••• SPONSORED SECTION •••
This is the thirty-fourth in a series of informative monthly articles for North Carolina businesses from PNC in collaboration with BUSINESS NORTH CAROLINA magazine.
As North Carolinians continue to open their hearts and pocketbooks to help those impacted by Hurricane Helene – and with the traditional season of giving now underway – philanthropy is top-of-mind for many families throughout the state.
While philanthropy may bring to mind traditional charitable giving – writing a check to a nonprofit organization, for example – a new class of family funders is redefining what it means to deploy capital to create impact.
And at PNC Private Bank® and PNC Private Bank Hawthorn, a new class of professionals is helping families deliver on their purpose, which can take the form of philanthropy, purchase power, purpose-driven investing, or a combination of these approaches.
Charlotte-based Brett Coffman, a senior vice president and wealth strategist for PNC Private Bank, is one such advisor who is laser-focused on helping families preserve their legacies, prepare for business succession and create impact.
“Because families of great wealth are often motivated to create impact, charitable goals are front and center when discussing wealth strategy, estate planning and business succession holistically,” says Coffman, who concentrated the scope of his Ph.D. studies on family business dynamics and succession preparedness. “For these families, success is measured not just by the assets they accumulate, but by the difference they can make for organizations and causes that are meaningful to them. Our role as a trusted advisor is to help families define their purpose and then translate that purpose into action through the framework of their wealth strategy.”
To help families and individuals identify and execute their purpose, Coffman and his colleagues collaborate closely with the Hawthorn Purpose Team within PNC Private Bank Hawthorn to take a layered approach through the activation of three main levers: Philanthropy & Impact, the Hawthorn Institute for Family Success and Purpose Driven Investing.
DEFINING A FAMILY’S PURPOSE
Led nationally by the head of Hawthorn Purpose, Avery Tucker Fontaine, the group leverages quantitative and qualitative strategies in working with each family or individual client to gain a sophisticated understanding of the external – or community – engagement necessary to deliver on their purpose, the human side of wealth and whether aligning investments with purpose is right
for them.
These conversations often begin with questions about the family’s patriarch or matriarch, with advisors encouraging family members to share the story of how their family’s wealth was created. During the course of these discussions, families will often reflect on the sacrifices they made in order to build that wealth, and this family story-telling lens often brings to light shared values that have emerged from personal experiences in a manner the PNC Private Bank Hawthorn team views as integral to understanding and articulating a family’s unique purpose.
Having open and candid dialogue with family members is particularly important for business owners who are planning to sell or transition a business. “When a business has been such a major part of your life for 30 or 40 years or more, it’s important to think about what the meaning of life becomes once you move on from that business,” says Jim Benedict, the Charlotte-based managing director of Business Owner Solutions at PNC Private Bank Hawthorn. “Purpose occupies a central role in that consideration.”
TURNING PURPOSE INTO ACTION
Coffman and Benedict emphasize that only after these meaningful conversations have occurred can advisors and the family begin identifying and implementing the appropriate vehicles to achieve the family’s desired outcomes.
For example, private family foundations continue to be both popular and useful in a stack of vehicles to drive change or support a specific cause. Private foundations enable families to effect direct contributions with a great degree of specificity in how the funds are used – such as endowing a scholarship or professorship or underwriting research.
Another strategy, which has increased in popularity in recent years because of its lower monetary threshold and ease of administration, is establishing a donor advised fund (DAF), a charitable fund sponsored by a 501(c)(3) entity.
By giving to a DAF, usually managed by a financial institution, public charity or community foundation, a donor may receive an income tax deduction at the time a contribution is made – and then make recommendations for distributions to charitable beneficiaries over a longer period. Its structure can be particularly helpful when a funder is interested in front-loading their giving for tax reasons, while maintaining long-term flexibility to make decisions regarding distributions. Additionally, donor advised funds can name successor advisors, and therefore represent a way for funders to leave a charitable legacy for future generations to continue.
Regardless of the giving vehicle leveraged, Coffman says it’s important for families to be intentional about creating a mission statement that guides their philanthropy. “While it can be a unifying experience for a family to come together in support of a shared cause, this unity can turn to conflict when communication regarding values and funding priorities is left to chance,” he says.
“Because families of great wealth may be approached by organizations representative of a wide range of causes, it’s even more important for them to be able to articulate their mission and collaborate with organizations that can help them maximize their impact and ultimately deliver on their purpose.”
Finally, it is important to focus on both the human side of wealth and external functionalities. “Addressing various aspects of wealth sustainability – including risk management, wealth strategy, philanthropy and purpose, and business owner solutions – often translates to more defined and impactful families who are meaningfully engaged with their communities,” says Fontaine.
“As the Great Wealth Transfer plays out, we’re working with more families who not only see and feel community problems deeply, but also seek to address the root causes and current needs simultaneously. Solving challenges in a way that acknowledges the environment in which they were created requires a deep understanding of one’s purpose, and we are committed to helping families navigate the complexities of delivering on that purpose.”
These materials are furnished for the use of PNC and its clients and do not constitute the provision of investment, legal, or tax advice to any
person. They are not prepared with respect to the specific investment objectives, financial situation, or particular needs of any person. Use of these materials is dependent upon the judgment and analysis applied by duly authorized investment personnel who consider a client’s individual account circumstances. Persons reading these materials should consult with their PNC account representative regarding the appropriateness of investing in any securities or adopting any investment strategies discussed or recommended herein and should understand that statements regarding future prospects may not be realized. The information contained herein was obtained from sources deemed reliable. Such information is not guaranteed as to its accuracy, timeliness, or completeness by PNC. The information contained and the opinions expressed herein are subject to change without notice. Past performance is no guarantee of future results.
Neither the information presented nor any opinion expressed herein constitutes an offer to buy or sell, nor a recommendation to buy or sell, any security or financial instrument. Accounts managed by PNC and its affiliates may take positions from time to time in securities recommended and followed by PNC affiliates. Securities are not bank deposits, nor are they backed or guaranteed by PNC or any of its affiliates, and are not issued by, insured by, guaranteed by, or obligations of the FDIC or the Federal Reserve Board. Securities involve investment risks, including possible loss of principal.
The PNC Financial Services Group, Inc. (“PNC”) uses the marketing names PNC Private Bank® and PNC Private Bank Hawthorn® to provide investment consulting and wealth management, fiduciary services, FDIC-insured banking products and services, and lending of funds to individual clients through PNC Bank, National Association (“PNC Bank”), which is a Member FDIC, and to provide specific fiduciary and agency services through PNC Delaware Trust Company or PNC Ohio Trust Company. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax services agreement. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
“PNC Private Bank” and “PNC Private Bank Hawthorn” are registered marks of The PNC Financial Services Group, Inc.
Investments: Not FDIC Insured. No Bank Guarantee. May Lose Value.
©2024 The PNC Financial Services Group, Inc. All rights reserved.