ML - Aspen Peak

2014 - Issue 1 - Summer

Aspen Peak - Niche Media - Aspen living at its peak

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and simply handing heirs a family foundation to administer isn't enough these days. Goldseker explains, "It isn't possible just to bring those individu- als into the status quo. [Heirs] bring their own ideas and visions to the table." Long before they are old enough to understand just how wealthy their family is or what philanthropy involves, children or grandchildren can develop an understanding of their privileged situation by becoming engaged in volunteer work, through a school, a religious organization, or some kind of entity alongside their parents. "A grandparent or parent can say they'll donate money that's equivalent to the amount of time they put in, too," says Melissa Berman, president and CEO of New York – based Rockefeller Philanthropy Advisors. She notes that family vacations or extended family reunions can also include a volunteer initia- tive that all family members can share: a park cleanup, per- haps, or, as children get older, a Habitat for Hu m anity build- ing project. B ut introducing chil- dren to the concept and reality of fam- ily philanthropy at a very young age doesn't mean they'll follow where their elders lead as they get older. "It's important to be open with heirs about what is coming down the pike," says Brian Wodar, a senior vice president a nd d i rector of wealth management research at AllianceBernstein. "If parents aren't willing to go beyond a cer- tain area when it comes to making grants, then they should make that clear to their chil- dren and grandchildren. If they don't want to be f lexible in terms of how that wealth is spent, and they still want to have the next generations involved, they have to find some kind of compromise." Bridgespan's Ditkoff explains that since the first generation tends to be the one who made the wealth, "they feel that they earned it, and it's theirs to give away in whatever way they choose." Sometimes, there are gulfs that can't be bridged. Perhaps one family member is an evangelical Christian and can't support the giving priorities of his parents and siblings; perhaps one part of a traditionally Republican family drifts leftward and can't condone giving money to causes that run counter to their new opinions. "To say that family philanthropy is a panacea that can bridge all gaps is a fallacy," says Karoff. "A baby won't fix a bad marriage; philanthropy won't make a dysfunctional family functional once more." Gillian Howell, the national Philanthropic Solutions group executive at US Trust, says it's best to start preparing both sides to make compromises as early as possible. "One of the most memorable events I witnessed involved a wealthy family, who began an annual series of New England vacation weekends focused on philanthropy by asking the youngest mem- bers of the family the question of how they would like to change the world," she recalls. The patriarch and matriarch were so moved by what they heard that they were very open to the idea of changing the governance and even ulti- mately diluting or reshaping the mission of the foundation they had created in order to incorporate their young heirs' insights and vision. While parents and grand- parents may fear that large gaps exist between the genera- tions—and underestimate the extent to which they need to compromise to fully engage their heirs—when push comes to shove, there's far more align- ment than family elders may assume. A 2013 Merrill Lynch survey showed that 73 percent of the "millennial" generation— those aged roughly between 18 and 35—had values similar to their parents, even though they might express those values differently. "That reflects the reality that values are shaped by what people are exposed to; that's what children model and internalize and express later in life," says Michael Liersch, Merrill Lynch's head of behav- ioral finance. A growing number of younger donors plan on "giving while living"—an attitude that often sepa- rates wealth creators from their heirs. That's the case for Howard G. Buffett and his foundation, which was seeded with gifts from his parents and in recent years has been supplemented by significantly larger donations of Berkshire Hathaway stock. Buffett's philanthropic focus is worldwide food and water security and conf lict mitigation, and as of mid-March, he says, he has visited all 54 African nations, most recently to understand food security issues and search for innovative agricultural projects to support. "I "I KNOW THAT IT'S IMPORTANT FOR THE NEXT GENER ATION to challenge me, ask me tough questions." —Howard G. Buffett One of The Howard G. Buffett Foundation's initiatives is to assist Afghan farmers and improve agribusiness in the impoverished country. Here, Howard W. and Howard G. Buffett in Afghanistan. PHOTOGRAPHY COURTESY OF ERIC CROWLEY 172 ASPENPEAK-MAGAZINE.COM 170-173_AP_F_Philanthropy_SUM_FALL_14.indd 172 5/6/14 2:25 PM

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