Success Council was interested in getting some practical advice on how to help children inherit wealth without harming themselves, their family and their community. They had a camera on hand and recorded my response (above). I am including the transcript here as well:
Looking at families that have a relationship with wealth.
There are families who for many generations have had a very very positive relationship with wealth. They have a lot of it and they continue to turn out productive, effective, decent human beings in their family.
Why do some families have that positive experience and other families get messed up and have a negative experience with their trust fund baby?
One of the factors, there’s a variety of factors that play into this, but one of the factors is families that have a successful relationship with wealth, have an active and deliberate participation in charitable giving.
They give back to their communities. They view their wealth, not merely as a self-indulgence mechanism, that allows them to enjoy a certain lifestyle, but as a way of blessing people around them.
I’ll give you an example of this, I like to help my families, that are willing to, to create a family foundation, and to begin to develop some social capital. This is money that is not theirs, it has to be used for charitable purposes, under our current tax laws, and in fact we can capture dollars that would otherwise be lost to taxation, and we can gather those back, instead of sending those away to the politicians, we can capture those and we can have them in our own foundation.
The family then gets to do charitable stuff with that, and when children are integrated into that process at a young age, it has a huge consequence. Here’s an example, I’ve actually been through this with multiple families:
A family has a little 10-year-old girl, and they say ‘look, here’s your charitable budget this year. you have “this many” dollars, and you get to decide what’s going to happen with them. They have to go to a charity, and you have to find the charity. You’ve got do the research and then you’re going to come back and present your idea to the elders in the family, and you’ve got to persuade us that your idea is a good one. Then, if we approve your idea, you are going to deliver the money (we always recommend delivering the money in person, never sending the money), you participate directly with the charity and it’s use of the money over the next year. And then, you’re going to come back a year from now and you’re going to report’.
So, you see a little 10-year-old girl, with, like a science fair project:
‘Here’s my charity, here’s the things they do. I’ve talked to [this person] I wrote these letters, I’ve done all this background research, and I want to give them the money. Here’s what they’re going to do with it…’
Next, the senior family members, auntie, and uncle, grandma, and grandpa, ask her questions:
‘How did you know…?’
‘What did you do…?’
‘How are you going to be involved in this?’
The little girl will answer their questions and then, they will “Pull the Trigger”! They approve the decision, they write the check and she (the little girl) delivers the money, and for the next year, she participates in that charity.
At the end of that year, she reports back to the family, where they say:
‘Ok, how did that go?’
They have a debriefing where she gets to tell them what happened…
That kind of experience for a young person in a family of wealth has huge consequences!
That little girl is going to grow up, even though she may live in a very nice house and drive a very nice car and never want for anything to eat, she is going to view her wealth as a means… as a tool to make the world around her a better place; and she’s going to have the resources to do it.
So that’s an example, and the foundation that I run, Legacy Global Foundation, helps families create that kind of a foundation. Part of our mission is to help families create their own foundation, and have their own social capital that they can do these kinds of things with.
I hope you take a second to click the link above and look into starting a foundation for your family, so your children can learn the peace of helping others and the possibility of having a positive impact on the world.