November 29, 2005
by Phil Cubeta
The following essay was prepared for a discussion on bequests and legacies—part of a series of six discussions entitled "The Dialogues on Civic Philanthropy: Perfecting Our Grants" (2005-2006). By clicking the links to the right, you can access more information on this series, learn about the Dialogues project as a whole, read other prepared essays, and download discussion transcripts.
The Case of the Forest Primeval
PERHAPS AN example, fictionalized from real cases, might isolate our key issues.
Sarah, age 36, and her brother, Bill, are heirs to a fortune made in the forestry industry in Northern California. Their family now has holdings of approximately $55 million, including raw land with first growth redwood trees, but most of the family wealth is now in now in gas and oil stock in a family owned company, run by Bill.
Each year the family has a meeting with their family officer, Alex, to plan the family’s giving in the light of their overall goals and objectives. Sarah is an environmentalist who has been trying without success to have at least $7 million worth of the old growth lands contributed to the Trust for Public Land. Her father had consistently refused. Sarah’s Dad recently died, leaving Sarah’s mother, Meg, as the key decision-maker. Bill’s philanthropic, business, and political interests converge. Along with donations to conservative political candidates, he contributes large sums each year to a libertarian think tank in Washington, DC, that lobbies for tax breaks for businesses, income tax relief, estate tax repeal, tort reform, and regulatory rollbacks, particularly for the oil and gas industry.
Meg’s sympathies are divided. Her heart leans to Sarah and the environment, but her head leans to the Bill’s strategic philanthropy. He tells her, what her husband did, that the weak perish and the strong survive. The best rise to the top. The best way to help others is to maximize net profit. The family’s responsibility is to grow the business that creates jobs. The best way to do that is to align all the family resources, including its political clout, its family foundation, its charitable contributions, it business entities, its PR efforts, and the various thinkers it can hire, to drive a single coherent agenda. As a compromise Bill offers a series of public service announcement from the family foundation aimed at the environmental community touting prudent forestry through selective logging. He suggests that Sara be the family spokesperson. She angrily refuses. Meg, steps in and suggests that it might be a good time to break for lunch.
Meg, after the group disperses with little progress made, wonders what will be her legacy. To whom has she given what, as a mother? What values have she and her husband passed on? How can she create some semblance of family harmony? As the majority owner of the family resources how will she allocate them between her children and the family foundation or foundations? She has a pre
Phil Cubeta, CLU, ChFC, MSFS, CAP, is chief of staff and “charitable cheerleader” for a financial services group serving affluent clients with tax, financial, and philanthropic strategies. He blogs philanthropy at http://www.gifthub.org.
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