When it comes to communicating around money and values, many families face a significant challenge. Some families never talk about these issues. Others talk about them — but with difficulty.
Family philanthropy can be an important and safe area in which to commence a family conversation about money and values — creating new and effective rules of engagement that carry over into other family matters. Here’s how.
Most philanthropic capital sits in family foundations or donor-advised funds and is no longer owned by the family. It has been irrevocably donated and no longer appears on a family’s “balance sheet.” Alternatively, this capital is earmarked for charity and will soon be donated. Either way, philanthropic capital is very different from the rest of a family’s assets.
This separate pot of money is usually a small percentage of a family’s overall wealth. It can be deployed strategically to help families discover, discuss and act upon their core values around money and philanthropy — creating opportunities for healing, growth and empowerment.
By treating philanthropic money separately and differently, families can create a “safe zone” in which to discuss important topics.
Bridging generation gap
Issues of control are often significant to the wealth-creating generation of a family (usually — although not always — older members). Often, in working with families, we hear wealth-creators express doubts about the capacity of rising generations to handle money responsibly and to lead effectively. That lack of confidence can also exist between spouses and among siblings.
In the “safe zone” of charitable giving, the playing field can be leveled and all adult family members can participate with equal voices.
According to Sharna Goldseker, executive director of 21/64, a nonprofit supporting multigenerational philanthropy: “The more a family is able to see that ‘involving the kids’ not only means adding children to an existing system, but rather shifting the family paradigm to become truly multigenerational — embracing what each generation brings to the table — the better prepared they will be for the next phase of the foundation’s evolution, and for meeting the needs of the 21st century.”
In many families, creating the “safe zone” for all generations can be challenging. No matter where a family member sits, the issues of control, trust and confidence can seem overwhelming.
Family wealth counselor Courtney Pullen advises, “All families feel a gravitational pull towards maintaining their patterns and norms. In order to be successful, a family needs to expend as much time and energy investing in the dreams and ambitions of the rising generations as they do in establishing shared values and mission”
Benefits of “safe zones”
Working to establish this philanthropic “safe zone” for family relationships can create enormous and enduring benefits.
Families we have worked with have transformed their communication patterns and achieved a growing sense of empowerment (rather than entitlement) among the rising generations. These effects can migrate to other aspects of kinship.
Prominent New York family business attorney Roy Kozupsky concludes: “Successful families who have sustained not only their wealth and their cultural fabric, but who have also cultivated the next generation of leaders, have a number of things in common, including 1) a clear sense of family vision and purpose, and 2) a shared sense of the family’s wealth and how that is shared with their community through their philanthropic values and activities.”
In this column, I have often written about how being philanthropic can be valuable to the individual giver as well as to the recipient. Being philanthropic as a family can yield the same results.
In this process, wounds can be healed, relationships strengthened, and family members’ values surrounding philanthropy can be discovered, expressed and transmitted up and down the generational ladder. All this can be accomplished while marshaling the family’s philanthropic resources to focus on positive ways to improve the world.
Bruce DeBoskey is a Colorado-based philanthropic strategist working with The DeBoskey Group to help, families, businesses and foundations across the U.S. design and implement thoughtful philanthropic strategies and actionable plans. He is a teaching fellow with Boston College’s Center for Corporate Citizenship and a frequent speaker at conferences on philanthropy.