Sunday, March 14, 1999
ENTREPRENEURS
Planned giving now her business
BY JOHN ECKBERG
The Cincinnati Enquirer
For more than two decades, lawyer Penny Friedman was a member of Cincinnati's legal elite - a high-floor and high-powered attorney lawyer who practiced real-estate law for the city's movers.
She worked in corporate law for Taft Stettinius & Hollister, became vice president for property development for Taft Broadcasting Co., distributing more than $500,000 annually in charitable contributions, and was real estate portfolio manager for Bartlett & Co., where she managed $100 million in holdings.
Since October, Ms. Friedman has taken on a new challenge, one that takes her from mahogany row to the corner offices of the region's small-business factory floors. As owner, president and sole employee of BeneFactors, Ms. Friedman will plan philanthropy for businesses, individuals and families. Never at a loss for words, she says her new role is simple: “Get money out of the woodwork.”
Since the stock market crash of 1987, vast wealth has been created in America, and not solely from shareholders of multinationals. Mostly, it comes from the family fidget and widget companies: the pump makers, plastic extruders, metal fabricators, blade makers and gear grease companies that make up the fabric of a local economy.
Ms. Friedman thinks her contacts among local foundations, legal training and ability to analyze benefactor values and philosophy will bring BeneFactors a long list of clients and a long life. She will also monitor grants for foundations that have no full-time staff. “I will be the head, heart and hands for a foundation,” she said.
From her 35th-floor office in the 312 Walnut building downtown, she looks out on two trends. The World War II generation of business owners is beginning to transfer assets to heirs. Economists predict that $10 trillion will change hands in an intergenerational shift between now and 2050. “It may even be higher,” said David Morse, director of public affairs at the Pew Charitable Trusts, a $4.7 billion foundation based in Philadelphia. “That $10 trillion extrapolation occurred before the recent upswing in the stock market.”
With a tax code that can direct 55 percent of an estate to the government — after deductions of $650,000 a person and allowances that can send up to $1 million a person to grandchildren — it makes sense for executives to find charities while they are alive, if only to watch their money work, Ms. Friedman said.
Instead of boosting the federal bottom line, philanthropic planning can leave a local legacy for business owners, she said. Millionaires are not the only target. Recently, after a brief introduction, a woman awaiting a flight to Cincinnati asked how to give away a $400,000 estate. She was saved by an operation as a child and wanted to get it to the hospital. That was an easy one.
“I told her to call the hospital's development director and ask,” Ms. Friedman said.
Because of the tax code, millionaires have the most to lose during this coming generational transition. Ms. Friedman, now a bona fide small-business owner, hopes a few will ring her up to figure out how to best way give it away.
John Eckberg covers small-business news for the Enquirer. Have a small-business question, concern or quandary? E-mail him at jeckberg@enquirer.com and he will find the expert with the answers.
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