Move Over, 5%, and Let Mission Drive


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Move Over, 5%, and Let Mission Drive

  1. 1. Move Over, 5%, and Let Mission DriveBy Peter Frumkin, Chris Didier and David KlenkeSynopsisMany donors to private foundations focus on the tax benefits and logisticalquestions involved in setting them up and don’t pay as much attentionto the larger question of their missions. Of particular influence is the IRSrequirement that foundations distribute 5% of their net assets to charity eachyear. Set by Congress, this arbitrary number dictates the spending policiesand corresponding investment strategy of most foundations. However, donorsmay increase the likelihood of the success of their foundation by defining theirmission separately from tax law, creating spend policies that correspond withthose missions while meeting the minimum distribution requirement and,finally, setting investment strategies that are appropriate for those policies.IntroductionIn May 2009, the two richest men in America, Bill Gates and Warren Buffett,presided over a confidential dinner meeting of billionaires in New York City.In June 2010, the true purpose of that meeting was revealed. Gates andBuffet challenged America’s billionaires to give away the majority of theirwealth to charity – either during their lifetimes or at death – in an effortcalled the Giving Pledge. If successful, this effort could raise an estimated$600 billion and may alter philanthropy for decades to come. -1-
  2. 2. Many wealthy individuals, not To realize the social benefits theirThe History of 5% just billionaires, will likely follow donors seek, foundations mustPrior to 1969, the federal governmenthad little control over how foundation the example of Gates, Buffet and clearly define their missions, createfunds were used or managed. With countless others before them who spend policies that correspond withthe Tax Reform Act of 1969, Congress have taken philanthropy seriously. those missions and set investmentresponded to concerns that had been Most want to solve a social strategies that suit those policies.raised for decades regarding the size of problem or simply give back to theassets in foundations and the role they Defining the Mission communities that fostered theirplayed in society. success. Many are also motivated From the start, foundation donorsThe act prohibited self-dealing by have appreciated the tax and legal by income and estate tax rules thatfoundations, regulated their grants to promote charitable giving. Setting implications of philanthropy butindividuals, restricted their ownershipof businesses and limited their up a private foundation, which struggled to pin down what theirinvolvement in legislation and political provides some measure of control foundations should achieve. Wecampaigns. It also taxed foundations during the donor’s lifetime while believe that the one important driverfor the first time and required that creating a family legacy, may be the of this lack of focus on mission is thethey distribute the greater of their preferred giving platform for the IRS requirement to pay out 5% oftotal investment income or 6% of their bulk of these philanthropists. net investment income (see sidebar,assets to grantees each year. Later “The History of 5%”). This rulelegislation changed the distribution The tax code encourages charitable highly influences the spending policypolicy to 5% of a foundation’s net giving in return for special treatmentinvestment assets. of the foundation and, in turn, the under the assumption that some way the assets are invested. What getsBy defining distribution policy, federal social benefit will be law may have unintentionally lost in the focus on the 5% payout However, the code neither ensureshijacked foundation spending policy. are the mission of the foundation that significant social benefitsBecause most private foundations base and the shape of the problem beingannual payouts on the 5% threshold will be achieved or defines what solved. It is our contention thattoday, they may have lost the ability to a social benefit would be. It often because the rules are defined andbe flexible in the spending policies that comes down to the intent of the the mission is not, spend policy isfulfill their missions. donor. Unfortunately, the history predetermined, investment strategy of philanthropy is littered with standardized, and mission becomes examples in which donor intent a tertiary thought. was fuzzy or misinterpreted once the donor could no longer provide The most successful foundations, guidance. In cases like these, the however, take the time to do a results are often disappointing. little soul searching and clearly define their intentions. Arabella By focusing on the tax and Philanthropic Investment Advisors logistical issues involved in suggests that a written mission setting up foundations, lawyers, statement be developed that reflects accountants and other advisors a donor’s values, guides the work of may put off or ignore the their foundation and helps others opportunity to help donors understand their larger purpose. define the core missions of their A mission statement defines the foundations. Once the foundations change the donor wishes to see are up and running, the focus tends and how it will be achieved. to shift to managing assets and complying with IRS guidelines. -2-
  3. 3. The following is an example of a the amount of money was so greatA Focus on Mission written mission statement: that the foundation needed outsidersIn Chicago, the Steans Foundationdecided to focus its philanthropic “The Sara Hutcheson Foundation’s as well as family members to serve asenergies on fashioning a mission is to ensure that the trustees. It was a decision he wouldcomprehensive and sustained poorest families are treated with regret for the rest of his life.intervention in the Lawndale the respect and dignity all people The next several decades wereneighborhood on the west side of thecity. Lawndale is an area with all the deserve. We believe that helping filled with many adventures andproblems that can beset a community, women and children is the most misadventures. The “outsiders” ledincluding violence, high levels of effective way to improve life in the Ford Foundation into areas thatunemployment and poverty, and weak under-served communities.” were well beyond its founder’s visionschools. Rather than rush in and begin and values. By 1976, Henry Ford IIdeveloping programs and funding Most donor families have specific passions that can serve as the basis resigned from the board saying he noactivities, this small family foundationtook a very different route. for foundation goals. If these longer recognized the institution – passions are not obvious, there are an acrimonious parting between theThey hired an executive director who professionals, like Arabella, who Ford family and the philanthropy ithad credibility in the community,having run popular youth programs. can help the family identify their had spawned. In spite of this, manyHe was charged with the task of setting goals and define a mission that suits have argued, the Ford Foundationup a store front office in Lawndale these goals. Taking the time to be has produced significant publicand listening to what residents thoughtful upfront can alleviate benefits. Still, it may have failed tothought were the real needs of the achieve the benefits that Henry Fordneighborhood. Additionally, the Steans guesswork by others in the future. had expected.Foundation hosted a policy conference The story of the Ford Foundationon urban poverty to learn about offers a well-documented example of Creating a Spend Policyapproaches that had been tried and what can happen when the charitable Once a foundation clearly definesstudied in other neighborhoods. As theFoundation became more confident mission is open to interpretation. In its mission, it can more successfullyabout its ability to assess and respond 1936, shortly after Congress raised create a spend policy with a payoutto the neighborhood’s true needs, it the top estate tax rate above 70%, rate that supports that mission.began to fashion a broad program Henry Ford sought to protect his There are three primary issues thataimed at assisting residents. family’s control of the Ford Motor influence this rate:Because it was a relatively new player Company by creating the Fordin the nonprofit scene, the Steans Effectiveness – whether an Foundation. When Henry FordFoundation began by listening to accelerated payout will help to died in 1947, the Ford Foundationthe community and then sought resolve a social issue sooner, or just received 95% of the economic interestout partners to aid in its work. The use up funds that may be morefocus of it mission, which was a single in the Ford Motor Company while greatly needed down the roadneighborhood, never changed. By his family maintained voting control.taking their time to understand how Generational equity – whether an From the outset, Ford’s grandson,to best match their spending policy accelerated payout can help to even Henry Ford II, decided that thewith their mission they increased their out the relative benefits and taxchance of success. family would not try to control the burdens of different generations (continued) foundation. Although Henry Ford II was chairman of the board of both Values expression – whether donors the Ford Motor Company and the want to see their goals fulfilled Ford Foundation, he believed that during their lifetimes or in perpetuity -3-
  4. 4. Effectiveness problem a donor wishes to solve. (continued from previous page) Consider how a foundation might This requires an understanding ofThe Steans FoundationMission Statement: address environmental problems the degree to which the problem is versus curing polio. Plotting likely to increase, decrease, or stay“ The Steans Family Foundation concentrates its grant making environmental problems over time the same. and programs in North Lawndale, would create a relatively steep Generational Equity a revitalizing neighborhood on ascending curve (Figure 1) that Chicago’s west side. By dedicating Foundation payout rates also have represents increases in greenhouse time, money, and skills, this serious fairness implications – small family foundation works in gases, air and water pollution, and other especially given the exponential partnership with local residents and global indicators of environmental growth in philanthropic assets that is institutions to build and enhance distress. Plotting the progression of expected in coming decades. When the North Lawndale community. polio over time would produce a The Foundation’s work supports the donors fund private foundations, downward slope, as the number of idea that effective revitalization can they receive current tax benefits. children victimized is projected to occur within the embedded social Because these benefits reduce tax drop precipitously. As you can see and economic networks that create revenue, they decrease government and sustain communities.” below, the “shapes” of these issues resources for current social programs. are quite different. If a foundation exists in perpetuity, Giving away larger amounts of future generations will receive money in the short and near term, benefits, but the generation that as Gates and Buffet have urged with experienced the lost tax revenue may the Giving Pledge, may make it easier not. Although there is no moral or to cure social problems rather than legal obligation to use money earned merely treat their symptoms. in one generation to benefit the same To determine the effectiveness of generation, some donors want to such a strategy, one must understand return some of their wealth to the the shape of the specific social generation that helped them earn it. FIGURE 1: Projected Severity, Over Time, of Environmental Issues and Polio Relative severity of social Global problem environment Polio Time Source: Xxxxxx Xxxxxx -4-
  5. 5. Making a Difference Values Expression Long-Term MissionsDonors who want to “do something Current spending strategies may be Donors that fund long-term missionsbold, break new ground, and address particularly attractive to donors who have concluded that their funds havethe root cause of an issue” must take wish to participate fully in the act a greater effectiveness in the futurethe time to thoroughly research theirmissions, says Curtis Meadows Jr., of giving. They may also alleviate than they would have today. Warrenpast president and director emeritus concern about having others make Buffett, who continues to controlof the Dallas-based Meadows decisions about donors’ gifts after Berkshire Hathaway, seems a goodFoundation. “If they care about how they’re gone. example of such donors.their money is spent, they have to There is little doubt that donors Achieving sufficient returns overget involved up front.” who spend the bulk of their wealth time will likely involve more risk,Meadows, an attorney who also while still alive ensure that their however. For long-term missions, itadvises other charitable foundations,notes that “the biggest problem in philanthropy is animated by their is appropriate to seek a rate of returnbeing effective is time.” Some donors specific passions – convictions that maintains the corpus (corewho’ve spent their lives making money that professional foundation assets) over time. The 5% minimumdon’t want to be the driving force in managers may not share. Having set by the IRS may make this efforttheir philanthropy. the philanthropic principals, rather more challenging. To meet the IRS“People do care,” he says. “They just than their agents, make the actual requirement, a foundation must earndon’t always recognize that disposing gifts is also the best way to ensure at least 5% just to stay even. Largerof wealth wisely requires the same that philanthropy’s unique voice distributions require higher returnseffort as creating that wealth. If a continues to be heard in the public and, typically, greater risk.donor has strong feelings about themission of the foundation, there is sphere in ways that are different and When the Economic Recovery Taxno one better suited to carrying out less constrained than the voices of Act of 1981 set the payout minimumthat desire.” government agencies. at 5%, the 10-year Treasury (whichThe Meadows Foundation, a perpetual Setting an Investment Strategy many would consider a “risk-free”institution, has a very simple mission: investment) was yielding about 15%.benefitting the people of Texas. Still, Once a foundation establishes its Given current yields, a foundation“the trustees have been carefully mission and creates a spend policytrained in applying the vision of the must thus take much greater risk based on the shape of the problem,founder in an ever-changing world,” today to reach the 5% threshold it must design an investment strategyMeadows says. (and avoid invading its corpus) than to support the spend policy. While when the law was written. Greater foundation missions are as unique as risk means investing in instruments their donors, they can be placed in that have higher volatility and the three primary categories: potential for large losses. • Long-term missions In seeking higher returns, a • Short-term missions foundation may actually find itself • Long-term missions with with less money to give away when inflection points -5-
  6. 6. losses occur. Table 1 below shows In the 1980s and 1990s, foundations four portfolios that invest $100 minimized the impact of volatility million over two years at different on returns by using modern portfolio rates of return. Assuming no interim theory to allocate investments to distributions, all the portfolios end cash, bonds, and stocks. They still up with the same arithmetic average experienced significant volatility, return. (See the Average Returns however. Following the volatile column.) However, Portfolios C markets of 2000–2002, more and D, which have lower volatility, embraced the “endowment model” end Year 2 with $3 million more of investing. than Portfolios A and B, which have Made popular by foundations at higher volatility. (See Assumption Yale and Harvard, the endowment #1 column.) approach seeks to lessen volatility by Now assume Portfolios A through D allocating significant assets to non- represent four foundations that must public, illiquid markets. Typically, make distributions. Each commits fixed-income investments are to paying $5 million at the end of replaced with market-neutral hedge each year for two years. Once again, funds. Equities are replaced with volatility matters. Portfolios C and private equity funds, venture capital D have more money at the end of funds, and real estate. Because there Year 2 than Portfolios A and B (see may be times (such as 2008) when Assumption #2 column). It is also most asset classes decreased in value clear that the timing of returns matter at the same time, this strategy is most when distributions are introduced. appropriate for foundations with Portfolios A and C, which have longer spending horizons that will negative returns in Year 1, both give their investments enough time end Year 2 with less money than to normalize in price. Even with a Portfolios B and D, which have longer-term horizon, a foundation negative returns in Year 2. must maintain an appropriate level of liquidity to meet the IRS distribution requirements.TABLE 1 Short-Term MissionsPortfolio Returns Initial Capital Ending Capital – Year 2 An endowment strategy becomes Assumption #1 Assumption #2 less appropriate for short-term Year 1 Year 2 Average* No Distributions Annual $5M Distributions missions because a financial crisis A -20% 20% 0% $100 $96 $85 could cause the riskier assets to decrease in value simultaneously B 20% -20% 0% $100 $96 $87 and for potentially long periods of C -10% 10% 0% $100 $99 $89 time. Foundations with shorter time horizons should thus invest primarily D 10% -10% 0% $100 $99 $90 in less risky, lower-return assets such as cash equivalents and bonds, with perhaps a minor amount allocated to liquid equities. -6-
  7. 7. Unfortunately, not all shorter-term In 1991, the foundation’s boardThe Beldon Fund foundations take this approach. sensed an inflection point inThe Beldon Fund was created byJohn Hunting in 1982 as a national In 1999, Steven Kirsch created their cause. Despite significantfoundation committed to promoting the Steven and Michele Kirsch technological advancementssound environmental policies. In 1998, Foundation and endowed it with in the 1980s, few universitiesBeldon received a major infusion of $50 million. He set a relatively had biomedical engineeringmoney from the sale of Hunting’s stock high payout rate of 10% to departments. The foundationin the Steelcase Company. Hunting 12%, indicating a commitment decided it could have a greaterset his foundation on a new courseby deciding to spend all its principal to making a difference sooner impact by spending its assets downand earnings over the next 10 years rather than later. The foundation’s than by continuing in perpetuity.on efforts that would build a national board invested 90% of the assets It then fully distributed its assetsconsensus for achieving and sustaining in high-tech stocks – the same over the next 14 years.1a healthy planet.* investment from which Mr. Kirsch Foundations that have long-termFoundations with short-term missions, had earned the wealth that made missions with inflection points canlike Beldon, conclude that the present his gift possible. When the dot-com combine the endowment methodvalue (discount rate) of future cash flow bubble burst, the foundation’s assetsis greater than the return they could with short-term portfolio strategies. plunged to $9.2 million. Clearly How far they stray from theearn on financial assets. Because thesefoundations believe their effectiveness the foundation’s funding status endowment approach will dependis greatest in the short term, their would no longer allow Mr. Kirsch on the frequency and magnitudeinvestment goals should thus focus on to make the difference he perhaps of the expected inflection points.preserving the wealth that they expect had planned.1 The greater the frequency and/orto disburse. Long-Term Missions With magnitude, the more they should Inflection Points depend on shorter-term strategies.* Beldon Fund, “Giving While Living: The Beldon Fund Spend-Out Story,” 2009. Many foundations with long-term No matter what time horizon a missions recognize that near-term foundation chooses, it is important opportunities to increase benefits to correlate investment strategy may arise from time to time. The with mission. For example, assume HKH Foundation strives to protect a hypothetical foundation seeks civil liberties and the environment, to maintain and protect the Gulf which most would see as a long- of Mexico and splits its portfolio term mission. During the 2004 evenly between non-traditional election, however, HKH saw a equities and bonds, which are short-term opportunity for using a considered to be less risky. The large payout to make a significant values of these two types of impact. With the potential to be investments would appear, at least highly effective during this window on the surface, to have relatively of time, HKH disbursed funds low correlation with each other. beyond its typical 5% target.2 But what if both the bond and Another example is the Whitaker equity allocations had a heavy Foundation, created in 1975 weighting in energy companies? by Uncas Whitaker to pioneer Suddenly, the BP oil rig accident advances in biomedical engineering. of 2010 occurs, and charitable 1 Deanne Stone, “Alternatives to Perpetuity: A Conversation that Every Foundation Should Have,” 2005. 2 -7-
  8. 8. demands on the foundation rise Foundations should consider bothdramatically. Because the accident liquidity and portfolio correlationwas caused by an energy company, when contemplating a program-all investments in that industry are related investment (PRI). With PRIs,punished. The energy bonds decrease foundations use their investmentin value – as do the non-traditional portfolio to provide capital throughinvestments, which cannot be equity investments or loans directlyliquidated. At a time when the need to the non-profit organizationsis greatest, the foundation’s capacity they support on preferred help is reduced because its These strategies include privateinvestment portfolio correlates equity or loan funds (partnerships)too closely with its mission. that provide diversification while complementing a foundation’sDistribution Challenges With overall mission. Generally, PRIs arethe Endowment Approach illiquid and highly correlated to theWhile using non-traditional foundation’s mission. As a result,investments can smooth out volatility, even though they don’t count whenthey generally have lock-up periods considering net investment assetson the front end and limited and the minimum distributionliquidation windows. This can keep requirement, the more liquid portiona foundation from accessing the of the total investment portfoliofunds it needs. still must be managed differently toAssume a foundation with $100 provide the flexibility and the returnmillion splits its investments evenly the foundation needs to achieve thebetween traditional and non- rest of its mission.traditional vehicles. To make grants, Factoring Taxes Into Returnsit must raid the traditional portfolio,where the only liquidity exists. Over While tax savings is often a majortime, if not carefully monitored, the force behind the establishment ofinvestment mix becomes more heavily a private foundation, once up andweighted toward the non-traditional, running, they can be overlooked.less liquid investments. If a financial Currently, there is a 2% maximumcrisis strikes before corrective excise tax on the net investmentmeasures are taken, the foundation income (including capital gains)may find itself in a liquidity bind of private tax-exempt foundations. However, the rate was historicallyand be forced to sell illiquid assets at higher. The Tax Reform Act of 1969drastically reduced values. This was first imposed this tax at a rate of 4%.the experience of many who followed Given that the IRS now claims thatthe endowment model during the the tax does not raise enough revenuefinancial crisis of 2008. Because of to cover audit and compliance costs,this experience, many will likely adjust Congress could decide to raise thethat model to make more room for rate in the or equivalents. -8-
  9. 9. Regardless of the rate, foundationsCase Study: Matching Investment Strategy to Mission can reduce the impact of this tax byMike and Linda Smith set up a $100 million, Texas-based family foundation prior to the matching capital gains and losses.partial sale of their business to support local inner-city educational programs. Their goalwas to give back to a community that had helped them and their family and make a During the financial crisis of 2008,difference in the lives of those less fortunate than themselves. most foundations saw the value of their assets decline. Many thenThe Smiths worked with their advisors to set up a structure that would handle realized those losses in 2009 asadministrative tasks, grant making and investment management for the foundation.Their investment strategy was built on traditional asset allocation concepts and the they made distributions or adjustedEndowment Model popularized by major universities like Yale and Harvard. Anxious their investment strategies. Unliketo make an immediate impact, they quickly made several very large grants and easily individuals, however, they couldexceeded the 5% annual payout rate used by many private foundations. not carry the losses forward to offset gains in future years. If a foundationWith the financial crisis of 2008, the foundation’s assets declined substantially at thesame time that the needs of organizations it served grew dramatically. This strain caused recognizes $50 million in gains insignificant concern for the Smiths and their advisors. In February of 2009, their primary the year following a loss, it pays theinvestment advisor was asked to update an analysis of spending policy that been 2% tax on those gains (or $100,000).completed shortly before the crisis. If the foundation claims the $50The original analysis had yielded the following conclusions: million gain and the $50 million loss in the same year, it would eliminate• Spend policy, like any planning, requires flexibility. the $100,000 tax.• Spend policy should also relate to the foundation’s time horizon. Staying True to the• This time horizon is a function of the purpose of the foundation and the expected role, Long-Term Mission if any, of future generations.• Asset liquidity should match both horizon and spending policy. Preserving a donor’s intent over time requires accountability systems• A foundation’s “return” on giving, while difficult to measure, must be considered. that help to preserve a foundation’sUpon revisiting the foundation’s spend policy seven months later, these conclusions mission once the donor is nohelped improve both the spend policy and the investment strategy. The Smiths and their longer on the scene. Some donorsadvisors had realized that their original investment strategy had too many moving pieces try to maintain control and avoidto provide the flexibility they required. Multiple advisors, essentially doing the same thing, mission drift by specifying thathad not provided additional diversification, just additional complexity – making it difficult family members, long-time businessto make changes efficiently. Even rebalancing the foundation’s investment portfolio had associates, attorneys, and otherbecome an overwhelming task. influential members of the localJust as importantly, the Smiths zeroed in on what they wanted their foundation to community serve as trustees. Othersaccomplish and the role that their children might eventually play. Because this had not define the selection criteria forbeen clear at the beginning, the foundation had, by default, ended up with an asset naming trustees in the future. Butallocation designed for a long-term horizon that included many illiquid investments. most donors rarely foresee how theAs other foundations that follow the endowment model had found, a lack of liquidity tension between time and missioncan be a serious problem during a financial crisis. will play out. Examples of mission conflicts after a donor dies are legendary and numerous. One of the most high- profile disputes has pitted the friends and associates of Milton Hershey against each other in a struggle for control of the chocolate magnate’s philanthropic legacy. -9-
  10. 10. In the Pennsylvania town bearing his created a major division within thename, Milton Hershey endowed a community. Some argued that theschool for orphans. Today, the school creation of a research institute, farserves 1,500 students, mostly from from allowing the school to helpsingle-parent families – not orphans. more children, abandoned the realThe school’s endowment, now at values and commitments of themore than $5 billion, is greater than Hershey family. The battle led toall but a small number of private court cases and ultimately went touniversities in the country. With the Pennsylvania Supreme Courtabout 650 full-time employees, the in 2003. The Court decided to letschool spends more than $60,000 the state attorney’s office mediateper student each year. It is located on between the embittered sides. Thea plush campus with a new library, dispute has quieted down for thearts center, swimming pools, and moment as both sides are focused onthe latest technology. Given these celebrating the school’s centennial.substantial expenditures, some Choosing between current givingalumni and community members and the slow disbursal of funds inbelieved the school should expand its perpetuity is ultimately a personalmission rather than spending lavishly choice for donors that has profoundon new facilities. implications for the organizationsThe school’s leadership created and individuals that benefit fromsignificant controversy in 1999, their gifts. One thing is certain,however, when it proposed a foray however: treating time as somethinginto research and training related complex and contingent – ratherto educating needy children. To than simply accepting perpetuity asmake this important shift in the default – is critical to fulfillingpriorities, the school took the philanthropy’s goal.unusual step of going to probate Conclusioncourt to seek permission to divert$25 million to the construction of It is up to donors and their advisorsa Catherine Hershey Institute for to shift the focus from the taxLearning and Development and benefits to the larger question ofuse additional funds to support its missions. Once mission is defined,future operating budget. appropriate spend policies that correspond with those missions andThe school’s board had to show investment strategies will follow.that it was unable to use the funds By putting “mission” in the driver’sleft to the school efficiently and seat, donors may have a better shotthat the modification sought was in at getting to where they want to gokeeping with the general charitable with their philanthropic efforts.intent of the Hershey’s. The move - 10 -
  11. 11. ABOUT THE AUTHORS: Peter Frumkin is a professor of public affairs and director of the RGK Center for Philanthropy and Community Service at the Lyndon B. Johnson School of Public Affairs, University of Texas at Austin. His research and teaching focus on social entrepreneurship and philanthropy. Frumkin is the author of numerous articles on all aspects of philanthropy, and has lectured on philanthropy at meetings of grant makers across the country. You can contact Peter at 512-232-7062. Christopher G. Didier is a managing director of the Baird Family Wealth Group. He holds an MBA from the University of Chicago and is a CFA Charterholder. Chris was named to Worth magazine’s “Top 100 Wealth Advisors” in 2007. David A. Klenke is a vice president with the Baird Family Wealth Group. He holds an undergraduate degree from the University of Wisconsin-Madison and is a CFA Charterholder, a CPA, and a CFP® professional. The Baird Family Wealth Group is a multi-family office committed to providing customized and comprehensive wealth management services to business owners or executives with at least $25 million in investable assets. Baird Family Wealth Group has offices in Milwaukee, Wis., and Dallas, Texas. You can contact Chris at 414-765-7095 or Dave at 414-298-7434. The opinions in this article are those of the writers and not Robert W. Baird & Co. Robert W. Baird & Co. does not provide tax or legal advice. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirement. - 11 -© 2010 Robert W. Baird & Co. Incorporated. 800-RW-BAIRD First use: 9/10. MC-30835.