CICF News / 2010 / November / News Post
November 30, 2010
Ideas for Discussing Philanthropy With Your Clients

by Susan Elser, CFP, President of Elser Financial Planning, Inc.

Susan Elser, CFP
Susan is CICF's Professional Advisor Leadsership Council's Incoming Chair and is president of Elser Financial Planning, Inc.

As advisors we are always looking for the right words or helpful tools that will facilitate the exploration of our client’s values and goals. Some of the best ideas that I have heard to inspire conversations with clients on philanthropy have come from Central Indiana Community Foundation presentations. Below are a few of my favorite ideas and the speakers who shared them.

Charles Collier, author of Wealth in Families

Charles Collier, Senior Philanthropic Advisor to Harvard University's Endowment, has twice spoken to advisors and their clients at CICF-sponsored presentations. He shared one approach that may be helpful for parents who wish to initiate a conversation about inheritance and philanthropy with their children:

Our family has several kinds of capital including:

  1. Emotional capital, in that we love and care for each other.
  2. Human capital, in that we each have a unique calling in life to use our individual gifts and talents.
  3. Financial capital, in that we intend for you to inherit wealth so that you and your children can pursue your calling without the financial compensation it may provide being your primary concern.
  4. Philanthropic capital, in that we plan to create a charitable entity that will continue to transform our family as we learn and work together to help others.

Kelin Gersick, author of Generations of Giving

Kelin Gersick made a presentation sponsored by CICF in 2006 discussing his research on how family foundations are not born as such but evolve. As he noted, family foundations are rarely started by families but rather by individuals or couples, although they may become true family foundations through a series of transitions over time. He described how charitable funds may be operated in one of the following styles and how the style may affect the children’s involvement.

Mr. Gersick discussed that some parents seek to create a legacy to further their own charitable values exclusively, which may result in the charitable fund being governed in a "directorial" style. Children may or may not share the same passion for the parent's charitable goals and therefore may not become involved in the way the parents had hoped.

Other parents seek to create a common family fund where children can work parallel to them making gifts to fulfill their own charitable goals in a "cooperative" style. The parents and children share control over the disbursements from the fund but may not engage collaboratively as a family. The children's interest and participation level may also vary depending on how strongly they feel about pursuing their individual philanthropic interests.

Parents who are willing to both share in the governance of the fund and also engage children to seek out shared values and interests can achieve a "collaborative" style. This may result in a more meaningful process with greater interest and involvement from the family.

As advisors we can help our clients clarify their goals for family engagement when they establish a donor-advised fund or private foundation. CICF can assist families, whatever their goals may be, connect with organizations that match their values. Also, CICF may be beneficial in leading family discussions to minimize negative family dynamics, such as parents adopting an authoritarian tone or sibling rivalries.

The nationally renowned speakers brought to Indianapolis by CICF, such as Charles Collier and Kelin Gersick, inspire us and our clients and further our conversations about philanthropy. Be sure to take full advantage of the opportunities presented to our advisor community by CICF.

Susan Elser received a BA in Economics from IU and her CFP designation from the College of Financial Planning. She is President of Elser Financial Planning, Inc. and works directly with clients to determine their priorities and then implements strategies to reach their goals. She oversees the day-to-day operation of investment management and client services. She has been named a 5-Star Wealth Manager for three years. Susan has been an Independent Fee-only Planner since 2004. We welcome Susan's leadership of PALC for 2011 -2012.