Wealth in Families
by Charles W. Collier
There is a famous exchange between F. Scott Fitzgerald and Ernest Hemingway. Fitzgerald says, “The rich are different.” Hemingway responds, “Yes, they have more money.” Charles Collier’s book demonstrates the accuracy of both viewpoints as he explores the issues faced by individuals and families who have amassed wealth.
Most of us, at some point or points in our lives, attempt to assess the meaning and impact of what we’ve achieved in our lives and what our children and grandchildren will know of us and learn from us. Families, Collier asserts, have four types of wealth: human, intellectual, social, and financial. Not all families, of course, possess great financial wealth. However, all families possess all four types in some degree, and assessing the nature and extent of each type of wealth is a necessary precursor to deciding how (or whether) to proceed to formalizing a structure for expressing a family’s philosophy and values through philanthropy.
That formalized structure is a family foundation, dedicated to the shared vision and goals identified by the family. The commitment and structure required for the family to establish a well-running family foundation pays big dividends in family function and cohesiveness. The family members participate in the foundation’s philanthropic and business affairs. Children learn about philanthropy, shared family values and goals, and sound money management through their involvement. The foundation provides a reason and a purpose for regular communication and involvement with other family members, both within generations and between generations.
The book includes appendices with planning questionnaires, brief descriptions of popular gift vehicles, and additional resources on both money and philanthropy.
Though I suspect that many family foundations are established around the vision of the founder and spouse, rather than through an all-family strategic planning retreat, I have seen family foundation evolve into the model that Dr. Collier describes. His interviews with philanthropists and development professionals rang true for me as I remembered the functioning of my stepfamily’s family foundation.
I was especially interested in the discussion of how to determine appropriate wealth transfer to family and other heirs, as a precursor and component of philanthropic planning. Many wealthy people, and especially many in the majority who are newly wealthy, are very concerned that their children and grandchildren are well-provided for without becoming indolent.
The book gives a good insight into what drives family philanthropy and why it’s important for successful family function. Having wealth and deciding what to do with it is hard work, and it’s possible to make all kinds of tragic mistakes along the way. Dr. Collier writes with a respect for this effort and for those who have the ethical and intellectual capacity, as well as the financial capacity, to give meaning to their lives, their families, and their wealth through deliberate philanthropy.
- Family Wealth: Asking the Essential Questions
- Exploring the Meaning of Wealth
- Defining a Financial Inheritance: How Much is Enough?
- Family Parenting: Managing Family
- Psychological Parenting: Managing Money
- Financial Parenting: Managing Money
- Philanthropic Parenting: Managing Financial Care