Family Wealth & the Greater Good

I highly value recommendations from Phil Cubeta at gifthub.org. He recently recommended Family Wealth: Keeping It in the Family – How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations by James E. Hughes, Jr. He also described The Greater Good: How Philanthropy Drives the American Economy and Can Save Capitalism by Claire Gaudiani as one of the recent books making the case for philanthropy. Both authors are silent on the real sources of wealth in our society. That aside, both books are quite useful.

Jay Hughes addresses the preservation of wealth in a society where the common pattern is for one person in a family to go out and — with no time for the family — make a bundle. Then the moneymaker and/or others in the family try to build a strong and balanced family with the resources thus provided. While Hughes’ insights are a treasure chest for a wealthy family, I have an additional pattern in mind. I think families that want to become wealthy together can learn much from Hughes as well.

From watching overseas Chinese families operate over several continents, numerous immigrant families build wealth together in America as well as increasing nepotism in American political and business families, I am convinced that families that learn how to operate in a strategic and/or syndicate form can become wealthy in a more diverse and lasting way. I think Hughes’ advice and lessons can help a family willing to plan and act in concert to become wealthy. Given the nature of our times, I think such family “conspiring” will become increasingly important to surviving and thriving. As I often say in my speeches, the family organization is the most successful risk management tool created by society to date. So Family Wealth is strongly recommended for families that want to grow wealthy together as well as those that want to preserve wealth.

Claire Gaudiani does a fine job (Peter Drucker and Edward Deming are my favorites) of describing the contribution of human and intellectual capital to a strong economy. She does this by telling story after story of one person or a small group of people seeing an essential and important need and responding to it in a philanthropic manner. Her collection of stories and examples is a resounding testimony to the value of entrepreneurial action and philanthropy. I am always astonished at the generosity of Americans with both time and money — this is one of the best parts of our culture. I did not know many of the stories that Gaudiani told and found them fascinating and inspiring.

3 Comments

  1. Thank you for the link, but also for the insights. I had missed the “family syndicate” aspect of Hughes, or had not highlighted it. Have you ever run across Old Money by Nelson Aldrich? He describes the old WASP system, of which Hughes is very much a part. Each child is placed in a role that allows the family to operate as a syndicate. One is mayor, one chief of police, one owns the bank, another is a Bishop, another runs the paper, etc. Another great source is Walter Lippman’s Public Opinion. He shows how common sense is managed by these syndicates, whether of families interwoven, or cliques formed in the salons where the Bishop shares canapes with the runner of illegal rum – well, he doesn’t use that example, but it is implicit.

  2. I have not come across Old Money. It sounds like something I would enjoy. A critical ingredient to building great communities is nurturing and supporting successful families and their successful investment and wealth in places — and connectivity within and between families from place to place.

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