Family Philanthropy + Creating a Shared Legacy

Family Philanthropy + Creating a Shared Legacy

 

LUTZ BUSINESS INSIGHTS

 

family philanthropy + creating a shared legacy

lisa strutzel, family office services director

 

There’s no denying it: you feel good when you do good. The brain stimulation that occurs from being charitable is credited for a variety of benefits, including reducing stress, feeling happier, and improving life satisfaction. Health reasons aside, creating a shared legacy through family philanthropy positively affects your family. A family that works towards a common philanthropic vision perpetuates family values, provides educational opportunities for family members, and fosters family bonds.

PERPETUATES FAMILY VALUES

How does a family collectively determine what it truly values and the resulting legacy it wants to pass on? Defining a shared legacy requires individual and group reflection. A common vision needs to be identified, as it guides the family’s giving strategy. As so aptly put by Yogi Berra, “If you don’t know where you are going, you might wind up someplace else.” 

Creating a charitable mission statement is a good way for a family to express its values and passions. A mission statement articulates the family’s purpose for giving and the impact it wants to achieve. It provides the framework for goal setting and helps ascertain where to place the giving focus. 

A good example of a clearly stated purpose for giving is the Bill & Melinda Gates Foundation mission statement:

Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty.

PROVIDES EDUCATIONAL OPPORTUNITIES

Philanthropy is a way for a family to move from talk to action while learning valuable life lessons. “Giving together creates spaces for collaboration and engaged focus on one giving mission and opens the door to multi-generational learning between older and younger members of the family.”[i] Philanthropy provides an exceptional opportunity for learning, regardless of how a family chooses to practice its giving. 

Compassion and empathy are taught to younger children when family members model what it means to be charitable and have conversations concerning the challenges faced by those less fortunate.

Money management skills are learned when parents require kids to use the “giving jar” approach to allocating allowance. By sharing a portion of their savings with others, children can experience first-hand what it means to make a difference. 

Teamwork, social awareness, and problem-solving is reinforced by volunteering as a family to support a common cause. Serving a meal at a local homeless shelter or assisting with a building project in a low-income community are excellent ways to fortify family values and instill gratitude. 

Leadership, governance, and financial competencies are promoted when a family foundation is the vehicle for charitable giving. A foundation is a legal structure that requires corporate governance, exposing junior board members to the intricacies of a philanthropic board. Additionally, it’s an optimal setting for introducing financial fundamentals like investing, budgeting, and grant-making.   

FOSTERS FAMILY BONDS

As a family becomes more disparate from size, location and age perspectives, family philanthropy can act as the tie that binds. Foundation meetings and service projects offer opportunities for connection. Practicing philanthropy provides the means for a family to work through generational differences in a nurturing environment to perpetuate its shared legacy.

Jay Hughes talks about the bonds created by family philanthropy in his family wealth book stating, “Most important, it tightens family bonds—the family glue—by recognizing and acknowledging the creativity and passions of each member.”[ii]

RESULTS BEYOND CALCULATION

Does your family have a shared legacy? If not, it may be beneficial to create one with philanthropy at the forefront. Working together for a charitable purpose not only makes the community better, but it does substantial good for your family as well. In the words of Miriam Beard, “The results of philanthropy are always beyond calculation.”

 

[i] Family Philanthropy Guide. (n.d.).  Retrieved from https://givingcompass.org/family-philanthropy/

[ii] Hughes, J. (2004). Family Wealth: Keeping it in the Family – How Family Members and Their Advisors Preserve Human, Intellectual, and Financial Assets for Generations. Bloomberg Press.

ABOUT THE AUTHOR

402.763.2974

lstrutzel@lutz.us

LINKEDIN

LISA STRUTZEL, CPA, CAP® + FAMILY OFFICE SERVICES DIRECTOR

Lisa Strutzel is the Family Office Services Director at Lutz with over 14 years of past experience as a family office executive. She is responsible for assisting high-net-worth clients manage their family enterprise. 

AREAS OF FOCUS
  • Family Office Services
  • Financial Reporting
  • Philanthropy and Legacy Planning
  • High-Net-Worth Families
AFFILIATIONS AND CREDENTIALS
  • Certified Public Accountant
  • Chartered Advisor in Philanthropy, CAP®
  • Family Office Exchange, Integrated Wealth Advisor Council Member
  • Purposeful Planning Institute, Member
  • Nebraska Society of CPAs, Member
EDUCATIONAL BACKGROUND
  • BBA, Iowa State University, Ames, IA
COMMUNITY SERVICE
  • The Hope Center for Kids, Board President, Past Treasurer
  • CAP Advisory Board Member

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OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Family Office Millennial Educational Series: Financial Literacy Basics

Family Office Millennial Educational Series: Financial Literacy Basics

 

LUTZ BUSINESS INSIGHTS

 

Family Office Millennial Educational Series – Financial Literacy Basics: Beginner’s Guide

Nick Hall and Josh Jenkins of Lutz Financial cover savings plans, insurance basics, and credit & debt, along with a Q&A session.

 

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OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Family Governance + Not an Act

Family Governance + Not an Act

 

LUTZ BUSINESS INSIGHTS

 

family governance + not an act

lisa strutzel, family office services director

 

For a family enterprise to sustain its wealth, acting collaboratively is required. This need for cohesion leads to the creation of structures and processes that guide the family’s behavior as it navigates the complexities that come with growth. Developing a family governance system is an evolutionary process. It typically begins with informal family gatherings where in-depth communication occurs and ends with the formation of policies and practices that govern the family’s joint decision-making.

MISSION STATEMENT

Making unified decisions requires communication between family members. Communication is key to fostering cooperation and collaboration, essential to building relationships that bond the family together. The governance process begins with families determining commonality as it relates to values and vision and using that awareness to craft their family mission statement. The mission statement defines the guiding principles of the family. “If a family has a statement of principles that can be referred to, or its family mission, then succeeding generations have a core of basic principles to which they can adhere”, according to Dennis T. Jaffe, PH.D.[i] The mission statement provides the framework for the creation of governance structures that are aligned with shared family values.

POLICIES

Once a family defines its shared vision, it uses that awareness to develop policies that oversee family interaction. These policies, sometimes referred to as a family constitution, should be reasonable, clearly written and updated as dictated by changing family circumstances. Policies adopted by families vary, covering issues like:

  • Conflict resolution
  • Succession planning
  • Role of spouses
  • Trust distribution guidelines
  • Code of conduct for meetings
  • Education expectations
  • Philanthropic goals and objectives

The process of creating the shared guidelines can be as valuable as the documents themselves as evidenced by Barbara Hauser, a family governance expert. “Many families slowly get used to the idea of having a family constitution, and by the end of the discussions and drafting, they feel a proud sense of ownership.”[ii]

STRUCTURE

How a family decides to practice governance is dependent on multiple factors, such as the family’s size, complexity, and if they have a joint operating business. Many families establish assemblies and councils to act as their leadership bodies. The assemblies are typically all inclusive being composed of adult family members and their spouses. The family council is the elected governing body of the family. Its duty is to implement the wishes of the family, including planning the family meetings, drafting changes to policies and practices, and doing whatever else is necessary for maintenance of the governance system. More complex family structures may also have various committees and boards that oversee their businesses, philanthropy, family office or other holdings. 

Good governance practices are essential to family sustainability over generations. They are rooted in the family’s values and vision and grow into enduring policies and practices if properly preserved. Implementing a collaborative system of governance is not an act; it is a deliberate process that stands the test of time.

 

i Jaffe, D. T. (2003, April). Six Dimensions of Wealth: Leaving the Fullest Value of Your Wealth to Your Heirs. Retrieved from http://dennisjaffe.com/download/six-dimensions-of-wealth-leaving-the-fullest-value-of-your-wealth-to-your-heirs/

ii Hauser, B. (2019, March 6). What are the Best Ways for a Family to Make a Decision Together? Retrieved from http://www.campdenfb.com/article/what-are-best-ways-family-make-decisions-together

ABOUT THE AUTHOR

402.763.2974

lstrutzel@lutz.us

LINKEDIN

LISA STRUTZEL, CPA, CAP® + FAMILY OFFICE SERVICES DIRECTOR

Lisa Strutzel is the Family Office Services Director at Lutz with over 14 years of past experience as a family office executive. She is responsible for assisting high-net-worth clients manage their family enterprise. 

AREAS OF FOCUS
  • Family Office Services
  • Financial Reporting
  • Philanthropy and Legacy Planning
  • High-Net-Worth Families
AFFILIATIONS AND CREDENTIALS
  • Certified Public Accountant
  • Chartered Advisor in Philanthropy, CAP®
  • Family Office Exchange, Integrated Wealth Advisor Council Member
  • Purposeful Planning Institute, Member
  • Nebraska Society of CPAs, Member
EDUCATIONAL BACKGROUND
  • BBA, Iowa State University, Ames, IA
COMMUNITY SERVICE
  • The Hope Center for Kids, Board President, Past Treasurer
  • CAP Advisory Board Member

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

 

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Family Meetings + Strengthening the Bonds That Bind

Family Meetings + Strengthening the Bonds That Bind

 

LUTZ BUSINESS INSIGHTS

 

family meetings + strengthening the bonds that bind

lisa strutzel, family office services director

 

 We’ve all heard the saying, “The key to a good relationship is communication.” This is especially true for families who want to perpetuate their wealth and values over multiple generations. Research has shown that most successful families hold some form of family meeting. Family meetings accomplish multiple purposes, being used to foster communication, engagement, education, and facilitate decision-making.

 

COMMUNICATION

The breakdown of communication and trust within the family is the leading cause of the failure of families to successfully transfer their wealth beyond the third generation. Communication is a reciprocal arrangement, requiring a balance of listening and talking. A well run family meeting provides a non-threatening environment for the exchange of different perspectives. It is a forum for senior family members to reinforce values and share stories about the family’s heritage and legacy, and it allows the younger family members to talk about their dreams and receive encouragement and guidance. This healthy information exchange strengthens familial bonds and reinforces the value of the individual as an integral part of the family unit.

 

ENGAGEMENT

Family meetings should be engaging to provide motivation for people to attend. They should be treated like special events, held at desirable locations away from the family home or business that are comfortable and free of distractions. Family business consultants Craig Aronoff and John Ward recommend a balance of fun, family development and family business for the meeting format.[i] A successful family meeting should be well planned with a clear agenda, accomplishing the intended goals through both business and recreation.

 

DEVELOPMENT

Family development is an essential element of every family meeting. Family meetings are an excellent way to instruct the younger generation on the family legacy, financial basics, and philanthropy. Outside experts can be hired to educate the family on specific topics, and family members can offer instruction on their areas of expertise. Prior to each meeting, thought should be placed on identifying the family’s current educational needs and creating an educational plan that fosters multi-generational learning.

 

GOVERNANCE

Family meetings provide the medium for creating family governance, the structure and processes families use to guide their family enterprise. Good governance practices result in the creation of family policies that lay the ground rules for decision-making. Many wealthy families have a family business that binds them together or have common business interests. Family meetings are a good opportunity to disseminate information about joint ventures and to make shared decisions in a collaborative manner. Using the family meeting to facilitate decision-making in a safe environment can prevent unnecessary conflict and strengthen family cohesion.

 

Successful family meetings create memorable experiences, facilitating in-depth communication between generations. By providing a conducive environment for value sharing, education and decision-making, they assist with family growth and development over time.  Family meetings act as a bonding agent for families, strengthening and preserving a family’s legacy for generations to come.

 

[i] Aronoff, C. and Ward, J. (2011, January). Family Meetings: How to Build a Stronger Family and a Stronger Business.

ABOUT THE AUTHOR

402.763.2974

lstrutzel@lutz.us

LINKEDIN

LISA STRUTZEL, CPA, CAP® + FAMILY OFFICE SERVICES DIRECTOR

Lisa Strutzel is the Family Office Services Director at Lutz with over 14 years of past experience as a family office executive. She is responsible for assisting high-net-worth clients manage their family enterprise. 

AREAS OF FOCUS
  • Family Office Services
  • Financial Reporting
  • Philanthropy and Legacy Planning
  • High-Net-Worth Families
AFFILIATIONS AND CREDENTIALS
  • Certified Public Accountant
  • Chartered Advisor in Philanthropy, CAP®
  • Family Office Exchange, Integrated Wealth Advisor Council Member
  • Purposeful Planning Institute, Member
  • Nebraska Society of CPAs, Member
EDUCATIONAL BACKGROUND
  • BBA, Iowa State University, Ames, IA
COMMUNITY SERVICE
  • The Hope Center for Kids, Board President, Past Treasurer
  • CAP Advisory Board Member

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

 

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

What is a Family Office?

What is a Family Office?

 

LUTZ BUSINESS INSIGHTS

 

what is a family office?

lisa strutzel, family office services director

 

Modern family offices have been in existence since the late 19th century when John D. Rockefeller decided he needed a professional team to manage his wealth. The complexity of the financial landscape, coupled with the continuing growth of personal financial wealth, is fueling the rise in the number of family offices and the momentum is expected to continue. 

Single Family Office vs. Multi-Family Office

Family offices are professional organizations established to help a family (single family office) or families (multi-family office) manage significant wealth.

The sophisticated systems and professional capability required to run a single family office equate to high operating costs, necessitating a family to be worth at least $150 million for this exclusive option to be viable. For this reason, many high net worth families are opting to use the services of multi-family offices. The multi-family office offering is a cost-effective way to receive customized services while recognizing economies of scale from pooling resources.

Sustaining Wealth from Generation to Generation

The numbers support the adage, “Shirtsleeves to shirtsleeves in three generations”, given there is over a 70 percent failure rate to transfer wealth beyond the third generation. Sustaining wealth between generations requires more than just managing money. It takes a commitment to manage the wealth as a family enterprise.

The role of the family office is to:

  • Assist the family in determining its goals and priorities
  • Establish processes
  • Provide integrated financial solutions

An effective family office provides the “glue” which can help hold a family together through generational transitions. By supporting an organized family governance process, the family office is central in fostering family unity and engagement. As the family office knows the totality of its client’s financial situation, it can provide the integrated planning needed for sustainable wealth in concert with promoting and preserving family harmony and values.

ABOUT THE AUTHOR

402.763.2974

lstrutzel@lutz.us

LINKEDIN

LISA STRUTZEL, CPA, CAP® + FAMILY OFFICE SERVICES DIRECTOR

Lisa Strutzel is the Family Office Services Director at Lutz with over 14 years of past experience as a family office executive. She is responsible for assisting high-net-worth clients manage their family enterprise. 

AREAS OF FOCUS
  • Family Office Services
  • Financial Reporting
  • Philanthropy and Legacy Planning
  • High-Net-Worth Families
AFFILIATIONS AND CREDENTIALS
  • Certified Public Accountant
  • Chartered Advisor in Philanthropy, CAP®
  • Family Office Exchange, Integrated Wealth Advisor Council Member
  • Purposeful Planning Institute, Member
  • Nebraska Society of CPAs, Member
EDUCATIONAL BACKGROUND
  • BBA, Iowa State University, Ames, IA
COMMUNITY SERVICE
  • The Hope Center for Kids, Board President, Past Treasurer
  • CAP Advisory Board Member

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

 

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850