As a nationally recognized expert in planned giving and
family philanthropy, Harvard University's senior philanthropic
advisor Charles W. Collier has worked with hundreds of individuals
and families to help them discover the meaning of legacy and
encourage the principle of generosity beyond the family unit. His
book, Wealth in Families, is the culmination of years of research
and experience exploring such questions.
In the conversation that follows, Collier discusses how
advisors can better serve their clients by helping them focus more
on the "whys" than the "how-tos" of their charitable
What are high-net-worth donors looking to achieve through their
I think high-net-worth clients are looking for philanthropy to
serve both a public purpose and a personal value. First and
foremost, they want their resources to have an impact on society
and effect positive change to make the world a better place.
Secondary is the goal of using philanthropy as an activity in which
their family works together and through which their children can
come together after they are gone. For some families, family
philanthropy is indeed a family enterprise.
How can financial advisors, attorneys, and other professionals
help their clients achieve more optimal outcomes with their
These advisors can do two things. First, they can help a client
or family uncover and articulate their philanthropic impulses. I
think that is often best done by asking such questions as, "Are you
a family that cares about others beyond the family?" and "Do you
care about passing on to your children and grandchildren a legacy
of philanthropy and volunteerism?" From there, an advisor needs to
make a decision as to whether he or she is going to handle a deeper
engagement with the client or hand it off. If the advisor decides
to hand it off, there are many wonderful resources to which they
can steer their clients. The local community foundation is a great
resource—many provide a quite thorough engagement around
family philanthropy and grantmaking.
Second, one of the most important conversations advisors can
have with wealthy clients is helping them define and quantify what
is an appropriate inheritance for their children. If you can do
that, wealthy clients can begin to understand that they may have
sufficient financial assets such that they can give more to
Every donor has a different appetite for charitable giving,
ranging from writing a check at the end of the year to employing
planning giving vehicles. How can advisors work with clients to
determine and then focus their charitable impulses?
One way to begin is to ask your clients to write down every
institution that they gave money to last year and the amounts that
they gave. Then, divide those donations into three categories:
social or obligation giving; passionate giving, which may include
payback to educational institutions or hospitals; and finally,
strategic giving. In many cases wealthy clients will be giving more
money to the first two and realize that they don't have a
thoughtful, long-term strategy for dedicating part of their
charitable money to effect real change in society.
What key questions need to be answered before beginning the
process of building a family legacy of philanthropy?
Two questions need to be answered. First, "Do I have enough
money on an inflation-adjusted basis to maintain my current
lifestyle?" And second, "What is an appropriate inheritance for my
children?" Until your client can quantify those two issues, they
will not be comfortable giving away substantial financial
Advisors are very good at helping people think about the types
of vehicles available for giving away their assets and which assets
should be used for charitable giving. But deciding how to give the
money away should be the last piece of the puzzle.
I think advisors can best serve their clients by first helping
them define the scope and scale of their philanthropy, and then
finding the giving vehicle that suits the family. Too many donors
set up a foundation when it may not be what they truly need.
How can financial advisors help families address the
often-delicate issues of balancing charitable giving with the
expectations of inheritance?
Money can be an object of anxiety in a family. Many advisors
will encourage their clients to be more open with their children
about their inheritance and the role philanthropy can play in their
lives. One way to engage children early on in the process is to
have the parents dedicate some of their own charitable dollars to
their children's favorite causes. Parents can provide discretionary
grant money or matching grant money. That encourages the principle
of generosity in the next generation, helps children work together,
and teaches the next generation various financial concepts by
learning how philanthropic capital is managed.
I like to encourage parents to include their children while they
are still in their teens to capture their idealism. Then, when the
children are in their twenties, if there is a foundation, they come
on the board of the foundation.
Do you have a final thought to help guide advisors as they
counsel clients on these issues?
If parents are clear and open around their money and their
philanthropic values, that will help develop these values in their
children. That's perhaps the most important connection that parents
need to understand.
Learn more at www.communityfoundations.net.
Copyright 2005, Council on Foundations and Community Foundations
of America Used with permission