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Mission: Spend family riches this way

Sean Cole Jan 5, 2008

Mission: Spend family riches this way

Sean Cole Jan 5, 2008


Bob Moon: Ah, the heady days of early January. I resolve to save more, spend less, finally fix that pesky… aw, the heck with it.

Anyway, resolutions aren’t just for New Year’s anymore. These days they’re taking the form of family mission statements, especially among the rich.

They’re like corporate mission statements except they’re about what to do with family wealth and handing down the right values to future generations.

Sean Cole is a member of the Marketplace family; he has our story.

Sean Cole: The whole idea of family mission statements isn’t so new. Uber-rich families like the Hearsts and the Rockefellers were writing them in the early 1900’s. What is relatively new is that family wealth management firms are now helping their clients write these things. Even suggesting it. Sometimes to prevent squabbles, sometimes to tell the heirs what’s expected of them and sometimes to focus their philanthropy.

Jeffrey Scheck: Giving together is essential to our family and we want it to continue for generations. We also hope to…

Jeffrey Scheck’s family sold their restaurant supply business a few years ago for… a lot of money — he wouldn’t say how much — and as they set up their charitable funds, they drafted a three-paragraph statement saying they wanted to support Jewish causes and cultural organizations in their city. He says the process was a bit painstaking…

Scheck: We just talked about each sentence, what does each word mean, made changes.

…but the result can be really affirming.

Scheck: It’s sometimes good to pull it out and say “you know, even though we’re doing this, we really do have a mission” and it’s a great reminder of what we’re trying to accomplish.

In fact, Scheck says his family is thinking of writing a more general mission statement about the values they want their kids to have — working hard, achieving excellence — which is more common. Also, about 80 percent of the wealth in this country was created within the last generation and while it’s hard to sympathize, getting rich can be scary and complicated for a lot of families. So in struggling for a foothold, some families might say:

Keith Whitaker: “Oh, look, here’s something I recognize from my business experience: a mission statement. I can do that with my family and everything will flow naturally from it” and it’s not so.

Keith Whitaker helped the Scheck’s with their mission statement. He’s the director of family dynamics at Calibre, a division of Wachovia. He says a lot of his job is helping neuvo riche families get along — and not squander their money.

Whitaker: And so the family mission statement can be a focal point for working on those other things, but it’s not an end in itself.

He showed me a couple of other examples that dealt with handing money down.

Whitaker [reading]: “Dear children: In recent years we’ve had progressive discussions about my plans for transferring some my assets to you.”

Cole: So, couldn’t they just say that to their kids? Do they need to write it down like that?

Whitaker: But again, you’ve got to take the big picture view that this is also a statement for generations that they may not meet. It’s also like an anchor in the family so you don’t have to come back to saying the same thing over and over again, but you can kind of refer back to the document.

John Guaspari: Frankly, it sounds like pretentious bullshit to me.

This is John Guaspari. For a lot of years, he was a quality management guru, helping companies serve their customers better. He used to joke about using quality improvement techniques on his family, as in this passage from his fictional essay “Quality Day at the Guaspari’s.”

Guaspari [reading]: “I only had to assert my authority once by pointing out to my son that the words ‘puke,’ ‘scum’ and ‘scuzz’ tend not to show up very often in effective family mission statements.”

He meant that as satire, thinking that corporate speak has no place in the living room.

Guaspari [reading]: It just feels so discordant to me that I don’t… you might get a result that’s approximately 180 degrees out of phase with what you’re trying to get.

Cole: In that instead of happiness and being able to pass the values down, you’ve…

Guaspari [reading]: You look silly.

Then again, neither Guaspari nor I — nor probably you — know what it’s like to manage an awful, awful lot of money. And when you amass enough of it, the wealth itself becomes a kind of business.

Whitaker: Well sure, it’s got income that flows from the securities…

Again Family Dynamics specialist Keith Whitaker:

Whitaker: It has a whole host of advisors or employees that go along with it…

Cole: Like you, for example.

Whitaker: Exactly, like our firm.

There are even corporatese terms that identify different subsets of rich families: single wealth creator, sibling partnership, cousin consortium — so in that sense, family mission statements aren’t too much of a stretch and families like the Schecks seem to have the whole mission statement thing in perspective.

Scheck: Unless you’re showing and leading by example, I don’t think they’re worth the paper they’re written on.

Hopefully the Scheck cousin consortium — Jeffrey’s kids and nieces and nephews — will feel the same way.

Maybe they should put that in their mission statement.

I’m Sean Cole for Marketplace.

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