When an individual or a family accumulates resources that are enough to survive the wealth creator, they are transformed from wealth consumers to wealth stewards. In this role, they assume the added responsibility of making decisions that could affect multiple family members and generations far into the future. They begin to understand and appreciate both the responsibility and the opportunity they have to influence current family members and future generations in a positive or negative way. They see the need to take a strategic approach to planning for today's generations and those who will follow them.

As new households are added, the family begins to resemble not only a typical ancestral tree but also an organization whose members are related by blood or marriage. To keep the fortune and family intact, a formal structure that allows for joint decision making and conflict resolution becomes more important.

The Family Office Exchange coined the term instividual, which brings together the concept of family members connected as an organization through their common ownership of wealth. At this point, the family takes on many of the characteristics of a business, including a leadership group, those in control of the wealth; a stakeholder or stockholder group, those with a current or future ownership stake; and often an employee group, those who work for the family to help manage the shared resources.

The Essential Question

Before a family begins its journey into all the activities surrounding the management of wealth as a group, members must ask themselves a critical question: Are we a family or are we simply people related to the same antecedents?¹ From that question come many more:

• Do we have similar values that could form the basis for a coherent wealth management strategy?
• Do those values come from a sense of shared family heritage and history?
• Are we willing to work together for the benefit of the family as an entity, even if it means giving up some of our own autonomy?
• Do we trust one another, or are there deep divisions within the family that would make it difficult or unpleasant to work as a family unit?
• If we have never considered these critical questions, are we willing to examine them now? Will we be happy to take the time and make the effort required to set the stage for understanding one another and making decisions together so that all may prosper?

If the answers to these questions suggest a willingness and an ability to pull all the oars in the same direction at the same time, it may be time to build the family boat.

Christian Caspar, Ana Karina Dias, and Heinz‐Peter Elstrodt² mention that family businesses that endure do so because they are well‐run and governed by agreements that are written down and understood by those family members who are part of the business. They go on to say that “the interpretation of these agreements, and the governance decisions guided by them, may involve several kinds of family forums. A family council representing different branches and generations of the family, for instance, may be responsible to a larger family assembly used to build consensus on major issues.”

For families of shared wealth who have agreed that common wealth management is a sensible course, the most useful way to build a decision‐making framework is to establish a set of organizational or governance tools, including a vision statement, mission statement, and family constitution and bylaws. These tools help the family keep in tune, clarify the roles of each group of stakeholders, and share the beliefs of the wealth owners with current and future generations. They also provide a defined exit strategy for any stakeholder who does not agree with the principles and structure and therefore chooses to leave.

The best way to bring these useful tools to fruition is for the family to craft them with the help of an experienced facilitator. By creating these foundational documents, the family builds the platform on which to set a solid and sustainable family wealth management structure. The vision and mission statements articulate the individual and shared values of the current group of family members. These values represent the family's fundamental beliefs and are the driving factors for decision making in their day‐to‐day lives. They are created by past experiences and learnings and they form the foundation of what the family believes will be important in the future. Understanding and memorializing the family's past experiences, present values, and vision for the future provides a common purpose around which to align the family and its wealth. This common purpose allows them to create goals and objectives concerning how they manage their wealth.

In many families, the need for new goals becomes apparent when the family sells a closely held business they shared as owners or future owners. For a protracted period of time, the family business may have served as a rallying point around which family members gathered and bonded, told stories, and imparted values. However, if the business is sold, the focal point of the family organization disappears. The family is no longer a business‐owing family but a financial family. As the Hawthorn Institute puts it, “A business owner family is … a single family that exercises control over a closely held business. A financial family is … a multigenerational family that has attained affluence primarily through the successful operation and sale of a closely held family business.”³

After the sale, the family may be very wealthy, but it often lacks the unity the organization of the business provided for it. At this juncture, family members come face to face with the challenges of shared ownership outside the family business and the importance of the structure and fellowship the business offered. The idea of applying family business principles to the new business of family becomes attractive as the group reaches for coherence, effective decision making, and efficiency in managing their new circumstances.

Vision and Mission

Although they are related, a vision statement and a mission statement are not the same things. The Foundation Center defines the two: “A vision statement expresses an organization's optimal goal and reason for existence, while a mission statement provides an overview of the group's plans to realize that vision by identifying the service areas, target audience, and values and goals of the organization.”⁴

A vision statement defines what the family believes is the optimal way of being in the world and offers inspiration and guidance as family members work toward that goal. It's aspirational and a touchstone for the family when they are making crucial decisions about who they are and what they support. The statement should be memorable and easy for everyone to understand. It might serve as the opening of any family meeting, so it is reinforced for adults' understanding and children's learning.

A vision statement looks to the future. It's a “we will” promise, although many organizations don't use that exact wording. CVS, for example, wants to “improve the quality of human life.”⁵ And at Ford Motor Company, the vision is “people working together as a lean, global enterprise to make people's lives better through automotive and mobility leadership.”⁶

Like businesses, private foundations have their own visions that are based on a variety of factors. For example, the vision of the Samuel Bronfman Foundation is to “inspire the Jewish community to leave this world a better place than we found it,” and the W. K. Kellogg Foundation envisions “a nation that marshals its resources to assure that all children have an equitable and promising future—a nation in which all children thrive.”

A mission statement is somewhat more pragmatic and practical. As Andrew Bangser, president of Foundation Source, said, “An effective mission is one you have the scale to accomplish. Biting off the right size chunk of the problem is the key in being able to make a difference.”⁷

The creation of a vision statement helps the family stay on track even in the face of difficulties such as the death of a family member who has had a significant role in leading the organization. A clearly defined vision keeps the ship afloat even as the waves are rising.

A mission statement, on the other hand, has a shorter time frame and can be adapted to meet changing circumstances. In an article for Psychology Today, Janelle Evans says that a mission statement “defines the present state or purpose of an organization … and answers three questions about why an organization exists:

• What it does
• Who it does it for
• How it does what it does”⁸

The American Red Cross mission statement covers all the who, what, and how bases with its mission statement, which says the organization “prevents and alleviates human suffering in the face of emergencies by mobilizing the power of volunteers and the generosity of donors.”⁹

The St. Jude Children's Research Hospital has a strong mission statement: “… to advance cures, and means of prevention, for pediatric catastrophic diseases through research and treatment. Consistent with the vision of our founder Danny Thomas, no child is denied treatment based on race, religion or a family's ability to pay.” Donations pour into the hospital to help make that promise a reality.¹⁰

At the MacArthur Foundation, a massive private foundation, the mission involves creating a “more just, verdant, and peaceful world,”¹¹ and the foundation has the resources to make a major difference in the areas they support. These wide‐ranging interests include health, population, education, conservation, arts, and culture to name just a few.

In 1953, the Howard Hughes Medical Foundation stated that “the primary purpose and objective of the Howard Hughes Medical Institute shall be the promotion of human knowledge within the field of the basic sciences (principally the field of medical research and medical education) and the effective application thereof for the benefit of mankind.”¹² Even a cursory look at the statement provides a clear picture of what the foundation will support and how it will do it.

The Ford Foundation mission says, in part, “Across eight decades, our mission has been to reduce poverty and injustice, strengthen democratic values, promote international cooperation, and advance human achievement.”

Although not stated as a mission, The Lilly Endowment says it “exists to support the causes of religion, education, and community development. The Endowment affords special emphasis to projects that benefit young people and promote leadership education and financial self‐sufficiency in the nonprofit, charitable sector.”¹³ Although the endowment awards grants elsewhere, the organization notes that its primary interests are in the city of Indianapolis, where the Eli Lilly corporate offices are located, and the state of Indiana.

Families seeking to create their own mission statements may put more emphasis on one of the three traits Evans mentions, and the language of the statement may be revised as it is reviewed periodically based on economic conditions or new priorities and possibilities. Although it can be revamped, revision should not take place unilaterally. Like a vision statement, the mission statement looks forward with optimism, but it is oriented toward action rather than contemplation.

A mission statement, like an ethical will, is not a legal document, but it is a useful guide for making important decisions, enhancing family harmony, and ameliorating conflicts that might never have surfaced had great wealth not entered the picture. Money can bring out the best in a family, but if it's not managed well, it also can open up old wounds and result in anger, frustration, and hostility.

Creating a vision or mission statement takes more planning than simply sitting around in a living room with a bunch of family members and having everyone shout out what they believe in. Discussions like this can become circular, contentious, and unproductive if they are not well structured. A trained facilitator skilled in consensus building can be helpful in leading the exercise. The facilitator can capture and categorize input, assist the family in recognizing where commonalities exist even in areas of disagreement, keep the discussion moving by periodically restating the essence of the exercise, and, most important, make sure the process isn't dictated solely by the wealth creator or a small cabal of older family members.

Vision or mission statements that are imposed rather than agreed to are statements that will fail. Family members who have no input will be resentful and disinclined to participate in making the family mission work. They may not be actively hostile, but they will be far less committed to the success of the process.

Getting Started

To create the vision statement, it helps to look once again at the family's history and consider what insights or guiding principles suggest the foundational values. Writing a vision statement can take several hours or even a few days; once again, it's helpful to employ a professional and objective facilitator to manage the meeting. Prior to organizing the family session, a survey or questionnaire could be administered to the adult family members, both to gain their feedback and to motivate their participation in the meeting. The questions in such a survey often involve family dynamics and how to come to a mutual understanding around values. They might look something like this:

In your opinion:

• What are the values that most bind us as a family? How do we enact them? How do we instill them in the next generations?
• What have we discovered to be the strengths of the family? Are there traits and tendencies that undermine our strengths? How do we deal with them now? How should we deal with them?
• What are the roadblocks to family unity? What can we do to remove them?
• How do we choose the family leaders? By age/generation, skills and talents, or some other qualification?
• How do we deal with inevitable changes such as death?
• How do we take care of one another if or when we become unable to carry out our responsibilities?
• What do we do if we have serious disagreements about decisions that are being made by the family leadership?
• How should the youngest generation be educated about the family's legacy? At what age should that begin? When should this generation become part of the decision‐making processes?

The Values Edge System: An Exercise in Personal and Team Discovery, which “clarifies personal values, enhances relationships, [and] strengthens team performance,”¹⁴ is sometimes a very effective tool to help structure the discussion and align the input of the key family stakeholders. This system, created by Dr. Dennis Jaffe and Dr. Cynthia Scott, offers a mechanism by which family members can understand and communicate their individual and shared values. The system originally was designed to foster organizational effectiveness for management teams and employees of operating businesses. However, given the similarities of the issues families of wealth face in working together, this system also can serve the purpose of bringing the family into agreement with a communal set of values. Other types of instruments also may work for specific families.

Once family members understand and document their independent and shared values, they can use the areas of commonality to develop the basis for a vision statement. For example, say a particular family identifies the following five values as the ones that collectively are most meaningful to the family:

1. Spirituality
2. Family harmony
3. Community
4. Integrity
5. Health

A subset of family members might then work together to write two or three options using the five values for the family to vote on. The options might include:

• With our family's foundation in our reverence for God, we will encourage family members to live physically and socially healthy lives with a focus on integrity. We will use our resources to inspire family harmony and support for the communities we live and work in.
• Spirituality is at the core of who we are as a family and is the guidepost for how we will live our lives, with integrity and a focus on family unity, healthy living, and our greater community.
• The health of the community is our highest value, and we will dedicate a portion of the family wealth to supporting programs that promote physical, emotional, and social well‐being.

From questioning, participating, and, most important, listening to each other, a family often will be able to discern a vision that supports its shared history and values. Because of its long strategic view, the vision statement usually remains a constant North Star over the years.

Of course, the resulting document is important, but the process itself is equally so. Working together on a concentrated project can help resolve old conflicts, reveal unexpected talents, and tease out new directions the family might wish to explore. Creating the document can be exciting and energizing for every member of the family.

Once the family has been successful in defining its vision, it can move on to the mission statement: the document that defines how the family will act out its vision. As before, questions can be the catalyst to get the family talking and agreeing. Inquiries around mission tend to deal more with shorter term, day‐to‐day decisions and might include such topics as:

• How should we use our financial and human resources to support our family vision?
• How should we invest our money to make it support the family's values for generations?
• What are the activities and opportunities we should consider and encourage to strengthen the family?
• What should we avoid and discourage among family members?

Because of its shorter term, the mission statement is somewhat more fluid and tactical. A mission statement needn't be lengthy; a paragraph or two may suffice. If we use the first hypothetical vision statement from the prior example, the mission statement might be:

The mission for our family is:

• To encourage family investments and activities that are congruent with our spiritual values.
• To inspire, support, and resource healthy lifestyles in the community and to help family members and others who are struggling with health issues.
• To work and play together as a family by providing consistent and compelling opportunities to interact and participate while encouraging and supporting individuality.
• To accept our responsibility as part of larger society and use a significant portion of our time, money, and talent to support the greater good and to monitor and measure the results.

Families with Purpose suggests a three‐pronged approach to writing the statement: action, the manner in which the action is carried out, and the benefits or results of the action.¹⁵ The following examples show this principle in practice:

• As a united family, to care for one another and participate in impact investment in the technologies and ideas that will provide better lives for the members of our community, city, and state.
• To increase our family fortune by following the ethical precepts of those who came before us and to ensure the finest education and the widest array of vocational choices for those who follow us.
• To improve the health and economy of the world by using a significant portion of our shared resources to support cutting‐edge research in the treatment and elimination of Alzheimer's disease, which devastates families and may cause international economic chaos within the next thirty years.
• To work with other families of means to identify areas of emerging global concern and to partner with international organizations to devise solutions that will result in stronger, healthier societies throughout the world.

It's evident that family mission statements are as different as the families themselves. However, no matter how the family defines its values, vision, and mission, the written documents are invaluable in creating family fellowship and movement toward a united and thriving future.