When you create your family mission statement, woven throughout is governance, the family’s vision for its future, what role philanthropy plays – today and tomorrow – to ensure the family’s legacy. I’ve written in the past about strategic philanthropy and how and why charitable giving should be a year ’round endeavour.
Creating a foundation, a donor-advised fund, or some other vehicle can be a powerful and lasting manner to enhance the family name, whilst giving back to a cause or causes that are important to you.
But first, you need to know who “you” is. That is, as the family grows and the next generation comes to the fore, is yesterday’s giving serving tomorrow’s vision?
Needs and visions change. What might have been important to the family patriarchy a generation ago may not serve the adult children or grandchildren now rising to the helm. Even patriarchs’ views change. Think about Bill Gates and Melinda French Gates. For decades, the Gates Foundation seemed to serve their common goals. When the couple announced their divorce, Mr. Gates discussed funding a separate foundation for Ms. French Gates, as their mission seemed to diverge from what had been a shared mission. Now Ms. French Gates no longer contributes the Foundation, but gives directly and has signed a new giving pledge letter to reflect her values.
I have had numerous conversations with clients who recognise the power giving can have in uniting the family behind a shared cause. Whilst the numbers aren’t as lofty as with Bill and Melinda, I’ve had conversations with others whose mission behind their giving had diverged from that of the patriarchs. However it may be formed, philanthropy can serve many masters – giving back to the community, enhancing one’s tax position, even creating a shared bond across the generations.
If structured incorrectly, though, it could bring near-term gain and longer-term pain. The vision is derived in another process I’ve discussed in the past: the family meeting. Philanthropy can be an effective way for families to discuss legacy and the role current and future generations will play in solidifying the family’s tomorrow.
The family meeting is where those hard conversations must be held. Whether uniting the family philosophically around the creation of a foundation or coming together to decide the purpose of a donor-advised fund, even determining each year which charities the family will support, this often is guided by the family mission statement. This dynamic vision statement may have been created years ago, but it should be flexible enough to adapt to the changing needs and views of the individuals in the family. This is because each generation brings their own experiences and passions to the table.
As an aside, along with your own due diligence, asking for references, and meetings with non-profit leadership, a review of Charity Navigator and GuideStar can be powerful indicators of whether a non-profit’s operational performance is worthy of your investment.
Ideally, the patriarchs should include their children and possible grandchildren in the statement’s creation and any future revisions. Guidelines should be laid out directing the path for any future changes, for example, who will guide the family and its endeavours, including giving, if one or both parents pass away.
It’s critical that if the elders want the family legacy to live on, they must decide the role their heirs will play. Family meetings can be an ideal setting for these discussions. They can help align unique visions and make sure the next generation’s intention comes to light – without simply appeasing Mom and Dad’s history wishes, and thus protecting the family legacy.
If you’re open minded to the possibilities change can bring, charitable giving can serve the family’s needs today – and long into the future.
If your family giving plans could use some guidance, or your next family meeting would benefit from outside leadership from an objective third party, let’s talk. This can help ensure your intentions align with your vision for the family’s future.