In this season of giving, there’s no shortage of gifts we can buy to communicate our love for family members. But if we focus on the deeper meaning of the holiday spirit, I think it can lead us to true fulfillment in the form of sharing our values and our legacy with our loved ones.
In 2008, I researched and wrote about an impressive process that teaches generations of wealthy heirs to become good stewards of wealth and to get along well with one another. This process has been refined to meet the needs of individuals and families by Rodney Zeeb, a former estate planner, and Cameron Thornton, a wealth manager. Together, they direct Your Legacy Foundation in Portland. They call their work “transformational philanthropy.”
The foundation provides training and consulting to financial planners and investment advisors, estate planning attorneys and CPAs, as well as nonprofit organizations and professionals who work with donors and families. To learn more about how it could help you assist clients to discover and achieve their vision, I spoke to Cam Thornton.
Olivia Mellan: How did you become interested in helping clients transfer wealth more harmoniously?
Cam Thornton: Sixteen years ago, a client of mine who was a business owner passed away. We established a strategy to protect his principal, but one thing we didn’t do was prepare his heirs for what would occur. After he passed away, all the legal mechanisms of estate planning kicked in, and we had family members fighting each other.
This led me to a lot of soul-searching about what could have been done differently. The result was a system I created called The Family Financial Philosophy, whose purpose is to help families transition wealth from one generation to the next with minimal conflict. It allows people to discover and solidify their deepest values, convictions and objectives related to their wealth.
OM: How did this system evolve into transformational philanthropy?
CT: About seven years ago, Rod Zeeb of the Heritage Institute became aware of my work, and I was invited to take part in their training program. Coming from a financial planning background, I thought money was the most important driver. But the co-founder of the Heritage Institute, Perry Cochell, conducted an interesting exercise where he took money off the table.
It dawned on me that even though money was an important tool, it wasn’t the most important factor in maintaining family unity. What Perry and Rod shared with me was that first you need to establish safety and trust by focusing on communication.
I had more conversations with Rod, and what emerged was a joining of the discoveries we had both made. For the last five years, he and I have directed Your Legacy Foundation, whose primary purpose is to help individual donors understand what’s most important to them in giving.
That’s how we developed transformational philanthropy: the concept that a person giving money or other assets is as profoundly transformed as the organization receiving the gift.
OM: How does introducing transformational philanthropy to clients benefit the advisor?
CT: We see three major benefits. First, it gives you the opportunity to build greater loyalty as you deepen client relationships. Working with families also puts you in a position to be introduced to a new generation of clients. Last, your involvement can lead to referrals and to other new clients with whom you can create strong relationships.
OM: How would an advisor start this process?
CT: One way to get clients on board is to ask them, “Would you be interested in including philanthropy in your planning if you can enhance what your family will receive and minimize what the IRS will receive?”
Then you might ask, “Have you ever been involved in philanthropy, either by volunteering or by giving money?” If the client says yes, I’d find out how they first got involved. That could lead to the question of “What philanthropic activity has meant the most to you? How has it affected your life?”
OM: Should an advisor introduce the subject of philanthropy if the client doesn’t mention it?
CT: Absolutely. Philanthropic planning is an important tool for protecting assets.
Many times, advisors fail to bring it up because they believe they lack skills in this area. In addition, they may not feel comfortable discussing matters of the heart. I find that these advisors often lack a process to discover what is most important to their clients.
OM: Once the client or clients are on board about the value of philanthropy, what’s next?
CT: I’d ask them, “What would it mean to your heirs to have that experience?”
“Philanthropy” is a spooky word for some people because they think you have to give away large sums of money. That’s really not the case. The thing that’s important is to match your desires with the needs of organizations. If you can align your desired outcomes with the needs of an organization that you have an affinity for, think how cool that would be, not only for yourself but also for the organization receiving your generosity.
OM: How can client families train the next generation to be stewards of their wealth through philanthropy?
CT: Some families create what we call a “charitable challenge.” The family pools their resources and instead of giving individual gifts to charities, they consolidate all the money in one pot and give it to the offspring as a group. It’s up to the children to decide together where the money will go. They report back to the family on the research they did, the organizations they considered and the reasons they donated to the organizations they chose. This process deepens communication among all the family members involved.
OM: How long does the training process take?
CT: It depends on the family. Some families gather around Memorial Day or July 4 and the conversation will begin then, with the idea that the giving will take place around the holidays. The younger generation might report back by the new year at another family gathering where everyone’s present.
So it can take from a few days to a few months.
OM: How do you get the whole family together when everyone’s so busy?
CT: We suggest they ask themselves two questions to determine whether they want to participate. First, “Is it worth it?” Second, “Can I do it?”
If three siblings say yes and the fourth says no, you need to explore why the fourth one doesn’t want to participate. If things go well, the holdout will hear about it and will usually join in at the next opportunity.
OM: Is it possible to characterize philanthropic donors? For example, there’s a perception that liberals are more compassionate while conservatives have a tougher “pull yourself up by your bootstraps” attitude.
CT: I’ve been blessed to work with people on both sides of the political perspective. Most of my clients are business owners. They have all struggled, so they know what hard work is all about. Those who are on the left tend to give based on feelings: Their giving may focus more on environmental causes or animal rights. Those on the right focus more on humanitarian causes in their local community. This is a big generalization, of course, based on what I’ve witnessed in my work.
OM: How can an advisor get started with transformational philanthropy?
CT: Advisors can learn more by visiting www.yourlegacyfoundation.org.
I love the idea behind transformational philanthropy: that gifts, no matter how large or small, have as much impact on the donor as they have on the recipient.
In this holiday season, you might suggest to wealthy clients that instead of buying material things for their children or grandchildren, they introduce their offspring to the recurrent satisfaction of philanthropic giving to others.