Editor’s note: This month’s feature story is an excerpt from the new edition of our Passages issue paper series. A full copy of this issue paper, complete with specific tips, tools and interviews, is available here for members of our Friends of the Family Program and subscribers to the Family Philanthropy Online Knowledge Center.
By Sam Davis and Allison Sole
The child of divorced parents, Stanton Thalhimer was especially close to his maternal grandparents. His grandfather, who owned several department stores, brought Stanton to his flagship store during the busy weekends to teach him the value of hard work. It would have been easy for Stanton’s grandparents to indulge him by providing gifts and money to meet his every desire. But they chose another path—one of love, discipline and giving back to the community.
Stanton remembers times as a 9- or 10-year old when his grandfather drove him around Richmond, Virginia, showing him parks, museums and community projects supported by his family. Stanton recalls those tours: “My grandfather always spoke of the family’s responsibility to the community, never about money.”
As a teenager, he learned from the example set by his grandparents and emerged as a responsible, engaged young adult. Today, Stanton carries on the Thalhimer legacy, sitting on the boards of several nonprofits and joining with his family members in providing philanthropic support to others.
The Unique Challenges of Wealth
Due to his grandparents’ influence, Stanton was able to avoid what confounds many families of wealth: the display of entitlement in the attitudes and behaviors of their offspring. The boundary between providing children the benefit of a successful lifestyle supported by a family’s wealth and generating an unproductive and often corrosive dependence on wealth is often a blurred one. Unlike Stanton, who received positive guidance at an early age, some children of wealth fail to receive such benefit and end up abusing the privileges of their economic status, often depicted in the media through stories of consumptive or self-destructive actions.
Families of wealth face their own special set of challenges. In most cases, children cannot avoid being set apart because of the communities in which they live, the kinds of cars they drive, the vacations they take, and the affluent friends whose company they keep. They can afford to attend elite private schools and receive the support of coaches and tutors. The extent of their wealth requires professional advisors. As a result, some children of wealth learn to behave as if privileges are unrestricted, have less incentive to lead productive lives, and often feel estranged from their broader peer group.
Strategies for Inhibiting Entitlement Behaviors in Children of Wealth
Many advisors to families of wealth focus on overcoming counterproductive behaviors of their clients’ progeny. We believe a more constructive approach to raising responsible adults emphasizes positive practices, such as philanthropy.
In our research, we identified four areas of philanthropic engagement which can help inhibit entitlement behaviors in children of wealth.
Financial Literacy
As challenging as such conversations may be, affluent families are wise to discuss their wealth with their children, sharing both stories of success and fear. In their 2009 article “From Entitlement to Stewardship,” family business consultants Fredda Herz Brown and Dennis Jaffe point out that our culture avoids discussions about the role of money in our lives. Financially privileged families infrequently discuss their wealth, leading young people to either take money for granted or to feel anxious about its origins and expectations for their use of it.
Conversations about money should begin early in a child’s life. In Kids, Wealth and Consequences, Jayne Pearl and Richard Morris recommend that families begin the conversation when children are 6- or 7-years old to get them thinking about wealth as a responsibility, and to start to cultivate financial literacy. They recommend games to teach basic principles about managing money, including budgeting, saving, investing, and giving to others. In Good Influence, Daniel Heischman emphasizes the importance of family intergenerational dialogue in discussing values, including the meaning of money and what it represents to the family. This is a challenging charge: American culture focuses excessively on the accumulation of those things money can buy while tacitly perpetuating the notion that money is a taboo subject for family discussions. Heischman reminds his readers to be steadfast—by having regular discussions with their children about the family’s wealth, the appropriate uses for it, and the role of philanthropy in the family’s life.
The Power of Voluntary Service
Herz Brown and Jaffe maintain that an important way to defy “narcissistic entitlement” is to engage young people in voluntary service so that they may experience the inner reward of doing for others. Scholar Peter Frumkin goes further when he writes, “The process of getting outside one’s own narrow needs is such that it often turns out to be transformative for the person who is giving.” Herz Brown and Jaffe assert that young people who develop a positive self-image maintain stronger relationships with their immediate family and close friends, and are more likely to extend their network to include an outer circle that incorporates the community at large.
“Young people who develop a positive self-image maintain stronger relationships with their immediate family and close friends, and are more likely to extend their network to include an outer circle that incorporates the community at large.”
Modeling Positive Behaviors
We recommend parents articulate and model th
e behaviors they wish to see in their children. Joline Godfrey, a consultant who provides financial education to youth, is quoted in an article by writer Joanna Krotz as saying, “The culture speaks with a boom. The sounds of parents are much softer.” Parents play critical roles in helping their children develop self-esteem and awareness of the needs of others. Congruence between what parents say and how they act is important; children tend to adopt the behaviors of their parents even when those behaviors are contrary to what the parents say. Heischman affirms these points and emphasizes that young people require positive adult role models in order to gain self-confidence and to develop appropriate degrees of independence. According to Heischman, “Parents need to go beyond merely setting boundaries to demonstrating consistently positive behaviors for their children to follow.”
Power of Decision-making and Industry
Younger generations must feel they have a stake in decisions. According to Herz Brown and Jaffe, “offering a young person a specific opportunity to contribute, have a voice, and then vote in the family affairs is important. If a person is not involved by being informed or making decisions about family wealth, then that wealth becomes passive and in the background, not active and needing tending.” In cases in which inheritors are indulged, malaise may take hold, eroding motivation while nurturing feelings of helplessness. Some express it more strongly: “Malaise is a soft word for it,” says Soniya Luthar, a psychologist at Columbia Teachers College, in an article by Jennifer Senior. Luthar continues, “anomie, alienation, anguish—this is what happens when we’re robbed of that sense of efficacy.”
Herz Brown and Jaffe allege that “for young people to succeed in the world, to have a sense of their own abilities, they need to develop the motivation to overcome obstacles, the skills to get things for themselves, and the capacity to get what they want.” A maturing individual needs an active sense of their life’s purpose.
“In cases in which inheritors are indulged, malaise may take hold, eroding motivation while nurturing feelings of helplessness.”
Our Findings
Each of the interviewees featured in our Passages issue paper reported being told at an early age about the nature of their family wealth, and each benefited from the positive examples set by their parents or grandparents. They described increased self-confidence and a sense of independence in response to the setting of clear expectations and boundaries by their parents or grandparents. They were given opportunities to participate in philanthropy and to have decision-making authority at a young age through voluntary service and other means. Finally, each of the six young adults we interviewed said they were provided opportunities to have their voices heard and heeded by family members, which led to their subsequent participation.
From these interviews, we identified four paths through which philanthropy contributes to the development of responsible adults:
- Stewardship: Each of the young adults we interviewed cited the importance of tending to their families’ philanthropic legacies. Each said they assimilated the importance of philanthropy from prior generations, and each stated an intention to nurture and perpetuate a family legacy of giving to others.
- Voluntary Service: All those we interviewed are currently engaged in volunteering efforts. Each of them learned early on to find a sense of self-worth by offering their time and talents, not just the financial resources of their families.
- Peer Networks, Giving Circles and Youth Philanthropy Programs: Each of these vehicles was cited as being helpful to those we interviewed. Such resources give young adults decision-making opportunities in a safe space with peers. Several of those interviewed were engaged in youth philanthropy programs offered by community or family foundations. They cited the benefits of learning about the disciplines of strategic philanthropy and, similar to giving circles, the benefits of learning to work in groups and respecting the views of peers.
- Family Legacy and Governance: Four of those interviewed serve on the boards of their family foundations, and most began their engagement in family philanthropy at a young age.
Although our interviewees’ stories may sound exceptional, our experience working with philanthropic families suggests that those we interviewed are representative of next generation members of philanthropic families throughout North America. So what steps might families take?
- Present information in a way that invites questions, leads to the sharing of concerns and the genuine expression of feelings, even disagreement and frustration.
- “Walk the talk,” by not only writing checks but also by inviting their children to actively participate in volunteer and other activities related to the family’s philanthropic work.
- And remember, the passions and commitments of young adults will be informed and animated by the philanthropic legacy and practices of their parents and grandparents.
For more information on this topic, see the complete edition of this new Passages Issue Paper, and reference the articles and resources referenced within this article and below.
Additional Resources in the Family Philanthropy Online Knowledge Center
ABOUT THE AUTHORS
Allison Sole is an advisor, speaker and writer on issues related to strategic philanthropy and humanistic medicine. Allison most recently served as deputy director of 21/64, the generational consulting division of the Andrea & Charles Bronfman Philanthropies. Prior to 21/64, she served as director of programs for the Arnold P. Gold Foundation, a public foundation dedicated to fostering the relationship between practitioner and patient at medical schools and in clinical settings. Allison may be reached at allison.sole@gmail.com.
Sam Davis, formerly a partner in the firm of relative solutions LLC, continues to serve family enterprises and family foundations through The Davis Group of Richmond, Virginia.
A full copy of this issue paper is available here for members of our Friends of the Family Program and subscribers to the Family Philanthropy Online Knowledge Center.
