Be engaged in your mission — be outspoken. Again, this goes back to the importance of mission alignment. If your core values and mission are not within the very fabric of everything you do then how can you expect others to buy in? Be your own best advocate and do the work to ensure your mission is at the core of everything you do.
For someone who wants to set aside money to establish a Philanthropic Foundation or Fund, what does it take to make sure your resources are being impactful and truly effective? In this interview series, called “How To Create Philanthropy That Leaves a Lasting Legacy” we are visiting with founders of Philanthropic Foundations, Charitable Organizations, and Non Profit Organizations, to talk about the steps they took to create sustainable success.
As a part of this series, I had the pleasure of interviewing Peter J. Klein.
Peter J. Klein, CFA®, CRPS®, CAP®, is the Chief Investment Officer and Founder of ALINE Wealth, a wealth management firm that specializes in providing clients with financial planning advice for every stage of their lives. Headquartered in Long Island, New York, with offices in Manhattan and Palm Beach, FL, the firm specializes in exit and philanthropic planning for executives, business owners, and families. Along with Peter’s deep financial wisdom, he adds considerable acumen in philanthropy, helping clients navigate family trusts, institutions, and nonprofits. For more information, check out ALINEWealth.com.
Thank you for making time to visit with us about a ‘top of mind’ topic. Can you please tell us about one or two life experiences that most shaped who you are today?
I think being raised by my grandparents had a major impact on the person I have become today. I am the oldest of three boys, and we lost our mom to brain cancer when I was five years old — she was only 30, which was obviously an impactful event for any child. In our case, we moved in with my father’s parents and stayed there until we went off to college and started lives of our own. When you are raised by your grandparents — when you have that “old school” upbringing — it’s like the generation gap becomes a Grand Canyon. Curfews were barely allowed and when they were, they were so strict. But the values that are instilled — hard work, honesty, frugality — are still guiding forces in my life today.
Another life changing experience for me was learning that a client’s legacy intentions was to name me as her legacy agent. Claire Friedlander was a client; someone who saw in me an opportunity to further her legacy. She would instruct me for hours on her values and interests — the things that made her tick. This led to an eclectic array of interests along the philanthropic landscape. I interfaced with the nonprofit organizations — asking pointed questions and reporting back their responses — that met her wide spectrum of interests. I am proud to lead the organization that become her family foundation upon her passing in 2008. The foundation has made nearly 750 grants over the last several years totaling in the tens of millions of dollars — and in doing so we continue Claire’s legacy.
You are a successful leader. Which three-character traits do you think were most instrumental to your success? We would love to hear a few stories or examples.
Leadership is of course multi-faceted — from introspection and honesty to listening to others and being tenacious with due diligence. Preparation — doing the homework as I refer to it as — is a critical part of being a good leader. A leader cannot pontificate from the corner office — he or she MUST be present — and involved — and fighting the fight every day. The leader’s team needs someone to emulate and that needs to be the leader. If you want your team members to work a certain way, to do a series of tasks, no matter how difficult or time consuming — well they should see the leader also engaged in a similar fashion. With my team, I not only seek to lead by example, but I maintain a policy of open dialogue and engagement.
What’s the most interesting discovery you’ve made since you started leading your organization?
I have always prided myself on my sense of empathy –trying to understand how others think and feel and then making sure I behave in such a way that respects these feelings. However, leadership takes this one level further — it is not just the team but also the spirit of the firm/company that you are leading. What’s to be the company message? These are the underlying tenets that make that enterprise one to which you and your team can be proud of working for. What I have learned is that my firm’s core values are a direct reflection of myself and the people that make up my team.
Can you please tell our readers more about how you or your organization intends to make a significant social impact?
At ALINE Wealth, where I serve as CIO, we work with our clients — select families, entrepreneurs, foundations, and endowments — based on a partnership; one with shared interests and the sole goal of achieving the client’s objectives. Occasionally, an engagement will migrate to helping the family with their charitable work. Our first step in these engagements is always to better understand their values — and we work with the family (at retreats or family meetings) in formulating these, codified in a Family Mission Statement. From there, we take a hard look at the composition of their portfolio — asking the question: Is there alignment there? Are the companies and thematic investments inside the portfolio in concert with the family’s mission statement? Their values? By better aligning the family’s giving and portfolio their impact is so much more produced and sustainable from generation to generation. At the foundation, we also promote social impact through our targeted grant-making in addition to makeup of the portfolio under our stewardship.
Traditionally, the goal of investing has been all about the bottom line. However, the growth of Socially Responsible Investing (SRI) is changing the landscape. Sustainable investing is a means of aligning personal values with your money through value-aligned investing. SRI is particularly compelling for foundations looking to bring about positive change. Is the foundation’s core mission reflected in its investments? Mission alignment (ALINEment) is both a means of fulfilling our duty as fiduciaries to our clients and maximizing social impact. But real change will only happen when investing dollars are shifted towards impact and sustainability. In this way, we use the capital markets as a force of good in the world. We are lucky to be in a position where we can both help families and endowments fulfill their charitable goals while feeling good about the tangible social impact of our work.
What makes you feel passionate about this cause more than any other?
Philanthropy truly became a passion of mine since I started my work with the Claire Friedlander Family Foundation. That experience opened my eyes to the outreach and impact of nonprofit work. As a wealth manager, I am especially passionate about the opportunity to both fulfill the charitable mission of our clients while achieving social impact. We are seeing an exciting shift in the world of investing and world management, where investors actively care not just about returns but where their funds are invested: doing well on the balance sheet while doing good for the world. I am confident this movement will only continue to grow. With ALINEment comes further engagement and a more sustainable charitable organization. Wealth continues to grow when there are values steeped in one’s philanthropy. We see more buy-in from stakeholders and a greater commitment expanding the foundation’s grant-making which continues for generations. The stuff that makes a legacy.
Without naming names, could you share a story about an individual who benefitted from your initiatives?
A family foundation I advised held within its core values a strong belief in environmentalism. However, the portfolio they had with a competing wealth management firm was anything but committed to the environment. Their existing portfolio was littered with companies and investments focused on industrial growth at the expense of the planet. How did we determine that? Well, we used an analytical tool to conduct a did a comprehensive Xray on the sustainability and impact of the companies currently held within the portfolio. This assessment allowed us to identify companies to divest from as well identify companies which were better aligned with the family’s core values. Now, the family is both proud of the grants they are making as well as the social impact of their portfolio’s investments. And we are still able to achieve growth of their investments to maximize their giving output. Truly a win-win situation.
We all want to help and to live a life of purpose. What are three actions anyone could take to help address the root cause of the problem you’re trying to solve?
Through my work I am trying to solve several issues, from healthcare to lack of STEM education to food insecurity and water scarcity. I think anyone, regardless of resources, can be present and responsible but also purposeful. Being present means that you understand the issues at hand and aware of the circumstance involved. Of course, responsibility goes hand in hand with impact. Living a purposeful life is also an attribute that one could strive for. You can make strides that move the proverbial needle on matters that you are “invested” in by evaluating your current portfolio and whether it is aligned with your values.
Lastly, we can all think about what we want our legacy to be. Constantly evaluate your own core values. Ask yourself what is your why? If you lead a life where this why is at the core of what you do then you will find yourself grounded in values you believe in. It will reflect in everything that you do.
Based on your experience, what are the “5 Things You Need to Create A Successful & Effective Nonprofit That Leaves A Lasting Legacy?” Please share a story or example for each.
- Develop strong leadership –executive director and team. When I work with foundations and endowments, one of the first things we do is sit down and assess the board’s goals and core values. The most successful nonprofits have values that are very clearly stated and developed. This all stems from strong leadership team, including an executive director, which can set the tone for the foundation. I recently spoke to a nonprofit soup kitchen — a wonderful organization serving those who are food insecure. They are seeking funding for a program focused on providing oral health to their guests at their soup kitchen. The proposal is well thought out and combines philanthropic entities (private/family foundations and community foundations) as well as local social services organizations — all geared to make progress on this issue. And it worked. These initiatives are successful because they are spearheaded by strong leadership at the top.
- Develop a strong and engaged board. A foundation or endowment’s board is vital because they help craft the investment policy statement (IPS) and determine key functions like grant-making. The IPS is the roadmap for how investment decisions will be made. It clearly lays out spending policy, risk tolerance, as well as unique circumstances such as socially responsible investing. The full board provides a “tone” or the “spirit” of the organization. It speaks to the way the organization is perceived by others in the community — what it stands for and how it is best able to ensure impact in their specific and targeted area. While board members participate on a volunteer basis, they must take this responsibility seriously. No one should be on a nonprofit’s board who is not fully engaged in the mission of the nonprofit and who is not committed to voicing that to others as they advocate for the nonprofit in their daily lives.
- Utilize an advisory board as advocates for your mission. The advisory board can be crucial to providing insights and alternative perspectives. When selecting your advisory board, consider industry leaders whose values closely align with your missions. They should not only help you with funding but also be influencer-like in their advocacy for your organization. They need to understand the mission and the spirit of the organization so that their advocacy for the organization rings true.
- Be engaged in your mission — be outspoken. Again, this goes back to the importance of mission alignment. If your core values and mission are not within the very fabric of everything you do then how can you expect others to buy in? Be your own best advocate and do the work to ensure your mission is at the core of everything you do.
- Be fiscally conservative with your endowment. Your endowment or foundation is not the place to be taking investment risks. Leave those games to your personal accounts. Consider that you have a responsibility as a steward to be mindful of the risks you are taking within the portfolio. Your primary focus should be building a lasting legacy rather than striving to beat the markets. The old adage rings true with respect to managing nonprofit assets: the slow and steady win the race. Think of the power of long-term compounding rather than short term trading. Stick to plain vanilla strategies for the most part and embrace sustainability as it relates to the investment portfolio’s holdings.
How has the pandemic changed your definition of success?
The pandemic heightened our awareness to the disparities that exist within our society. It exacerbated existing issues such as food insecurity, housing, and healthcare. In the face of so much uncertainty and loss, I think we all were forced to reassess our lives and what matters to us. For me, I was undoubtedly made hyper aware of how lucky I am to be surrounded by a wonderful family at home and a great team at work. I was given a renewed focus to center the work that I do around nonprofit work and sustainable investing.
How do you get inspired after an inevitable setback?
I conduct an autopsy of what happened. This means digging in and being honest with yourself about your weaknesses and where you went wrong. It can be a big hit to the ego but humbling yourself like this is necessary. That is the only way to repair and learn. Setbacks are only temporary if you embrace them as a challenge to grow and evolve.
We are very blessed that very prominent leaders read this column. Is there a person in the world who you would like to talk to, to share the idea behind your non-profit? He, she, or they might just see this, especially if we tag them. 🙂
I would have to say Bill Gates. I would love to pick his brain as both a businessman and philanthropist.
You’re doing important work. How can our readers follow your progress online?
Visit our website at AlineWealth.com. Follow me on LinkedIn and Twitter.
ALINE Wealth is a group of investment professionals registered with Hightower Securities, LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities, LLC; advisory services are offered through Hightower Advisors, LLC.
Thank you for a meaningful conversation. We wish you continued success with your mission.