Strategic family philanthropy

In all my years working as a consultant to wealthy individuals and families, I have become increasingly convinced that, other than being blessed with good parents, the best thing that can happen to someone who inherits substantial wealth is to be philanthropically involved. The secret behind successful family philanthropy is that all members are brought into the process in an atmosphere of love and caring and with an outcome that benefits, not oneself, but others. Many of the families I work with have created this form of philanthropy and are actively using it as a device to teach and practice financial responsibility. These families understand that if their heirs are to be ready to take on leadership roles inside or outside of the family, giving to others teaches critical leadership lessons. There are so many wonderful by-products of an organized family philanthropic strategy, such as: • A chance to express and act upon the

family's shared mission • An opportunity to strengthen and pass

on a family legacy • Deepened connection to each other

and the outside world • An intergenerational common ground • A venue to learn about the meaning

and responsibilities of wealth • A challenge to make a significant

difference in the world • An odyssey of shared learning about

the world and each other.

Actor Alan Alda wrote in a speech given to the Council on Foundations and printed in the newsletter of The Philanthropic Initiative: "I think something happens to us when we give. There's a better self in us that comes to the surface, gasping for air; glad to be let out." Later he writes: "So, I've come to believe that giving feels good, but I think giving strategically feels terrific." He goes on to point out that responsible philanthropy depends on answering a few key questions: "Why do we give?"; "How much should we give?"; "Where should we give?"; and "How should we give?" .

There are a number of choices for families to consider when crafting a philanthropic strategy. Each family is unique, so there are no "one size fits all" solutions. After careful and thoughtful consideration of the following options, most families find a comfortable selection, or combination of options which align with the family's unique mission, vision and deepest values.

One option is a private family foundation, which is a separate legal entity that can endure for many generations after the grantor's death. You create the foundation and then transfer assets to the foundation, which in turn makes grants to public charities. You and your descendants have complete control over which charities receive grants.

Another is a donor-advised fund, which is an account that is held within a charitable organization. The charitable organization is a separate legal entity, but your account is not - it is merely a component of the charitable organization that holds the account. Once you transfer assets to the account, the charitable organization becomes the legal owner of the assets and has ultimate control over them. You can only advise the charitable organization on how your contributions will be distributed to other charities.

Finally, if you want your dollars to be spent on improving the quality of life in a particular community, consider giving to a community foundation. Similar to a private foundation, a community foundation accepts donations from many sources, and is overseen by individuals familiar with the community's particular needs, and professionals skilled at running a charitable organization.

If your family needs assistance in exploring/evaluating philanthropic options, seek out a professional advisor who is dedicated to helping clients create their own unique strategic philanthropy plan. There are a number of great organizations that provide guidance such as The International Association of Advisors in Philanthropy, Inc., Rockefeller Philanthropy Advisors, The Better Business Bureau Wise Giving Alliance, The Philanthropic Initiative, Inc., and The National Center for Family Philanthropy.