How families can create a strategic philanthropic mission statement

This article is brought to you by RBC Echelon, a suite of private wealth management services for ultra-high-net-worth clients, and Arabella Advisors, a consulting group focused on helping clients achieve more impact with their philanthropic giving.

For families looking to make a philanthropic impact on the causes that are most important to them, it can feel like trying to fly a plane without a manual.

Figuring out where you are headed, how best to get there and how to get everyone onboard is not always easy—and can sometimes seem overwhelming.

The good news is you can create that operating manual yourself, with the first step in the process being the development of a philanthropic family mission statement.

A clear distillation of what your family stands for and the causes that are most important to you, a mission statement can serve as a giving guidepost not just for the creators of the family wealth, but for the generations that follow.

“A philanthropic mission statement can be a critical part of ‘North Star’ planning for high-net-worth families,” says Jordana Belke, director at Arabella Advisors, a firm that helps individuals and institutions craft and implement giving strategies. “We like to help people think about what success looks like, because that can be different for each family. A mission statement is a key tool to help you focus in on the values you really care about.”

How to get started: making a plan

Creating a philanthropic family mission statement takes careful planning, especially if the individual who generated the family wealth has previously handled their philanthropy on their own. If that generation is now inviting more family members—such as their children or grandchildren—to participate in that philanthropy, they’ll want to consider the extent to which they want people involved.

For example, are they hoping for younger generations to help select a charity in an area that has already been decided on—such as early childhood education or animal welfare or cancer research? Or are they asking for even deeper involvement, perhaps having younger generations help determine the broader areas of focus from the start? Establishing that kind of clarity at the beginning of the process can help everyone understand what is required of them, and can help avoid potential confusion and hurt feelings.

“When you are inviting the next generation in, make sure you are ready to do so personally, and make sure you’re considering everyone else,” says Betsy Erickson, head of family and individual services for Arabella Advisors. “Think about those family members you’re inviting: What do they want to do and what do they not want to do? Make sure you get the invitation right, because you have only one chance to offer it.”

What the process looks like: Putting pen to paper

Once the idea of crafting a philanthropic family mission statement is formed, the next step is the practical challenge of making it happen. Convening a family meeting is an obvious starting point, perhaps over the holidays, when multiple generations usually get together.

Getting professional guidance here can be a good idea, since there are a number of potentially volatile elements involved, from family history and power dynamics to emotions and money. Having a third party—such as a wealth advisor—run the meeting can help you navigate this terrain and think through various complex issues.

The meeting can look very different depending on the family and how much detail they want to include in a mission statement. A statement could be a couple of sentences to a few paragraphs in length, or it could be a brief, concise paragraph supplemented with a longer, more explanatory “intent letter” that talks about the history of the family and why certain themes or values are so important.

For a family interested in education, a potential statement might read: “We aim to expand access to humanities education that inspires and equips teens to question, care, create and make change.”

Alternatively, if a family is more focused on economic mobility, a statement could describe how the family aims to “promote equality and reduce barriers to opportunity by increasing access to education, health and financial resources to support those who strive for a better life.”

Revisiting the mission statement

Once the philanthropic family mission statement is agreed upon and transcribed, don’t think you are stuck with that exact wording forever. It’s your document, and you can go back and change it as needed. After all, life is constantly evolving: Circumstances, wealth and preferred charities can change.

With that in mind, review your statement annually to make sure it still makes sense, or to see whether there are elements you would like to add or subtract.

It can also be changed depending on the success a family foundation or donor-advised fund is—or isn’t—having. If the focus and outcomes aren’t working out as hoped, then perhaps some adjustments are needed after seeing the results on the ground and learning more about the best use of your charitable funds from those closest to the issues you care about, says Belke.

Mission statements as teachable moments

While a philanthropic mission statement can make a difference for charities and communities, it can also have a critical impact on younger family members who are likely being brought into these kinds of financial discussions for the first time.

In that way, creating a family mission statement can be a teachable moment. Young adults may have yet to consider how to handle significant financial resources thoughtfully and responsibly. But in future years they will have to do so, and this can be the first step on that journey.

“I find that with many families, charitable giving is an important piece of their values,” says Liz Jacovino, a wealth strategist at RBC Wealth Management–U.S. who specializes in guiding ultra-high-net-worth families. “Having the younger generations participate in charitable giving is a way for families to promote those values. Those next generations get to understand their purpose in the family, and having an articulated mission statement can put some structure around that.”

While significant wealth is a responsibility that should be taken seriously, a philanthropic family mission statement shouldn’t be something to dread. When a family has the financial means to change its corner of the world for the better—and perhaps get closer as a family at the same time—that is a rewarding and energizing prospect.

“It should be an enjoyable process, not a burden or a chore,” says Jacovino. “Ideally, families are doing this with joy.”