a donor couple and their children. The manageable number and the intimacy of the family changes quickly as the second and certainly the third generation includes spouses, cousins, aunts and uncles, grandparents and a host of others – across generations and branches of the family. Depending on the donor’s goals for family involvement and perpetuity, participation may mean everyone is a potential trustee or advisor.”  NCFP, “The Value of Family in Philanthropy
  • “Our family tradition of giving began before there was any wealth at all,” said one trustee. Said another: “The Depression remained a strong influence on my parents, and they knew what it was like to give when you weren’t sure you had enough for yourself. Why would we not give out of abundance?”NCFP, “The Value of Family in Philanthropy
  • “Families can be proactive in changing the world that is consistent with their values. Some can do this with politics; some can do it by being successful in business. The best opportunity offered by family philanthropy is the chance for the family to engage in the work of improving the community and the world in which they live.”  NCFP, “The Value of Family in Philanthropy
  • “The freedom philanthropic families often demonstrate – to act quickly when needed, to act on convictions and to act on new knowledge – can be one of its greatest strengths and gifts.”  NCFP, “The Value of Family in Philanthropy
  • “There is a misperception that family boards think and act in unison; that they have the same politics, religions, interests, and perspectives. That has never been my experience. If I were to found a nonprofit, I would surround myself with people well familiar with and equally committed to my cause. Family boards don’t have that commonality of background and purpose. You get what you get with your family and you learn to accommodate, agitate, all the while working toward consensus and, ultimately, a functioning team.”  NCFP, “The Value of Family in Philanthropy
  • “Legacy is a powerful tool that plays out in family giving. Where Mom and Dad have been driving the philanthropic activities, they look to their children when it comes to how that legacy will be continued. In the end, we all want to believe that our lives have mattered, and we will leave behind a footprint. And why not leave our legacy in the hands of those who knew and loved us the most – our family?”  NCFP, “The Value of Family in Philanthropy
  • “The choice to involve one’s family in philanthropy is grounded in legacy.”  NCFP, “The Value of Family in Philanthropy
  • “There is something meaningful to the recipient communities that this is a family philanthropy – something very resonant with the people who receive the benefits of the philanthropy. It is like a family’s loving arms embracing a larger group of people. You can’t underestimate the love part of the family philanthropy. It’s the best part.”NCFP, “The Value of Family in Philanthropy
  • “A board of family members adds richness to the discussion and it can get spicy at times.”  NCFP, “The Value of Family in Philanthropy
  • “Opportunities and threats all key on the family dynamics. If you can’t leave the baggage t the door, if you can’t come together as a unanimous board of a public trust, it can be a threat to the foundation. But there is enormous opportunity in the very diverse religious and political views family members bring to the table.” NCFP, “The Value of Family in Philanthropy
  • “In a study sponsored by The Philanthropic Collaborative, economists Robert Shapiro and AparnaMathur concluded:  “Each dollar that private and community foundations provided in grants and support in 2007 produced an estimated average return of $8.58 in direct, economic welfare benefits. As a result, the $42.9 billion in grants and other support provided by private and community foundations in 2007 produced some $367.9 billion in direct, social and economic benefits.”  Robert J. Shapiro and AparnaMathur, The Social and Economic Value of Private and Community Foundations (Washington, DC: Sonecon, 2008), p. 2. Available online: http://www.philanthropycollaborative.org/FoundationStudy.pdf.
  • “It was a surprise to me when I found out that not every family in the country had the same way of looking at the world, which is that if you’ve got stuff, you’re absolutely obliged to give it back, and why wouldn’t you? It wasn’t called philanthropy. It was just what my father, my role model, my uncles and auntsand cousins, who were older than me, were always engaged in. That’s where I first became aware of philanthropy.”  – Richard Rockefeller
  • “I recently heard someone say that it’s hard to feel ownership over something that’s been given to you. Paradoxically, giving is helping me to come into a feeling of ownership, not only of my identity but also of these incredible gifts I’ve been given. I find that giving has helped me to accept the identity that has been challenging—it’s a gift but it’s also a burden.”- Rebecca Rockefeller Lambert
  • “Keeping a money diary, identifying “money heroes,” or creating a priority ranking of “belief statements” about money can provide valuable insights. Your understanding of how philanthropy fits into your money values will determine the way you shape your children’s philanthropic values.”  Remmer, “Raising Children with Philanthropic Values“
  • “One of the pitfalls of wealth is that children may live in an isolated world of socioeconomic homogeneity and may not be exposed regularly to the “have not” segment of society. Our culture is replete with subtle and not-so-subtle messages about the “failures of the poor.” Sometimes our American spirit of individual achievement and competition can be understood to mean that everyone gets a fair chance. Parents can debunk these stereotypes and take proactive steps to broaden their children’s horizons. Encourage your child to join after-school activities with diverse groups of kids. Get involved as a family in community service projects. Use travel together as an opportunity to “unshelter” your children.”  Remmer, “Raising Children with Philanthropic Values“
  • “Many families find this practice useful for children of all ages. Divide your child’s allowance among 3 “jars,” for spending, saving and giving. This will reinforce the importance of saving and giving and also will provide early practice in money management. Once or twice a year, talk with your child about the “giving jar” and help identify possible recipients. If your child likes animals, visit the local animal shelter or do research together on the Internet for an appropriate charity. Some parents encourage their children to hand-deliver the gift, or to add volunteer time to their financial donation. Parents of older children can provide an added incentive by offering to “match” the contribution”  Remmer, “Raising Children with Philanthropic Values“
  • “Rituals around holidays are especially meaningful when they include the value of giving. This can be as simple as donating a book to the library on each family member’s birthday or delivering a turkey to a homeless shelter on Thanksgiving. Some families host an annual Christmas cookie party where everyone brings coats and warm clothing for global aid programs. Other families have created a Mother’s Day tradition of doing a good deed for someone else’s mother.”  Remmer, “Raising Children with Philanthropic Values“
  • “Invite your children to participate in your charitable giving by creating an informal “family fund.” Encourage children to nominate their favorite charities or causes and then hold an annual family meeting to discuss their ideas. When the children are younger, it may be helpful to offer specific ideas, such as buying toys for hospitalized children or supporting baby animals at the local zoo. As they mature, you can show children how to research and evaluate their proposed charities for presentation at the family meeting. The Internet is a wonderful tool for the preliminary research, although nothing replaces the heartfelt experience of visiting organizations and seeing them in action.”  Remmer, “Raising Children with Philanthropic Values“
  • “A family foundation is an opportunity to work collaboratively on community or social issues of common concern. We believe that family foundations are excellent vehicles for bringing family members together to: (1) express and test shared family values, (2) make a significant difference in the community or on a selected issue; (3) strengthen and pass on a legacy of giving; (4) deepen connections to each other and the outside world through a sense of shared enterprise.The family foundation is a legal structure that requires a modest amount of legal and financial infrastructure and maintenance. Other philanthropic vehicles include donor-advised funds at community foundations or commercial institutions, charitable lead trusts, and “virtual” family funds. There are different tax rules and benefits for each of these vehicles. Your family’s legal and financial advisor will help you select the one that is best suited to your situation and goals.Your choice of philanthropic vehicle, as well as the way you involve your children in the giving process, should be consistent with your parenting and family goals. Are you simply hoping to encourage your children to be altruistic? If so, any vehicle will suffice as long as it gives the young person an opportunity to give according to their interests and passions. Do you want to establish a family legacy? If so, it might make sense to set up a family foundation in which family members work together to address focused social needs.”  Remmer, “Raising Children with Philanthropic Values“
  • “There is a misperception that family boards think and act in unison; that they have the same politics, religions, interests, and perspectives. That has never been my experience. If I were to found a nonprofit, I would surround myself with people well familiar with and equally committed to my cause. Family boards don’t have that commonality of background and purpose. You get what you get with your family and you learn to accommodate, agitate, all the while working toward consensus and, ultimately, a functioning team.”  NCFP, “The Value of Family in Philanthropy
  • “I recently heard someone say that it’s hard to feel ownership over something that’s been given to you. Paradoxically, giving is helping me to come into a feeling of ownership, not only of my identity but also of these incredible gifts I’ve been given. I find that giving has helped me to accept the identity that has been challenging—it’s a gift but it’s also a burden.”- Rebecca Rockefeller Lambert
  • “By the time children reach the age of 10 or 11, they are fully capable of identifying and researching organizations for your family fund to support.”  Remmer, “Raising Children with Philanthropic Values“
  • “Engage your adolescent children in straightforward conversations about money. Stress the importance of measuring personal success in terms beyond dollars. At the same time, help them develop financial responsibility by asking them to develop budgets for their personal expenses and showing them how to research prices for their purchases.Philanthropy and volunteering are good vehicles for young people to explore social roles and to balance the cynicism that often characterizes the adolescent years. Family service and philanthropy projects may still be appealing, but be sensitive to the possibility that your teenagers may prefer to volunteer with peer groups at school or with community or religious groups. Similarly, while this is an appropriate time to involve children in a family fund or foundation, many children are less interested in working with their parents during the teen years. Some families have kept their children involved by creating “mentor” programs that match aunts, uncles or trusted advisors with teens for discussions or activities related to the family philanthropy.”  Remmer, “Raising Children with Philanthropic Values“
  • “Some family foundations establish “junior boards” (Ages 18 to 25) of next generation members who, as a group, take responsibility for making a select number of charitable gifts. Others invite their young adult children to work as equal partners in determining the family’s contributions. Many parents have found that young adults can breathe fresh perspective and new ideas into the family’s giving patterns.”  Remmer, “Raising Children with Philanthropic Values“
  • “Those motivated by legacy seek to influence the future. Donors may want to be remembered for more than financial success. Their philanthropy is their public commitment to making a better world. Other legacy donors want to create a family culture of generosity and public service. They seek to pass down values as well as resources to the next generation. Having their family involved in philanthropy is deeply meaningful to them.”  “YOUR PHILANTHROPY ROADMAP” ROCKEFELLER PHILANTHROPY ADVISORS
  • “The primary test for both the poetry and the practice of philanthropy is integrity – was our purpose noble, were we true to it, and did we in all instances, deeply listen to the community of interest we presume to serve.” Founder of The Philanthropic Initiative
  • “To undertake effective succession planning, you may want to define a family vision and mission, create a structure for decision making appropriate to your family, foster open communication, and encourage the growth and development of all your family members.” Wealth in Families Third Edition (Charles W. Collier) Page 7
  • “First of all, recognize that grown children are going to make their own decisions anyway. The real question is” How do wealth holders help create the circumstances for their children to make wise decisions? For example, around the family philanthropic process, you might say, “what are your passions and how do you want to support them?” You have to allow them to give to the causes they care about and in ways and amounts that they decide.” Wealth in Families Third Edition (Charles W. Collier) Page 22-23
  • “In every culture that I’ve encountered-in China, Latin America, and Europe, for example-I run into the same proverb. In China, rice paddy to rice paddy; in Ireland, clogs to clogs.  It appears that financial wealth is destined to disappear in three or four generations. The proverb means that the first generation makes the money, the second generation preserves it, the third generation spends it, and the fourth generation must re-create it. I prefer the rice paddy idiom; for example, imagine a poor couple in China wearing torn clothing. They pull rice every day and make a financial fortune. They don’t leave their home or change their way of life. The second generation moves to the city, joins the opera board, and becomes significant members of society. The third generation, having no experience of work, spends the money, and the fourth generation goes back to working in the rice paddy.” Wealth in Families Third Edition (Charles W. Collier) Page 35-36
  • “Another challenge in raising children in the context of wealth is how to give them a balanced sense of the role of money in their lives, ensuring that they make the connection between work and reward-that is, the value of money. “If affluent parents do not actively instill within their children a sense of value and respect for money and the effort earning it requires,” asserts Hausner in Children of Paradise, “the result can be a child who not only believes there is an endless supply of capital but one who consequently abuses it.”” Wealth in Families Third Edition (Charles W. Collier) Page 42