Holiday Family Giving Conversations Can Reap Great Benefits

At a recent University alumnae dinner, the host asked the attendees, to indicate, by a show of hands,
who engaged in family philanthropy. Nearly the entire room or about 150 guests raised their hands. But when the host followed up by asking who engaged the family in a conversation about the meaning of philanthropy and the impact they want their donations to have both for the organization (s) and the family, only 2 raised their hand.

With the holidays providing a favored setting for family conversations, perhaps this can be an appropriate setting to start a conversation about the impact of giving for the family.

Remember these 3 tips to make your conversation more engaging, should you choose to initiate a family conversation on charitable giving. Know and communicate the intention of the conversation and its intended outcome. Keep the conversation friendly and inviting rather than judgmental and limiting. Have an inclusive conversation by ensuring that everyone has an opportunity to say what is on their minds and in their hearts, without interruption.

When each member feels heard, understood and included, they feel connected. This connection can reap great benefits for families as they initiate or develop their family giving.

Holidays and giving, bring it home for deeper cheer.

Advertisements

Key Strategies to Keep Money Intact Across Generations

When the subject of passing money to the next generation is broached, a question that is often asked is: “What are you going to do with the money?” Although this is a great question, I think there is a farther-reaching question to ask as well: “How is the recipient being prepared to receive their inheritance?” What make this question so compelling? Because it redirects the subject from being about the money to being about preparing the inheritors. And this is so important yet often omitted.

There is a common phenomenon taking place around the world. This phenomenon even has a phrase associated with it. It has to do with the common consequence to inherited money: inherited wealth does not tend to survive beyond 3 or 4 generations. Independent studies have found that 70% of families lose their wealth by the end of the second generation while 90% of families lose their wealth by the end of the third generation. The common phrase that accompanies this horrible unintended consequence is: in the U.S., shirtsleeves to shirtsleeves in three generations; in China, rice paddies to rice paddies in 3 generations; in Italy, barn stall to stars to barn stalls in 3 generations. Although this may be a common consequence to wealth, thankfully, today, this common phenomenon is being addressed head on. Families are looking to change the statistical probability to their accumulated wealth.

Let’s look at two strategies families are using to keep their wealth intact as it moves across the generations.

The first strategy is the passing down of the story, the one that describes how challenges ere overcome, how successes were dealt with, and what it meant for the creators of the wealth to build that which they can pass on. This is important for a family to have because each generation is farther removed from the wealth and having the story reminds them of their roots and of the principles it took to accumulate the wealth future generations have become accustomed to having. When succeeding generations understand what it took to build the wealth in an experiential rather than in a didactic fashion, there is a much greater chance for financial stewardship across generations.

The second strategy is to pierce the veil of sheltered silence, that silence protecting the status quo and instead, talk about the purpose of the money and supporting money stewardship in the family. Teaching money skills, like the 5 S.I.D.E.S. (Save, Invest, Donate, Earn and Spend)© of Money, help family members feel more confident with money conversations. Developing family philanthropic initiatives give families a formal method to talk about how their money impacts their community. Holding Money Nights, where one topic about money is discussed without judgment or interruption, develops deeper trust and more engaging conversations around money.

Find tools to use with your family so that the money you accumulate can stay intact across generations.

How do you view money as a family? Let me know your thoughts.

How Could My Parents Blow It?

As the multi trillion-dollar asset based makes its way from one generation to the next, in what has been called the biggest asset transfer in history, I hear a repeating question that has plagued families for hundreds of years: “How could my parents blow it when my grandparents had so much money?”

According to the Williams Group, a wealth consultant group, 70% of wealth families lose their money by the end of the second generation and 90% of these families find their wealth has been squandered, spent, or squabbled over by the end of the third generation. And they are not the only ones to have uncovered troubling findings. U.S. Trust found, in their survey of high net worth individuals, that 78% of the wealth holders feel that the next generation is “not financially responsible enough to handle inheritance.” 64% of those surveyed have disclosed little to their children about their financial wealth.

I have heard many stories due to the work I do with families, keeping them connected across generations, when money matters. One family’s senior generation, turned over all financial decisions, after receiving a large payoff for the sale of a product, to their financial advisor. The financial advisor has become the arbiter of family and friend loans. The financial advisor decides how and when the money is to be used. The family has not established its own purpose to the money. There are no family conversations about money. Although the sale of the product was completed two years ago, there are already disagreements about whether or not to let the next generation know about their wealth, where to send their children to college, and whether or not to help an older generation with their mounting health care bills. The financial advisor is not equipped to help the family build a framework of purpose to the money so family conversations about money can be neutral rather than tense.

Another family, whose story I know, doesn’t want their children to know about the money they received from the sale of a business. They decided, after receiving their initial check that nothing would change at home. But within a few months, one parent had quit work, wanted to move their parents to live near them, and was adamant that they did not want their older teenage children to know anything about “the money” as it may ruin them. The other parent has found that they cannot engage in a meaningful conversation with their spouse about their money. It has created a gap between them.

Money, in families, needs to become just another topic conversation or more families run the risk of finding that their money becomes a “home wrecker.” When money is not talked about and understood for its role in the family’s life, data supports the fear that the next generation will “blow it.”

“How did my parents blow it when my grandparents had so much money?” is a question I am often asked. “They didn’t know any better. Nobody taught them about what money meant to them nor helped them construct a framework of purpose that the family shared, developed and sustained across generations.

What can you do to affect a framework of purpose and financial smarts in your family? Let me know I would like to hear your comments.

Reduce Money Conflict by Instituting These 2 Key Elements

Conflicts can arise in families with family businesses in many areas, but one that seems to be prevalent and I see in many of these families is: conflict around money.

When there are family members both in and out of the family business, the topic of money can become heated when differing objectives are striving to be served. As the business grows, the business “side” may very well need and want to re-invest profits in the business, pay down debt, or expand while those not in the business may want their distributions or dividends to grow. This is a natural tension that can disrupt any family enterprise and family heart.

Families who want to sustain the family across generations while continuing the family business have had to create successful models to keep the harmony of the family objectives in partnership with those of the business. A successful model is one that codifies the purpose of the family money with the purpose of the business so both can be understood and appropriately developed.

Because individual expectations can disrupt what is being built or developed, it is critical that purpose be defined and codified by all appropriate family members. It is also important to conduct annual reporting meetings so each “side” is aware of the sustaining objectives of each other and stay in high communication with known expectations. This will reduce conflicts between the two entities. Without purpose, cohesion gives way to individual agendas and behaviors which in turn, ignite conflicts.

Responsible Stewardship is Key to a Successful Legacy

For families with businesses, there are issues that surface as the family grows and ensuing generations get involved or migrate away from the family business.

Conversations about the business that may have started in the living room at home, moved to the kitchen, then a conference room then to a board room, often become a struggle as families grow and as individual agendas develop. Working well together, across generations, can become tense when visions are not aligned, and responsible stewardship is not defined. Competing and contrasting priorities due to generational differences, ownership positions, and desires for the business as contrasted with desires for the family harmony, surface.

It is not natural to manage such complexity. Like a garden who needs proper care and maintenance to stay healthy, relevant, and vibrant, a family is best served by developing a disciplined and purposed component to their family and family business dealings and becoming responsible stewards of what they are growing and eventually, passing down.

Determining an initial purpose to both the family and family business initially separate the two entities so they can clearly define themselves independently. Agreeing on and articulating the value, vision and mission of each entity across generations is key to being responsible stewards. Adapting and becoming comfortable with change is the responsibility of each generation.

Questions to consider asking at home:
• Who do we want our family to be, as a family?
• What do we want our family to represent in the community?
• What is important to us as a family: what do we believe in? What do we stand for?
Creating purpose, mission, vision and family teams to develop the family’s success goes a long way to sustaining intergenerational trust and sustainability.

Questions to consider asking about the business:
• What is the purpose and mission of the business?
• Is the business meant to develop as a business or build family wealth?
• What do we need to do to support our working together?
• How do we communicate business information so it does not take over or interfere with the family environment?
Knowing the purpose of the business, communicating that to the family, developing trust in leadership development are all critical to successfully passing a business legacy and leadership from one generation to the next.

Leave me a comment on your thoughts or experiences on this important topic. I would be delighted to read your comments.

Do Not Forget the Past; It Provides Mighty Support

When we forget those who have come before, like our great- grandparents, we forget our history. When we forget our history, we must begin again leaving new footprints that are themselves, swept away and forgotten as our great grandchildren look back at photos of us and wonder who we were.

 

Contrast this with those families who have captured, and meaningfully nurture the values and enduring traits of those who have come before them as a pillar to support their own lives today and tomorrow.

 

If you do not care how your family will thrive or if it will drift into a fog of insignificance, your family’s history will play out as it has for centuries for most families. Great grandparents have no meaning, they have been forgotten. New generations start afresh as if nothing came before them.

 

But if carrying on the spark of “what matters most” to your family, as a group of like-minded connected individuals, then your family story is an important element to your family’s success. And you must create that story. It will not create itself.

 

Researchers at Emory University found that “…family stories provide a sense of identity through time, and help children understand who they are in the world.”  When adolescents can see the values and traits they share with past family members, they form a stronger sense of well-being and a stronger sense of identity.  This Emory University study also showed that ​there is real benefit in sharing the stories about where the family came from, both geographically and through their values. Family stories keep families connected through generations by its narrative.

 

Your story, the one that will live on, will include how you met challenges, what successes have meant to you, what values you deem to be important and why and how they have guided you. Your story will describe how you came to value what you do value so those who come after you can understand themselves better by hearing from you. When they understand themselves better, they have more confidence and feel more secure in a world where those without this foundation, struggle to be seen and known.

 

Do you have a family story in your family, one that benefits its members, is shared because it came from the “author’s” experience?  Let me know. I would love to hear your thoughts on this important recommendation.

 

 

 

 

 

 

Preparation is a Great Inheritance Tool

I have been part of conversation focused on what the best thing to inherit is. Some think it is cash. Some think it is real estate. Some think it is a portfolio of assets to be reinvested. I suggest it is being prepared, being prepared to become stewards of an incoming inheritance.

 

Studies show that for 90% of families where wealth makes it to the 3rd generation, it is gone by the end of this generation. This is not due to a fault of this generation. They are merely responding to a lack of preparation and instead doing what is naturally the course, spend, squander or squabble over the inheritance.

 

Each generation has a unique view and interpretation of its partnership with money and the family. The first generation carries the vision, the passion and focus to build a new company. This generation tends to sacrifice their personal life for the business. They must do so in order to build a successful enterprise.

 

The second generation has a different perspective. They have grown up with explicit or implicit expectations placed upon them to build on the family fortune that often conflict with their own personal objectives. Understandably this can create great friction. Couple this with squabbling that happens between siblings over the purpose of the wealth and there lays a sure recipe for even bigger problems. Studies confirm that 70 % of families lose their wealth by the end of the second generation.

 

For those families, whose wealth makes it to the grandchildren, there is a new perspective. The third generation is farther removed from the creation of the wealth. They are accustomed to being wealthy. From their point of view, having wealth is a birthright. They have never seen or been exposed to the struggle or the reason of making money. They are free to dream and create. They have never had nor needed the tools to build a productive life. They are only familiar with spending money.

In three generations, a family’s past and all its treasures will be lost and forgotten. Memories will fade as new generations spend their precious time scrambling to build a-new.

 

But when a family prepares its present and future for its inheritance, it can grow its bounty. A family who conscientiously grows and develops its assets, is called a legacy family. This is a family where the money as well as the family culture develops and is transferred from one generation to the next with purpose and intention. This type of family uses appropriate systems, tools and activities to stay connected through generations maintaining shared purpose, understanding, and trust. This family becomes a prepared family transferring its wealth with confidence it will grow in the family for generations.

 

Let me know your experiences on preparing inheritances for long term family connection. I would love to hear from you.

How Will You Be Remembered? How Do You Want to Be Remembered?

How do you want to be remembered? How will you be remembered? Is there a gap between the two responses?

If so, identify an element to that gap that you can address and take action on. Then, craft the first action step you can take towards bridging that gap. For example, a woman I spoke with wanted to be remembered as a creator of evocative paintings. When I asked how she would be remembered she said that she would not be remembered as a painter as she kept her paintings in her studio.

Realizing that she would most likely be remembered differently than how she wanted to be remembered, she decided to put a few pieces on walls in her home. She did not stop there. She organized an art show for family and friends. What began as a bridge to gap the distance between how she wanted to be remembered and how she would be remembered became an annual “Get Connected with Art” Show (now celebrating its eleventh year) where select artists, their families and friends came together to share their legacy through art.  Art pieces were sold, auctioned, and given away. This woman is both ecstatic and amazed at what resulted by addressing a gap to her legacy. She will now be remembered for her art…and much more.

How will you be remembered? How do you want to be remembered? Are they aligned? What is the first step you can take to bridge the gap? Let me know your thoughts on this topic.

1st-choice-2013-05-05-florida-orlando-gatorland-stork103-final-bvt

There’s Power in This Conversation that Matters

Knowing she was dying, Anne wanted to make sure her children knew who all the people in the pictures were. So, together, she and her two children went through five albums and hundreds of loose photos that reminded Anne of her past, her heritage, the things she did, and the people to whom she was connected by blood, but knew little about.

When I came over to visit, Anne instructed her adult children to show me the pictures on the guest room wall and explain who everyone was in those photos. But her children were unsure of who these people were. Yes, they had listened as their Mom reviewed the pictures with them, but they quickly forgot the information. Most of the people did not mean anything to them. The photos were pictures of the past without anything more to connect the children to them.

When I returned to the room where Anne was spending most of her waking hours, I wanted to help her communicate some of the meaning that these pictures had that she wanted to pass on to her children.

I asked Anne to step back, in her mind, to a time in her life, when she was a little girl, 10 or younger; I could see her expression change as her mind and imagination took her back to her home in Canada. I then asked her to think of someone, a school teacher, a religious teacher, a sports coach, a friend’s parent, an after school organizational leader, someone who had had a tremendous positive impact on her at that time of her life. Without hesitation, a big smile beamed across her face, her shallow eyes began to gleam as she whispered: “Lisa, my best friend.” I asked Anne to describe her friend Lisa and as she did her eyes sparkled with joy and contentment. I asked Anne what powerful positive benefit Lisa had on her back then. Again, without hesitation, Anne gazed into my eyes and boldly stated: “Acceptance. Lisa showed me then, as she always has, the power and possibility of acceptance.” Delving into the value of acceptance for Anne became a powerful compass point in Anne’s life. As she talked about the power and beauty acceptance had had in her own life tears welled up in her eyes. She thanked me for finding a way for her to recognize this.

I, who have known Anne for ten years, felt a shock wave of new understanding as I learned how important acceptance was to Anne. Anne confirmed this by saying acceptance is one of the most important values for her. She smiled. I looked over at her adult children, who had witnessed this conversation and their eyes expressed a sense of amazement as they just understood something profound about their mother they never really knew or understood before.  It was a profound moment of great bonding for all of us.

As tears came to their eyes, the children said: “In this short conversation we have gotten to know our mother so much more powerfully and in ways we will never forget. We can carry the value of acceptance forward, in her honor, in our lives.

Imagine knowing the people in the photographs on the guest wall in this way.  This is where the connection is, not in the scene they are in or the pose they have struck. In this experience, revealed by a few key questions that matter, Anne will be more than a photograph. She will hold something that matters, a value, which her children will honor, perpetuate and pass on to their children.

Isn’t it time to have more conversations that matter?   2015.05.27.Kirkland.Juanita Bay Beach.Water Droplets on Leaf006

The Time Has Come and Yes, I Do Feel Different

I have experienced discrimination. I remember being an early longshore woman in the Midwest, before woman were able to join the union. I was the woman who could last long enough to make it into the union, but the union kept its doors closed to me.

 

I remember being ridiculed for driving a truck, for being intelligent, for wearing pants in college, and for running for office in organizations that had not yet nurtured or cultivated women leaders. I did these things, not to prove a point, but simply because I could.

 

So, today, I have to admit, it does feel different now that a woman will be the official nominee of a major political party in the U.S.  I feel that I and women in general must be taken seriously when we step out of “traditional roles” and contribute talents, skills, perspectives and brain to the fabric of society.

 

This is a great moment, a legacy moment that will carry us, with more grace and confidence and acceptance into the world we shape.

 

We asked for this. We got it. Now we have to take responsibility for what we have created. This is big. It is a legacy moment.

 

Let me know how it feels to you to have a woman candidate of a major party here in the United States. I would love to read your comment.