What is the least discussed type of family capital? It may be spiritual capital — which many families find difficult both to define and to talk about.
“It’s a hot topic at the moment. I think a lot of people are looking for a way to discuss this topic in fuller measure, and to reap the benefits of this capital that that have gone unused to date in many families,” says Chris Koenemann, a consultant at Continuity Family Business Consulting; the founder of Chris Koenemann Consulting, whose focuses include facilitation and coaching on spiritual capital; and the founder of the Spiritual Capital Fellowship, a virtual space for discussing this topic.
Experts say a focus on spiritual capital can help families remain aligned on values — which in turn helps keep the family together through generational and other transitions. To reap these benefits, though, families first need to define what they mean by “spiritual capital.”
Koenemann defines the term as “‘meaning beyond us’ — that is, as anything that draws us out of ourselves and beyond ourselves.”
Betsey Fortlouis, executive director, family business advisor and coach at the InnerWill Leadership Institute, ties the definition to the legacy families are trying to leave with their wealth.
“When we talk about spiritual capital, I would say it represents the deepest ‘why’ behind a family’s wealth and legacy: the values, purpose, and meaning that guide how the family is going to steward those resources across generations — whatever that looks like,” Fortlouis says. “Spiritual capital is what prevents wealth from becoming just a balance sheet. Without it, families often struggle with the ‘shirtsleeves to shirtsleeves’ phenomenon.”
Strengthening family ties
As families grow and change, the need for something to tie them together becomes stronger.
“As family offices modernize, they understand that families need a reason to stay together beyond money,” Fortlouis says. “Because as families grow, as they get more complex, their needs are different — both as individuals, but also in their little individual nuclear families, generationally and across branches. If there isn’t something that brings them all together, they are going to fight.”
Whether spiritual capital works as the glue that keeps the family together or serves as the catalyst for family members deciding to go their separate ways may depend at least partly on what assets the family owns and how they are held. In families with limited shared assets, for example, members may realize through discussions of their values that they would rather invest on their own. And families with shared assets, such as land, may discover that, for example, the older generation has deep ties to the land, but the younger generation does not.
“Shared spiritual capital provides the common ground when business interests diverge or family relationships strain,” Fortlouis says. “It is not always easy to put into practice, but I think it does help families navigate conflict better when they can look at it through the lens of shared values.”
Complex conversations
It’s not always easy for family members to discuss spiritual capital, however.
“Some people think that spiritual capital is so personal that you can’t say anything about it. I disagree,” Koenemann says. “If we fail to talk about whatever transformative power each person believes in, we are really impoverishing ourselves and our relationships. We do that in secular settings, like in the workplace, because we fear the conflict that may come with those conversations. I’m promoting a way to gain the benefits from these conversations while also avoiding the pitfalls associated with them.”
Koenemann, who started his career as a strategy consultant and later worked as a top administrator of a Benedictine monastery, says families are often reactive rather than proactive when it comes to these discussions.
“Generally speaking, most people do not act in this regard until they have to,” Koenemann says. “It’s not until some degree of crisis in the family provokes a spiritual awakening or transition — then there is a need for a difficult conversation that they don’t know how to have. Or, on the flip side, you could have someone that’s being too controlling, thereby causing faith-related tensions and conflict, and that may prompt this type of conversation as well.”
One way Koenemann helps families have conversations about spiritual issues is to use what he calls a polarity map, with what he calls spiritual living on one side and natural living on the other. “You need the benefits of both sides to really thrive,” Koenemann says.
Starting with values
Families may also start by defining their values – an important step toward making sure everyone is on the same page.
A value “can’t just be a word,” Fortlouis says. “It needs a specific definition that truly reflects the family’s vision, and it needs at least three actionable behaviors underneath it. If you pick something like ‘family,’ what does that look like in action? For some people, ‘family’ might mean welcoming every single person like they’re family, and having fun, whereas for other people, it might mean not sharing certain things outside of the family and working toward a shared goal.”
Aligned values are the foundation for a smoothly functioning family office.
“In family office work, you need to answer the question, Why do you want to sell this piece of land? Or, Why do you want to keep this asset?” Fortlouis says. In the past, the answer may have been simply, “because we want to make as much money as possible,” but younger generations are looking for deeper answers.
“You have a younger generation now who is really hungry to have more of an impact, and family offices are more aware of the importance of cultivating gratitude, responsibility, and service orientation in rising generations,” Fortlouis says. “For family offices, particularly that don’t have an operating business anymore, having strong spiritual capital allows for longer-term wealth generation and family benefit — because people are willing to sacrifice short-term gains when they understand the why. When the next generation inherits money without meaning, they may be inheriting a burden rather than a legacy.”