Beyond Success Building a personal, family philanthropic legacy

1. �Beyond Success� Building a personal, family & philanthropic legacy This presentation is a result of 3 years of work related to a study I conducted with the support of Chris Letts of Harvard�s Kennedy school. In this study we went out to develop a framework of best practices related to wealth and legacy. Our focus was on three areas: Financial Wealth, Philanthropy and Wealth In Families. The study was prompted by my personal search for meaning in my life. I had a 20 year career in high tech, as an entrepreneur and investor. My last job was as a top executive in a public technology company in Seattle. Over time I did not want to go to work any more. I couldn�t find meaning in what I was doing. I went to work, went about my job and then came home to my family. Then I quit with some vague notion that I could help advise wealthy individuals with their investments and philanthropy. I became involved with a family office, and then in the family wealth practice at BofA. That led to the study. I was looking for an integrated framework for looking at wealth. Other than the Government, wealth was going to be invested or spent, it was going to society through philanthropy or it was going to heirs. Other than Scott Fithian�s book for advisors, I couldn�t find what I was looking for. The next thing I knew is that I was interviewing advisors to the wealthy all over the country to get their insights. I then spoke to legacy leaders like Bill Gates Senior, Les Wexner (Founder of The Limited), Jeff Brotman (Founder of Costco), Sandy Weill (Chairman and CEO of Citigroup), High tech millionaires in Silicon Valley, real estate tycoons and many others. I was asking them about what they did after they made their money. How they thought about investing their money, what they did with their philanthropy, and how they have prepared their children for wealth. I asked them what worked, and what didn�t work. This led to my book and to this presentationThis presentation is a result of 3 years of work related to a study I conducted with the support of Chris Letts of Harvard�s Kennedy school. In this study we went out to develop a framework of best practices related to wealth and legacy. Our focus was on three areas: Financial Wealth, Philanthropy and Wealth In Families. The study was prompted by my personal search for meaning in my life. I had a 20 year career in high tech, as an entrepreneur and investor. My last job was as a top executive in a public technology company in Seattle. Over time I did not want to go to work any more. I couldn�t find meaning in what I was doing. I went to work, went about my job and then came home to my family. Then I quit with some vague notion that I could help advise wealthy individuals with their investments and philanthropy. I became involved with a family office, and then in the family wealth practice at BofA. That led to the study. I was looking for an integrated framework for looking at wealth. Other than the Government, wealth was going to be invested or spent, it was going to society through philanthropy or it was going to heirs. Other than Scott Fithian�s book for advisors, I couldn�t find what I was looking for. The next thing I knew is that I was interviewing advisors to the wealthy all over the country to get their insights. I then spoke to legacy leaders like Bill Gates Senior, Les Wexner (Founder of The Limited), Jeff Brotman (Founder of Costco), Sandy Weill (Chairman and CEO of Citigroup), High tech millionaires in Silicon Valley, real estate tycoons and many others. I was asking them about what they did after they made their money. How they thought about investing their money, what they did with their philanthropy, and how they have prepared their children for wealth. I asked them what worked, and what didn�t work. This led to my book and to this presentation

2. WHAT DOES SIGNIFICANCE MEAN TO YOU? Bob Geldof�s Music To Combat World Poverty � Bob Geldof was born in Dun Laoghaire, Ireland, on 5 October, 1951, and raised by his father, a traveling salesman after their mother died in 1958. From this modest beginning Bob Geldoff went on to a career in music, founding a punk rock band called the Boomtown Rats in 1975, before landing his biggest hit, Live Aid. Television production company and knowledge of music industry In October of 1984, while watching a broadcast by the BBC about the famine in Ethiopia, Bob was moved, and became determined to do something to help. Recorded "Do They Know It's Christmas?" And we called the group "Band-Aid" and we raised money for the famine victims in Ethiopia. But subsequently I realized that that would not �8 million for the famine relief program. Using the enormous success of the Band Aid single, Geldof went on to organize the Live Aid concert. It was the largest rock concert for charity ever in history when it took place on July 13, 1985. 72,000 people piled into Wembley Stadium in London, England, and 90,000 people into JFK Stadium in Philadelphia, Pennsylvania to hear the greatest assemblage of famous rock bands ever. Over 1.5 billion viewers in over 100 countries watched the live broadcast. At one point it was claimed that 95% of the television sets in the world were tuned to the event. Live Aid, as it was known, was one of the most ambitious organizing events for charity ever. The concert lasted for 16 hours with hundreds of performers on two continents. In total the event raised over 150 million pounds (over $250 million dollars) for the plight of the starving in Ethiopia. [1]Bob Geldof�s Music To Combat World Poverty � Bob Geldof was born in Dun Laoghaire, Ireland, on 5 October, 1951, and raised by his father, a traveling salesman after their mother died in 1958. From this modest beginning Bob Geldoff went on to a career in music, founding a punk rock band called the Boomtown Rats in 1975, before landing his biggest hit, Live Aid. Television production company and knowledge of music industry In October of 1984, while watching a broadcast by the BBC about the famine in Ethiopia, Bob was moved, and became determined to do something to help. Recorded "Do They Know It's Christmas?" And we called the group "Band-Aid" and we raised money for the famine victims in Ethiopia. But subsequently I realized that that would not �8 million for the famine relief program. Using the enormous success of the Band Aid single, Geldof went on to organize the Live Aid concert. It was the largest rock concert for charity ever in history when it took place on July 13, 1985. 72,000 people piled into Wembley Stadium in London, England, and 90,000 people into JFK Stadium in Philadelphia, Pennsylvania to hear the greatest assemblage of famous rock bands ever. Over 1.5 billion viewers in over 100 countries watched the live broadcast. At one point it was claimed that 95% of the television sets in the world were tuned to the event. Live Aid, as it was known, was one of the most ambitious organizing events for charity ever. The concert lasted for 16 hours with hundreds of performers on two continents. In total the event raised over 150 million pounds (over $250 million dollars) for the plight of the starving in Ethiopia.

3. Slide 2 My Story Grew up in a political family in NY and DC, and was on a family foundation board at the age of 18 20 year career as a high tech executive One of the original franchisee owners of The Body Shop (Anita Roddick) in the U.S., which led to a white paper for the Points of Light Foundation on strategic corporate philanthropy Quit high tech in 2003 and joined Bank of America as part of my journey from success to significance Researched and wrote Beyond Success to identify legacy leadership practices for creating a personal, family & philanthropic legacy Started LMR Advisors to advise others on legacy planning and a professional approach to philanthropy Founded the Wealth Impact Network (WIN) to bring online technology solutions to the nonprofit sector and philanthropy

4. Slide 3 What I learned - The Wealth Megatrend The Baby Boomers Control The Vast Majority Of Assets (1946-64) 78 million boomers Own over 80% of money market savings accounts Own 79% of America�s financial assets Will transfer up to $136 Trillion dollars (Boston College) Ubiquity of family owned businesses 20 million family owned businesses worldwide Family businesses account for 75% plus of business commerce worldwide Responsible for 60% of employment Nonprofit sector is a growth industry Nonprofit sector is 7% to 10% of GDP 1.5 million charities in the US (over double since 1990)

5. Slide 4 What I learned - The Need For An Integrated Roadmap On slide 2 is the integrated framework related to wealth and legacy that we came up with. The foundation of the framework relate to the wealth/philanthropy and Family mountains. I talked about the mountains last time. They represent the way people learn to be effective with wealth. Individuals follow a common learning curve related to financial, social and family wealth. They move from less impactful practices at the bottom of the mountains to develop planning skills, learn to become diligent investors, and ultimately learn portfolio practices which support a portfolio of financial investments, of nonprofit investments and of investments in family members. When individuals develop these skills related to wealth and legacy, and combine them with legacy leadership practices, they can make a substantial, positive, multi-generational impact and legacy. The three areas of legacy leadership we will talk about sit on top of the mountains and relate to the internal process of self-actualization, which is about personal legacy and fulfillment, the external leadership practices that lead to a positive social impact, and the generational family practices that lead to family alignment across generations and engaged children. Let�s start with the internal process of self-actualization on the next slide.On slide 2 is the integrated framework related to wealth and legacy that we came up with. The foundation of the framework relate to the wealth/philanthropy and Family mountains. I talked about the mountains last time. They represent the way people learn to be effective with wealth. Individuals follow a common learning curve related to financial, social and family wealth. They move from less impactful practices at the bottom of the mountains to develop planning skills, learn to become diligent investors, and ultimately learn portfolio practices which support a portfolio of financial investments, of nonprofit investments and of investments in family members. When individuals develop these skills related to wealth and legacy, and combine them with legacy leadership practices, they can make a substantial, positive, multi-generational impact and legacy. The three areas of legacy leadership we will talk about sit on top of the mountains and relate to the internal process of self-actualization, which is about personal legacy and fulfillment, the external leadership practices that lead to a positive social impact, and the generational family practices that lead to family alignment across generations and engaged children. Let�s start with the internal process of self-actualization on the next slide.

6. Slide 5 Self-Actualization Practices �How do I build a life of meaning, passion and balance, with the flexibility to control my own time, and achieve all that I want to achieve in life on my own terms?� Practice 1: Pulling off the road & visioning your purpose Practice 2: Researching the terrain and developing a route map The term self-actualization comes from Abraham Maslow, a psychologist. He identified that individuals move from basic needs first such as food, clothing and shelter, to security and safety needs once the basic needs are met, then to social needs of love and belonging, and ultimately to what he termed self-actualization, which he termed as � a person's need to be and do that which the person was "born to do�. In other words a person�s calling. Self-actualization is in many ways the process of identifying your calling. The essential question that comes up in this area is� One of the best examples of how someone found his calling is Bob Buford. I will use his experience to illustrate the two practices of legacy leaders, that of Pulling off the road & visioning a higher purpose, and Researching the terrain, and developing a route map. Built a successful cable business, and during the early part of his career was singularly focused. A friend called him on his singular drive to make money and grow his business. �It was someone telling me that my level of focus was kind of frightening that caused me to ask myself what am I going to lose in all this gaining.� Bob stepped back or pulled off the road to reflect on his vision for himself. Ultimately he determined that there were 6 goals for himself that at the end of the day would lead to his personal fulfillment on this earth To serve god by serving others To be married to the same person and have a rich relationship with his wife For his son to grow with self-esteem To grow his company 10% a year (at age 34) To grow intellectually Re-deploy the wealth he created With these goals in mind, Bob could develop a plan or route map for himself. One focus was to create Christian Ministries. He pulled together 18 innovators or leaders, and with them started over 466 churches. He also ended up running the Peter Drucker Foundation.The term self-actualization comes from Abraham Maslow, a psychologist. He identified that individuals move from basic needs first such as food, clothing and shelter, to security and safety needs once the basic needs are met, then to social needs of love and belonging, and ultimately to what he termed self-actualization, which he termed as � a person's need to be and do that which the person was "born to do�. In other words a person�s calling. Self-actualization is in many ways the process of identifying your calling. The essential question that comes up in this area is� One of the best examples of how someone found his calling is Bob Buford. I will use his experience to illustrate the two practices of legacy leaders, that of Pulling off the road & visioning a higher purpose, and Researching the terrain, and developing a route map. Built a successful cable business, and during the early part of his career was singularly focused. A friend called him on his singular drive to make money and grow his business. �It was someone telling me that my level of focus was kind of frightening that caused me to ask myself what am I going to lose in all this gaining.� Bob stepped back or pulled off the road to reflect on his vision for himself. Ultimately he determined that there were 6 goals for himself that at the end of the day would lead to his personal fulfillment on this earth To serve god by serving others To be married to the same person and have a rich relationship with his wife For his son to grow with self-esteem To grow his company 10% a year (at age 34) To grow intellectually Re-deploy the wealth he created With these goals in mind, Bob could develop a plan or route map for himself. One focus was to create Christian Ministries. He pulled together 18 innovators or leaders, and with them started over 466 churches. He also ended up running the Peter Drucker Foundation.

7. Slide 6 Tools For Building A Legacy Plan Legacy Planning Process Legacy Planning Steps: 1. Capture your values 2. Develop your legacy vision (Roles & Relationships) 3. Prioritize your time 4. Prioritize your money 5. Assemble your team 6. Develop and share your written legacy Plan (Self, Family, Community/Philanthropy) So what can we learn from this case study, and what tools can individuals apply for self-actualization. Visioning-reflection time to write down your goals, then to revisit them on a regular basis. �Begin with the end in mind� (Stephen Covey) � Pull off the road and vision a higher purpose. Calculating the time value of life � where are you spending your time? Pie charts. Where should you spend your time. �Research terrain & develop a route map�. Enlisting & empowering others � extending your time. Why do some people seem to get so much more done? Buford and 18 leaders. Values-based estate planning � besides time this is the planning for your wealth based on values. Buford decided to redeploy wealth.So what can we learn from this case study, and what tools can individuals apply for self-actualization. Visioning-reflection time to write down your goals, then to revisit them on a regular basis. �Begin with the end in mind� (Stephen Covey) � Pull off the road and vision a higher purpose. Calculating the time value of life � where are you spending your time? Pie charts. Where should you spend your time. �Research terrain & develop a route map�. Enlisting & empowering others � extending your time. Why do some people seem to get so much more done? Buford and 18 leaders. Values-based estate planning � besides time this is the planning for your wealth based on values. Buford decided to redeploy wealth.

8. Slide 7 Social Impact Practices �How do I use my talents, resources and capabilities to make a difference in the world so I can leave something of lasting value?� Practice 3: Applying Your Learned & Innate Talents Close To Home Practice 4: Packing More Than Your Wallet & Keys Practice 5: Acting With Others The essential question to create social impact � Michael Milken case to illustrate 3 practices of legacy leaders Invented Junk bonds at Drexel Burnham Lambert In 1990 thrown in jail for market manipulation and fined $600mm In 1993 released and found he had prostate cancer Actions Milken Took Applied business skills to philanthropy in an area that hit home (prostate cancer) Researched field, identified for-profit, nonprofit, policy-makers other donors, and flow of funds � determined 80% of funds to treatment Used his influence to build a network of donors and pool donors. Not just about giving money. Created a public foundation � PCF � industry experts determine where money goes Convened the industry players to encourage collaboration � Acting with others and within a portfolio of needs Results from 1993 - 2004 24% reduction in per capita deaths from prostate cancer Raised $200mm (individuals) and $500mm (Gov�t) 20X increase Funded 1,100 projects selected by industry expertsThe essential question to create social impact � Michael Milken case to illustrate 3 practices of legacy leaders Invented Junk bonds at Drexel Burnham Lambert In 1990 thrown in jail for market manipulation and fined $600mm In 1993 released and found he had prostate cancer Actions Milken Took Applied business skills to philanthropy in an area that hit home (prostate cancer) Researched field, identified for-profit, nonprofit, policy-makers other donors, and flow of funds � determined 80% of funds to treatment Used his influence to build a network of donors and pool donors. Not just about giving money. Created a public foundation � PCF � industry experts determine where money goes Convened the industry players to encourage collaboration � Acting with others and within a portfolio of needs Results from 1993 - 2004 24% reduction in per capita deaths from prostate cancer Raised $200mm (individuals) and $500mm (Gov�t) 20X increase Funded 1,100 projects selected by industry experts

9. Slide 8 Tools For Creating Social Impact Defining personal mission and allocation of time and money � checkbook, schools etc., cause. Select 1 cause to focus time Leveraging Money � matching grants Celebrity � Bono Company � The body Shop, Starbucks Network � Milken Convening and Pooling � First grant towards researching the terrainDefining personal mission and allocation of time and money � checkbook, schools etc., cause. Select 1 cause to focus time Leveraging Money � matching grants Celebrity � Bono Company � The body Shop, Starbucks Network � Milken Convening and Pooling � First grant towards researching the terrain

10. Slide 9 Generational Family Practices �How do I raise confident, motivated children, and create an environment of openness, trust and harmony within my family, preserving family values & institutions now and for future generations? Practice 6: Preparing Others To Take The Wheel Llaird Norton Family � started in lumber business in 1855, sold holdings and invested with Weyerhaeuser, now in its 7th generation with over 400 family members. Invest together, have family meetings with over 300 people. Want to be a 14th generations family. Preparing others to take the wheel and modeling the way (modeling & mentoring) � Norton Clapp, third generation, started convening family members. Archive of letters. Brought in new married people and son-in-laws. Mentoring Psychological � LN values the individual, celebrates the individual, milestones, weddings, births, birthdays, small achievements Financial � curriculum developed with an outside party for kids. Help them get jobs for summer. Budgeting. Borrow to start a business. Philanthropic � Opportunity in foundation leadership positions. Active 1-on-1 philanthropy. Turkey dinner cooked and delivered Constructing road signs & landmarks � Succession � family wealth, business, foundation Family unit � Communication, values Llaird Norton Family � started in lumber business in 1855, sold holdings and invested with Weyerhaeuser, now in its 7th generation with over 400 family members. Invest together, have family meetings with over 300 people. Want to be a 14th generations family. Preparing others to take the wheel and modeling the way (modeling & mentoring) � Norton Clapp, third generation, started convening family members. Archive of letters. Brought in new married people and son-in-laws. Mentoring Psychological � LN values the individual, celebrates the individual, milestones, weddings, births, birthdays, small achievements Financial � curriculum developed with an outside party for kids. Help them get jobs for summer. Budgeting. Borrow to start a business. Philanthropic � Opportunity in foundation leadership positions. Active 1-on-1 philanthropy. Turkey dinner cooked and delivered Constructing road signs & landmarks � Succession � family wealth, business, foundation Family unit � Communication, values

11. Slide 10 Generational Family Practices �How do I raise confident, motivated children, and create an environment of openness, trust and harmony within my family, preserving family values & institutions now and for future generations? Practice 7: Constructing Communication Lines & Bridges Practice 8: Building A Brain Trust Llaird Norton Family � started in lumber business in 1855, sold holdings and invested with Weyerhaeuser, now in its 7th generation with over 400 family members. Invest together, have family meetings with over 300 people. Want to be a 14th generations family. Preparing others to take the wheel and modeling the way (modeling & mentoring) � Norton Clapp, third generation, started convening family members. Archive of letters. Brought in new married people and son-in-laws. Mentoring Psychological � LN values the individual, celebrates the individual, milestones, weddings, births, birthdays, small achievements Financial � curriculum developed with an outside party for kids. Help them get jobs for summer. Budgeting. Borrow to start a business. Philanthropic � Opportunity in foundation leadership positions. Active 1-on-1 philanthropy. Turkey dinner cooked and delivered Constructing road signs & landmarks � Succession � family wealth, business, foundation Family unit � Communication, values Llaird Norton Family � started in lumber business in 1855, sold holdings and invested with Weyerhaeuser, now in its 7th generation with over 400 family members. Invest together, have family meetings with over 300 people. Want to be a 14th generations family. Preparing others to take the wheel and modeling the way (modeling & mentoring) � Norton Clapp, third generation, started convening family members. Archive of letters. Brought in new married people and son-in-laws. Mentoring Psychological � LN values the individual, celebrates the individual, milestones, weddings, births, birthdays, small achievements Financial � curriculum developed with an outside party for kids. Help them get jobs for summer. Budgeting. Borrow to start a business. Philanthropic � Opportunity in foundation leadership positions. Active 1-on-1 philanthropy. Turkey dinner cooked and delivered Constructing road signs & landmarks � Succession � family wealth, business, foundation Family unit � Communication, values

12. Slide 11 Tools For Preparing Heirs & Family Harmony

13. Slide 12 Transformational Trends & New Models The Transformation of The Wealth Advisory Industry Beyond Wealth Management & Financial Investing From Product Companies To Legacy Advisory Firms The Transformation Of Philanthropy (Blended Value) Corporate Social Responsibility (The Body Shop) Social Enterprises (Newman�s Own) Socially Responsible Investing (Domini Social Index) Strategic/Effective Philanthropy (Social Venture Partners) Sustainable Development (Value Village)

14. Slide 13 5 Lessons Learned Legacy is about leadership. Your time and how you spend it is your most valuable asset. The baby boomer wealth creation is an unprecedented megatrend that will require new tools and business models for success. Raising motivated and successful children with money is the number 1 issue on the minds of most individuals. Everyone leaves a legacy.

15. Slide 14 �With Great Privilege Comes Great Responsibility� Anonymous

16. Slide 15 Resources Self-Actualization: Steven Covey �Seven Habits of Highly Effective People� Scott Fithian, �Values-Based Estate Planning� Social Impact: �Generations of Giving�, Kelin Gersick �The Foundation�, Joel Fleishman �The Blended Value Map�, October 2003 Community foundations and Social Venture Partners Various Universities, Consulting Firms & Large Foundations Generational Families: �Family Wealth, Keeping It In the Family�, Jay Hughes �Children of Paradise�, Lee Hausner �Wealth In Families�, Charles Collier �Preparing Heirs�, Roy Williams

17. Slide 16 Questions/ Discussion