Date: Oct 08 2019
In this episode, Jacqueline Valouch, head of philanthropy at Deutsche Bank Wealth Management talks about the role of philanthropy in onboarding the next generation, creating successful partnerships within your family, and even working with other families to make a larger impact.
Subscribe to FOXCast on Apple Podcasts here.
Below is a transcript from the conversation:
KC: Can you start by describing the type of family that you typically work with?
Jacqueline Valouch: Sure. So, the reality for us is we work with a lot of families that are multigenerational families—whether you have entrepreneurial families looking for a succession plan or conversation, and ultimately, families that are in the midst of creating and wanting to formulate their legacies.
KC: And what are some of the goals that you're helping them work towards?
JV: You know, the most important goals for families today—and we see this globally—the goals are really having the values of the family be part of, and be integrated into, the succession planning. And certainly, the philanthropy and the long term legacy. And I think the goals we see as the most common are: How do we, first and foremost, get the next generation involved? What are the steps to take to get that next generation involved? How do we do that, and how do we do it well? How do we make sure that everyone is on board with the family's values? And then, really importantly, when you look at a family goal, it's how do we make sure that this recipe is successful? Can we create it, and be strategic enough, to make sure that it's successful? Again, because we've been a successful family, how do we make sure this succession next-gen thing is successful as well?
KC: Yeah. Are there any qualities that you see in a family that you think, they've put in the work and this has the recipe to be successful. And what are some of those?
JV: That's such a good question. I think the reality is that the qualities are, first and foremost, the patriarch/matriarch level looking to, and wanting to talk. And really wanting to get the next generation involved. I think that's probably one of the more common challenges—when you look at the membership you have in the single family office space, what we find happening is someone in the family office that has gotten to know the next gen, is really trying to bring them in, and is encouraging the patriarch/matriarch level to open that door and have those conversations. So I think the families, when you look at the you know the qualities that they may have, just their willingness to have the conversation is probably at the core.
Some of the other things that seem to be very significant is families that are very open to knowing that just because they do things one way today, doesn't mean that that's the only way to do it. And some of the more successful plans and families are those that allow for independence and autonomy in the different family members to own their own piece of the plan. How do we give someone something that they can own, so they can have that responsibility with the wealth, feel accountable? Those are the qualities of the families that are having the conversations, even if they're in the beginning stages, or later, that you can really see in a successful environment.
KC: And for families that haven't yet had those conversations, or are wary of having them, what are some of the barriers? What have you observed?
JV: You know, great question. I think what we observe the most, of course, is that people are very hesitant to talk about wealth. Many families have really stayed away from sharing the level of wealth with the next gen. I think there are a lot of families that don't know how to start the conversation. And so the role of the family office head, and the advisers surrounding the families that we're working with, is critical in really encouraging someone to take those first steps. I think that's really the bigger challenge for families is, how do I even start this conversation?
You have to consider, if you haven't really talked about the wealth of the family over time and gotten the kids and next gen used to the conversation, that it would really come out of nowhere. You have to start, in many ways, in baby steps. Both with the patriarch/matriarch level and the next gen. You know, it's not sort of the shock to the system on either side, but really starting with the introduction of being responsible, right, regardless of the level of wealth.
KC: And with these multi generational families, do you feel that the first generation kind of needs to set a precedent in how to have these conversations?
JV: I think that the next generation likely expects and assumes that an older generation would actually open the conversation, and set the conversation and the foundation of it, which is not always the case. I mean, we have a lot of different matters where someone in the next gen was really empowered to go to the patriarch/matriarch level and propose that they start to have the conversations. So I think there's a wave of the next gen trying to own the conversation, which can go very nicely also. But I think you have that happening, too, which is a good thing in many ways because it's almost eye-opening to the patriarch/matriarch level that you have a next gen that's willing to own something, right? That's actually taking the interest and wants to have the conversation, and wants to have the awareness, and wants to plan.
KC: So what role do you feel Philanthropy plays in integrating the next gen into all the wealth planning conversation?
JV: I think it's a tremendous part of the conversation. I think of it as the stuff that we have seen, and I'm thinking of the families we work with globally … So, we have, you know, all different cultures. And all different levels of what multi-generation means, you know, throughout Europe and all of the other regions within which we work in Africa and Asia and certainly the Americas. And when you look across the board, one of the common themes is that next generation taking part of the plan. And I will say that is just a common theme throughout all the families—someone in the next generation is either involved in the business, or getting involved in the business, and happens to have an interest in the philanthropy, and is now playing a bigger role in the philanthropy.
The philanthropy conversation, regardless of culture, regardless of region, is this really non-threatening way for a next gen conversation to really take hold. I mean, if you think about the philanthropy conversation—we're working with a couple of different families that I think about internationally—you have next gen has taken a particular interest. They have the ability to own something. They have the ability to prove to the patriarch/matriarch that they can make a plan, like a business plan. They can consider the investments of that plan and the investments of their philanthropy. They can consider the impact of what they're doing, and they can also analyze who they're giving their money to, meaning in the form of a grant. So that that philanthropy wrapper allows them to really own something that can look very much like a business.
It's interesting when you look at the multigenerational families because, oftentimes, we lump that all together and we just assume the next gen is all interested in philanthropy. But the reality is that, generally, that's not necessarily the case. You can have multi-generations, you can have two siblings, and you can have one sibling who is particularly interested in pursuing the philanthropy piece. And so, that in and of itself is great because that sibling can actually own it and really make a plan with the other sibling on this: “This is what I like. This is this is my thing. So let me do this on behalf of us, on behalf of our generation.”
KC: Yeah they can kind of have a partnership without doing the same thing.
JV: Exactly. And we do have a couple that are very similar to that, where one person is just really passionate and the others are kind of fine with what the parents have done. And so that’s unique, and really also, when you talk about these successful qualities, really successful. Because that that's really just identifying—the family is gone out of their way to identify who is particularly interested, right? Who is good at this, wants to be good at this, wants to learn more, and then can actually take it on for the other parts of the generations, the other siblings?
KC: Or cousins or whatever it is.
JV: Yeah. And that's great. Those are really great examples of having a next gen, not necessarily know they could step up in a leadership position within their own family, but they do because of the passion for philanthropy. And they've been really great. You know, I think of a couple and I think as far as really satisfying, those are. That's the recognition that I can lead my siblings, my generation, because of this particular passion of mine.
And then the other thing there is that particular sibling collectively looking at, "what are my brothers and sisters, and whoever else, cousins, what do they want to fund?" What are some of the things we can do that really just speak to our generation? That one or two people can own.
KC: Are there instances that working with a family to define philanthropic goals can teach them how to work together?
JV: Oh sure, yeah. There are so many examples of sitting down … I think, importantly, the best examples of those are sitting down and trying to find out what some of the common causes and goals are. Really very much by asking each person, “let's go through and really list what are some of the things that you care about or you think you care about?”
And then one of the great exercises we've seen work really nicely is then constantly going and continuing on that list, so to speak, and asking, "why?" You know, really digging down deep into, "why do you care about getting hot food into school age children in low income areas?" And then continuously—so one family member may have an answer—but really then, as a family, going deeper and saying, "why?" Tell me why you care about that.
Because ultimately, when you ask "why" enough, and you unravel why someone may like a particular cause, you can chip away at some of the common things that other people around the table may also care about. And can you keep the layer going? So that's a great practice—having a family sit and really list what they think are the things they care about and then asking each other the "why."
KC: Right, it can kind of help define their values.
JV: Oh yeah. It's an incredible process. I mean, even if you know you tried it on yourself and you list "three things I think I care about," and you say "why." You know, "tell me the 'why' that’s behind that?"
I think what we're seeing more and more of is people that are realizing that they were doing philanthropy without using their business sense to do it, right? You know, they didn't apply the things that made them successful to their philanthropy. And I think we're seeing a lot more people start to do that—really put more of their business hat on and say, "OK, let me look at this like it's an investment, because it will only do great things for the cause, and it'll be better for the philanthropy in the long-term and short-term if I do this in a way that has strategy, has a plan, and has metrics." So, we're seeing much more of that.
And I'd say that one of the the final trends is idea of collaborating. I think people shied away from that for many years, but they're starting to see how powerful can be. You know, some of it is that the Buffets, Gates, and other big funders sending are money to big funders. And so, I think there's a little bit of that at play that we'll continue to see increase.
KC: So, what are some of the logistics of getting families together around a cause and really making an impact?
JV: So, good question, because I think one of the things we've seen in many of the families is, at least, openness to convening and collaborating. And so, the important thing in that is really identifying, "do they have the ability to be valuable introductions to each other?" You know, should they be sitting at the table? So, the logistics aren't too difficult with some of the larger families knowing that, at any point in time, they may either be in their home country or one of the big cities or where they may have business interests. So I think you're always trying to maybe align around something else that may be going on of interest for those families. You know, if you're if you're meeting in New York, are other things happening at that time that may align with some of the interests that they have? You know, if you knew they were particularly keen on art, is there something going on in New York like Frieze or something else during that period of time that just may be attracted to them? Or in London? So I think for our purposes, it's trying to meet in a convenient forum.
Again, the learning of what they have as common interests can only be done by talking, learning, and listening with the client. And that's really uncovering what do they really care about and knowing that someone else that's sitting you know maybe thousands of miles away that we're working with cares about that same thing but they may not know each other.
KC: That's really cool. Being able to connect the dots there.
JV: Oh you know it's been it's that's so exciting to me. Probably one of the most exciting parts because families, if you're talking about significant wealth and care about care about a particular cause it doesn't mean that they know someone sitting in another country that cares about that same cause it doesn't matter how much they may have or who they know. It doesn't mean they know others that are interested in perhaps collaborating with them on their philanthropy or on a particular project.
The other thing we have seen that's been really wonderful with families, is families that are doing philanthropy for years that have some successful models have been really open to sharing and having families that are newer to philanthropy learn from them. And really, I think, for this space, that's incredibly valuable for families to be able to learn from each other on things that they're doing in philanthropy that do or don't make sense for another family—just good, best practices and learnings that a family can really benefit from.
KC: Great answer. Well thank you so much for chatting with me today about this. It's really inspiring to hear you—clearly very passionate about what you do. And if somebody wanted to get in touch with you how could they go about doing that.
JV: Oh sure, they can certainly e-mail me to email@example.com. Or they can call me at 212-454-0010 and I always love to be a resource in any way that would be helpful to inspiring people to do a little bit more of their philanthropy.