FAMILY OFFICE INSIGHTS

Giving as a family

From the family office, A comprehensive guide for advisors, practitioners, and students

Getting started:

  • Articulate a philanthropy mission statement
  • Set guidelines for giving
  • Research opportunities and organizations

The family office is likely to play a central role in the family's philanthropic activities, whatever their mission, scale and scope. For example, foundation administration is a routine task commonly assigned to the family office, and it covers such matters as recordkeeping, legal compliance and tax reporting for the family foundation. Increasingly, though, family members are taking a hands-on approach to philanthropy, meaning they want to be actively involved not just in setting philanthropic strategy and giving policy, but in making gifts and assessing their impact and effectiveness. These donors want to see where their money is going and what it is achieving. They may also want to generate a “learning return”— an offshoot of their desire to pioneer something and spread learning to others.

Involving the next generation

Many successful family offices realize that family unity and long- term wealth preservation depend on their ability to prepare the family’s younger wealth owners. One of the biggest concerns is how to educate and pass on leadership to younger generation family members (commonly referred to as “next generation” or “new generation”).

Motivating the next generation can be a challenging task. Older family members may believe their young adult children enjoy the benefits of wealth and want little to do with the responsibilities. Or they may be waiting to see if or when their children express interest, skills or follow-through to engage in the family enterprise.

In spite of the concerns, some families don’t do much to ready the younger family members for their future roles in managing the family enterprise or working together. The next generation may view the family enterprise as elusive at best or a burden at worst. They may lack understanding about the family wealth, business and philanthropy — and why it’s important to be involved. There may be uncertainty that the older generation even wants them involved, or if so, what that involvement entails. Finally, there may be a reticence to get caught in family dynamics and conflict.

Philanthropy is an excellent way to bridge this conflict — teaching the next generation about the family enterprise, finances and values, and empowering them to do something of meaning. It can help younger family members develop their own sense of purpose and give them a chance to practice good stewardship, responsibility and how to share power.

This is an excerpt from The Family Office, A Comprehensive Guide for Advisers, Practitioners, and Students. Now available where books are sold.

Adapted from The Family Office by William I. Woodson and Edward V. Marshall. © 2021 Rybat Advisors, LLC. Used by arrangement with the Publisher. All rights reserved. 

Mr. Woodson is Executive Vice President, Head of Strategic Wealth Advisory and Family Enterprise Services for SVB Private. He has more than 25 years of experience within financial services and joined SVB Private from Citigroup where he served as head of the Family Office Group for Citi Private Bank in North America.

This publication discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice and does not represent a complete analysis of every material fact with respect to the economy, financial markets, interest rates, and any industry or sector mentioned in the publication. The graphs and charts presented were created for informational purpose only and may use data sourced from third parties. The accuracy and completeness of sourced data is believed to be reliable, but has not been independently verified. 

Any investment idea or strategy discussed herein is provided for information purposes only. There is no guarantee that a strategy will achieve its objective and the readiness and efficacy of such strategy will depend on your particular facts and circumstances. Please consult with your independent professional advisers for final recommendations before changing or implementing a financial strategy. 

Investment products mentioned herein, including stocks, bonds, and mutual funds may lose value and carry investment risks. Due diligence processes seek to diminish, but cannot eliminate risk, nor do they imply low risk. Asset allocation, diversification and rebalancing do not guarantee a profit or protect against a loss in declining markets. Past performance is not indicative of future results, which may vary.

The views expressed in the article are those of the author and/or person interviewed and do not necessarily reflect the views of SVB Private or other members of Silicon Valley Bank Financial Group. The materials on this website are for informational purposes only, are subject to change and do not take into account your particular investment objective, financial situation or need. Since each client’s situation is unique, you should consult your financial advisor and/or tax planning professional before acting on any information provided herein.