Case Study
Melinda Norman (in this fictional case study) has been active in the community since the 1960s. Let's say she lives in large Southern city. She has been a steady funder of the Women's Foundation, Planned Parenthood, the Community Foundation, and a shelter for battered women. Melinda describes herself as sitting in the living room eating buttered scones while her father and brother work in the Counting House, making and managing the family fortune. Recently she has been divorced. Her income comes to her from alimony, and a trust fund run by her former husband's business partner. Her father owns an oil drilling company, along with a real estate development company. He has a family foundation named for his wife, now deceased. Melinda, and her brother, sit on the grants committee. Melinda's charitable funds consist of what she can spare from her trust income and from the payments she gets pursuant to her divorce, plus whatever she can influence through the foundation. Let's say her annual philanthropic budget is $50,000 a year.
When we talk to Melinda about her vision and values, about her sense of what she wants to preserve or change in the world, she is very clear. Given that clarity she makes good use of her philanthropic dollars. But what of the "Counting House," as she calls it? When we ask about her net worth, or about her potential inheritance, she may be uncomfortable. What does she own? Well, a house, furnishings, two cars, clothing. The rest, including a shared family vacation home, even her boat, is owned by a trust she does not control. As for the family business and the finances of her father, around all that is silence. She says she first found out how wealthy she was when she read an article about her family in a regional newspaper. To her shock she found that she, her brother, and her father are among the wealthiest people in the South. In her world, polite women don't talk about money; and they leave business affairs to the men. To make things a little more tense, Melinda is a pro-life activist. Her father is an Evangelical Christian, who gives mightily to the church. She and he are in constant conflict over foundation grants. Melinda's brother has positioned himself as his father's steward.
How, then, do we conceptualize comprehensive planning for Melinda? How do the advisors to her father conceptualize her future role as inheritor? What say will she have as to form and timing of her inheritance? Will her father leave money to the foundation, knowing that she will lobby for progressive grants? Will he put her brother in charge of the foundation? Will he spend down his resources, giving to the Church, to prevent Melinda from giving it later to progressive causes? If the family system matters, the interplay of these forces, who is the client? Melinda? Her father? Brother? Or, do we take the family system to be the client?
Philanthropy as Play Money
It sometimes feels that philanthropy for some wealthy families is play money given to an heir or spouse, to keep him or her happily engaged, while the real financial action is elsewhere. Getting a shared vision for family and society that encompasses the entire family and its entire financial system may call for a family meeting or family retreat. In any case, getting a vision to control all the family money, not just the giving budget would seem to be critical if we are to maximize family harmony, financial efficiency, and social good. Whose vision will prevail? "Mine," says Melinda. "Can you get an appointment with Father, please, and straighten him out?"
The Emergent Profession of Wealth Coaching
In the world of multi-generational wealth, a new profession is emerging, that of Wealth Coach. These Coaches, sometimes trained as pyschologists and often as Life Coaches, and sometimes heirs themselves, do not presume to have financial expertise, but they may work with people like Melinda to deal with what some call "the dark side of wealth." My hope is that the Wealth Coaches will encourage open communication, and not simply take heirs like Melinda aside to reconcile them to their plight. Only (so it seems to me) by closing the open loops with advisors and other family members, are these heirs likely to emerge as the leaders they very well should be.
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