Thought Leader Series

Social impact bonds, sometimes known as “Pay for Success” projects, are contracts with the public sector in which commitment is made to pay for improved social outcomes, which may result in public sector savings. Despite their name, social impact bonds are not bonds; they are public or private partnerships in which investors are repaid if and when improved social outcomes are achieved.The first social impact bond, ABLE (the Adolescent Behavioral Learning Experience Program), was launched in 2012 as a partnership between Goldman Sachs, Bloomberg Philanthropies, and the City of New York, accordi...

The adage “Shirtsleeves to shirtsleeves in three generations” became a well-known prophecy because it is, unfortunately, true. And it appears to be true in virtually every culture. In Ireland, the saying is, “Clogs to clogs in three generations.” In Italy, it’s, “Stable to stars to stable” in the same time frame. In Japan, “The third generation ruins the house.” The Chinese proverb is, “From paddy to paddy in three generations.” Brazilians say, “Rich father, noble son, poor grandson.”What it often means is that the first generation works hard to build the wealth and a better life for the famil...

Trillions of dollars are beginning to shift within ultra-high net worth families to a new generation of heirs, according to a recent Accenture study. As this transfer of wealth takes place, what giving trends from millennial philanthropists can we expect to see in the years to come?To help answer that question, our parent company BNP Paribas teamed up with The Economist Intelligence Unit to publish the 2017 BNP Paribas Individual Philanthropy Report. The report is based on interviews conducted from November 2016 to January 2017 with ultra-high net worth millennials and relevant experts in the ...

The acronym ESG stands for Environmental, Social, and Governance. It refers to a mode of screening investments that considers environment, social and corporate governance disciplines as criteria, seeking to achieve both competitive financial return and positive social impact.ESG is part of the socially responsible investing (SRI) spectrum, and it is the most common portfolio screening that Family Wealth Advisors conducts.ESG in actionAlthough most ESG screening is done by wealth managers themselves, Thomson Reuters provides structured and standardized ESG research in easy-to-navigate databases...

As an entrepreneur or small business owner first starting out, you may have the desire to make philanthropy a core principle of your business but feel you have to put that desire on hold until you earn more money.But Vern Mangels believes you should not give in to that feeling. “You have to start with the intention that you are giving back from dollar one,” said Mangels, CEO and owner of the Anaheim RV Park, a family business that his grandfather started 61 years ago as Midway Trailer City. “Give back even when you don’t have much to give.”One route to merging business growth with giving Since...

When performing an analysis of a client’s unique personal risk profile, we often find that their assets relate to their special interests. Whether it is a passion for fine art, fine wine, or exotic cars, a hobby can often grow into a valuable asset. For those who have an interest in new technology, bitcoin could be a very exciting possibility. While some may view bitcoins as an investment, it is more generally defined as virtual currency. As early adaptors dive in and experience this still relatively new concept of regulation-free spending, they are discovering the limitations and risks a...

You can’t have a conversation about the future of the global economy these days without the subject of US presidential politics coming up. From trade to immigration to tax reform, the policies that Donald Trump implements could drastically impact markets all over the world – and that impact is already being felt. The challenge is that forecasting what the President might do during his time in office is nearly impossible. Trump prides himself on his unpredictability, but that’s not the only reason it will be difficult to figure out what he’s going to do. In order to enact any of his policies, h...

One of the fascinating things about philanthropy is its variety. Every philanthropist’s approach is unique based on a number of variables, including resources, talent, interests, and intentions. Some philanthropists follow complex strategies, others may be laser-focused on a single charity or solution.Many philanthropists want to make an impact, no matter their level of wealth. This could mean devoting time, talent, and treasure to a cherished cause. It could also involve various charitable vehicles or selected investments that yield financial returns as well as achieve an altruistic goal. The...

When the family friend of Dustin Hoffman’s character in the 1960s film The Graduate took the young man aside to offer him career advice, he had just one word of advice for the young man: “Plastics.” If there were to be one word I’d offer leaders of family businesses today, it would be “Neuroplastics,” for the discovery of the plasticity of the human brain has revolutionized not only modern neuroscience, but also leadership science.Breakthroughs in understanding the plasticity, or changeability, of our brains shed new light on how the human brain functions and how our minds actually influ...

Many of today’s ultra-wealthy philanthropists are looking for smart ways to make their donation dollars work hard for causes they care about deeply.They often value additional guidance on how much to give, through which funding vehicles, to which charities, over what timeframe, and with what purpose in mind.I’ll often encourage such clients to consider new choices in the shape of Purpose Investing. Purpose Investing combines charitable donations with investments in companies designed to build wealth and contribute actively to society. It allows clients to expand philanthropic impact by directi...

Margaret hired the neighborhood girl down the street to watch her children a couple days a week and run some simple errands for her. She never imagined that when she did that, she became an “employer” with all the legal implications that go along with that title. She is now being audited by the IRS and they are breathing down her neck, imposing fines and back taxes. Don’t let this happen to you.Before you decide to start paying someone to give you an extra hand, you may want to take a few added steps to be sure you are making the best decision and not creating potential legal problems for your...

In our work with ultra-wealthy families, we have seen that those families face some fairly unique risks that ordinary people or business would not typically need to think about. When family offices are doing a risk assessment, these are five questions I strongly encourage them to consider: 1) When was the last time your family clients reviewed their personal property and liability insurance?Successful individuals acquire assets over time, and it’s not unusual to engage with multiple insurance brokers or companies to respond to each immediate need. Be cautious if assets a...

Recently, I was reflecting on how uncertainty impacts our lives. For instance, modern technology provided ample warning (aka “certainty”) to the East Coast ahead of January’s once-in-a-lifetime blizzard and yet, tragically, some people found themselves unprepared. This is in contrast to the life experiences of many Midwesterners, who over time have learned how to prepare for and coexist with winter storms. I carried this theme of uncertainty into my ritual reading of the weekend newspapers, and through this lens, I was collectively left with the realization that I had no idea of what is ...

In December 2015, Facebook CEO Mark Zuckerberg announced he would transfer 99 percent of his Facebook shares—a sum currently valued at $45 billion—to the new Chan Zuckerberg Initiative, a philanthropic endeavor that will be led by Zuckerberg and his wife, Dr. Priscilla Chan. The Chan Zuckerberg Initiative LLC raised the question about why some philanthropists choose a limited liability company (“LLC”) instead of a private non-operating foundation (“foundation”) to carry out their mission. The move sparked much discussion about their innovative approach to giving. For philanthropists consi...

"I'm wondering if it's time for us to add outside experts to our advisory board," Julie Jacks mused aloud to her cousins. "Experts who would bring fresh ideas and who would have some gravitas around here." Julie and her cousins were gathered at the brown-bag lunch session they held each week in order to connect, share ideas and concerns, and offer updates on their various lines of business. Since last year's leadership transition to their generation (the third), they'd used this casual forum to strategize how to work most effectively together as the next generation family leadership team...

Recently, a family I advise came to me looking to plan a family meeting. Inevitably, the question came up: “Well, should we do it at Thanksgiving or at Christmas?” My response? Avoid both. There has been a growing recognition by families of the need to prepare future generations to be responsible owners and stewards of the family’s wealth. Family meetings can play a role in this process. If it’s been awhile since the last family meeting, the holidays may feel like the perfect opportunity to share details about the family’s succession or charitable giving plans. However, convers...

Stop for a moment and think about the leaders in your world. Consider friends, family members, teachers, colleagues and business partners. Which of these people would you consider to be the "best” leaders? Who stands out and what makes them stand out above others? Perhaps it's because they show you they care about you as a person, or because they are authentic, honest, trustworthy and reliable. Maybe they listen to you in a way that you feel heard. Maybe they believe in you, challenge you in a good way and, above all else, have your back. Perhaps it's because they are able to balance thei...

For many, owning a horse is the realization of a lifelong passion. However, it can also increase your risk of financial loss or even lawsuits. Whether you board your horse on your own property or at a professional facility, it’s important to ask yourself, “Am I protected against the potential risks?” Here are the top five questions horse owners should ask their advisors about their equine coverage: 1) Do you have clear proof of coverage on your policies? Many owners assume their horses have coverage under their homeowners policies, but limitations or exclusions are common. That ...

Earlier this year, one of my clients came to me with a question about her family’s trust portfolio. She was worried that, despite it going against her own personal social values, she (along with the rest of her family) was investing in cigarette companies. “Do we really have to invest this money in cigarette companies?” she asked me. “I mean, there have got to be more socially responsible investments than that.”The question raised some important issues that trustees might face when it comes to the trend more commonly known as socially responsible investing. And while it might seem like avoidin...

Families of significant wealth rightfully expect their attorneys, investment professionals and CPAs to be creative, effective advisors. It's time they expect the same from their banker.Banking is one aspect of wealth management that affects the family every single day. Yet, despite the increasingly complex needs of families with significant wealth, they and their family office professionals often view banking as a tactical, commodity service. The banker is merely an order-taker, opening and closing accounts, sending wires, etc. and competing for their business based primarily on rates and fees...

Family wealth is notoriously difficult to maintain across generations. Without a powerful strategic vision, statistics show that family wealth is bound to dissipate. One useful strategy for nurturing a legacy is to foster an entrepreneurial culture within the family.Most families of wealth began their stories generations ago with an entrepreneur—a risk-taker with vision, tenacity and optimism—who magically created something of value, seemingly from thin air. Later generations, who benefit from the wealth that was built, feel they have more to lose and grow more and more conservative. Meanwhile...

CFOs are increasingly using Accounts Receivable (A/R) Insurance as a strategic tool to support business growth.A/R Insurance, also known as Trade Credit Insurance, has long been a standard corporate operating procedure in Europe, where complex cross-border trade makes managing receivables a significant challenge. In the United States, A/R insurance is now becoming increasingly relevant to senior finance executives as companies seek new and better tools to manage risk, improve liquidity and support sales growth. Here’s how:Manage Risk - For many companies, A/R is the largest asset on their bala...

It used to be very difficult for beneficiary’s to change the terms of previously-established trusts, and if they were able to make the changes at all, it could be quite costly. But through a process known as “trust decanting,” trustees can “pour” the assets from an older, less-desirable trust into a new one. This essentially allows beneficiaries to change or rearrange the structure of the trusts.Many states have enacted decanting statutes in the past few years, and there has been a corresponding increase in interest in decanting and changing trusts. Here’s what Mark Harder, Partner at Warner N...

Families with significant wealth often tell us they wish to deploy a portion of their resources to make some kind of positive impact—broadly defined as doing good for people and the planet. We know that for many clients, the pursuit of impact is fundamental to their efforts to define their family or foundation legacy. While one way to achieve impact is by giving time and money to nonprofits and foundations, philanthropic activities can be complemented by impact investing.Impact investments are made with the dual goal of return on investment and positive social and environmental good. Impact In...

A client of mine once characterized Wealth Integration as a “fiscal physical.”Initially, I wasn’t all that flattered by the comparison. However, the more I thought about it, the more I came to realize that this unfortunate-but-fair description accurately recognizes that, like a medical physical, a fiscal physical is something that one knows should be done,but may not look forward to doing. The entire estate planning, financial planning and accounting process may actually fall in this category—clearly, few family members awaken thinking, “Wouldn’t this be a great day to call my attorney, financ...