Values and Planning Feed

Cultural differences: Citing Jesus among Yankees as mark of the Rube

Flew from Dallas to New England a few days ago. In a professional setting on the meaning and purpose of philanthropy, in as it happens the City of Brotherly Love, I mentioned the parable of the widow's mite from the Gospels.  Seeing my educated interlocutor's eyebrows go up, I quickly apologized. "I live in Dallas, but I grew up in VT. I am sorry about that." My interlocutor waved an impatient hand in dismissive forgiveness, "That's ok," he said, "I went to Boston College, was raised Catholic, go on...." I managed to settle things down again by quoting Maimonides, Cicero, and Boethius, gradually working myself out of the Dallas-Jesus hole I had stupidly dug for myself. But it was close call all the same.


On Course International: Inspiration and Guidance for Personal and Vocational Transitions

OnCourse International (OCI)...

is the umbrella organization for Jim Warner and a team of independent associates who inspire and guide CEOs, business executives, professionals and their spouses as they navigate difficult personal, interpersonal and vocational transitions.

Our work is a blend of:

  • Small group retreat facilitation
  • Life Transition retreats and follow-on coaching for individuals and couples
  • Corporate coaching, planning, team building and mediation
  • Inspirational and educational keynotes and workshops.

I was told by someone who knows them well that On Course International has assisted over 1,000 member of Young Presidents Organization and World Presidents Organization through the process of finding meaning and purpose, particularly for lives in transition.  Morals Tutorials for wealty families look like a going concern in this case.


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. 


Values-Based Planners as Resource for Nonprofits

Dien S. Yuen at Asian American Giving:

Values-based planning, where an individual client’s values drive the investment and estate planning decision-making, is an approach being employed by more advisors because it enables them to develop closer relationships with their clients. As a result, more and more advisors are referring new donors to charitable organizations or including some philanthropic component in the client's plans. In a recent national survey, 78% of affluent donors (those with estimated net worth $5 million or more) reported that their professional advisors played a significant role in motivating and assisting them to make a major or deferred gift (see previous post: High Influence Donors, Multiple Gifts & Planned Gifts).

How, I wonderered, could a nonprofit person so perfectly enter into the mindset of the better advisors? Dien's bio shows how. Among other achievements, she is  JD, LL.M. who formerly worked in a philanthropic area for US Trust.  She is giving excellent advice. The uptrend among financial people is values-based planning. Cultivating productive partnerships between advisors and nonprofits for the benefit of donors is one of the best ways to uplift the philanthropic ecosystem within a community.


Eliot Spitzer's Redemption

Better to go down dignified
With boughten friendship at your side
Than none at all. Provide, provide!  - Robert Frost

Might be a good time to approach Eliot Spitzer on values-based planning. I am rehearsing some opening gambits:

  • What are your family values? (Check all that apply; circle your top three.)
  • How should we pass those values on to your children?
  • What kind of world do you want to leave?
  • How would you like to be remembered?
  • What's next for you?
  • What have you lost and what have you gained?
  • How will your insights guide your life decisions going forward?
  • Given your great gifts, how can you have the greatest possible impact for the good in the time that remains?
  • Have you considered getting Born Again?
  • If you were taken down by bigger evil doers than yourself, how can I help you get even?
  • What role might philanthropy play in restoring or avenging your reputation?

Metanoia: Reflections of a Latter Day Fool

Thanks to Jeff Doyle at Handmeon who emailed me this information from Wikipedia: In the Eastern Orthodox Church there are three forms of genuflection.

Bow--this is a simple momentary inclination of the head and shoulders, without bending the knees. In some situations it is accompanied by the Sign of the Cross

Metanoia (metany; поясной поклон, poyasnoy poklon)--similar to the bow, but deeper; sometimes referred to as a "bow to the waist." The metanoia requires making the Sign of the Cross either before or after the bow, depending upon the tradition of the church;[3] bending at the waist without bending the knees, so that the worshipper's head is level with his or her waist; touching the floor with the fingertips of the right hand; and straightening up again. The metanoia is an abbreviated form of full prostration.

Prostration (земной поклон, zemnoy poklon)--This requires making the Sign of the Cross, getting down on hands and knees, touching the forehead to the floor, and standing up again upright. The requirement to stand upright again is commonly explained as being because Christ not only descended into hell, but rose up from the dead.

Under "metanoia" Wikepeida notes that the word can mean many things, though most often translated as change of heart, change of mind, or repentance, it can also refer to a rhetorical figure in which the speaker states something, retracts it, and then restates in a new and more apt way.

As we reflect on our own lives, or those of clients, friends, and donors; as we reflect on the meaning and purpose of our gifts (whether or wealth, talent, or love) to what greater than ourselves do we bow our heads, or genuflect? We to the donor? We to the client? Or, do we kneel together in the face of obligations or a mystery that might humble us and bind us all? When we as advisors say that the donor's values must be served, is this idolatry (in the proven style of marketers everywhere), or an indirect way to say that in serving what is highest and best in the donor or client we serve something beyond us both?

If in the presence of a donor or client we create an appropriate space, respectful and expectant, a state of waiting and listening, what may make itself felt is the movement of what some people call the holy spirit, others might call the muse, or some might call passion, or some might call inspiration. But, however you frame the language, in giving is (or can be) something close to the holy, so that we are its instruments. That too is strategic philanthropy. To work in that spirit of communion and commemoration is a calling, no less than a trade, job, or profession.

To get a privileged person to repent and bow before something greater is a Fool's errand, if you are a Cynic. That is, the moment of recognition, when the scales fall from our eyes, may come through laughter, or a practical joke, no less than through reverence. The advisor who elicits metanoia, will, like a good doctor, use whatever medicine will work the cure in a particular case. For some hardened sinners, in bondage to wealth, a good beating is still the best bet. Penance is supposed to follow repentance, but sometimes it works the other way around. Setting a good example helps too.


Jerry Chasen, The Advisors Project

I heard Jerry Chasen, JD give an excellent talk today for Dallas Foundation. His topic was, "Focusing Client Intentions: Planning Processes, and Passion." Jerry,  a top-rated estate tax attorney, is carrying the message of values based planning around the country and making his materials available online, at the Advisors Project, for free. To test my working hypothesis that those who are really good at values-based, or civic minded, planning have a dual background (not just tax, law, or finance, but also some liberal arts), I asked Jerry about his undergraduate degree. "Religion," he said. 


Inspired Philanthropy: Collaborating for The Commonweal

Competing or Completing? Beyond Planned Gifts as Transactions

In 2002 Robert Sharpe wrote an interesting article for Trusts & Estates, "Competing or Completing? Balancing the roles of various professionals in planning charitable giving maximizes the benefits for all."  I would like to second the spirit of his piece, while recommending that we as diverse professionals go beyond collaborating on specific "gift transactions" to collaborating on an overall legacy planning process of which the specific gift transaction is but one tactic or strategy. My sense is that such a collaborative process would transform our field for the better, move more money, and make our donor clients much happier and more fulfilled. In the process we advisors and gift planners will do ok too.

When we think of planned gifts as  specific  vehicles, like a donor advised fund, or a charitable remainder trust, offered by both nonprofits and for-profits we might ask, as Robert Sharpe does, whether the two distribution systems are competitors or complements.  Considered in that way, a life insurance agent "selling" a Charitable Remainder Trust payable at death to charity Y is competing with charity X who might have written the CRT payable to them. Likewise, Fidelity might compete with a community foundation for donor advised fund assets.  But let us say that the topic is not promoting a specific gift vehicle, or making a sale, but helping the donor client create an overall plan that is both prudent and inspired. (Prudent means a plan that takes care of the client and the client's family come what may. Inspired means having a positive impact on the community.) How then do the players arrange themselves around that program or process?  A case study may help us get the issues in perspective.

Case Study: Beyond Transactions to Prudent and Inspired Collaboration

Mary and John are worth $10 million, most of it in their closely held business. They are both 55. Both are active in the business and own 100% of the stock. They have two children, Alan and Marcie. Alan is a painter in NYC, barely getting by. He is single. Marcie is married with two children. She is the Comptroller in the family firm.  John and Mary are active in Holy Name Cathedral in Chicago where they live.  They have thought about spending more time working with the Church and less time in the business.  They dream of devoting their lives to working with disadvantaged children, instilling faith and character in children at risk.  Not only would they like to do more volunteering, they wonder if they might fund or endow a program and a facility. A local competitor has been making overtures to the family to sell the business.  Here are the questions on Mary and John's  mind. (These questions have been elicited in part by their lead advisor and in part through their own reflections.)

Questions

  • Should we sell, retire, and spend more time on volunteer work with the Church?
  • If we do sell at the proffered price will we have enough to live on for the rest of our lives?
  • Are we protected against major downside risks (death, disability, falling markets, liability, lawsuits, sickness, long term care needs, property and casualty losses)?
  • If we both die tonight, we owe what in estate tax? $3 million?
  • Can we reduce estate taxes in favor of the Church?
  • If we sell out to the buyer, where does that leave Marcie? Will she be out of a job?
  • If we sell to the outsider what will be the capital gains tax?
  • Should we find a way to keep the business in the family?
  • If so should it go to Marcie? And if so what do we give to her brother, Alan?
  • Should we divide our estate half and half for the kids? Or should Marcie get the bulk of it because she has helped us build the business?
  • If we let Marcie run the business when we retire, and she pays us some consulting fees so we have money to live on, and she then runs the business into the ground where does that leave us?
  • Can we afford to do more for Holy Name today? If we sell? At death?
  • How can we structure our affairs so we could do more now, later, and at death for Holy Name, minimize income tax and estate tax, while also taking care of ourselves and our children?
  • How can we balance all this?
  • Where do we start?
  • Who can help us?
  • Should we ask Marcie and Alan what they think? (If only they ever agreed about anything!)
  • Who should be at the legacy planning table when we sort all this out?

Exercises

  1. Check the questions you think need to be answered by someone.  Put a Y by those you can answer all by yourself from your seat at the table.
  2. Ask yourself which professionals are needed to do justice to this fact pattern? Attorney, CPA, Financial planner who can do a comprehensive financial plan,  financial product salesperson, planned giving consultant, banker, business valuation expert, other?
  3. Is there a logical order as among: goal clarification, fanning philanthropic intent, running financial scenarios, explaining planning concepts (including but not limited to giving opportunities), communicating with children, finalizing the overall plan, implementing products, legal documents, and gifts?
  4. Is the logical order the order you employ in your work with donor/clients?

Observations and Suggestions

  • Most financial salespeople and most gift planners working for nonprofits "pitch" rather than plan. They lead with a solution before understanding the pertinent context. ("Prescription before diagnosis is malpractice.") We as a field have to get past this package sale mentality for larger client/donors who have complex needs and whose potential gifts merit lots of tender loving care.
  • The family above might need a charitable remainder trust, or a foundation, or a donor advised fund, or a charitable lead trust, or an outright gift, or a bequest, but it is way premature to pitch any of those. We have not even finished the fact-finding and goal setting.
  • Well over half the challenge in working with complex situations like the one above are the human dilemmas, not the financial conundrums.  The issues in the case above are those of love and money, of fairness, and the push pull between self interest and giving, between playing it safe for self and family, and doing something wonderful for the Church as soon as possible.
  • To resolve such dilemmas good planning will run scenarios and quantify the possible consequences of all the permutations and combinations of tools, tactics, and techniques, but in the end the family must wend its own way in this "dark wood" of moral and prudential choices.
  • Some family decisions are made with advisors. Others on our knees in prayer, or in the dark of the night, tossing and turning. What is at issue here is the trajectory of many lives.   
  • The family needs an open ear. They need someone they can trust, not just to run the numbers, do the legal work, plead for the needs of the Church, sell financial products, or close various aspects of the "case." They need a friend with an open ear, who will listen as they feel their way through this dark wood.
  • The trusted advisor, or confidant, can be anyone on the team. But the trusted advisor cannot just be a special pleader. He or she will get paid in one way or another, and will represent this or that position at the table, but the trusted advisor rises above his or her professional specialty and his or her way of getting paid, and earns the right to be the trusted advisor by simply listening, processing the information, and allowing the family to make its own best decisions. The trusted advisor may also slow down the process, involve other needed specialists, or towards the end, gently urge the process to a conclusion.
  • The default choice in a case like the one above is for the family to play it safe. They might well say, "Charity starts at home," if the Church is too urgent about philanthropy. Given the parents unresolved dilemmas, given the murk and uncertainty, the most likely outcome is to do not much, or not much right now.
  • If properly planned a case like this could well result in a gift to the Church of several million dollars. But the Church won't get it for asking. They won't get it for pleading. And they are not likely to get it by pitching Charitable Trusts in a vacuum. They need to be at the planning table, or within earshot of it, as the whole plan comes together.

Competition or Collaboration?

  • So, if you represent the Church, as a fundraiser, what is your next move with this family? My sense is that the best move is to presume upon the common bond of religious faith, and the common bond of Holy Name Cathedral, to simply listen. Emerge as trusted advisor, or as confidante, or as an advocate for the fellow parishioner's better angel, the client's best self. Then, convene the team. Stay quietly involved as the team works forward.  Continue to cultivate and to act as sounding board.  As the team plans the options, your role  as  gift planner will come into focus, and you will get your chance to discuss the gift options in the context of the overall plan.
  • If you are tax, legal, or financial advisor, what is your next move, if you are first person to whom these clients turn? Will you or won't you contact the Cathedral? Maybe that will depend on how the Cathedral has positioned itself in town and with you. Do you think of their Stewardship Committee as fellow professionals who will assist in a team effort, or do you think of them as special pleaders with a one track mind, or as well meaning people who have no sense of the proper process, and who are always closing for action prematurely?
  • Ideally, Holy Name has cultivated the professional community and positioned itself as a caring team member. If so, whoever gets the case going will feel at ease involving the others who need to be at the table to do justice to this family's plan.
  • If we all were to operate in this spirit we would do better for our donor/clients and they in turn would do better for their heirs and for the community.

Practical Steps for Nonprofits, Donors, and Advisors

  1. Check out the Resources tab at Inspired Philanthropy.
  2. Appendices A and B outline a simple process for bringing donors, advisors, and nonprofits together in common purpose.
  3. Consider an event or series of events to educate all three groups.
  4. Tracy Gary and I have intentionally put this material out there for all to use. We believe in cooperative advantage and in public goods. We don't want to corner the market on philanthropy. We know that others can adapt these materials to their own communities and make them their own. We want that. Out of such experiments, we want to create an informal learning community so we can uplift giving and givers. The spirit is not unlike "Leave a Legacy."
  5. Per Tracy, the materials in the Appendices go over well with their intended audience. In her words, "They love it and money is moving."
  6. If you do improvise your own approach to the issues discussed above, please share the results with me, either in comments left on the blog or by email, so we can learn together.