Money, Family and Philanthropy

Money, Family and Philanthropy

Randy Fox interviews Gary Shunk
Article posted in Values-Based on 9 October 2014| comments
audience: National Publication, Two Hawks Consulting, LLC, Gary Shunk | last updated: 10 October 2014
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Summary

In this first in a series, Randy Fox interviews Gary Shunk of Family Wealth Dynamics about how family communications often stall the philanthropic process and explores methodologies to resolve these issues.

by Randy Fox - First in a series of interviews on Families and Philanthropy

Over the course of my professional career, I’ve had the opportunity to work on estate and wealth transfer plans for more than 500 high net worth (defined as net worth  greater than $10 million) families. My role was not as the direct contact with the family but as an advisor to the advisors who worked with the families.  With few exceptions, each plan had a philanthropic component woven into it. Upon reflection, I realized that many of these plans were never fully implemented by the family; some, not at all. That troubles me on many levels because ultimately the family will not get the result they said they wanted, the result they paid to have planned out. In many cases, charity won’t get the funds that were to be directed toward their cause.

In my estimation it wasn’t because the plans were bad or wrong. It also wasn’t because the advisor team wasn’t competent. My belief it was because the family was “stuck” somewhere and couldn’t commit to a result they didn’t fully embrace. Perhaps it was an addicted son or a son-in-law they didn’t trust with their daughter’s inheritance. I’ll never know. The real question for me is, how do we prevent this from happening in the future? How do we spot and help a family stalled in the process?

Gary Shunk is the founder of Family Wealth Dynamics, a national consultancy that helps families navigate the often thorny issues of acquired and multi-generational wealth. His work with many families both as a therapist and in his current role as family facilitator has allowed him to develop unique insights and perspectives about how the family system interacts, how and why they get stuck and how to move the family toward unity and harmony. In this series of interviews Gary and I will discuss some of these patterns and specifically relate those issues to the family’s philanthropic goals and mission.

Our first session, conducted (where else?) at a local Starbuck’s centered on the common statement, “he will never change” or ”it will never change.” This rather hopeless statement is a common one and is an indicator that there is a cycle of blame going on.

Randy: Gary, what do you mean by cycle of blame and how do you de-fuse this type of interaction?

Gary: First, anytime there is a blaming type statement means that there is a negative dependency going on. It’s easier to look at the other person and say that they are wronging you than it is to look at yourself to see how you contributed to this cycle. I become a helpless victim of another person’s bad behavior and can’t do anything about it. Woe is me!

Randy: So, what can be done?

Gary: Change really requires two things: acceptance and willingness. Acceptance means taking ownership and responsibility for one’s own behavior. Willingness means that you not only desire change but will take the steps necessary to change. In simple terms if you want to lose 20 pounds, you have to eat differently and probably add some exercise. This is generally between you and yourself.  Family communication is a little more complicated because it involves others around you, your family to change and accept as well. This can be a long and arduous process.

Randy: If it’s so difficult, how do you get anyone to take action?

Gary: I operate on the belief that families all want harmonious communication and unity. They just don’t know the best way to get there because often they’ve been communicating this way for years, sometimes generations. I’ve found that bringing the family together in a meeting or retreat setting can accelerate the process or at least give them a place to begin.

Randy: Tell me more about the family meeting/retreat: Prior to any meeting,

Gary: I interview every family member individually, including in laws. I try to finding what the issues are from each person’s perspective. Then, I create an agenda for the meeting. This is a critical element for me because it allows me to introduce each of the issues and guide the family through a better methodology of communicating. I allow everyone to speak what is true for them but do my best to contain the way they communicate it. There are often a lot of pent up feelings that surface and this time can be quite a challenge. There is no “step 1, step 2, step 3” to this. I use my training and experience to move through each family member and each family circumstance as I feel is needed.

Randy: So the retreat is finished, then what?

Gary: Normally, the family begins taking corrective action but it takes time. Sometimes we continue to work together monthly or quarterly until they feel they’ve made enough progress and gained enough new communication skills to move forward on their own. As you know, changing patterns and habits is hard. It’s multiplied in family interactions and multiplied again when there is significant wealth.

Randy: I understand how the family creates more challenges; tell me more about the wealth component.

Gary: Often there is a patriarch and matriarch who are the wealth creators. Maybe, there is a family business. They can use the wealth and the business as a means for reward or punishment. Further, children who work in the business may resent those who don’t who still want their share. Or, the sibling most equipped to handle the business isn’t the favorite child so is therefore punished while his inept brother or sister is put in charge. Money and business just add another dimension that must be dealt with.

Randy: Let’s circle back to philanthropy. How does all of this tie back to the family involvement in philanthropy?

Gary: Children often see the parents’ philanthropy as separate from them. Often they see it as their parents giving away their inheritance. Once we get that hurdle cleared, we often have the parents re-frame the philanthropic initiative by inviting their children into the process. Instead of demanding or requiring, the children may participate or not. Philanthropy can be a much more neutral place than the family business to begin to build or strengthen family harmony. It is a great place for multi-generational co-creation and participation.
 

This conversation really brings into focus what I sensed all along: families often won’t move forward with philanthropy, or any other planning for that matter, when they’re not in harmony. They may not know this consciously but they feel it. We, as advisors can’t figure it out and can’t solve it. We try different technical solutions, re-do plans, implement what can be agreed to and move on. The family suffers, we suffer and charity suffers. Perhaps we can sharpen our observational skills to spot “stuckness” and then become confident to bring in an outside specialist, like Gary to help the family move forward.

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