As Donor-Advised Funds Take Off, Five Potential Pitfalls to Consider

I found this recent Wall Street Journal article helpful in understanding the pitfalls of donor-advised funds. ENJOY!

By Veronica Dagher

Donor-advised funds have become the hot thing for philanthropists who have grown weary of foundations.Picture of money, donor-advised fund

These setups promise a number of advantages over foundations, such as lower annual costs, more privacy and no required minimum payout each year. A big difference between the two is control. In a foundation, the philanthropist calls all the shots about where the money goes and tackles all of the administrative duties of running the operation. With a donor-advised fund, the fund’s managers do all of the back-office work—and have final say about distributing the charitable dollars.

As the name implies, donors can give guidance about donations, and very often their wishes are carried out, but there’s ultimately no guarantee that the chosen recipients will get the money if they don’t meet the fund managers’ standards.

That’s just one of the challenges that donors face when shifting a foundation’s assets to one of these funds, or “collapsing” it. Here are some of the biggest to consider.

State Regulations

Foundations are required to notify the state in which they reside when they have an impending status change, says Ben Pierce, president of Vanguard Charitable. Each state will have regulations for filing procedures, and some may require regulatory approval for the dissolution, he says.

Leave Enough Money

People often grant the full balance of the foundation to the new donor-advised fund. But that may mean there isn’t enough money in the foundation to wind it down, says William Sternberg, vice president of philanthrophic services at the Minneapolis Foundation. Wind-down costs typically include a final tax return, excise tax and grant obligations outstanding, he says.

Remember Illiquid Assets

Some assets in a foundation, such as a hedge fund or real estate, may be hard to sell quickly, says Mr. Sternberg. That could lead to problems while collapsing the foundation if all of the liquid assets are in the donor-advised fund and “the private foundation ends up with a minimum distribution requirement and may not have sufficient liquidity,” he says. Philanthropists might be forced to sell assets at a loss to make the distribution.

Look at Obligations

Givers should pay careful attention to the relationships their foundations have with charities—because all of that may change with a donor-advised fund. Remember, there’s no guarantee that the charities will still be able to get funds under the new setup. So, donors should give charities plenty of notice when collapsing a foundation, in case they aren’t able to provide funding anymore.

Beware Family Dynamics

Unlike a foundation, donor-advised funds aren’t allowed to pay the donor’s family salaries for the personal services they provide, financial advisers say. Families can also get tripped up if some members have a strong emotional attachment to the foundation, says Henri Cancio-Fitzgerald, philanthrophic-services specialist at Wells Fargo Private Bank.

Source: WSL.com Ms. Dagher is a columnist for Wealth Adviser at WSJ.com. She can be reached at veronica.dagher@wsj.com.

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Paper Trail: An Abundant Gore Vidal Collection Gets Archived

How a mess of papers becomes a priceless archive. —By Eugenia Williams

Boston Magazine | March 2014

philanthropy, philanthropic gifts When Gore Vidal gave his manuscripts, notes, and letters to Harvard in 2002, Houghton Library – home to a number of noteworthy archives – so impressed the author that he bequeathed his entire $37 million estate to the university upon his death.  As Vidal’s gift wends its way through the legal system (his half-sister has challenged his will), some of his papers sit in boxes waiting to be catalogued in the basement office of Houghton curator, Leslie Morris.  Here, Morris explains how a collection like Vidal’s makes the journey from boxes of stuff to researchable archive.

1.

While the tax code once allowed living authors to claim a deduction for their donated archives, these days a Nobel laureate’s draft is worth no more to the IRS than the paper it’s printed on. This legal change has forced curators to purchase collections through dealers—driving prices up so high that even Harvard must sometimes pay in installments to afford them. Some authors might even occasion a fundraising effort, as was the case with John Updike, whose papers the university bought for an undisclosed sum in 2009.image of post cards, letters and cup of coffer, philanthropy

 2.

A good archive reflects its author’s inner life. Updike’s contains items that factored into his novels, including hospital pamphlets, postcards, and a bag of Keystone Corn Chips. Not everything makes the cut: “We do like to have some personal objects,” Morris says, but not all. “We don’t have room.”

3.

philanthropy, man standing in front of pile of boxesWhen an archive arrives at the library, Morris and her colleagues roughly sort it into boxes. Hence the present disordered state of Gore Vidal’s papers, which came to Harvard in nearly 400 cartons. Once an archive is catalogued, anything can happen. Warren Beatty was once spotted in the Houghton reading room hunched over the papers of Harvard alum John Reed, whom he played in Reds. But Morris says that researchers shouldn’t fear hunky actors: “It doesn’t happen here all that often, I have to say.”

 4.philanthropy, boxes with a checkbox on one and a circle with a line in it.

Just because someone gives Harvard his or her manuscripts free of charge doesn’t mean its libraries will accept them. Morris says that Houghton regularly rejects papers that don’t fit within its collections. So how do they decline them? “Gently.”

Source:  Boston Magazine – entire article can be found here: http://www.bostonmagazine.com/news/article/2014/03/04/gore-vidal-archive/

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

A Mother’s Last Gift to Her Children May Be a Legacy Video

non-profits, philanthropyThis recent Wall Street Journal article by Jeanne Whalen really touched me.  What an incredible gift to ‘leave’ your family.

Just So You Know, Thru My Eyes Are Nonprofits That Create Legacy Videos at No Cost to Patients

Before she died of cancer in 2011 at age 43, Michelle Wallace recorded a legacy video for her newborn son. Her daughter, Kallie Greenly, talks about making the video with her mother. Photo: Ben Sklar for The Wall Street Journal

The day Michelle Wallace gave birth to her fourth child, her doctors discovered she was suffering from an advanced case of endometrial cancer.

Ms. Wallace worried she was going to die before her newborn son, Toby, grew up. “Her biggest fear was that he was not going to remember her,” says Kallie Greenly, Ms. Wallace’s adult daughter. So before she died in 2011 at age 43, Ms. Wallace recorded a 17-minute video for her son, talking about her life, her idea of happiness and how she wanted to be remembered.

It is a step more terminally ill patients are taking these days, either on their own or with the help of nonprofit groups specializing in what are called “legacy videos.” Just So You Know, the group that recorded Ms. Wallace’s footage, offers its services free to patients at hospitals and cancer-patient conferences. Another nonprofit group, Thru My Eyes, records videos free in patients’ homes.

“I think there’s a sense of relief” for patients who make the videos, says Danielle Gagner, a physician assistant at White Plains Hospital in New York who helps guide breast-cancer patients through treatment. “I think they feel they’ve left something for their family members, so they’re at peace with that.”

Diana Nash, a bereavement counselor in New York City, says the videos can give children and other relatives a lasting memento of a loved one. Still, she says, “sometimes it’s hard for family members to see a video in the first couple of months after a person has died, because it’s just too soon. They’re still in shock, they’re still numb.” Legacy videos also can sometimes contain painful messages, overbearing advice or wishes that the children don’t feel they can carry out.

Research has shown that improvements in mental health and general well-being can result when people have the chance to tell their stories. In numerous studies, subjects who completed a daily writing exercise reported feeling more positive and less anxious, sleeping better and visiting the doctor less often, according to James Pennebaker, chairman of the psychology department at the University of Texas, Austin. There has been less research on the effects of videotaped expression, he says.

Kallie Greenly, 25, appears in the legacy video that her mother, Michelle Wallace, in photo at rear, created for Toby, age 5, before she died. Ben Sklar for The Wall Street Journal

Ms. Wallace decided to make her video on the spur of the moment, after coming upon a Just So You Know display at a conference for cancer patients in 2010, says Ms. Greenly, 25, of Refugio, Texas, who appears with her mother in the video. Robin Weinberg, who founded Just So You Know in 2008, gave the two women a list of suggested discussion topics and left them alone in the taping room at the conference.

In the video, a teary-eyed Ms. Greenly asks her mother about happiness, her faults and strengths, her heroes and even her favorite curse word. Asked what she would like people to remember her for, Ms. Wallace tears up, too. “How much I love my family,” she says. “I know if I die before Toby is old enough to remember me, that’s the one thing I would want everybody to share, is just how much I love my family.”

Ms. Wallace died seven months later, when Toby was 2. She never watched the video but was relieved to have made it and put it in a keepsake box for Toby, her daughter says. Toby, now 5, recently watched the video, according to his father, Glen Bullock.

He says Toby recognized his mother but isn’t sure what other impact it had on him, as Toby is still young. “He was just like, that’s my mom!” says Ms. Greenly. “I know that as he gets older it’ll be more important to him, more special.”

Just So You Know, based in Westport, Conn., and Thru My Eyes, in Scarsdale, N.Y., operate mainly in the Northeast but also have helped people make legacy videos elsewhere in the country.

Just So You Know, which makes videos for cancer patients at every stage of disease, charges hospitals and conferences a fee to cover its costs. Thru My Eyes relies on donations and grants. Both offer their services at no charge to patients.

Some hospitals tell patients about the video opportunity when their diagnosis reaches an advanced stage. Health-care professionals say the topic must be raised carefully. “It is very delicate.…I have to establish trust with patients to broach this,” says Eileen Heller, a social worker at NewYork-Presbyterian Hospital and Columbia University Medical Center. “Almost always the patients are emotional about it because they’re directly confronting the fact they won’t be alive to raise their children.”

Ms. Heller refers willing patients to Thru My Eyes, founded in 2010 by Carri Rubinstein, a 22-year breast-cancer survivor. Ms. Rubinstein says she got the idea after meeting a cancer patient at her gym who wanted to make a video for her child.

With grants from donors including the Countess Moira Charitable Foundation, based in Pelham, N.Y., Thru My Eyes has made some 40 videos so far in patients’ homes.

Sometimes the group lends families video cameras so they can capture meals, bath time and other everyday rituals for the video.

Sometimes Ms. Rubinstein interviews patients on tape. Other times family members or a psychiatrist volunteers with Thru My Eyes. One patient who was too frail to get up from her hospital bed spoke for 2½ hours, though her family thought she couldn’t go for more than 15 minutes, Ms. Rubinstein said.

Not every patient making a video has young children. Natalie Corbo recorded a video with Thru My Eyes before she died of breast cancer in 2012, when her children were in their 30s. Her daughter, Faith Corbo, now 34, watched the DVD about three months after her mother passed away. She says it is “one of the best gifts” she has ever received.

Ms. Corbo says she was struggling in her marriage at the time her mother made the video. “She, in a very diplomatic way, commented on my husband maybe not being the best choice for me, but that we were working very hard and she supported me in all my endeavors,” Ms. Corbo says. She ended up getting a divorce before her mother died.

Ralph Corbo, Faith’s father, says he has watched the video of his late wife twice. “You do put yourself through it again and of course you’re looking at your lover and loved one and listening to her voice,” he says of the experience. “It is real, which is different from a photograph.”

Write to Jeanne Whalen at jeanne.whalen@wsj.com  Click here for the article online!

Chinese Government Creates Philanthropy Partnership with Rockefeller Foundation

philanthropyIn the January 2014 issue of Town & Country Magazine there is an interesting article about Chinese philanthropy.

It points out that in the US, major foundations are rushing to give it all away and Chinese philanthropists are more closely following the Rockefeller style of philanthropy.

Members of the Rockefeller family and Judith Rodin, President of the Rockefeller Foundation, traveled to Bejing to meet with potential Chinese billionaires. Unlike the foundations that are moving toward sun setting at definite times, The Rockefeller Foundation has laid out plans that will take it well into its second century.

As the article notes, the Chinese government has recently started allowing private charities to act in concert with government initiatives for improving the environment. It will be very interesting to see what the Rockefeller/Bejiing partnership brings.

 Source: Town & Country Magazine

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com

James Pierson Responds to – Robert Wilson & Bill Gates Philanthropy Differences

philanthropyWe recently posted about how Robert Wilson and Bill Gates differ on philanthropy.  Here’s an article by

James Pierson, president of the William E. Simon Foundation that goes a step further: 

Donate to causes you care about, think long term, and remember it’s your money.

As is clear from the exchange (between Wilson and Gates), Wilson did not care whether his giving made him popular. But it is becoming harder and harder for philanthropists to take the kind of stand that he did. There are various pressures being placed on philanthropists to join the herd. The arm-twisting comes not only from Bill Gates and Warren Buffett, but from state and local governments, professional staffs of various foundations and, of course, academics.

So here are a few things that people starting out in philanthropy might want to keep in mind, especially if they can’t wait until middle age to start:

• When it comes time to donate, don’t think that you are “giving back,” because you haven’t taken anything in the first place. The vast majority of Americans who become wealthy have not done so by exploiting the poor. Nor have they simply lived off their family’s fortune.

Two-hundred seventy-three people on the 2013 Forbes 400 list earned their wealth through businesses they started or invested in. And making all that money had many positive benefits for society. Thanks to the technology developed by Bill Gates or the inexpensive goods available to people who shop at Wal-MartWMT -0.12% or the salaries paid by Facebook, FB +3.14% America benefits from the contributions of wealthy individuals before they give away a dime.

• Find a cause that interests you, learn more about it, and then give. This may sound obvious, but the fashionable advice in philanthropic circles is to give to charities that don’t interest you. Princeton’s bioethicist Peter Singer argues that donors should not give to higher education or arts institutions until every poor or handicapped person has been given needed assistance. A recent article in the Chronicle of Philanthropy, “Donors Should Give Based on Need, Not on Personal Interests or Whims,” makes the same point.

By that logic, Andrew Carnegie should have spent his funds on the needy instead of building libraries and Carnegie Hall. Stripped of subtleties, the point is that philanthropy should become an adjunct of the welfare state, a thoroughly mindless injunction.

• Think about the long term. Of course, philanthropists should measure results like businesses do. But unlike profit-making enterprises, foundations can wait to see the effects of their giving 10, 20 or 30 years into the future. Philanthropy conferences are filled with people who want to help you “benchmark” the effects of your charitable dollars. But donors can have more patience to find out where their interests lie and what strategies might offer the best results.

• It’s your money, not public money. Many advocates say that because of the charitable tax deduction, government has a right to direct donations to politically-favored causes. In their view, charitable gifts are a form of public money because otherwise (absent the deduction) the charity money would have been used to pay taxes. In New York City, newly installed mayor Bill de Blasio wants to force the Central Park Conservancy to redistribute its charitable funds to other public parks, even though these gifts were made for the sole purpose of maintaining Central Park.

Beginning in the 1960s, some foundations began to take on the role of a shadow government working with public officials to promote new programs such as urban renewal, the expansion of welfare, and race and gender preferences in higher education. But as government expanded it also became beholden to interest groups.

The great advantage of private philanthropy is that it is independent and not beholden to the interests that have turned government into an inflexible behemoth. Why would anyone think it is a good idea to turn philanthropy into a mirror image of the federal government? Some of the most important contributions of philanthropists, such as privately funded school vouchers, have come about by challenging government monopolies or circumventing inefficient governments.

• Find people you trust to help give away your money. There have been moves across the country to get philanthropists to “diversify” their boards and staffs. Groups like Philanthropy New York, a professional group of foundations, release reports about the lack of racial, ethnic, gender or sexual-orientation diversity on philanthropic boards. Other groups want to find ways for the government to exert more pressure and make philanthropy more “representative” of the nation as a whole. They are especially critical of family-oriented foundations with family members, friends and associates on their boards.

This is but another version of the same bad idea: Let’s turn foundations into political institutions in which funds are allocated by some representative formula. Young philanthropists are better off picking people they know and trust rather than taking orders from the philanthropic elite.

There is a world of people in government and the nonprofit sector who see philanthropists as fools easily parted from their money. Robert Wilson may have been right that it is prudent to wait till one is older to become a philanthropist. It may make you better able to resist such pressures. But don’t wait too long.

As Sir John Templeton, one of the wisest philanthropists of the 20th century once said, “If you’re giving while you’re living, you’re knowing where it’s going.”

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Groups Pledge $330 Million to Save Detroit’s Art Collection

By Matthew Dolan for the Wall Street Journal

Update to an article I posted in December…

philanthropy, DetroitDETROIT—A judge has found a way for Detroit to sell masterworks by van Gogh, Bruegel and Michelangelo without letting them out of sight.

The proposal by the judge, who is mediating Detroit’s bankruptcy case, got a $330 million boost Monday after some of the nation’s leading foundations publicly pledged to try to prevent a fire sale of city-owned art.

The so-called grand bargain has attracted nine foundations that have promised to help pay the city and place the holdings of the Detroit Institute of Arts into the hands of a new nonprofit public trust. In turn, the city could use the proceeds to help make up the shortfall in its municipal pension system, estimated by Detroit’s emergency manager at $3.5 billion.

The concept was hatched by Chief U.S. District Judge Gerald Rosen for the Eastern District of Michigan. He was appointed mediator by U.S. Bankruptcy Judge Steven Rhodes in the city’s Chapter 9 case filed in July, with an estimated $18 billion in long-term obligations. A recent valuation of the city-purchased portion of the DIA collection estimated it was worth as much as $866 million.

In many ways, the philanthropic rescue mission tapped into the connection between the Motor City and some of the nation’s largest foundations, including the Ford Foundation, started by the family behind the auto maker.

“It’s extraordinary. Honestly, the magnitude is the kind of response that you only see in the wake of disasters,” said Larry McGill, vice president for research at the Foundation Center, a nonprofit that tracks patterns of foundation giving.

Judge Rosen has had separate talks with Michigan Gov. Rick Snyder, Detroit Emergency Manager Kevyn Orr and foundation presidents, people familiar with the matter said. The judge briefed foundation leaders in a conference call Saturday before releasing his first public statement on the fundraising Monday.

“We kind of feel the weight of history because it’s the biggest case of its kind and we feel the need to get it right,” said a person involved in the talks.

So far, the state hasn’t committed any funds for the plan, though Mr. Snyder, a Republican, expressed some support for the idea.

Mr. Orr said in a statement Monday, “This is a very important step, but there is still much work to do.”

Without a bailout, there is growing fear that potential lawsuits over a possible sale of the art and a dispute over cuts to pension payments would help tie up the Detroit bankruptcy case for months, if not years, people familiar with the matter said.

Originally, Judge Rosen estimated that the art deal required $500 million in outside support. But since meetings began in November, the judge has indicated that the number is expected to grow, according to two people familiar with the matter.

Leading the pack among philanthropic groups is Ford, expected to commit $125 million to save the art, according to two people familiar with the matter. Other pledges include $100 million from the Kresge Foundation of Troy, Mich., a group that developed an urban renewal master plan for Detroit last year, according to a person familiar with the matter. The Miami-based John S. and James L. Knight Foundation has promised $30 million, the largest gift in the group’s history, while the Michigan-based William Davidson Foundation has pledged $25 million.

But hurdles remain as the parties involved race to finish talks before the city completes a plan, expected as early as next week, to cut debt, pay off creditors and reinvest in crime- and blight-reduction efforts. In the past, Mr. Orr has said that all of the city’s assets, including its art collection, could be sold to pay creditors. Among philanthropic leaders’ outstanding concerns is a desire to protect a new regional tax that provides operating funds for the museum.

For the deal to work, unions and pension funds would likely need to agree on the shortfall in future pension payments and stop their legal challenges over whether the city is allowed to cut pension payments at all under the state Constitution. It is also possible that other creditors may balk at the deal, questioning why the city’s pension funds should be paid back while there is no deal to repay unsecured bondholders.

 

Source:  Wall Street Journal wsj.com

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Ryan O’Neal can keep Farrah Fawcett portrait, jury says

By Ann O’Neill, CNN

Here’s an update on an article I posted in mid-December.

STORY HIGHLIGHTSFarrah Fawcett, estate planning, philanthropy

  • Jury’s verdict comes after three-week trial involving celebrity testimony
  • Pop artist Andy Warhol painted two portraits of Farrah Fawcett
  • University of Texas received one after the actress’ death in 2009
  • School sued Ryan O’Neal, her on-again, off-again partner of 30 years, for other portrait

Los Angeles (CNN) — Actor Ryan O’Neal can keep an Andy Warhol portrait of his longtime love, “Charlie’s Angels” star Farrah Fawcett, a jury has found.

O’Neal underwent minor surgery to remove a skin cancer lesion and was not in court when the Los Angeles jury returned the verdict at 3:25 p.m. PT on Thursday.

But his lawyer, Marty Singer, said the actor was elated he did not have to hand the portrait over to the University of Texas. The university had claimed Fawcett left the portrait in her will.

The verdict was reached shortly after O’Neal’s testimony was read to the jury again. He testified Warhol gave him one portrait and Fawcett another in 1980. The verdict indicated that nearly all of the jurors found his testimony credible.

The decision was not unanimous. But O’Neal needed to convince just nine of the 12 jurors to prevail.

The jury of six men and six women began their deliberations on a Monday afternoon in December. Most of them are too young to remember O’Neal’s 1970 tearjerker movie “Love Story,” Fawcett’s 1976 television hit series “Charlie’s Angels” or the era when they reigned at the top of Hollywood’s A list. Back then, People magazine was on the rise, and nobody had heard of reality shows, TMZ or Twitter.

Source:  Los Angeles CNN

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Robert Wilson and Bill Gates Differ on Philanthropy

Robert Wilson, philanthropyA recent post on Buzzfeed highlights and email exchange between Bill Gates and Robert W. Wilson (who committed suicide in late December) explaining Wilson’s reasons for refusing to join Bill Gates’ “worthless” giving pledge.

I found it interesting the way the two men discussed their views of philanthropy and wealth achieved by younger people.  Here’s the exchange:

Exclusive: Emails Reveal Deceased Hedge Fund Manager Refused To Join Bill Gates’ “Worthless” Giving Pledge

Bill Gates tried to get hedge fund founder Robert W. Wilson, who committed suicide over the weekend, to join his giving pledge. Wilson, who gave away hundreds of millions of dollars of his personal fortune on his own, politely told Gates he wanted to “stay far away” from his effort. posted on December 31, 2013 at 11:43am EST

Robert W. Wilson “©PATRICKMCMULLAN.COM”

WASHINGTON — Robert W. Wilson, the hedge fund founder who committed suicide at age 87 over the weekend, was known as one of the most active philanthropists in the country. But his style of giving was radically opposed to that of Bill Gates, who asked Wilson to join his Giving Pledge for the ultra-rich — and was rebuffed in a series of caustic emails.

In emails from 2010 provided to BuzzFeed by a source close to Wilson, the hedge fund manager tells Gates that the pledge is essentially “worthless” and that he wants to “stay far away” from his effort.

—— Original Message ——-

From: Bill Gates

To: Robert W. Wilson

Sent: Wednesday, June 16, 2010 1:03 PM

Subject: Giving Pledge discussion

Robert,

I’m writing to let you know about an idea we’re calling the “Giving Pledge” that came out of a number of conversations that Melinda and Warren and I have had with a number of people over the past year.

The idea is that when you take the Giving Pledge, you agree to give the majority of your wealth to charity during your lifetime or through your will. The Giving Pledge will be public, and pledges will be posted on a website (www.givingpledge.org). A pledge can consist of a single sentence or a longer explanation of your philosophy in respect to philanthropy.

 

By bringing together the people who take the Giving Pledge in various ways, including at an annual event, we hope we can all learn from each other. The Giving Pledge is more of a moral commitment than anything else. It is not a legal contract, and it does not involve pooling money or supporting a particular set of causes.

We will only invite people of substantial wealth to join this particular group but we will also cite efforts being made by others to draw everyone into philanthropy. At first we will focus on the United States, but we plan to extend it to other places if it goes well here.

Since your generosity has inspired so many and you have clearly already lived this Pledge, I am writing to see if you would be willing to help lead this effort and join us in encouraging others.

We are planning to proceed in three steps:

Today an article about the Giving Pledge was posted online at www.fortune.com. Warren and Melinda and I will be on Charlie Rose’s show tonight to further discuss the idea.

Second is that in the next few days, we are asking some of the great philanthropists in the United States to join us in signing a letter to hundreds of wealthy people in the United States inviting them to pledge. We are working on an initial draft, which we will send you for your feedback if you choose to be involved. We hope to send the letter out in a few weeks.

Third is that sometime in the fall – perhaps October – we will have an event for everyone who was invited and has agreed to sign up. This will be an annual event and we will discuss whether any other types of activities would be attractive to the group.

Thanks for considering this. I look forward to discussing this with you soon and I’ve asked someone on my staff to set that up.

Bill

Wilson responds:

From: Robert W. Wilson

Sent: Wednesday, June 16, 2010 12:16 PM
To: Bill Gates
Subject: Re: Giving Pledge discussion

Mr. Gates, I decided more than ten years ago to try to give away 70% of my net worth and have already given away one-half billion dollars. (I’ve never been a Forbes 400) So I really don’t have to take the pledge.

Your “Giving Pledge” has a loophole that renders it practically worthless, namely permitting pledgees to simply name charities in their wills. I have found that most billionaires or near billionaires hate giving large sums of money away while alive and instead set up family-controlled foundations to do it for them after death. And these foundations become, more often than not, bureaucracy-ridden sluggards. These rich are delighted to toss off a few million a year in order to remain socially acceptable. But that’s it.

I’m going to stay far away from your effort. But thanks for thinking of me. Cordially

Gates pushes back:

——- Original Message ——-

From: Bill Gates

To: Robert W. Wilson

Sent: Saturday, June 19, 2010 1:23 AM

Subject: RE: Giving Pledge discussion

What you are doing is fantastic. You are giving a high percentage and doing it in a very efficient way to causes you have thought deeply about.

The key benefit of your getting involved in the pledge would be having people learn more from your example both in your pledge letter and your participation in the yearly events. We believe the more people we get involved the stronger the effort will be and the more people who will join.

You are right that the Giving Pledge allows people to join in who don’t give until their will comes into action. Since people don’t know when they will die it is a bit difficult to make the timing of their giving super specific.

You are also right that some people set up foundations without a strong focus or leadership and with high overhead.

One of our goals with the Giving Pledge is to make it more common for people to consider their philanthropic plans at a much younger age. A number of people we have talked to about the pledge have said that they are thinking through their plans now instead of waiting because of the pledge. People often put off thinking about giving because it involves considering when they die and forces them to pick particular causes and decide how much to leave for each family member. The causes that are easy to pick are often not the ones that have the biggest impact on reducing inequity. We aren’t trying to homogenize the giving but we do think people getting exposures to others who have thought a lot about the right causes will improve the overall quality of giving.

So it is fine for you to stay out but I want you to know that we agree with your views on philanthropy and we would benefit from your joining in. If you are willing to talk further about this I would love to chat on the phone sometime.

Wilson closes the discussion:

——- Original Message ——-

From: Robert W. Wilson

To: Bill Gates

Sent: Saturday, June 19, 2010 4:15 PM

Subject: Re: Giving Pledge discussion

Mr. Gates, thanks much for your email. But as my previous email indicated, I wouldn’t have much fun or add much value to this group. You, being a liberal, think you can change people more than I think.

But let me make one comment. When I talk to young people who seem destined for great success, I tell them to forget about charities and giving. Concentrate on your family and getting rich—which I found very hard work. I personally and the world at large are very glad you were more interested in computer software than the underprivileged when you were young. And don’t forget that those who don’t make money never become philanthropists.

When rich people reach 50 and are beginning to slow down is the time to begin engaging them in philanthropy.

I’d greatly appreciate just leaving it at that. Cordially

Wilson was the founder of hedge fund Wilson & Associates. Over the course of his career he donated an estimated $500 million to various causes, including a number of environmental groups and the Catholic Church, though he was an atheist. According to The New York Times, Wilson pioneered the matching-gifts trend in the philanthropy world, with his checks “delivered only after the other donors had been lined up.”

Wilson died after jumping out the window of his Central Park West apartment building. According to the New York Post, Wilson Bill Gates, philanthropysaid he was only $100 million away from giving away his entire fortune before he died.

Gates didn’t return a request for comment about his effort to get Wilson to join the giving pledge.

Philanthropy takes on many sizes and shapes, and those in the ‘giving’ realm have many different ideas of how their gifts should be distributed.  No matter what the cause or the amount of money being given, it’s important that you have clear instructions of how that giving should be managed after your death. One more piece of the estate planning puzzle.

Source:  Buzzfeed

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com

Donations to Restore Rome’s Colosseum Encourages Corporate Philanthropy

corporate philanthropy, philanthropyTo Rome, With Love is a recent Wall Street Journal article highlighting the funding of the restoration of the Colosseum in Rome by Diego Della Valle, the billionaire president and CEO of the luxury group Tod’s.

His group has contracted to give $25million Euros to this endeavor. This gift is nearly half of the government’s entire budget for projects of this type. In 2009 Rome’s mayor began to solicit private corporate donations for the restoration, packaging it as corporate sponsorships.

Originally 20 companies were interested. In the end Tod’s beat out the Irish airline Ryannair for sponsorship of this restoration because Tod’s agreed not to use it for advertising. The Ryannair proposal wrapped the Coliseum in advertising banners. The Tod’s donation has sparked controversy over a “rights of image” clause that allows Tod’s use of the Colosseum for preapproved corporate events.

A member of the Ministry of Culture is quoted in the article as saying that most of the debate is occurring because Italy has almost no culture of private philanthropy and few rules to regulated it. Private funding of public cultural endeavors is very rare and for much lower amounts, and there has been no precedent for a donation like this one.

The Italian consumer protection agency, Codacons, tied up the agreement in court for two years because they were concerned that the use for preapproved corporate events could be used to smear logos over the Colosseum. The court dismissed Codacons case saying it did not have legal standing to test the contract. The funds were unused for two years and the restoration plan is now underway. The controversy has sparked additional corporate philanthropy in Italy – Fendi has now agreed to restore the Trevi Fountain and Diesel has pledged to restore Venice’s Rialto Bridge.

Della Valle noted that not only is private funding of Italy’s enormous cultural legacy of profound social value, it employs Italian citizens, tourists will continue to enjoy the historic sites and the Italian economy will be better for it.

Read entire article:  http://online.wsj.com/news/articles/SB10001424052702303914304579193891982221478

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Could Detroit’s Sale of Museum Art Become a National Tragedy?

Detroit Institute of ArtsIn a December 10th Wall Street Journal article “Delusions in Detroit” highlights the unique pressure brought on the Detroit Institute of Art to bail out Detroit by selling part of its very valuable art collection.

The Bankruptcy Court approved the city’s Chapter 9 filing and allowed the emergency manager to proceed with his restructuring plan, including selling art even though that plan exceeded the emergency manager’s goal of getting $500 million from the museum.

This is unprecedented and as the article points out violates two cardinal principles of museum ethics: the doctrine that museums hold art in trust for future generations and that therefore artworks may be sold only to purchase more art.

The article points out that no U.S. museum has ever been pressed to bail out its hometown and stresses that part of the plan is delusional. It gives specific examples and stresses that the museum’s art must be treated like all other city assets (for example Belle Isle which houses the aquarium and yacht club has been taken off the table), the delusion that the museum could easily part with some of its 66,000 artworks (the article points out that of the 2,871 pieces evaluated for sale, 75% of the value lies in 11 pieces of art) and other U.S. museums will buy the art to keep it in public view (the article points out that most museums do not have the capital to do this).

The article posits two possible solutions. One is that $500million be raised from foundations to buy the art and the second is that the State of Michigan buy the art and transfer the ownership from the City of Detroit to the State of Michigan.

So far neither of those options seem feasible and Judith Dobryznksi, the author of the article, notes that Midchiganders might remember that in the 1920s and 1930s the cash hungry Soviets sold off Russia’s art treasures dispersing them to other countries. Today that episode is viewed as a national tragedy. I know I will be watching this story very closely as it unfolds.

Read entire article:  http://online.wsj.com/news/articles/SB10001424052702304096104579242490968248588

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

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