Big Charitable Life Goals
KRIS FLAMMANG
Randy, you have a very interesting history. Take us through that, and tell us what led you to where you are today.
RANDY FOX
I started a career in financial services in 1984, partnering with a former high school classmate after I ran into his mother in my family’s restaurant. I asked her how he was doing, she told me he was a financial planner, and I said that sounded interesting, so I had dinner with him. At the time my wife and I had two kids under the age of three, but I quit my job and went to work with him and another partner. I became a typical retail financial planner, charging fees to do written plans, helping to implement those plans, and so on.
But I got bored with that. I always wanted to learn more, do more, be more. Also, after the 1986 Tax Act, when they took away all the favorite tax shelters many clients were using, we read about a program that was offered by a company called Renaissance in Indianapolis, to learn about charitable planning. My two partners said, "We don't want to go. You go." I did, and that changed everything. Because I learned how to use some of the charitable planning tools specifically, then the charitable remainder trust, but I realized that I had become a specialized one-trick pony.
So, I set off, learning the rest of estate planning, traveling around the country to every advanced estate planning seminar I could get to and every advanced charitable planning program I could take. Lo and behold, I started a business with an attorney partner that did planning for other advisors around the country. We would get called in when the advisors, whose typical client had one to three million dollars, came in contact with a $10 or $20 million client, and they had no idea what to do. That evolved to where I am today.
KRIS FLAMMANG
They felt they might be in over their head, and they needed somebody's background and knowledge in that.
RANDY FOX
I always used to use the analogy that they were like the dog chasing the fire truck. Eventually, the dog caught the fire truck, and said, “Uh oh, what do I do now?
KRIS FLAMMANG
That’s an appropriate analogy. If you could go back and give your younger self advice, what do you wish you could have known then that you know now?
RANDY FOX
Oh, everything. I have made so many mistakes in my career it's unfathomable that I've failed my way to success. It's taken 35 years to become an overnight success. It just takes a long time, and a lot of scrapes and bruises and mistakes. I think they’ve all been great experiences, although some of them have been very painful along the way.
KRIS FLAMMANG
What do you think kept you going? What was your driving force?
RANDY FOX
I just always wanted to do what I'm doing, and I pretty much tried not to let anything get in my way. I have this vision about how planning should be, and I don't see a lot of people doing it the way I'd like it to be done. I think to myself, “If I don't do it, or if I don't set an example, who will?” I'm not one of those outspoken yell-from-the-street leaders. I just want to do what I do, the best way I know how.
KRIS FLAMMANG
Let's get into some of the specialties you have. What exactly is a wealth strategist? How do you define that?
RANDY FOX
All my clients are other advisors, so I don’t have a retail practice, but when I look at a client matter for another advisor, I try to take the broadest overview possible and look at all of the parts. Instead of putting a Band-Aid on a wound, I want to know what caused the wound, and how we can heal it and prevent it from ever happening again. I try to be very comprehensive in my approach, and I like to use all of the tools that are available to us, not just the couple of tools that I know how to use, or my favorites. What works for that client and those circumstances trying to get to this goal is much more important to me than the fact that I know this widget.
KRIS FLAMMANG
Is there a type of person or family that you think can most benefit from philanthropic estate planning?
RANDY FOX
Statistically in the United States, nearly 70% of Americans give something to charity. The high-net-worth families give at a higher level, around 95% according to the last study I read. What they do, however, is they give inefficiently. Most people write checks. They don't even give appreciated stocks. If we could just slow everybody down, and back up and say, “I know what you want to do, let's find the best way to do this, and let's see how it integrates into the whole picture of everything you're trying to do,” we can be much more effective and impactful. In fact, one of the big issues I always face is that people think if we increase their charitable giving, we're going to take assets away from their heirs, so there's this balancing act we have to do. I always tell them we're not disinheriting their heirs; we're going to disinherit the government.
Given that choice, would you rather have your money go to Washington, or would you rather have it go to something else you believe in? Once we can have that conversation, it gets a little bit easier to go further down that road.
KRIS FLAMMANG
I like that. People use the term charitably inclined. I think I know what that means, but how do you define or interpret that?
RANDY FOX
It's interesting. Often, I’ll get somebody who tells me they’re not charitable. Well, I bet that’s not true. Look at the statistics I just mentioned. What that usually means is they don't understand that they have a choice, and they can direct where some of their otherwise tax dollars would go. I think we as advisors just don't ask the right questions. If someone says they aren’t charitably inclined, we need to ask, “What do you mean by that?” What you'll find out is that same individual sponsors the local little league team. That same individual is on the board of his church. That same individual serves in the Rotary or the Kiwanis or the Lions Club. They may say they’re not charitable, but they are.
KRIS FLAMMANG
It’s that art of being able to ask questions. So many times, we take client answers at face value and just move on and make presumptions about that. We're not asking those additional questions to explore more, to get deeper, to find out if that’s really true. That's where some breakthroughs can take place and you find out the person is different than what we might think.
RANDY FOX
Absolutely. I think advisors are in such a rush to prove their intelligence and to provide the solution that they don't take the time to really question deeply. If you're working with somebody who has substantial wealth, these are big decisions. You really have to understand who they are and what they're trying to accomplish. And the only way to do that is to ask and ask and ask because the clearer you get about what a family wants to do, the better the outcome. Many times, they don't really know, you have to point them in the right direction or tell them, “If you do this, here’s what the outcome will be. If you do this other thing, the outcome will be this.” They won't act unless they're really clear, and if they don’t do anything, that’s not a good result.
KRIS FLAMMANG
That's the fear of making a big mistake. “I won't do anything. I'll just stick with the status quo.” Speaking of fears, when you work with advisors with their clients, what are their biggest fears or concerns when it comes to philanthropy?
RANDY FOX
There are a couple. First is the fear of giving up control. Second is, “I'm disinheriting my children.” Those are the two major ones. Then a third is, “I’ve never heard of this before. My attorney or CPA never told me about these things. I’ve been with them 20 years. Why didn't they tell me?”
KRIS FLAMMANG
Is there an area of your expertise that you get the most enjoyment from right now?
RANDY FOX
At the height of COVID, things were quiet for me, so I used the time to listen to a number of books. One was called 10xTalk with Dan Sullivan and Joe Polish. I asked myself, “What do I want to 10x?” I don't want to grow my business 10 times, because I'm not young, and I don't want to build a big infrastructure around me or any of the things that would take. But then I looked back over the last 35 years, and realized that in conjunction with other advisors in working with the client base I work with, we raised about a billion dollars for charity. I said, “That's what I want to 10x!”
I’m still building it out because I don't have a clue what it's going to look like. It’s a movement called TEN Billion for Charity. I'm a child of the 60s, and we were that group that wanted to change the world. The only way I think we can do that is not by improving government, but allocating our dollars to causes we believe in. If I can help lead to $10 billion in philanthropy before I quit, I think that's going to make a difference. Is that enough? Of course not, but you have to start somewhere.
KRIS FLAMMANG
That’s awesome. Without sharing any client particulars for confidentiality reasons, can you think of a really satisfying client experience that you had recently? Can you talk about the problems they were facing, what they’re trying to do and how you were able to help them?
RANDY FOX
I love telling this story. I actually just recently met this client for the first time, after having a total online relationship all of last year. An advisor in California brought me one of his clients who had been with him for 10 years. He's a fifth-generation member of a very successful family business. He has about a $25 million estate and gets a dividend of about $3 million a year from the company stock. He’s divorced with three grown kids, and had a living trust. No planning. He's a very simple guy. If you met him, you might think he’s your UPS driver. Not a sophisticated investor, he just wanted to live his life and leave me alone. So, we brought him into the planning process very gradually, introducing many new ideas and concepts. At one point he told my colleague, "Why did I pay this guy this money? I don't want to do any of this stuff. Why am I here?"
Today his plan is fully implemented. We have created a $5 million gift to charity, and we’re doing a family meeting with his kids to go through the planning with them. And when I met him, he thanked me. That, to me, is what this is really about. It's really creating a difference. He'll pay no estate taxes when we're done. We've moved significant assets out of his estate. We've created liquidity to help purchase the family business shares he owns, so they won't have to be sold off to pay estate taxes. It took about a year to do all that.
To go from someone thinking I'd taken his money for no reason, to thanking me for getting it done and feeling safe and settled and secure and not worrying anymore, that's a big deal.
KRIS FLAMMANG
The thank you is really what it’s about. Let's shift gears a little bit. You have a lot of life experience. I’m curious, what’s your first memory or first experience with money?
RANDY FOX
I come from an entrepreneurial family. Nobody has ever worked for somebody else. My father was very successful. He started a number of businesses. When I was 13, I went to work in his factory. I helped to unload trucks, and worked in the lab, and got my hands dirty, and I realized that I didn’t want to do that. I wanted to be able to think and interact with people on a more even-handed basis.
But after I left college early without graduating, I ended up coming back and working in the family businesses again. I rotated through all the jobs, from unloading trucks to cooking and tending bar in our restaurant. I was doing the everyday work, and as I did, I thought, “What I do best is managing all these people. I get along with them, and they'll listen to me.” I also thought I had pretty good ideas. I ended up running three enterprises at that point.
KRIS FLAMMANG
Your family was successful and so are you. Money can be a positive or negative thing. Have there been any experiences in your life which made you keenly aware of either the positive or negative effect of wealth?
RANDY FOX
I've explored both aspects, and have witnessed it in many families. Families who don't want their kids to be entitled, but they already are. I know old families where the kids were raised wealthy, and driven to school in a chauffeured limousine. That makes it really hard to get them past the idea that they're special. There are parents who fly their kids first class, and now those kids are out in the working world and they still want to fly first class, but they’re having trouble realizing that they have to earn the type of living to allow them to do that.
KRIS FLAMMANG
Is there anything you think from a planning standpoint that people can do with the tactics you use to help deal with that entitlement standpoint?
RANDY FOX
Yes, I think there is. The word “Affluenza” has become common jargon in the wealth advisor world. One of the things I believe, is to teach kids early. You can start as young as five or six years old, to have your children give to charity on an annual basis, and have discussions about how fortunate your family is and how important this is. Don’t call it giving back, because that makes it sound like you took something. Talk about how important it is to contribute to society, to things that are meaningful to you. Then at some point, let the children pick their own charities and have them explain why they picked it.
They might give to the Humane Society because they just love animals even though you don't have one. It's not about judging. It's about identifying what you care about in the world and doing something about it. It puts money in perspective. It allows you to see the power of it and the good it can do, but you're not spending it on yourself. They have studied this, and families who do this actually get along better and communicate better. Who doesn't want that with their children? I've never met anyone who says, “When my kids grow up, I don't want them to get along. I want them to never talk to each other and fight all the time.” But that's what a lot of parents create, and if we could help resolve that, it would make a huge difference.
KRIS FLAMMANG
Let's take the focus off ourselves. Let's put it on others. We're not as important as we think. If we can do that, then we're not thinking about our own needs, we’re thinking about others, and it generally helps everybody get along when you're putting the other person first.
RANDY FOX
It's about balance. We don't have to give everything away. We didn't take a vow of poverty. We worked hard for what we have, but our family's value system says we share what we have with important things in the world. I don't think there's anything the matter with that.
KRIS FLAMMANG
What would you say is your biggest life accomplishment so far? This could be personally or professionally or both.
RANDY FOX
I have two really mature, wonderful children, and I can't imagine how they got to be so brilliant. I look around, and I see other almost 40-year-olds, and I think, “Gosh, I'm really lucky. My kids are settled. They married well. They have beautiful families. They're great parents. What could I be happier about?”
KRIS FLAMMANG
If you weren't doing what you are doing now, what do you think you would be doing instead? Was there some career path you thought about growing up, or some other aspiration you had?
RANDY FOX
That's a tough one. I've often thought that if I ever retire, I might want to go teach on an Indian reservation or something like that. There's just something about that, that's always called to me as serving some place that's totally underserved. But I couldn’t see a different career. I love what I do. This is potentially so powerful and so much fun for me that I don't think in terms of what would be better.
KRIS FLAMMANG
Outside of your practice, your business, your consulting, what are you really passionate about personally?
RANDY FOX
That's another good one. I try to keep myself fit. I'm passionate about health and fitness. I'm a pretty avid bike rider. I'm not a political person because I don't see a solution for me in that mix. I stay out of that. But I'm passionate about making the world a better place, anyway I can.
KRIS FLAMMANG
Is there a unique or interesting fact about you that very few people know?
RANDY FOX
Here’s one. Everybody wonders where the two hawks came from. I apprenticed for five years with a Blackfoot medicine man. I grew up watching westerns, and I always liked the Indians better than the cowboys. I just thought their value system was much more in alignment with mine. I had the opportunity to learn very traditional native spirituality practices, including the sacred pipe ceremony and the sweat lodge ceremony and all of those. In fact, at one point I was regularly leading sweat lodges, and at the very first one I poured water for, two hawks were circling over the sweat lodge the entire time I was in there. I said, "Okay, I got it. I'll use that." That's how it became Two Hawks Consulting.
KRIS FLAMMANG
That's a cool story. One of your other roles is editor in chief of the Planned Giving Design Center. Talk about what it is, what it does, and who it serves.
RANDY FOX
I believe the Planned Giving Design Center is the largest single resource in the world for scholarly articles about planned giving. Everybody who's anybody in the world of planned giving has written for us. There’s about 70,000 pages of content from hundreds of different authors. All the articles are available on the website to anybody who wants to read them, and it's a great knowledge base. It's a great place to learn things.
KRIS FLAMMANG
What do you consider to be the most exciting part of your work right now? What’s the biggest opportunity for your business?
RANDY FOX
First of all, I think my TEN Billion for Charity movement really can't be done by me. I think the only thing that will make it happen is a wholesale change in the conversation that advisors are having with their clients. The opportunity to have these deep and meaningful conversations with clients is there for all advisors, and it's certainly there for me. If you don't have the conversation, you can never make it happen. I think most advisors are afraid to have that conversation because they don't know how to do the nitty-gritty planning. The studies say your clients don't care if you bring in an outsider. They just want the result. They don't care if you know everything. I'm trying to help change the conversation, and I think that’s really where the opportunity is, having better conversations with our high-net-worth clients.
KRIS FLAMMANG
Is part of what you do coaching advisors on having those conversations? What to say, what questions to ask, how to approach it?
RANDY FOX
I do the basics of that. Frankly, I work with people that are much better than that. I have a number of very good friends through my membership in the Heritage Institute, where they teach these deep conversations. If you really want to get good at working with high-wealth families, having the tools to have deep conversations with them is very important.
KRIS FLAMMANG
That’s so important, making a meaningful connection with somebody.
RANDY FOX
Too many people are in a hurry to gather assets and sell something. as opposed to developing a long, long, long relationship.
KRIS FLAMMANG
That’s sad. We look at our client relationships as ones we want to have for a very long period of time. We want them to be able to talk to us about things that aren't necessarily financially related, but they're big life decisions that they're going to make. If they want our opinion or our counsel, we want to be there for them.
RANDY FOX
Exactly. Even back in my retail practice, my clients would tell me everything about their families and what was going on. We hardly ever talked about their planning after the first few meetings. It was, “How are the kids? Where are they going to college? Where should I grab the money from?” All those things.
KRIS FLAMMANG
Often, I’ll meet with a client, and at the end they say, “You probably don't like being my psychologist, and I don't know why I told you all that stuff, but it just came out.” I look at that as a compliment that they're comfortable.
RANDY FOX
That's because they trust you, and they appreciate your feedback.
KRIS FLAMMANG
What do you think is your biggest challenge or obstacle right now in your business?
RANDY FOX
There are actually a number of challenges. One is I'm a one-man army, so if I push on one lever over here, I have to pull on another lever over there. I have the same number of hours in a day as everybody else, and I have to focus my attention on getting things done that I promised to people. I'm one of those people that if I say you're going to have it on Tuesday, you'll probably have it Monday night. I try to stay in integrity with that. I have so many things that I want to do before the day is over. It's a bit of a focusing problem, which is why I went back to strategic coach and joined the 10x program. I'm starting to learn the “who, not how”, and starting to bring in outside help to do some of the things that I'm bad at or don't want to do.
KRIS FLAMMANG
Everything's a trade-off. We have to focus on what our skill set is, what we're really good at, to make the most impact. Thank you for making such an impact with what you do.