As Harvard’s senior philanthropic adviser, Charles W. Collier has had many opportunities to observe the social and psychological dimensions of financial wealth as it relates to the development and functioning of families. His recent book, Wealth in Families, discusses a number of his observations. In this interview, we asked him to expand on some of the ideas in his book.

Capital Ideas: Why did you decide to write Wealth in Families?
Charles Collier: Over the last few years, my presentations to alumni around the country have focused on the deeper questions surrounding family wealth, the human dynamics around families and money, and the positive impact philanthropy can have on children and grandchildren. As a result, a number of alumni suggested I write a book. Harvard agreed that it was a good idea and would provide an important service to the University community and beyond.

CI: How would you define "wealth"?
Collier: One of the main points of the book is that family wealth has four dimensions: human, intellectual, social, and financial. I hope that readers will realize the importance of the three dimensions beyond financial wealth and begin to think seriously about nurturing and developing the human, intellectual, and social capital of each family member.

CI: What are some of the challenges for wealthy families?
Collier: First, there is the issue of communication and secrecy. Most parents are not accustomed to talking with their children about money, its meaning, or its uses for them and succeeding generations. The second challenge is that as families expand and new in-laws marry the next generation, there is often great diversity within the family culture. Thus, it may be hard for families to agree on where they want to go, much less even to meet once or twice a year. I am convinced that all families ought to consider using regular family meetings as a way of guiding the development of each family member.

CI: Can financial wealth be detrimental to children?
Collier: Raising children in the context of substantial financial resources can create additional challenges in helping to develop competent, responsible citizens. Significant financial wealth (and the messages and modeling around that wealth) has the potential to curb motivation and isolate children from the real world. I believe that families with high net worth need to think seriously about sending positive messages concerning money to their children, modeling responsible uses of wealth, and undertaking a program of financial education tailored to each family member.

CI: What are the benefits of family philanthropy?
Collier: Family philanthropy has the potential to provide a safe environment in which children and grandchildren can learn the skills and competencies necessary to lead fulfilling lives and steward inherited wealth responsibly. Moreover, family philanthropy sends a message to children and grandchildren about the importance of the values of personal and financial generosity--that "we as a family believe there is something important to do beyond ourselves."

CI: In this book, you avoid any discussion of specific estate planning or philanthropic techniques. Why is that?
Collier: This book focuses on the "why" questions: Why do you want to preserve your family’s financial wealth? Why do you want to give back to society? What do you hope to accomplish with your financial wealth and why? I have not focused on the "how" questions. There are many capable advisers and much good written material (including the University’s own Harvard Manual on Tax Aspects of Charitable Giving) on the "how to." Families can use these in arranging their financial and legal affairs to create the structures and entities to accomplish their goals. What is often lacking, I believe, is good material and wise counseling on the more important issues concerning families and financial wealth. Are you the kind of family you want to be? What are you teaching your children about money? What do you really want to do with your financial wealth? These are the deeper questions that I address in Wealth in Families.

CI: You talk about the importance of family meetings in your book. Why are they beneficial to families?
Collier: Formal family meetings build stronger families. Meetings can be useful in articulating your family’s values and traditions, for example, or preserving family history, or exploring financial and estate planning initiatives, or undertaking family educational and philanthropic projects. Family meetings serve to strengthen the "relationship currency" of your family.

CI: What constitutes a typical agenda for a family meeting?
Collier: The agenda will, of course, depend on the age of your children, among other variables. Families with young children will often conduct brief meetings once a week that include the following topics: compliments, allowances, chores, new business, and concluding with a fun activity.
   Family meetings involving adults are often held once a year and can last for a few hours or a full weekend retreat. One family agenda may include:

1. family vision and goals for the future;
2. new estate planning information;
3. financial education;
4. family philanthropy; and
5. vacation planning.

CI: Is this book relevant to families of modest means? If so, how?
Collier: Absolutely yes! This book explores family wealth in all its dimensions, not just financial. I champion family potential. Financial wealth is not the key variable in achieving true personal and family happiness. However, it can serve as a useful tool to enhance the growth and develment of each family member over time. Indeed, my principal goal with Wealth in Families is to help readers articulate and interpret, for themselves, the big questions surrounding how to live their lives.

For further information, please write or call:

Charles W. Collier
Senior Philanthropic Adviser
Harvard University
Office of Gift Planning
124 Mount Auburn Streetv Cambridge, MA 02138-5795

(617) 495-5218
Fax: (617) 495-0521
Email: ccollier@harvard.edu