Gift Hub

Financial Advisors as Guiding Stars to Philanthropic Giving

At Philanthropy Now, Charles Maclean has posted for download his "Financial Advisors as Guiding Stars to Philanthropic Giving." He too, as are Tracy Gary and I, is trying to network donors, advisors, and fundraisers into a more thriving ecosystem, in which all benefit by helping the idealistic donor/client achieve what he or she wants for self, family and society. To make it work each of us has to change our habits, but just a little.  I am pleased to see the vision (that we in our various roles in the giving field form an as yet suboptimal system) beginning to take hold. The next step is practical: putting the ideas into action community by community. Charles is pioneering that, as are Tracy and I.

Human Flourishing in a Constitutional Republic

Jay Hughes is the best read and most cultured and probably the wisest of those writing about wealth in families. He has taken certain concepts (such as human flourishing and systems of governance) from political and moral philosophy, along with sources in psychology, religion, and literature to create both a vision and a methodology for perpetuating dynastic families. The truth is that this is an aristocratic vision going all the way back, and honorably so, to Aristotle's Ethics and Politics. What Jay helps wealthy families see is that their success is not just perpetuating the family wealth, but optimizing the family's lived life, their human potential, or human capital. So he talks in terms of developing each family member as a family asset. This means nurturing and cultivating human excellence, productivity, virtue, and wisdom. It also means, I would imagine, getting Junior elected to the Senate, and having Sister run the Family-Owned Bank, and Uncle run the NY Times, and so on, so that the family weaves itself into the power centers of our society in such a way as to become puissant and indomitable. From family, to clan, to dynasty. Aristocracy at its best works like that. At its worst such a system devolves into an Oligarchy, or Plutocracy. And in the ambit of these increasingly concentrated and interwoven power systems comes putsch, silent takeover, gilded lies backed by force, or Tyranny.

My question is this: Can we replant Jay's insights back into their native soil, that of the theory and practice of a just society? Can we ask what it would take not just for some disproportionately wealthy families to flourish, but what it would take for all families to flourish, whether they wear shirtsleeves or ermine?

I would like to hear Jay connect dynastic, aristocratic, 100 year families with themes like democracy, social justice, and happiness or human flourishing for all, or for the greatest number. I do not think that can be done unless words like obligation or public service or stewardship are introduced. Phrases like "the responsibilities of wealth." I note that Jay does not use such phrases, much or at all. His words are about the service of the faithful servant to those in power. He almost seems fulfilled by the very act of prostrating himself at his client's feet. (He speaks metaphorically at one point about sleeping as a trusted advisor curled up at the foot of his master's bed, a role taken from the concept of fealty to noble families in a monarchy.) Very little is said about the service of those who have the most to those who have the least. That is a political, moral, and spiritual obligation, it seems to me, and must be bred in the bone and beaten into the backsides and thick heads of our upstart-aristocrats or what we will have is plutocracy or worse.

If the goal is widespread human flourishing, up and down the social hierarchy, and if philanthropy, and personal leadership, and public service, are among the levers, and if social investing or mission aligned investing, and local organizing, and political action of informed citizens are among the levers, then we finally have a topic comprehensive enough to offer potential solutions.  Few in philanthropy or philanthropic consulting think at this  altitude, or even try. We drill deep in our silos (this one an expert on giving, that one an expert on media reform, this one an expert on nonprofit law, that one an expert on public policy around charter schools, that one an expert on investments, or social investments, or metrics, and so on)  So, we lack a conceptual framework for seeing how these elements fit in a  sustainable society in which all might flourish.

With Catherine Austin Fitts I am trading ideas on mission investing, centered on not only giving but also on economic returns, and also on spiritual and humane social capital widely dispersed. I have learned from Jay how to make life just grand for the wealthiest families, "lest they go from shirtsleeves to shirtsleeves in three generations." (Becoming in the process much like you or me, as horrifying as that might seem to our dynastic clients.) From Catherine, I am a learning how ordinary people can prosper, even when their efforts are sabotaged by those in high places (be they dynasts or parvenus) who have every advantage, including wealth, political power, secrecy and sometime access to illicit force, and who may act as parasites, or tapeworms, upon or within the body politic, flourishing at our expense.

My point, please, is not to enforce a conclusion in this post. What I am trying to flag for my fellow advisors to wealth and my fellow citizens is that we are at risk in this tottering democracy of making too much of the wealthy and their well-being, and their flourishing. Let us turn our thoughts to how all may flourish and let us ask in that context whether an increasingly separate class of well-fed, well-educated, flourishing, often complacent wealthy people, organized in interwoven family dynasties,  or clans, operating often behind the scenes, is in our national interest.  If not, why are we working as advisors so hard to create this?

Caveat: Of course, it matters whether the "dynasty" an advisor seeks to preserve is a restaurant owning family in Smallville, a farm in Nebraska, a locally owned bank in Canton, or a multi-billion dollar family firm with tentacles in think tanks, media, politics and the like. If we are to build and preserve thriving dynasties, I hope they are small, local, and community-spirited. To that effort I lend, and Catherine, I believe, would lend a willing hand.  And in fact while that (the world of small town entrepreneurial families)  is not Jay's world, it is the world of most wealth advisors and attorneys who read his work.  Philanthropy embedded in community, responsive to ethical, humane, spiritual and democratic traditions, in which families give back to help others flourish as they have flourished; well, that is part of the good life in a just society. That is maybe how Aristotle translates in a Constitutional Republic in which we all have an equal right to the pursuit of happiness, or human flourishing, in our families great and small, whether in pinstripes or work-shirts.  It would also be  interesting to hear from Bill Schambra on such themes. 

8.5 Years for Trustee Run Wild

Make of this tangled tale what you will: trustee  of  charitable and other trusts funds fighter planes, body armor, and rocket launchers. Case ends ends in a jail sentence. A sidelight on this case, and others, here.

Mapping The Philanthropic Ecosystem

The Ecosystem of Philanthropy

Who is part of your "better world" ecosystem? That is, if you want to create for yourself and those you love a better life in a better world, what other "players" impinge on you, for good or ill? And how might you, then, uplift both your own actions and the overall ecosystem so that a better world is possible? That is the line of thought that I have been pursuing within an informal network over the last several years. I will organize for my own use these observations under key names in my ecosystem.

Tracy Gary

Key actors in her vision are donor, advisor, and nonprofit. Key indicator of success is the number of dollars raised. Key driver of dollars raised is donor training to help the donor manage the planning process with advisors towards a more inspired, but also prudent result. As donors are trained to ask for philanthropic plans that very request will motivate more advisors to provide such plans.  Training for advisors would then be well-received, since tied to a practical result, that of meeting a real demand. Also, a key actor is the next generation, the children of the donor. If money goes to charity it might come at the expense of taxes first, but at some point it will come at the expense of inheritance. Hence, children must be raised and mentored in their roles as carriers on of a giving tradition. Nonprofits on this model become the convener of the appropriate training and conversation and network.

Tracy and I will present this vision to Advisors in Philanthropy at their Annual Conference next week. The following week I will present a version of it to Southeastern Council of Foundations.  We do have some early success stories. A number of other professionals have expressed interest in this way uplifting the philanthropic ecosystem.

Catherine Austin Fitts

A former investment banker, and former assistant director of HUD, Catherine seems to have stumbled upon the dark side of money and become for awhile an "enemy of the state," as she puts it with a smile, suffering the tribulations of Job, as a lesson in civics for herself and others. She is not keen on philanthropy, because she has seen where money, in certain cases, comes from, with whom it consorts behind the scenes, and how brutally those who control so much of the world's money and power behave when their insider games are outed or challenged. She has seen philanthropy used as cover or cleanser for the reputations of people who should probably be in jail for financial fraud, extortion, drug running, betrayal of the public trust, mere graft, or high crimes and misdemeanors. She also sees that philanthropy will be tolerated as a cleanser as long as it remains both upbeat and ineffectual. Philanthrocapitalism is also safe because it does not challenge, in fact personifies the hegemonic game.

You might think, then, that while Tracy is liberal that Catherine is a revolutionary Marxist taking her cue from Che. In fact she is a Christian Conservative taking her cue from Adam Smith and Jesus Christ, which makes her a dangerous mind. She is not asking capitalism to give way to socialism. She is demanding that capitalism live up to its own founding ideals: financial transparency, honest  book keeping, the rule of law, and the prosecution of criminals regardless of their wealth, rank, philanthropy, connections, or access to armed force, or criminal networks.

Catherine urges us to create a better, more financially intimate world, by withdrawing wealth from the rigged and gamed financial markets and reinvesting in places governed by the rule of law, maybe New Zealand, or maybe your home town, or among a circle of friends who have farms, small businesses, or a local bank.  As an investment banker she thinks bigger than that too, asking who will own the water supply, for example, in your town? Who will commandeer the food supply? Might we not form investment pools that would allow local decision makers to steward such resources for the good of the town, rather than, say, Nestles?

You can see that this is not your idea of "philanthropy," but the actors named by Catherine (the drug dealers, the slum lords, the corrupt governmental officials gaming the sub-prime mess, the investment bankers bringing for profit prisons to market, the private bankers who own the Fed, the governors owning prison stocks and passing "three strikes you're out" laws, the shadowy actors trading drugs for arms and arms for hostages,  the corrupt accountants of both business and government, the blackmailers and hit squads operating here and abroad to silence those who out the dirty game) are part of the same ecosystem in which philanthropy goes about its upbeat work.  Some capitalist like Boverton Beaver who has made billions out of buying companies in, say, the liquor business, gambling stocks, the porn business, or armaments, or in for profit prisons, might call himself a Double Bottom Line Social Investor and might start a double bottom line bakery employing at low wages the convicts on parole from the prison he owns up the hill from the ghetto, blighted by the drug lord whose Harvard educated son sits with Boverton on the board of the local hospital, or the home town newspaper, or serves on a Blue Ribbon Commission studying urban poverty.  That philanthrocapitalist might then endow a business school, or a chair in social venture capitalism, or might fund a DC Think Tank on Engaged Philanthropy, or on Pro-Market Public Policy, or might hire out the writing of any number of white papers and scholarly studies on metrics for double bottom line firms.  All this might then be applauded by leading philanthropy bloggers who, in their business life, consult to the banks and the brokerage houses with their captive philanthropy departments catering to private wealth from sources both light and dark, or who make their living managing Boverton's money. So the world closes back on itself in an ecosystem in which the herbivores, the carnivores, and the hominids thrive and prosper - up to a point, though that punctuated equilibrium is far from optimal from the standpoint of human flourishing. 

H. Peter Karoff, Amy Kass, Bill Schambra, and others Devoted to the Liberal Arts

What other actors? What are we leaving out? How about the teachers, writers, artists, prophets, and thinkers who are the masters of our spiritual, intellectual, ethical, and cultural traditions? (If you are not familiar with such figures you might think instead of Star Wars or Marvel Comics or Grand Theft Auto or the Matrix; those may be close enough to wisdom, if that is all you have and you don't know the difference.) If our better world is to be guided by what T. E. Hulme called "the best that has been thought and said," then we must listen to voices of the graces, or the holy spirit, or the muses,  or the voice that speaks out of the thunder, or the still voice we have been ignoring, or whatever one wishes to call that voice that rises in us when we are obedient to what is greater than ourselves, what is most alive and life-giving in our traditions. I could go on at great length on this point. Eloquence trumps power. The pen is mightier than the sword. Love conquers all. And the dead shall rise into eternal life, dead or not, as they live on within the tradition they would not betray, even at the cost of their own life, the ultimate gift.  As different as are the three figures mentioned above they share an almost helpless love for the life of the mind and of the spirit. When they discuss giving, it is within the shadow of Mt Ararat  within eyeshot of the ruined garden. I am not implying that they would get crossways with worldly wealth or power. We catch more flies with honey than with vinegar.

Phil to Thee

Well, you can see that the company I keep makes my head ache and buzz.  What I come down to is this: Whatever is the correct map of the ecosystem in which we live, whatever actors you see, or think you see, whichever you name, or fear to name, whatever your personal resources, you cannot blink the questions:

1. What kind of person do you want to be?
2. In what kind of world?

As you meditate on those questions, you will need your own vision of success, and a realistic model of your current situation - whether upbeat or dark or chiaroscuro. Given that vision of a better life in a better world, and given your assessment of what you are up against, you will have to make your own decisions, in the light of the traditions that speak to you and through you, as to how you will deploy your money, your time, your attention, your life energy, and your love within a risk profile that includes your assessment of the probability of success or failure under conditions you can barely discern. Each of us can see only a little.

Best Practices within a Learning Community

As we find our way, across this landscape, let us share what we see, share what we learn, mapping our terrain, and sharing the paths that lead out of the dark wood into the light. As you address the two questions above (and they cannot be evaded for the evasion itself is an answer), consider sharing what works and does not work so that we can collectively do better than we could alone. I am trying to take that approach here sharing my notes on what I am learning, and hope you will share as well, whether through a note to me, or on your own blog, or however you wish.  Perhaps if we live in truth, and speak what we know, and look out for each other, we  not only ameliorate specific ills,  and prosper in our own lives, but also uplift the overall ecosystem of which our efforts individually are but a tiny part. 

The Happy Tutor's Cure for Tapeworms

The Happy Tutor, the master to whom I was apprenticed in our noble trade, during my years in Wealth Bondage, when I was young and foolish, before I was born again as a Morals Tutor to America's Wealthiest Families, is almost 500 years old. I assume he was in his thirties in 1515 when he starred in Erasmus's The Praise of Folly.  Some say he is much older than that, older than Romulus and Remus even, old maybe even as Dionysus himself.  Tutor can always be found wherever the faithful make merry in Carnival. You can see him moving among the Monks, Kings, Queens,  CEOs, Trusted Advisors, Butlers, Courtiers, Beggars, and Machiavels, with his Jester's Cap and Bells pushed back on his neck, his eyes aglint with sadistic glee, looking for some lovely upscale sinner to spank into virtue. Some say The Happy Tutor lives inside Wealth Bondage. Others say he inhabits a Dumpster on its margins where Wealth Bondage proper abuts the public square. (Philanthrocapitalists say the public square is a service of  Wealth Bondage provided as an amenity to its Private Clients, and made available to ordinary people from time to time under a double-bottom line master contract with binding one way opt out. Whether that's so or not I do not know.)

Anyway, to bring you up to date, I dropped by the Dumpster after work today to talk with my old mentor. When he is not pretending to be a teacher, he often pretends to be a Physician. (It is all a way to get girls, honestly.) He said, raising his forefinger high in the air, that he had found a cure for the tapeworm. "They are parasites that inject you with a chemical that makes you long for what kills you. The more you consume, the more the tapeworm consumes you. The more you eat, the hungrier you are. You can tell someone has the tapeworm when they begin to talk about Freedom all the time as they compulsively feed their face . Freedom is what tapeworm people call it when they have the tapeworm inside them, eating them alive. Through contact with food, or clothing, or money touched by the infected person, the tapeworm spreads throughout the marketplace. It has become an epidemic, but everyone is happy, feeding away, and passing on the tapeworm to those they love. It has become a huge public health crisis, though no one talks much about it.  Now, you will be glad to hear, I have found the cure! To get the tapeworm out of a consumer's system you can go at it from either end, Phil," he said, "if you know what I mean. You can reason with them, of course, as you do, Phil, for all the good that does, or...." And then he began to rummage among his sacks of garbage for some kind of medical implement. I did not wait around to find out what. I have known him of old. You are better off not messing with him when he is in that crazy mood.   

The New Philanthropic Question

Steve, for years you and I have tried to get advisors to ask the philanthropic question: "Are you philanthropically inclined?" You know, maybe we would have more luck asking clients: "Are you philanthrocapitalistically inclined?"

In Imitation of Pope's Imitation of The First Satire of the Second Book of Horace

Phil: There are some readers  (I hardly believe it, but I'm told) to whom my Satires seem too bold.

Friend: Phil, you know, you catch more flies with honey than with vinegar.

Phil: Fine, but how am I with flattery to cure the wealthy of vanity?

Friend: To each client the client's own vices. Who are we to judge? We are here but to serve. We help clients live their values and pass them on to their children. It is noble work we do.

Phil: If a client had syphyllis would you work with him to pass it on to his children? How then can we work to pass along the clients' vice and folly, their hypocrisy,  though they call it "family values"?

Friend: Syphyllis is a disease. Corruption is in the eye of the beholder. Who are we to judge what is high or low, noble or debased, healthy or corrupt, authentic or hypocritical, in good faith or bad faith? A tree is judged by its fruits. What have been the fruits of your labors? How many have you cured? How much have you earned? How many referrals do you get? With your tart tongue you injure only yourself. No one basically cares what a loser like you thinks. Look at you! Naked on a sack of garbage. And if you don't mind my saying so, you really do stink.

Phil: I have the empire within.

Friend: You mean you are insane? Everyone says so. And you yourself admit that you are at best a World Class Fool.

Phil: Here in the Dumpster on the mildewing pile of great books, I.....

Friend: Phil, if you will excuse me, there goes Bill Gates. Bill! Bill! Brilliant speech at Davos! I have read it 1,000 times and have only begun to assimiliate its wisdom. Yes, I have blogged it every day and will until you return my calls!

End Note: Provided as a public service for the instruction of advisors to wealth by Dr. Amrit Chadwallah, curator of the Gifthub Dumpster-Ready Satire Collection: "Please compare this satire by our unique and irreplaceable genius, our national treasure, Phil Cubeta, with the original counterfeit here." Authorial note: Please for that matter compare Dr. Chadwallah to Martinus Scriblerus. And if you would be so kind as to compare me to Diogenes, or Lear's Fool, or even Thersites, I would be much obliged. Now if you will excuse me I am re-reading the Dunciad in search of a cure for madness. We are all mad and the prognosis does not look good.

Holistic Estate Planning - The Role of the Mediator

Holistic Estate Planning and Integrating Mediation In the Planning Process, byDavid Gage, John Gromala, and Edward Kopf. This article appeared in Real Property, Probate and Trust Journal A publication of the American Bar Association, Fall 2004.

An excellent article for any professional engaged in estate planning. Also, well worth reading if you are a potential client for such services. The key point made is that planning is premature until the family as a whole has come to clear conclusions about the outcomes they seek, including just how they want assets distributed, and what roles they wish (or are able) to play vis a vis one another going forward. Such conversations about ends in view, and about family ties, are best handled by whom? This article suggests by those trained in mediation. I have also heard psychologists present themselves in this capacity, and life coaches too. As a World Class Fool, I must put in a word, though, for the unlicensed practice of the liberal arts. In the end the key skill is elicitation of shared understandings and common purposes in the light of choices made under the aspect of eternity, or at least life, love, and death.

A Parable for Palm Sunday

For Palm Sunday, Jeremy Gregg cites Rumi in defense the wise who beat those beset by sin. Jeremy cites me as his Morals Tutor, as I cite my Tutor, honored by Erasmus, a famous monk, and the wisest of fools.

The Wise Administration of Power

"Do you, or your group, want a fresh perspective on the wise administration of power?" - Kathryn P. Davison, Ph.D. of Tonic Capital

Here is her blurb, very interesting indeed:

Kathryn P. Davison, Ph.D., is a global expert on holistic wealth creation and wealth structures, advocating a more human perspective on value. She has nearly ten years' experience working with the world's most influential families, counseling them in the area of wealth transfer, family relations, and value creation. Her early work in health psychology revealed massive waste associated with the biomedical viewpoint, which spurred her to examine more carefully human biases that diminish social value. Today she functions as consultant, catalyst and curator, helping groups create success in healthier ways. Her unique style blends traditional virtues with innovative ideas and methods.

Power, money, meaning, virtue, moral and mental health - these are themes few have the courage to treat. To speak of the "wise administration of power" may be a kind of power grab on her part, though. She may mean to upstage all of us Fools who espouse the Foolish administration of Wisdom. But that is Foolishness of a kind that Kathryn might tolerate, for they say that laughter is the best tonic.