A true story fictionalized with an important moral or two. Spent two and one half days being trained in estate planning by our company's top financial advisor and an estate tax JD who, in addition to being the lead estate tax partner for a national law firm, runs the philanthropic back office for more than one Ivy League University. Great course. But here is a Case Study from that class, fictionalized but true, that points to the need for a Gifthub, or at least for more humane planning.
Client is 42, high school educated, owns a construction company, real estate, and fast food franchises. Net worth is $100 mil. Objectives, as given to the advisor are: reduce estate tax preferably to zero, transfer businesses to the children, and provide income for client and spouse. The rest to charity.
Many intricate moves later the client now has no business to run and has a family foundation worth $50 mil. What is he doing now? Well, he toured the world and now sits at home in his bedroom staring at the walls in a deep depression.
Mission Accomplished! All goals and objectives completed, Sir! The plan met the specs, but left the client demoralized. ("Operation successful, patient died.")
What never happened in the opening interview was a deep and humane conversation about what the client means by "charitable." He should have been asked questions like, "How will the world be a better place for your charitable project or program?" "How will you know that your efforts have succeeded?" "What do you love other than self and family?" "What keeps you awake at night?" "Where do you volunteer?" "Where do your kids volunteer?" "What organizations do you belong to?" "Are there things you did as a young man, or that your wife did, that you would like to begin again?"
Out of that conversation, let me imagine a better ending. (And we may still have a chance to sit down with this man and his family.) Imagine that he had a Downes syndrome brother, who died years ago. Now, as he thinks about it he would like to help kids like his brother. So, he travels, does research, observes best practices, converts his foundation, or funds through his foundation, an operating organization that actually works with the Downes kids and their families, providing assistance, making wishes come true, and helping the parents provide care. Can you see how this entrepreneur might soon be running a major outfit, devoted to that goal? Not just using his $50 mil but his talent, passion, love and skills. Who knows, maybe in all this is a cash flow positive business model, and the $50 mil that starts the new organization could be repaid or recycled to start facilities all over the country, or the world.
I would like to imagine our depressed friend, rising from his arm chair and slamming his fist down on the desk. "Yes! I will do that and more." That is what a real conversation should be like, when it comes to "charity." The JDs and advisors come in later, to make it happen, not necessarily to have the "vision" conversation up front. Most advisors are not good at that conversation, their heart does not prompt them with the right questions. Their attention is focused, rightly so, on the complex tools and techniques. But someone needs to open the vision questions early, before the plan hardens into place around goals and objectives that are relatively superficial and generic.
What this man needs is more than a passion, it is also a whole series of introductions, and referrals within the philanthropic community. He needs to meet grantmakers in his funding area, talk to social venture entrepreneurs, meet with specialists in Downes, build a face to face network he can draw on as his own charitable project crystallizes. A Hub to network from and through. Friends to friends of friends. Note that as a blue collar guy, he may not fit in well with Council on Foundations or some of the more established philanthropic networks. He might feel more comfortable with those who work as he has done all his life, with their hands, right on the practical issues, working away and building something.
The planners involved in this case are two of the best in the nation. My vignette here is no knock on them. I learned as much as my poor brain could absorb of their technical mastery of estate planning. I would be proud to introduce anyone to them, and know that the process of technical planning would be first rate. But what was missing is not taught in law school, or in financial services. Goes to show you the size of the opportunity for us street preachers, prophets, poets, and lapsed lit teachers. Somehow we have to find our place at the table, before the charitable deals are done, to make sure that the client's better angel is represented. I do not have system for doing that (I think the system is called "philosophy without a license"), but I hope that on this site we can piece together solutions, from our shared experiences, and begin to get the word out, from friend to friends of friends. The needs in our society are much too great to have a good-hearted philanthropist/entrepreneur sitting cradling his head in his hands, in a blue funk.