May 18, 2023: Dr. Jamie Weiner on the rising generation’s quest for legitimacy

Bob.Allen
May 17, 2023
11 months ago
James Weiner

Dr. Jamie Weiner is a clinical psychologist and the co-founder of Inheriting Wisdom, a Chicago-based consulting firm that specializes in the human factors affecting high-net-worth families. He has written several books on this topic, the latest of which is The Quest for Legitimacy: How Children of Prominent Families Discover Their Unique Place in the World. A small-group self-help program based on the book’s findings launches this July with a retreat in Oxford, England. Dr. Weiner met with Crain Currency’s Darrell Hartman to share more about his latest venture. 

This book is for those who grew up in “the land of giants,” as you call it—in the shadow of highly prominent and/or successful parents and forebears. Many would say that they’re lucky. Are you saying that they’re not?James_Weiner_mug

It’s probably best to understand it as an advantage and a challenge at the same time. It’s a challenge because you grow up having seen people [around you] accomplish unusual success, and you struggle—usually in silence—with figuring out how you’re going to measure up. Many of the people we interviewed [for the book] are people the world would see as successful. But internally, they felt their real desires were in the shadow or that they weren’t legitimate.

What are the four phases of the “quest for legitimacy"?

The first phase is awareness. For example, I talked to a woman whose parents were diamond traders and whose dad taught her to count using a bag of diamonds. Then she got to school and learned that not everyone learns how to count this way—that how she’d grown up was different. The second phase is the tug of war: that point where you’ve begun to feel the pull between your family and the outside world and you think, “Which of these is right and believable?” The third phase is exploration. The fourth is ownership—taking agency over one’s life.

Let’s talk about exploration for a second. Why is this crucial phase such a problem nowadays?

In a classic rite of passage, there is a period of separation from the world that you were brought up in. But these rites were for tribes, and we now live in a global culture. What are our rites of passage? Most of what’s offered to the rising generation is about the tools they need to fit into the family enterprise, not about helping them discover themselves.

Some families try a version of it, though, right?

For kids of the rising generation who want to go into the family business, there’s often talk of working for somebody else for a year or two. That’s an attempt to let somebody go out and explore something on their own. But the things that we think are periods of separation — going to college, say — don’t actually serve that purpose.

Why is it hard for families to embrace this idea of a trial separation?

Two fears. One is that the wealth will be lost. Every culture has a version of the “shirtsleeves to shirtsleeves” phrase about wealth being lost in three generations, even though there’s no truth to it. The second one is a fear that the next generation won’t be able to handle what they’ve been born into. It’s a misguided sense of caring. Particularly in a generation of helicopter parents, there’s this idea that you love your kids by cutting off their wings and helping them do everything.

Tell us about a successful exploration phase.

My favorite example is of a woman whose family had done very well until all of a sudden, in high school, the business fell apart. In spite of that, she traveled to all these programs, with the encouragement of her mother, where she met people from around the world and did different things to help people. It was an exploration outside of the shadow of her family. Now, through that, she’s built her own business helping families in Mexico work through business challenges. When she went to get married, her father was upset because he couldn’t help her buy a house or anything else. But she turned to him and said, “You’ve given me the gift of helping me figure out how to do this on my own.”

Does a smoother transition between the generations, a sense that they are on somewhat equal footing, help to build and preserve wealth?

Yes, but it’s about more than that. Almost everybody we interviewed said that making a contribution within the family was important: being in the business, managing the money, some form of leadership, or feeling a sense of stewardship about what’s being handed to you.

You spoke with a lot of multigenerational families. Did you find any that had especially constructive policies with regard to the rising generation? 

I interviewed one 250-year-old family that had set up a system where you didn’t grow up believing that you would have a role in the business. There are a couple thousand people with some connection to this family, but only six to 12 of them are going to end up in ownership roles. So you don’t plan your life around that happening. That makes it very different. But I also think that this [policy] could be done in second-generation or third-generation families.

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MORE INSIGHTS: How to ensure your philanthropy has the most impact

Betty Pettine, director of philanthropic consulting for the Callan Family Office, explains the nuances of engaging in the business of philanthropy.

Philanthropy is a passion for most high-net-worth families. Yet just because it’s a passion, doesn’t make it any less of a business. As such, whether a donor is highly experienced or a novice, it’s important to approach philanthropy as you would any investment — with proper research, diligence and the right approach. Here are several steps we recommend to our families to help them maximize their philanthropic efforts.

RESEARCH MANY CHARITABLE OPTIONSPettine mug

Philanthropic giving starts with making sure the donor is aligned with the mission, vision and values of the organization. Whether it’s climate change, social justice and/or education, deciding what causes matter to you can be a challenging and personal decision.

Donors should ask themselves the following:

  • What are the issues I care deeply about?
  • What do I want to accomplish with my philanthropic efforts?
  • Where do I want to make an impact?

Some donors even consider causes that can be addressed through means beyond traditional grant-making, such as programs that are eligible for microlending, recoverable grants, impact investing and program-related investments.

Even if a donor’s cause is clear, with more than 1.4 million charities in the U.S. alone, narrowing the list to focus on those organizations that are best-positioned to carry out their stated mission can feel overwhelming. 

When thinking about possible causes, donors should research a variety of organizations to ensure their contributions will go to the most successful nonprofit. They should learn about the organization’s history and mission, research any relevant financial information and consider each charity’s track record. Additionally, they should understand how their donations will be used as well as where and when the funds will reach their intended destination.

To enhance these efforts, donors should seek out advice both within and outside of their network, speaking with experts — through online news or social media feeds — who have expertise within these areas.

CONDUCT THOROUGH DUE DILIGENCE

A great place to begin researching charitable organizations is to understand how transparent they are in sharing information. For example, the degree to which budget information, 990PF (tax returns for nonprofits) and other financial data is shared publicly can vary widely. By choosing to work with an organization that is open about its finances and spending, donors can ensure their gift will deliver maximum impact.  

The diversity and talent of an organization’s leadership team, including the board, are also important. Most donors want to see that the organization’s constituency is represented — that is, that decision-makers at the organization have a stake in the community it serves because of their lived experiences.

Donors should focus not only on how organizations use donations but also their track record in achieving promised results, as well as their approach to accomplishing their goals. For example, has the charity been successful in its past initiatives? Do they depend on and/or collaborate with entities with whom you also share values (government funding or political officials)? Are key stakeholders easily identifiable?

In addition to financial data reported to the IRS or disclosed in audited financial statements, nonprofits may also report policies, procedures or other internal information that can be helpful to a donor’s decision-making. A donor should consider whether an organization has a whistleblower policy in place for the staff, board or others to detect potential internal or external fraud. Furthermore, it may be helpful to know what percentage of the board supports the organization through personal philanthropy, to better determine their engagement.

While many of these data points are self-reported, they can be as important as mandated information when considering the overall health of the organization. For example, viewing this information in a public setting can help donors gauge a nonprofit’s willingness to share information as well as the organization’s dedication to these important details.

Before making a gift, some donors conduct a site visit. When doing so, donors may want to speak to a member of the leadership team and/or a board member whose responsibilities include knowing the organization’s mission, purpose, strategic priorities, strengths and financial needs. Additionally, their commitment to the organization and willingness to meet with funders speaks volumes about the strength of the overall board and the organization as a going concern.

Keep in mind that while most organizations are open to site visits, either virtual or in-person, potential donors must also be clear about their objectives, such as observing operations and seeing the good work being done in person, and limit any disruptions and/or follow-up reporting to what’s necessary to making an informed decision. If a potential donor still has questions, that person should consider volunteering to engage more deeply.

HOW TO CONSIDER THE TYPE OF DONATION

Finally, families should consider what type of donation they intend to make to the organization and whether they’re satisfied with how it will be measured. Will they contribute to the overall budget or restrict the gift to a specific program, project or capital campaign? Recently, many funders who typically make restricted gifts were asked to pivot during the pandemic and give toward general operating funds to support nonprofits whose needs, supply chains, staffing and fundraising were significantly impacted for obvious reasons.

Philanthropy can and should be a fun and rewarding experience that can lead to lasting relationships — all while contributing to something bigger than any single person.  

And yet contributing to positive change comes with great responsibility. Considering what causes are most important, thoroughly researching prospective organizations and keeping open lines of communication are all mission-critical to the philanthropic process. Additionally, donors must also think critically about the various ways they can help those in need, making sure that their contributions have the most positive outcome possible.

Examining all the resources and ways in which individuals and families can become more knowledgeable — such as engaging experts — can be instrumental in better understanding “the business of philanthropy.”