There is a strong connection between managing private wealth and governing a charity: both involve a form of trusteeship. Although by no means always so (and you’ll readily think of people at the other end of the spectrum), personal wealth is treated most enduringly as a role akin to that of a trustee rather than a winner. Some have a gift, and people will act differently in possession of that gift; some with a personal (or selfish) interest, some with a wider interest. This latter type of behaviour often drives a further connection, in that philanthropy and charitable generosity often arise from that individual trusteeship posture.
Allow me a sobering interlude before I return to that point.
Business and personal development can both suffer from a fundamental weakness: the growth drive. Growth is not necessarily bad of course: one has to keep up after all, but one should also keep perspective. The growth drive I mean which is negative is growth as a priority above all else – the notion that prices must go up; wages must go up; capital must go up; sales must go up; turnover must go up; so scale, acquisition, market position, assets, headcount, bonuses, share value, ownership, investments, net worth …. must all go up.
But why? Is there no level which is optimum? In business, most people act as if enough is never enough; you must move ahead or you fall behind. Naturally, it’s better to be sure of assets, savings, reserves, investment, in order to be sure of the future. But, though we may rarely admit this, it is not possible to be absolutely sure. No project, asset base or net worth is ever entirely secure and no business will ever thank you for giving your all. Not really: when you leave (and you will), the waters will close over as soon as your ship’s wake has settled. In personal wealth too: if you’re working hard for yourself, that is only for the duration plus those you choose in your Will. If you think otherwise, you’re a fool.
Both personal and business wealth also have this in common: multiple ingredients beyond our control. Of course intelligence, hard work, acumen, creativity and bravery are crucial. But so too are many factors outside your control, including a regrettable amount of luck.
So, if you’re fortunate enough to be leading a financially successful life, family or business, remember all that. It’s partly from your input I’m sure, but partly it certainly isn’t. Your deliberate actions are taken in that context of ingredients. And as with so many things in life, those ingredients are often not down to you, although your reaction to them most definitely is.
Individuals and families usually take the long view when managing their wealth and investments – assuming they have wealth to manage of course. To shore up retirement, leave assets to their family, avoid paying unnecessary tax, and perhaps even for legacy reasons, one needs to balance the needs of today with the uncertainties of tomorrow. Charity trustees must also take the long term view.
And so, lets return to personal wealth management and philanthropy. People with money and other assets to manage will do so with an overall aim in mind. Capital growth and income generation are sound aims, but subordinate to a higher purpose because the increased wealth will usually be for the purpose of funding a lifestyle or retirement. Long term purposes are greater than short term needs, although the two must be balanced. The best interests of the individual’s or family’s long term guide the decisions. This concept is identical to the duties of charity trustees, who must always act in their charity’s best long term interests, even whilst they govern the current requirements of the charity.
Individuals who act like trustees of their wealth rather than self-congratulatory hoarders who see themselves as deserving winners, consequently make decisions in the best interests of the current and future needs of themselves and their families. They also tend to favour giving benefits to a wider circle of need in the form of philanthropy. Acting as custodians and not deserving winners makes for wider perspectives. They are also often good candidates for being charity trustees.
Present and future; action and luck; immediacy and perspective; personal assets and others’ needs. Some have a gift; and some of those treat it like a trustee.
