Elevating Women Magazine-Empowering the Next Generation
Celebrating the women – and their supporters –
who are forging a path for the next generation of business leaders.
*Winter 2023*
Elevating Women Magazine
<strong>Empowering the Next Generation</strong><br><br>Be inspired to own your future and help rising generations do the same.
*WELCOME*
Empowering the Next Generation
Be inspired to own your future and help rising generations do the same.
Women’s growing economic influence across all generations has been one of the most significant shifts within our economy across recent decades.
Through both wealth creation and inheritance, women are set to control more than two-thirds of private capital in the U.S. by 2030.
While this new dynamic represents great progress toward our financial equality, the reality is that nearly half of us still defer long-term financial decisions to our male spouses. And surprisingly, recent studies show Millennial women are doing more than any other generation. A primary reason is a lack of confidence — a belief that men know more about investing.
To change this mindset, we have to take action. Leading by example to expand our knowledge, share our stories and engage women of all ages will lead to teachable moments that empower us — and future generations — to build confidence around all aspects of our wealth.
In this issue, we celebrate two women who are harnessing their expertise to impact all generations. From a woman inspiring boldness through the skills learned in poker, to a Millennial successor using her own unique experience to help bridge the generation gap — this issue is proof that leading by example is one of the most effective ways to empower those around you.
We hope this issue inspires you to own your wealth and help rising generations do the same.
Enjoy!
Steph Wagner
National Director of Women & Wealth
Northern Trust
*Conversations That Inspire*
Raising the Stakes
Learn how Erin Lydon is using poker to help all generations of women "go all in."
Steph Wagner, National Director of Women & Wealth, sat down with Erin Lydon, President of Poker Power, to discuss how poker is more than a game; it’s a game-changer for women across all generations.
We hope you enjoy learning about how thinking like a poker player gives all women the skills to succeed from the classroom to the boardroom.
The following transcript has been edited for clarity.
Steph Wagner: Erin, I am so glad you're here today. I have been looking forward to this conversation.
Erin Lydon: I'm so delighted to be here with you. And thank you to Northern Trust for having me.
SW: Absolutely! I think that what you're doing with Poker Power is so interesting. And I have to admit, at first I didn't get it — poker and women? And then the more I learned, it hit me. Our organizations both share the mission of the economic empowerment of women and recognize the importance of providing the resources and tools to really impact them and help them build confidence around money. And I just I love that! So, I'd like for you to start there.
What is poker power? And really, I think, almost more importantly, why poker?
EL: Great. Happy to do so. I get asked this question a lot. The company name is Poker Power. So, at our core, we are a community of girls and women, and we are using the game of poker, the strategy of poker, to empower women across the globe. And we do it through a very innovative curriculum. We are virtual; we are in person; we are on apps. We've built the products that are needed to deliver the messages and the skills and the strategies that are so critical for girls across the board — we say we're from interns all the way to the C-suite, teenagers to grandmas. That is our community.
You may not know this if you're not a poker player, but poker is a game of adjustments. Poker is a game of imperfect information. And what occurs at a poker table so closely mirrors what occurs in a boardroom or what occurs at a negotiation table. When you're talking with a client and you're trying to figure out a strategy to get them to the next step — all of that can be practiced through poker game play, and that's the secret sauce. Typically, when you think of poker you think of gross smoky basements, opulent casinos and you think of places that women don't sit. And that's what
we're changing.
SW: I love it! And you’re talking about how it's teaching negotiation skills and how it's teaching strategy, right? To be more strategic, to think beyond just what's in front of you, to try to predict and react. I love that. And I think even beyond just negotiating during the day-to-day at work, even negotiating your worth. It's so important not just for us, but especially for the next generation. Can you talk a little bit about how this all came about? Because it really is an incredible story.
…poker is a game of adjustments. Poker is a game of imperfect information. And what occurs at a poker table so closely mirrors what occurs in a boardroom or what occurs at a negotiation table.
EL: Well, I love telling this story because I was not a poker player at all. And I started my career on Wall Street. I started a career in finance in 1999 and back then pay was secret and pregnancy was hidden. And I was surrounded by a lot of men and a lot of poker, and I never took my seat.
The original idea for Poker Power actually came from Jenny Just. She is the co-founder of PEAK6, which is an equity options trading firm here in Chicago, as well as many other businesses. In fact, we are one of the portfolio companies. The moment that really was the ‘aha’ around poker was with her 14-year-old daughter, Juliet, who at the time was a very good tennis player but had had kind of a mediocre match. Jenny and her husband Matt were in their kitchen talking, and Matt says, ‘Juliette should learn to play poker.’
Jenny, who is a visionary and sees a solution to a problem before most of us even realize there is a problem, sort of sat with that idea: ‘Should I really teach my 14-year-old daughter to play poker?’ And it sounded so funny to her, especially because there are three older boys in that family. All three of them know how to play poker and they weren't taught. They just grew up knowing how to play poker.
SW: That's right. My three boys as well.
EL: But why did it sound so strange to say that a 14-year-old girl should learn to play? What Matt was getting at is he realized in her tennis game, she wasn't playing the player. She wasn't being strategic. She wasn't predicting and using probabilities, thinking what's going to happen next in the match. And so, he saw that as something that could be improved through the game of poker.
And so, when we started we were very focused on high school girls. Initially, it made sense. We got Juliet and a bunch of her friends together. We had to find a female poker teacher, which is not easy to do. Our very first teacher is actually a Chicago Public Schools third-grade teacher and an excellent poker player. It really was grassroots.
But what started to happen is the moms would say, ‘Well, if it's so good for my 14-year-old daughter, why am I not doing this?’ Women typically don't play this game, and women certainly don't Google how to play poker. So, the whole premise around the game, and the negative stereotypes so many of us hold, prevents us from even exploring that this could be just an incredible tool.
SW: Well, I think that's what hit me, personally. As I learned about it, I was like, ‘wait, wait, what?’ I had the exact initial reaction that you just described. And then when I began to peel back the onion and really dive into it, I thought, ‘This makes complete sense and why am I not playing?’ In fact, we should all be playing. So it’s working, Erin!
And I love the story of how it was created. Can you talk a little bit about the pivot? While you did start with girls, the company is now heading into a different direction and yet you're using this new direction to still impact that next generation.
EL: So, I joined the company in February of 2020, and if you think back to February 2020, there was a lot happening in the world. And three weeks later, we were in lockdown. I thought I was going to run a company where we taught real women, with real chips and cards at real tables. That was the idea. But very quickly we had to pivot and become very innovative. We had to start to use the virtual world that we were all thrust into, or this business would have failed, and we would just run out of steam.
We had to translate gameplay to negotiation and decision making and problem solving, and we had to create the fun part.
Very quickly the girls who were in our community were completely overwhelmed by the amount of time they had to spend on Zoom. Their schooling and the disruption to their lives was enormous. We really lost the momentum that we had just started to build. We had three months to figure it out. That’s the runway that Jenny gave us to create a virtual curriculum.
We knew we had to make poker incredibly welcoming and inclusive. And that’s not what the game is. It is none of those things. We also had to make it bite size, we had to make the lessons digestible. We had to translate gameplay to negotiation and decision making and problem solving, and we had to create the fun part. And I don’t know if you remember, but it was hard to have fun across a Zoom screen. We didn’t know how to do that.
SW: No, none of us did.
EL: And so as we looked to bring our community together, we started to pivot to corporates. And the reason we did that is it is so clearly a next step for women on any step of the ladder looking to accelerate their careers. They’re looking to get comfortable with money. And you can do that through the game of poker. We initially partnered with a few internal companies at PEAK6.
Our first actual external client was the Grace Hopper Celebration of Women in Computing, the big technology conference for women, and we taught 100 C-suite technologists over Zoom. And I will tell you, I've never gone back and watched that video because I think I would just be absolutely mortified, you know how bumpy we were at being virtual back then.
SW: Yes, we all were!
EL: But that's really when we started to receive feedback like, ‘Oh, this is fun, this is fascinating. I see why these skills matter!’
SW: And you're building a community, which is so critical at any time. But I think during that time in particular, creating that engagement, creating those connections for people was so important. Obviously, so many positives there. And your timing — there are a lot of silver linings that came from that period of time. We all learned a lot.
And I'm glad that this new direction has yielded such success.
I also think it is important to add that we all want to give something positive to our children, right? Of course, I want to teach my three boys things and give them tools that will positively impact their careers, their lives, and help them learn from our successes, right? As well as our mistakes. But we often don't sit back and realize how much we need something in that moment. And you’ve created awareness around that.
And also, the need for modeling. If we do it first, we're showing the next generation through our actions, not words. So, you're really creating a phenomenal way to help ourselves and the current leaders of corporate America, but also to impact our children. And I just love that. I think engaging that next gen this way is powerful, and maybe even more powerful than the original direction of the company.
Confidence in the game of
poker transcends into
confidence in life.
EL: I do too. And I think poker game play at its core is a game of interaction. No one plays poker all by themself. It’s not very much fun. You need a community. And what happened during the pandemic for us, pivoting mostly towards corporates — we will always teach young girls; it's very much part of our mission — but now we've been able to scale to 40 countries and we have 150 corporate partners. That, I really don't think — and I can say that as the person running this company — my head would have gone there back when we started. It simply wasn't a possibility.
SW: I love it. So why don't we talk a little bit about the curriculum? Because how you're doing it is really impactful. First the why, but now let's get into your approach.
EL: We've built 18 one-hour poker lessons. That's our flagship offering and that's what we deliver across the globe via virtual lessons. When you first learn with us, we will tell you that you're going to learn leadership lessons by gamifying poker. It's gamifying the game of poker. We’ve also gamified leadership.
Each lesson has a theme and each one is an hour. The first one is courage, because it takes a lot of courage for a woman to sit down at a poker table. We're very trepidatious to do that. The next one is bold. This lesson teaches how to use aggression at the poker table, which is a critical skill to win a poker game. This is just as critical when you're negotiating and working with clients.
SW: I love what you just said because so often as women, we shy away from being aggressive. We are afraid of delivering that message. If we're aggressive, how will that be received by others? What you are talking about really is about building confidence. Confidence in the game of poker transcends into confidence in life. I love it! I know you have some rules too, right?
EL: Oh, we do, yes. We like to only give two or three bits of information in each one of our lessons, and that's what we want the women to be practicing when they're playing with us. For lesson one, our rule is no limping. And it is just as bad as it sounds. In poker, no limping means that you can’t just put in enough chips to stay in the hand. In other words, you're not going to call the hand and put the minimum in.
Instead, what we teach in our classes is that we want you to do three times the big blind. And if you don't play poker, I am sure you're thinking ‘what is all that?’ There is so much jargon in poker so please don't worry about it. All you have to take away from this is you don't get to play the minimum, and I want you to push to the maximum. I want you to actually feel outside of your comfort zone and fail because you're going to lose a lot at poker. Even the best poker players lose a lot of hands at poker. The secret is, that when you have the hand or when you're in the position to bluff (and there's a lot of factors that will help you make that decision) that's when you're going to lean in and be aggressive.
As women — and I know this about myself — if you didn't grow up doing that on the sport court or you never navigated a male dominated environment and been successful, it can feel really challenging. And we can't just walk into the first time we negotiate something that really matters and know how to do it. You have to practice it. And the poker table is a superb place to practice.
SW: Unbelievable. First of all, ‘no limping’ is the new mantra… I love it! It's so symbolic of so many things, but what you're also talking about is building the confidence to take risks, and leaning into that discomfort, because discomfort means you're growing. I love it. And this is a real live version of it all playing out and seeing the rewards and, to your point, the failures. Because we learn from those too. I love that you highlighted that. Brilliant.
EL: One of the other lessons that is easy to remember so we say it a lot, is that if your hand is good enough to play, it's good enough to raise. Without knowing the jargon of poker, all you need to understand is that as you're looking at your two cards — and they're private, no one sees those — you have to make a very binary decision. Am I going to raise or am I going to fold? Fold means you're out of the game. Raise means you're still playing. In Poker Power, we say if your hand is good enough to raise — and we help you understand how to make that decision — then we want you to play it really big. We want you to go in with a lot of chips.
And I can tell you whether it's virtual, or at an in-person workshop, as soon as we say to a player who puts in just two chips, we're like, ‘no, you’ve got to do three times the big blind,’ which means six chips. Typically, she'll then say, ‘I can't do that. That’s so much, that’s so many chips. I can't do that.’ And I say, ‘You can!’ The physical act of pushing value to really validate the decision you’ve made — that shifts the mindset. It’s intellectual and physical, and it works. The best moment is when a woman has analyzed the situation and she’s made the right decision at the poker table, and she wins all those chips and gets to scoop them all back. That’s my favorite part.
SW: Those are powerful words, really powerful words, that you just said. It’s much bigger than just at the poker table when you think about it in the game of life, right? One thing that is important to stress is no money is ever exchanged, correct?
EL: Yes. Thank you for saying that. And it really is critical because the stereotypes around poker are very much situated within a casino or in a home game space where there's 20 bucks on the table. At Poker Power, there is no money. There’s no gambling. Everything we're doing is to stack skills. And that's really how we think about it.
And also, as you mentioned earlier, the risk taking — we actually were concerned in the very beginning that if there's no money on the table, is it really going to feel like a risk? Are you really going to be able to practice that? We now have no concerns about that at all because we have almost 30,000 women that are in our community now, and I've watched so many of them struggle to push those chips in.
At Poker Power, there is no money. There’s no gambling. Everything we're doing is to stack skills. And that's really how we think about it.
And what we know with women is if you have $10 to spend, you're going to really think ‘Do I spend it on me? Do I spend on my children? Do I spend on my charity?’ Most often ‘me’ doesn't get the $10. And so, we're typically very uncomfortable making that decision and then putting the risk into the table. We think it's just a critical way to get better at it.
SW: Yes, I couldn't agree more. Well, let's talk a little bit about that next gen, because I know this whole amazing idea started with the desire to impact the next gen. You're very much impacting the next generation in the work you're doing right now through your corporate programs, through the mothers, the sisters, the aunts. But can you talk about the great work you're doing directly with the next gen? Again, aligning with the inspiration of how this all started?
EL: Thank you for asking this because at our core we are so committed to empowering young girls. So actually, before they even step on to the ladder, they have leveled the playing field. We think it's really critical. And at Poker Power, we are not trying to exist outside of everything that happens in corporate America, outside of men at all. We're just trying to provide skills so that women can be more competitive when they get there.
One of the things that we've done is partnered with a number of high schools, certainly here in the U.S., but even abroad. In fact, the partnership we're most proud of is with an organization called Global Give Back, which is an extraordinary nonprofit organization. And we have been asked to teach 5,000 girls across Kenya how to play poker. We completed our first cohort and are starting our second cohort in January 2023.
It was an extraordinary experience, because obviously this is all virtual. You may not realize this, but technology was a big challenge. We needed cell phones for all the girls so they could play on the poker app. We had to deal with bandwidth issues on Zoom. There are many, many obstacles, but the girls stuck with it. Our instructors stuck with it.
We've just received feedback from this first cohort. It's extraordinary how life changing it has been for these girls who grew up in very marginalized communities, with very limited opportunities. They sometimes play better than any of us. They are able to translate practicing aggression at the poker table and apply decision making at the poker table to the opportunities they're now creating for themselves.
Anything we do with schools, we do without cost to the students. As I shared, it's very much a part of our mission and we want to be empowering the next generation. And now we have this incredible example of what we’ve done in Kenya, and we want to replicate it around the world.
SW: It’s not only where you started (focusing on next gen) but really where you've been doubling down — no pun intended.
EL: Raising the stakes.
SW: Exactly. I mean you're helping them, no doubt. But the gift back to you, as an organization, is huge. Just phenomenal work. What are some other examples?
EL: Another thing to add is that many in our community now are adult women and working women. And what we love to see is when the women start to share this with their daughters and their nieces. And I can tell you personally that this happened to me over Thanksgiving. I have two teenage daughters. One is 16 and one is 19. And my 19-year-old came home from college and I said, ‘Will you play poker with me?’ She knows how to play, but she's not really a game player. She's just not that comfortable. Well, she played phenomenally. The progress I saw in her, her processing and analyzing of information, she's thinking about the probabilities of pot odds and making decisions based on that. So, I had that moment with her. But even more importantly, I now have a game that I'm playing with both of my daughters, and they feel amazing. They feel so confident when they get to pull all the chips in from the pot.
We know that this is very much from mother to daughter, to sister to friend — that is truly how we're going to scale to a million women, which is the goal. And so, if I can teach you and then you can pass it on to your niece, and she's going to tell someone else because you don't play poker alone. You have to find a community to play with. So come to us or certainly, you know, share it with your friends and family.
SW: Well, I love that story because it's about meeting at a common place to do something together. And even the dialogue that comes out of that experience together is a gift. And I think there's so much talk about how generations are so disconnected, and how the next generation thinks differently than we do. We do think differently than them, but this is a way to bring generations together and do something and learn together, simultaneously. Now you have become quite a player, haven’t you? But for me, sitting down with next gen, I'm at the starting point just like them. I've never done it before. So, to do that together, I think is really powerful and a really unique opportunity.
…it doesn't matter where you went to school; it doesn’t matter what your title is. When you sit down at the poker table in those first few hands everyone is even until you start to play the player…
EL: Well, the poker table is a meritocracy. And the reason we say that is, it doesn't matter where you went to school; it doesn’t matter what your title is. When you sit down at the poker table in those first few hands everyone is even until you start to play the player, which is what we say in Poker Power: you're playing the player, not just the cards.
For girls in particular, that can be such a confidence booster for them because it doesn't matter what the background is. We are going to start to play this game. I may know you as a colleague, but I don't know how you're going to play poker. And there’s all sorts of personalities and skill sets that come out at a poker table.
And in fact, at a poker table, you actually never have to speak. And that's another very interesting point for women who might be more reserved verbally with what they want to say in particularly high stakes, confrontational settings. You don’t have to say a word at a poker table. You can make all your decisions, show all your worth, by how you play those cards and those chips.
SW: I never thought about it like that, but really an interesting insight. And you're absolutely right!
Well, Erin, I cannot thank you enough for your work. I think our audience will understand why I got so excited when I heard about Poker Power and learned more about the great work that you and your team are doing. I'm excited to start playing poker!
EL: I can’t wait to teach you! It’s my favorite
thing to do. »
*Spotlight: Women Elevating Others*
Leading By Experience
Meet Nike Anani, the woman helping families bridge the generation gap.
As a family member of Millennials or Gen Zers, you may at times find yourself worried about whether or not they are prepared to manage their financial futures.
While research shows younger generations are engaged in their wealth, many lack the tools to invest effectively. In fact, recent surveys reveal only one in four Gen Zers understand the stock market1, and only 37% of Millennials feel knowledgeable about investing at all2.
While every family has its own dynamics and should not be stereotyped, generational divides (communication styles, values, perspectives) often make it difficult for older family members to impart knowledge and empower their younger loved ones to lead financially successful lives. This challenge may be further complicated for children of wealthy families, as the success of the family legacy is often largely dependent on the older generation’s ability to equip their children to manage the many complexities of wealth.
Nike Anani knows firsthand about the importance of empowering the next generation. As the daughter of an entrepreneur, her personal experience as a Millennial successor has provided her with a unique perspective on the challenges rising generations often experience as they step into wealth ownership. Through her work as an award-winning family business consultant, speaker and author, Nike has dedicated her career towards helping families bridge the gap between generations.
Drawing from her personal experiences, Nike expounds on four ways families can work together to empower the rising generations to own their wealth.
Have Dialogues; Not Monologues
Rising gens appreciate their parents’ desire to impart wisdom and experience onto them. However, when it comes to communicating their insights, the older gen often thinks they’re doing so effectively, but from a rising gen’s perspective they’re often not. As a next gen, we want to be spoken with, not at. We want to be part of a two-way dialogue where we have the space to ask questions, gain additional insights and offer feedback. Ultimately, this can help us better understand the older generation’s perspective, including the ‘why’ behind some of their ideals and decisions. Too often, the parental dynamic becomes the default, preventing everyone from being heard. With Millennials and Gen Zers this is especially important. We want to have a voice in the matter, and most importantly, feel confident that prior generations care about what we are saying.
The book “The Quest For Legitimacy” by Jamie Weiner offers some great insights on how to encourage the younger generation to proactively communicate, explaining how family leaders are like giants in the eyes of the rising gens, making them difficult to approach. It’s helpful as the older generation to openly share your struggles, your mistakes, your failures, your anxieties, so that you can be humanized. This can help the rising gen feel more comfortable coming to you and saying, ‘I really messed up, I made this mistake.’ And in turn this gives you the opportunity to say, ‘I have been there before. I understand,’ and ‘this is what we can we learn from this and move forward.’ Sharing struggles can be challenging for those who want to protect their family from the issues and trials of life and keep them in a perfect cocoon. Parents do the rising gen a disservice when doing this because it’s really through the trials, the failures and the mistakes, that the next gen has an opportunity to learn and develop a growth mindset and grit.
Respect Generational Differences
It’s important for family members of all ages to understand and respect that different generations hold different belief systems. Each grew up with different experiences and factors that helped form their perspective. In my experience, many of my elders started their careers in environments that encouraged (and at times demanded) them to work around-the-clock. Today, they proudly describe themselves as ‘workaholics’ and judge younger generations who desire work-life balance. To me and my peers, it’s more about working smarter, not harder. It’s not that we want to work less, or lack appreciation for the dedication it takes to succeed — we just want to be more strategic about how we use our time in order to leave room for our personal lives. Many of us have watched the older generation sacrifice their mental and emotional well-being in the dogged and constant pursuit of success. As witness to this, we often do not want the same for ourselves. We believe work-life balance is a component of success — not something that must be sacrificed in its pursuit.
For example, I’m of a strong view — which is in sharp contrast of my father’s — that I don’t necessarily need to be in the field every day to add value. I can also be impactful from the sidelines as a strategic advisor, board member, serving on a committee, chairing the family council, and still significantly add value. I will then still have the time (and energy) to devote to my personal life. Because ultimately, I don’t want to feel obligated to our family business; I want to feel a sense of gratitude toward the opportunity of being integral to it.
Rather than allowing generational differences to polarize conversations, avoid judgement and respect that each generation has a unique perspective that’s been derived from their life experiences. Doing so will help multi-generational families find common ground.
Have Empathy
Many rising gens are intimidated by their parents’ success. Some struggle with what is commonly known as imposter syndrome, asking themselves ‘Did I earn this or am I here because of my last name?’ Overcoming this struggle requires an inner journey of getting to know oneself and developing deep conviction around what one brings to the table. It is important for older generations to have empathy for the psycho-emotional dimensions of the successor growing up around a prominent, storied, successful individual.
Personally, I found that I had to develop inner strength to challenge my dad, who was a prominent figure in both our community and industry. In my culture, challenging older figures is not appreciated. The ‘daddy-daughter’ dynamic caused me to default to doing as I was told and I often felt disempowered. My father’s leadership style and strengths differed from mine: for instance he was very deeply involved in every detail of the business and tended to micromanage operations. He knew everyone from the COO to the custodian. I wanted to lead differently: I didn’t have to be my dad 2.0 to be effective. To become confident in my approach, I had to get very clear about the value I was bringing to the table given my professional experiences and character strengths. I had to be at peace with the fact that I could embrace work-life balance and still make an impact on the business by creating a collaborative environment, empowering team members and being more strategic. This enabled us to move away from the ‘daddy-daughter’ dynamic and to a ‘partner-partner’ relationship.
As the daughter of a business owner, it was also difficult for me to feel as if I earned the title of a successor leader. Particularly when all the relationships I’ve inherited, all the boards I’ve served on, all the companies we’ve invested in, all the suppliers, the customers — they still see me as the daughter. There was one particular board that I found extremely intimidating. I was the only woman, and the youngest by at least 20 years. But the Chair from time to time would stop and say, ‘Nike, do you have something to contribute here?’ ‘Nike, I’d love to hear what you have to say.’ That left a big impression on me and encouraged me to find my voice. Having empathy for the next gen’s struggle to find their identity and taking steps to reduce self-doubt can build their confidence in their ability to lead.
Be Open-Minded
The next generation often plays an internal tug of war between the ‘me’ and the ‘we.’ While the desire to see your children follow in your footsteps is understandable, consider your children’s struggle with finding their place in the world. Recent data suggests that many rising gens often want to pursue a different path than their parents, particularly when a family business is involved. Some of us might want to utilize the family’s platform or resources differently — whether it be financial, social, political, or intellectual — to accomplish our dreams and build a new (and often very different) legacy.
Encouraging a child’s individual gifts and talents, and being flexible when it comes to how they want to be involved in the family enterprise (if at all) isn’t always easy. But, it is important to remember that ultimately the goal in any family legacy is engagement from the next gen — whether they follow your lead or forge a new path entirely. Being open-minded and supportive of individual aspirations can help families reach that goal.
I think about the family dynamic like a sports team. We all play our different roles: some will be the attacker, some will be the defender, some will be on the bench waiting to be subbed in, some will be the referee — but we are all collectively working toward a common purpose. Some children may be fully involved and are active managers of the business, while some have their own pursuits and are only owners. All generations should appreciate the different roles, responsibilities and skillsets that are brought to the table.
Editor’s Note: I am thrilled to share that Nike Anani will be officially joining The Northern Trust Institute this February. I am confident her unique perspective and expertise will be invaluable in amplifying the voice of rising generations and empowering them to become successful stewards of family wealth.
1. Generation Z: Stepping Into Financial Independence (investopedia.com)
2. The Affluent Millennial Investing Survey (investopedia.com)
*Insights That Help You Take Action*
Overcoming Obstacles to Financial Education
Prepare the next generation for
financial responsibility.
Initiating conversations on wealth
can be stressful and, for some, uncomfortable. But education is critical to successful wealth transfer.
The largest wealth transfer in history is quickly approaching: Over the next 25 years, in an event economists call the Great Wealth Transfer, approximately $68 trillion will change hands from older generations to younger.1 However, for reasons we detail below, it is common for financial education to be either delayed or neglected entirely, often by the generation currently in financial control. Generational communication gaps and social mores can further complicate discussions.
IN this article we discuss three of the most common objections to financial education and how they can be addressed to prepare the
next generation to successfully inherit and manage wealth.
I Don't Want to Burden My Children
As with all of the objections we discuss, this concern is not without merit. The stresses and challenges of inheriting wealth can be formidable – look no further than news media headlines to see dramatic examples of wealth inheritors who have experienced difficulties. Frequently, this objection manifests in concerns that the next generation is too young or just not ready to begin undertaking the burden of managing finances.
Yet delaying conversations about wealth can be counterproductive. The less prepared your children are, the greater the challenges they are likely to encounter. The below strategies can help you begin preparing them early:
Separate financial education from disclosure. Financial education is often associated with disclosure of assets. And in light of older generations’ tendency to find discussing financial matters socially uncouth, disclosure is frequently ignored until wealth transfer is imminent. By separating financial education from disclosure, education can begin at a younger age. Eventual disclosure of the family finances remains the goal. By focusing on the fundamentals first, however, the learner can gain confidence, resulting in a greater grasp of financial best practices leading up to disclosure.
Hold multigenerational educational sessions. A multigenerational setting prepares all involved for disclosure and wealth transfer. The younger generation will be empowered to move forward with greater confidence when they have been given an opportunity to learn and practice the basics of good personal finance habits. And the senior generation is often inspired to convey meaningful insight in multigenerational discourse. The senior generation is able to observe the next generation developing confidence and abilities, and by the time disclosure occurs, all parties are ready.
We are Worried Our Children
Will Lose Motivation
Many wealth creators set high standards for the next generation. For instance, many parents are focused on ensuring that their children gain admission to, and thrive at, elite educational institutions. They are often concerned that delving into financial education — with the end-goal of preparing children to manage family wealth — could be a distraction. Worse yet, increased exposure to the wealth they eventually stand to control could demotivate them, or even negatively impact their outlook.
However, financial acumen is the one educational skillset that the next generation is virtually guaranteed to need. To facilitate engagement and sustain motivation, we recommend that financial education take place in tandem with larger conversations on purpose and values.
Infuse core family values into financial education. By creating a shared purpose for wealth informed by core values, entitlement and demotivation are less likely. Look at your discussions as opportunities to solidify historic family values, view them through a contemporary lens, and gain consensus on how these values can guide the family with a shared vision for the future. Doing so can guard against demotivation by providing a purpose beyond wealth generation, allowing everyone a stake in the family vision.
Reflect and share key stories. In addition to articulating core family values, storytelling and sharing experiences can be powerful tools to underscore that conversations on wealth are more than bottom-line balance sheet discussions. Psychologically, storytelling forges connections between people and to ideas, culture, history and values. And factual content is far more likely to be remembered when conveyed in story form. You likely have many decades of valuable experience. Which stories best represent your values and intentions for your wealth?
Our Family Has Too Many Generational Differences For a Cohesive Program
Each successive generation brings a wider range of age, professions, values, financial acumen, geographic locations and interest levels in managing wealth among family members. Indeed, many may find it challenging to imagine a meaningful financial dialogue that includes, for instance, both a 20-year-old artist and a 55-year-old MBA with decades of experience.
Begin with broad, non-financial topics. Many first and second generation family members are understandably focused on financial wealth. But an inclusive financial education program that addresses non-balance sheet topics like cyber security or financial etiquette can act as a leveler across generations. These programs should facilitate the diverse experiences, interests and values of all participants to foster engagement. Families often find that newer family members, life partners or grandchildren have an additive perspective that can help bring the full impact of their wealth into focus.
Start with a small, voluntary program. A voluntary program often resonates better than a hard sell. The program should presuppose no prior financial knowledge of the participants and encourage dialogue across the spectrum. By starting with the basics, the program will nurture the intellectual curiosity of even those with minimal financial knowledge. And starting with a small group is often a catalyst for momentum that attracts more family members as word of its value spreads.
With the Great Wealth Transfer upon us, time is of the essence. By prioritizing financial education, families can ensure young family members have the opportunity to develop the skills they will need to manage their wealth. Education is a journey, and it is much more important to begin than to wait for the perfect program or the right timing. You will have many opportunities to adjust along the way. »
American Bankers Association Research Study. The Changing Face of Wealth Management 2019 Report. Oct. 23, 2019
*Insights That Help You Take Action* Communicating
the "Why"
Maintain family harmony with these
wealth transfer tools.
Although traditional wealth planning is effective in creating vehicles to pass wealth from one generation to the next, it falls short of helping families manage successful cross-generational wealth transfer and ease the strain that shared resources can put on relationships.
Over time, uncoordinated — or misunderstood — actions by individual family members, whether intentional or not, can erode the very fabric that binds a family together. Successful multigenerational families, however, construct technically sound estate plans while nurturing strong communication and joint decision-making skills critical to maintaining family harmony. The following communication tools may be written for different recipients, but they all center on values and the “why” behind decisions on wealth transfer planning.
Statement of Wealth Transfer Intent
Provide context to beneficiaries around your wealth transfer plan by sharing your intent, values and plans for supporting your family’s goals, lifestyles and priorities. Consider sharing your story ahead of time, including how your wealth was created and the lessons you have learned, perhaps even describing setbacks or disappointments.
These statements are intended to complement your estate planning documents (but do not override the specific terms of your trusts) and allow you to expand on how your own values and life experiences have informed your plan.
_____________________________________________________
EXAMPLE:
WRITTEN BY: THE GRANTOR
WRITTEN FOR: BENEFICIARIES
I intend for my beneficiaries to have the opportunity to create their own wealth as defined by each individual. I want the trust to be used to encourage a drive for personal fulfillment and achievement. I established trusts that allow for distributions to support education and career opportunities as well as ongoing health and support needs of the beneficiaries and their families.
I envision that my beneficiaries may request funds to invest in new business ventures. I view entrepreneurial efforts as opportunities for learning. I experienced several early failures with start-up businesses before founding my current business. While those experiences were very difficult, the lessons I learned far outweighed any monetary losses and ultimately led to the wealth I now can share with my family.
__________________________________________
Letter of Wishes
Provide context and guidance to your trustee or your beneficiaries, and in combination with a Statement of Wealth Transfer Intent (SOWTI), guide decision-making on behalf of your family. Letters of wishes, like SOWTIs, can give the trustee insights into how you envision your wealth should be managed for your beneficiaries and express your hopes and desires for your family. They may include specific examples of how you expect distributions to your beneficiaries to be handled or your perspective on the trustee’s ability to address changes of circumstances, but they are not legally binding and do not change the terms of the trust.
You may execute multiple different Letters of Wishes, each intended for a different recipient (trustees and/or beneficiaries). Ideally, you'd share with your beneficiaries a letter of wishes written for a trustee. Be clear in the letter of wishes to a trustee whether it can be shared with beneficiaries if you haven't shared it during your lifetime.
____________________________________________________
EXAMPLE:
WRITTEN BY: THE COLLECTIVE FAMILY
WRITTEN FOR: BENEFICIARIES AND TRUSTEES
To clarify my intentions about why I have chosen to transfer my wealth in various ways, including setting up trusts for my family, I am sharing this letter of wishes. I hope that this communication will give my descendants a deeper understanding of how my life experience and values have shaped my goals for my family.
Growing up I never wanted for any material possessions and have enjoyed a “rich” life with family and friends. I did not fully appreciate that my position was unique until I met my partner, who had a different life experience. I was taught that money was not a subject for discussion. In raising my children, I followed this tradition, and we didn’t talk about our wealth. I now believe that discussions about money are necessary and healthy for families.
__________________________________________
____________________________________________________
I want my beneficiaries to have a deep sense of autonomy and competency and the flexibility to seize opportunities — whether to start a business or a foundation. I wish I had used my wealth to take more chances professionally and that I had been more adventurous and expanded my experience with new people and more travel.
My family should invest in pursuits that give them a sense of passion and purpose. I want them to have fewer regrets of what might have been if they had not had to worry about the cost of losing or failing.
I have made small annual gifts to my children and grandchildren and have seen the positive impact that wealth can bring in terms of education, travel and the ability to spend time gaining skills that are important to my beneficiaries. I believe I have used my wealth wisely and believe that my family will do the same with access to the right resources.
__________________________________________
Cornerstone Statement
Articulate your family’s shared values, vision and goals to build on values of the past and project them onto a shared vision for future success. By identifying actionable steps to bridge their current and desired future state, families can create a common purpose for today. Unlike a SOWTI, which is focused on the purpose of the grantor, a cornerstone statement captures a family’s consensus on their core values, future goals and their commitment to working together to achieve those goals.
The process of building a Cornerstone Statement is as important as the statement itself. Embracing the natural diversity families develop over generations leads to both a well-informed vision and a high functioning family. By developing a Cornerstone Statement, families can create transparency, foster trust, develop repeatable communication patterns and bolster joint decision making skills that will serve them long into their future.
___________________________________________________
EXAMPLE:
WRITTEN BY: THE COLLECTIVE FAMILY
WRITTEN FOR: TRUSTEES
Our family is dedicated to compassionate involvement in each other’s lives and advocating for each other’s well-being. Through open communication, mutual respect and a family-first mentality, we will continue to cultivate a strong family that will prosper for many generations to come. We desire to stay motivated and active intellectually, physically and emotionally,
___________________________________________________
continuously searching for ways to improve ourselves, our family and the world around us. We are committed to:
Maintaining good health, both physical and mental
Pursuing a life of education across multiple functions and interests
Identifying philanthropic opportunities that promote diversity and equity for all
Creating wealth transfer plans that promote financial responsibility and independence
Family Values Statement
Coalesce around how your family’s wealth can be used to gain consensus on issues important to your family. In the context of ESG investing, these statements can be used to identify shared values and sustainable objectives, giving every trust beneficiary a voice in how the portfolio can be leveraged to make an impact and reinforce intergenerational harmony by aligning on sustainable investment goals. At Northern Trust, we have worked to establish a process by which beneficiaries with consensus sustainable goals may be able to implement sustainable objectives in their trust portfolios. »
___________________________________________________
EXAMPLE:
WRITTEN BY: THE COLLECTIVE FAMILY
WRITTEN FOR: TRUSTEES
Our family believes that everyone has a right to clean air and water. As such, we are committed to climate-aware investments that seek to promote better ecological practices around the globe. We therefore ask that our investment team use ESG factors in their due diligence, asset selection and monitoring process to identify investments making a positive environmental impact. As a family, we are committed to reassessing this statement periodically to ensure its continued relevance.
___________________________________________
*Insights That Help You Take Action*
Engaging the
Next Generation
in Philanthropy
Strategies to empower younger family members in charitable giving.
Your charitable giving has allowed you to make a lasting imprint on society, your community and the world. Now you would like your children and grandchildren to become involved in charitable giving.
Including younger family members in your philanthropic activities is a way to pass on personal values, share experiences, establish family traditions and promote a spirit of cooperation. You may even have a goal of preparing your children or grandchildren to manage a family foundation. Indeed, they may play a key role in creating social and environmental benefits for future local and
global communities.
Getting family members involved in philanthropy also may be an important part of your overall wealth transfer plan.
Who is the Next Generation?
Millennials and Gen Zers will be the inheritors of the next great wealth transfer. Combined, these two generations represent 49% of the current population with this percentage likely continuing to increase as the number of Traditionalists and Baby Boomers decline over time. Both Millennials and Gen Zers have strong characteristics that will influence the ways in which they are involved in philanthropy. These characteristics include their use of social networks to interact with their peers, the desire for transparency, and a belief that all sectors — governmental, nonprofit and for profit — have a role to play in solving society’s challenges.
Advances in technology and the expansive amount of digital information that have been readily available to Millennials and Gen Zers have broken down barriers, allowing them to connect with people, organizations and causes outside of their local communities. Millennials and Gen Zers are more likely to have large online networks of friends, colleagues and even global networks.1 These networks provide opportunities for them to leverage resources and promote the causes that are important to them.
Unlike Millennials, most members of Gen Z do not remember a time before social media. They are inclined to spend hours using their smartphones and online platforms.2 Because many of their interactions take place through social networks, they lean towards supporting charitable organizations through these platforms as well. Sharing information with peer networks is a hallmark of this generation, many of whom have grown up sharing their lives on Facebook, Instagram and Youtube among other platforms.
Both Millennials and Gen Zers measure the impact of nonprofit organizations not only through compelling stories, but through data, metrics and transparency. They expect organizations to collect data on the effectiveness of programs and demonstrate how they have created positive change in the populations and communities they serve. They value transparency in all aspects of a nonprofit organization’s operations. Next generation donors appreciate having information that breaks down how funds are being used to support programs and projects, using technology to provide real time updates. They welcome the opportunity to directly interact with the communities that benefit from the organization’s work.
Future generations expect nonprofit organizations and for profit companies alike to share the responsibility of serving the public good. They are constantly seeking new ideas to expand the philanthropic landscape. These expectations have caused a shift in the philanthropic community and organizations are taking notice as they seek to develop relationships with these generations of donors.
Communicating with the Next Generation
In comparison to the other generations, Millennials and Gen Zers may have different ideas about how to give but they generally have similar views on why they give. This is largely due to the formative lessons learned in their youth, namely from their parents and grandparents. In a recent survey administered by 21/64, almost 90% of those surveyed said their giving was influenced by their parents and 63% said their grandparents had inspired them to give.3 The survey further indicates that by taking the time to articulate and model your values and interests with your family,
you can potentially help influence and shape the next generation of donors.
If you are just beginning to have conversations about your charitable activities with younger family members, it is important to give them an opportunity to share their own interests with you. The most rewarding family philanthropy reflects the shared values and interests of all family members. Taking the time to assess individual readiness and interest in charitable work makes your family’s philanthropy stronger and provides greater satisfaction around charitable giving. The following questions and your responses to these questions can help you have meaningful conversations and spark your family’s exchange of ideas and perspectives.
Lay the foundation. To encourage your family to make a real and lasting difference in the world, to reflect on these foundational questions.
Why do you want to include the next generation in your philanthropy?
Who will participate in the family’s philanthropy?
Have you determined how much time you and your family are willing to commit to charitable giving?
Have you settled on using one or more charitable giving vehicles, such as a donor advised fund or private foundation, to facilitate your giving?
Share culture and values. The values you share with your family can empower them, build trust, encourage accountability and establish expectations. Communicating your giving philosophy with your family can make it easier for them to understand your motivations and create and continue a family philanthropy legacy.
What motivates you to give?
What values have your family and other role models passed on to you?
What are some of your favorite family traditions?
What past experiences have shaped your beliefs or thinking?
What are some of your family’s most important shared values?
Determine communication styles. In order to plan for your family’s philanthropy in a way that takes all perspectives into account, it is important to understand how your family currently functions. For example:
Be a good listener. Once you have shared your values, it is important to listen to and create space for family members who will participate in your family philanthropy. If the next generation feels as if they are not being heard or that their perspectives are not important, they are less likely to be engaged. Questions might include:
What issues, causes or organizations excite other family members?
How much and in what ways do you think other family members would like to be involved in philanthropy?
How much do you know about the causes that interest other family members?
Are there common areas of interest to the whole family?
Convey your wishes. Take some time to reflect on the information and ideas shared by the next generation, look for opportunities to deepen their understanding of the issues that matter most to them, and take steps to include them in your current philanthropic activities. You might consider:
How much do your children or grandchildren know about your current philanthropic activities?
What have you shared about how you would like them to be involved in the family’s philanthropic plans?
Are you willing to spend the time necessary to prepare your family members for philanthropic stewardship?
Once you have been able to share your interests and values with your family and have gained a better understanding of how they would like to be involved, you may use this guide to help you continue to discover opportunities for family engagement. Effective engagement of the next generation is not a one-time event. You will be more successful when the next generation is exposed to a series of informal conversations and activities that build over time. »
http://nonprofithub.org/social-media/future-social-gen-z/
http://genhq.com/igen-gen-z-generation-z-centennials-info/
Sharma Goldseeker and Michael Moody, “Generation Impact: How Next Gen Donors Are Revolutionizing Giving,” 2017, pg. 178.
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This document is a general communication being provided for informational and educational purposes only and is not meant to be taken as investment advice or a recommendation for any specific investment product or strategy. This information is not intended to be and should not be treated as legal, investment, accounting or tax advice and is for informational purposes only. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal, accounting or tax advice from their own counsel. Past performance is no guarantee of future results. All information discussed herein is current only as of the date appearing in this material and is subject to change at any time without notice.
Certain affiliates of Northern Trust may be utilized in providing investment management services, including Northern Trust Investments, Inc. and 50 South Capital Advisors, LLC, which are registered under the Investment Advisers Act of 1940.
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