From 2007 to 2061, the largest wealth transfer in US history will entail roughly $59 trillion shifting from one generation to the next, according to a 2014 report by the Center on Wealth and Philanthropy at Boston College. At the same time, family members increasingly want to work together over generations to use their wealth for social good. What factors influence a successful strategy for managing multi-generational philanthropy? SSIR publisher Michael Voss addresses this question and others in a conversation with Suzanne Wheeler, managing director at Mariner Wealth Advisors, and Mary Jovanovich, senior manager for relationship management at Schwab Charitable. The full transcript of the episode can be read below.
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MICHAEL GORDON VOSS: Welcome to Season 2 of Giving with Impact, an original podcast series from Stanford Social Innovation Review, developed with the support of Schwab Charitable. I’m your host, Michael Gordon Voss, publisher of SSIR. In this series, we hope to create a collaborative space for leading voices from across the philanthropic ecosystem to engage in both aspirational and practical conversations around relevant topics at the heart of achieving more effective philanthropy.
A 2014 report by the Center on Wealth and Philanthropy at Boston College estimated that $59 trillion will be transferred to the next generation from 2007 to 2061, the largest wealth transfer in US history.
Lifetime giving to charity in that same period is estimated to be $20.6 trillion. At the same time, there’s an increasing desire among families to work together to use their resources to solve social challenges, with longer lifespans and greater understanding of the benefits of multi-generational philanthropy having encouraged more multi-generational collaboration. And while a variety of challenges can compromise the work, successful intergenerational giving strategies can foster an ongoing tradition of giving, making an impact on issues the family cares about and deepening family relationships.
What contributes to these successful strategies? To help answer that question, we’re joined today by two individuals with extensive experience in family giving. Suzanne Wheeler is the managing director at Mariner Wealth Advisors. Suzanne is a certified financial planner with more than two decades of experience helping her clients navigate legacy planning, as well as the array of day to day challenges life can bring. Previously, Suzanne was cofounder and director of Adams Hall Wealth Advisors. She holds a bachelor’s degree in finance, with an emphasis on financial planning from Northeastern State University.
Joining us once again is Mary Jovanovich, Senior Manager for Relationship Management at Schwab Charitable. Mary joined Schwab Charitable in 2015, and has more than 10 years’ experience with Charles Schwab & Company. Mary is involved as a board member with Dress for Success, Indianapolis, and also serves on both the Integrating Women Leadership Foundation board and Indiana Wesleyan’s Alumni board.
Mary obtained her master’s degree in management from Indiana Wesleyan University, and she holds a graduate certificate in philanthropic studies with the Lilly Family School of Philanthropy at Indiana University.
Suzanne, Mary, thanks for being part of today’s discussion and for sharing your insights into what can help for a successful intergenerational philanthropy strategy. Let’s get started.
Suzanne, in my opening, I mentioned the generational wealth transfer currently beginning to take place, as well as the projections for total philanthropic giving over the next few decades and how that may have many donors thinking about the future of their family’s philanthropy. Let me ask you, how might families who want to involve the next generation or two in their philanthropy begin that process?
SUZANNE WHEELER: Thank you, Michael. That’s a great question. In my working with many families over the years, each family may come to it with a different idea, but at Mariner, we’ve developed the strategies for families to begin this process, to begin discussing their feelings about different organizations that they may want to give. And it’s been really encouraging to watch clients bring the whole family in and begin those discussions, and each person bring their idea of who they may want in their charitable giving lists, as well as demonstrating why they feel it’s important to give.
Many times we facilitate roundtable discussions with family members, and we’ve even gone as far as having a time period where each family member brings their own pitch about why they think their organization should receive money from the family. And it often begins a really neat time period for the family to come together and to share their passions of the various organizations, and then they all vote on them. Sometimes it becomes a little competitive, and it’s certainly a great way to start those discussions.
MICHAEL: Suzanne, as you were just saying, the idea of bringing the whole family into the process and I like what you said about each member sometimes bringing their own pitch, with that in mind, is it a mischaracterization, then, to say that the older generations in the family may be less receptive to the charitable suggestions of younger generations?
SUZANNE: No, I think times have changed, as we’ve all been in this industry, and as we’ve seen the charitable organizations evolve. People that are in their 70s and 80s, maybe they are thinking of Red Cross, the Salvation Army, or their church, where younger generations are thinking of many other areas of giving. And I think that you see the younger generations, maybe generation two, are more open and receptive of what the generation three might have aspirations as far as giving. And they’re more open to listening to children now than they were, say, 25, 30 years ago.
In addition to the many choices that we have now, I think life experiences really plays a part and guides our clients and donors into the areas that they feel led to give.
I know in my particular family, we have a child that needed a kidney, and I was able to give her a kidney in 2006 and my husband gave her a kidney in 2012. That really changed the dynamics of our charitable giving, as we had another entity to add to the list, and it’s organ donation, Live Share of Oklahoma in particular, is who we have added to our list, because organ donation now is an everyday topic in our family. We hope we don’t need another organ, but we want to share our story with those that are in need, as well as share monetarily to the organization so they can reach out even further.
MICHAEL: Suzanne, even though lived experiences like the one you so generously just shared can help bring together families and their thoughts on giving, younger generations may still not feel empowered to spend their family’s money if they didn’t create the wealth in the first place.
How do you help families navigate the discussion around who will have decision-making authority with regards to giving, especially when it may eventually involve children’s spouses or grandchildren?
SUZANNE: That’s a great question, Michael. I think these discussions start at generation one, and maybe at the beginning of how the wealth was created. I know that the younger generations have probably seen their grandparents, or parents giving in the past, and seeing that giving pattern. But for them to have the conversation with the younger generation of the importance to them in giving. And maybe it is divided into purses where this is their charitable purse, and how they would like for everyone to have an impact, or a say in how this money is distributed is a great way to start. And make the younger generation feel comfortable in sharing their ideas.
And once you get people in the room, and you hear those ideas flowing, you can see on generation one, the look of their faces, and how proud they are by seeing their offspring be as involved in charitable giving as they have been.
MICHAEL: Well, Mary, let me bring you into the conversation now. When you become involved in generational planning or estate planning, what are some of the key questions you field most often from those families?
MARY JOVANOVICH: It can vary, but the most common questions tend to be, ‘How much do I give to my children?’ And this is a very personal question and each family is different. However, I like to think of Warren Buffet and his quote when he says, ‘Enough money so that they would feel that they could do anything, but not so much that they could do nothing.’
MICHAEL: That’s actually one of my favorite Warren Buffet quotes.
MARY: And you know what’s great about the quote, Michael, is that his goal, and this should be our goal for all of our children, is to help them make their own mark, and find their own success, independent of their inheritance. That’s the key to successful generational planning.
And then the next question usually is, ‘When do I give it to them?’ And, again, it depends on the family circumstance, but my experience is to give while you’re still alive, so you can experience the true joy of giving and witness what takes place as a result of your generosity within your family and your community, as well
Another question that typically will be asked is, ‘In what form?’ And, normally, that question tends to be, ‘Should I give it to them directly or should it be in trust?’ But from a charitable perspective, and where I come into play, is it’s especially important as it relates to art and other collectibles, because we’ve all heard the stories of famous art pieces being purchased at the local Goodwill only to be sold, you know, days later at an auction house for millions of dollars because the family didn’t know the value of that asset. So I think it’s important for families to have a conversation, especially with their children and their grandchildren, on what they want and what they may not be interested in having one day, so that it enables the original owners of that asset to decide what to do with it and plan accordingly.
Another question is, ‘How much do I tell them?’ And, again, my experience is don’t wait for the attorney, especially the estate attorney, to tell them when the will is read. I worked with a client not too long ago in Boston, and her aunt was a multimillionaire unbeknownst to her. And she learned that she was the sole beneficiary after her passing and inherited an extremely large sum of money. And it was very overwhelming, the responsibility of what to do with it, and how to honor her memory. So it was too much for her to handle at that time.
And then, finally, ‘How do I involve my children?’ And, again, when the time’s right provide children with opportunities and invitations to become involved with family matters, projects, or funds, or just to listen in on family conversations and meetings about investments and philanthropy. And, of course, donor-advised funds are a great way to help your children get started. Especially for those families who may want to transfer a family foundation responsibility to future generations, it’s a way for them to get started, it’s a way for them to learn prior to taking on that full responsibility.
MICHAEL: And, Mary, when should we start the conversations with our children around ideas of wealth and philanthropy? In other words, how young is too young?
MARY: Susan Crites Price she’s the author of Generous Genes, she states as soon as the child says ‘mine’ for the first time. And I actually chuckled when I first heard that. But other individuals and well-recognized experts in the field have suggested as early as three years to five years. And it starts by setting an example, and it could be family rituals, or volunteering, or what Suzanne said earlier, the importance of telling stories. I know, from my own experience, my father was a Boy Scout leader for 35 years, and I saw firsthand what it means to be a servant leader. I later joined the Girl Scouts and volunteered to earn badges. And my parents also incorporated giving via church and tithing. So I had my own envelope and I would put it in the basket with my own quarter every week when we would go to church. So philanthropy was and still is in my life because it was taught from birth. But my parents also provided guidance, and they discussed caring for possessions.
What other experts have encouraged is to structure a three-part allowance—spending, savings, and giving. So encourage long-term savings, set limits on spending, and encourage them to give, and help them understand their passions and causes.
Now, if you start early, you’re going to capture their attention, but if you wait until they’re teenagers, they’re really going to be more concerned about peer pressure and they might check out at that time, so you might not be able to engage them until they’re young adults. And then, of course, allow for consequences. And use mentors, like, potentially, your advisor or other family members, or even the nonprofits to help encourage your children and their giving.
MICHAEL: Mary, as you’ve probably experienced, family dynamics can often be quite complicated. Adult family members may assume they know how to work together, but group decision-making, particularly when money is involved can sometimes expose differences.
How do you help families avoid those pitfalls and become stronger through an intentional inter-generation giving process?
MARY: Well, it’s all about clear communication and making sure that everyone has a voice, and that everyone’s voice is heard. The best way to avoid those types of pitfalls is to set an agenda, have a meeting specifically for this conversation, and then set an agenda of what that’s going to look like. And going back to Suzanne’s earlier point, it’s always good to start with the history of the family and those stories, and why it’s important, and why these things matter to that family, so that there’s context around what they’re trying to accomplish, what the mission is, what the vision is for now, for the future, and future generations to come.
So as long as you have those open lines of communication, and you’re giving everyone the ability to have a voice at the table, that’s where you’re going to avoid those pitfalls. And it’s just being open to other ideas, and then working those things through the family.
MICHAEL: Suzanne, turning back to you and turning to some other practical issues around giving, how do the families with whom you work go about finding the nonprofits whose work addresses the issues that they’ve agreed to support?
SUZANNE: You know, a lot of the families that I’ve had the opportunity to work with have already come with their ideas. I know that some people that I’ve worked with had a whole spreadsheet of criteria that they wanted to make sure that the organization met before donating money to their cause. In documents after a death, that they’ve listed maybe their causes, but they want them to make sure that they still have these guidelines in place or the beneficiaries or next in line can change those organizations.
So I really think it’s conversations, looking at interests, looking at history within the family. Maybe it’s organizations within their own community that they’ve had time to meet with. A lot of times, what we do is narrow down their decisions of who they might think they would like to donate to and have a representative come to those meetings and give their own pitches, and then the family later decides who they want to have more dialogue with or who, ‘Yes, this is definitely who we want to give to,’ or ‘No, it isn’t. And start at that place and point, and see if we need to add more entities as we go.
MICHAEL: Are there any other tools you’d recommend for families who might want to delve into the research themselves?
SUZANNE: You know, I know there are many online areas that you can search, Charity Navigator, for instance, where you could go online and input your criteria and the list of charities may come up for you to narrow down. But it’s more than just searching on the website, it’s a connection that one family member’s had. Maybe it’s a third generation that an illness has come up, and, say, it’s cancer, and they have a certain area that they really are now led to contribute to, and they bring those ideas to the table. It doesn’t always have to be healthcare. It can be more generalized. It’s something in their community.
MICHAEL: And, Mary, I know Schwab Charitable has a wealth of resources for donors. Any additional that you would suggest for families looking to research nonprofits with whom to work?
MARY: Well, Suzanne already stated how great Charity Navigator is, and GuideStar, as well, can provide helpful information as it relates to some of the statistical information, like how much of each dollar given goes to support programs and services. But I also like to show donors ways that they can look at a nonprofit’s website to better understand the mission and the values, and how the stories on the website reflect what they’re trying to accomplish.
And then finally, again, to Suzanne’s point, connection. Interview the staff, maybe board members, or even other donors that are listed on their website if you feel comfortable, because that way you get to really understand what they’re doing. And then, finally, you know, attend their events. Interact with people at that organization, because then you are actually getting multiple opinions at the same time and having fun while doing it.
MICHAEL: Well, and I agree. I think that that donor to donor, that peer to peer information is a great tool, as is getting to know the nonprofits directly. Suzanne, as we get close to the end of our time today, any final thoughts on, intergenerational giving and what makes it a way for families to, you know, possibly get closer together in the process?
SUZANNE: You hit it right there when you say it’s an opportunity for the families to get closer. We’re all busy, and everybody’s going their separate ways. I’ve seen families that will set up a retreat out of town to where there’s no technology, and there’s one on one discussions. And it’s a time where it brings them together. There’s a lot of emotions during that time, whether it’s tears or it’s laughter. And, Mary, I know you talked about board members on different nonprofits. Many of the family members are already sitting on boards, and they, obviously, have a passion there and a commitment, and having those discussions and sharing the opportunity with their other family members.
And I say opportunity because it is such a wonderful thing to be able to give and to share the experience with your family. And I think that is where we see the most connection with family. And it’s a way that they are able to leave behind the running of businesses or taking care of soccer teams and things like that to really hone in on one item, which is giving.
MICHAEL: Here, here. And Mary, any final thoughts from you on the topic?
MARY: Sure. I’m just going to make it very simple and short. Begin young. And if you haven’t, it’s never too late to start.
MICHAEL: Suzanne, Mary, thank you both for your time. I think we’d all agree that supporting causes as a family can be well worth the effort, and when done in a thoughtful process, actually bring families closer together.
Thank you for listening. We hope you’ve enjoyed this episode. Please consider leaving us a review on Apple podcast or your favorite listening app, as it helps others discover the show. We encourage you to listen to other episodes in this series, as well as other podcasts from SSIR. This podcast series is made possible with the support of Schwab Charitable, who played an important role in the selection of topics and speakers. For important disclosures and a transcript of this episode, visit SchwabCharitable.org/ImpactPodcast.
