The gifts of the Commodore’s descendants, like his, tended to be rather spontaneous one-offs, often posthumous. William H. gave $200,000 to the university his father founded and nominal bequests to hospitals and museums. His own son, Cornelius II—a man of rigid rectitude, as blithe a spirit as a Puritan magistrate—devoted a considerable portion of his time, as well as his purse, to charitable activities. He served in dozens of posts of varying degrees of responsibility, including that of vestryman, member of the finance committee of the Episcopal Board of Foreign Missions, member of the executive committee of the YMCA, and director of the American Museum of Natural History. Yet even Cornelius’ philanthropic efforts received little formal structure outside his daily regimen, and his will made relatively modest provisions for these favored organizations. Beside the monumental bequests of later prominent clans—the Phipps, the Morgans, Frickes and Mellons—the Vanderbilts’ philanthropic legacies were remarkably scarce: Other than Vanderbilt University and the Whitney Museum (the brainchild of Cornelius’ daughter, Gertrude), the only monument to the Commodore’s name that remains is Grand Central Station—appropriately, a commercial rather than a civic endeavor. Even the fortune, which the Commodore’s last testament had guarded so jealously, is for all intents and purposes gone.

This slow finale began with William H.’s decision to depart from his father’s wishes in dividing the Vanderbilt estate among his four sons and four daughters: Each of the six youngest received $10 million, while William K. and Cornelius II each inherited equal allotments of $65 million. The family business, which had to that point served as the unifying element within the family, would persevere in that role for one more generation, as the elder brothers cooperated in its management—Cornelius as the captain of industry, William as the greaser of social wheels. But the brothers were the last to play any active part in the railroad; after them, the family’s only common bond was their pursuit of social status and their willingness to spend unlimited sums in attaining it.

Their philanthropic disinterest may have contributed to the dissipation of wealth. The Vanderbilts’ curious chronicle illustrates what attorney and family counselor James E. Hughes Jr. (see "Growing a Great Family") describes as entropy—a gradual decline in vitality measured in terms of creativity, consciousness of the world and the family’s place in it, a sense of purpose and of stewardship toward succeeding generations, and the recognition that wealth does not exist independently of the society in which it is generated. If we regard the complex of relationships, institutions, financial instruments and individuals that form the family enterprise as a kind of engine, then the addition of energy—time, talent, discipline, experience and money—is required to maintain it in working order from one generation to the next; without this fuel, it sputters to a halt. The Vanderbilts lived, figuratively and literally, off of their principle, both financial and intellectual.

Philanthropy as Wealth Preservation
There are multiple reasons why this failure occurs," says Hughes. "But on a practical basis (and the world is a practical organ), no one will be good or useful in managing financial capital if they are not first thriving human beings and intellectually curious creatures. You don’t just get born with financial skills. The greater problem that causes families to disappear is that they don’t concentrate on creating thriving human beings in the next generation. They don’t create an intellectual community within the family that is based on learning, sharing the learning, and then making the learning useful to the whole family."

In our 100-year family plans, philanthropy often furnishes a sense of community, particularly at points when businesses or merely geographic proximity no longer perform this vital function. The defining common values by which we identify ourselves as a family, and which shape our family mission, find their most meaningful expression in our charitable endeavors. And these endeavors, in turn, by exercising our values—by putting them into action—keep them vibrant, alive and evolving from one generation to the next.

"[People] ask themselves how they can draw their family together in a common purpose," observes Karen Putnam, principal and director of Philanthropic Advisory Services at Bessemer Trust, "and they see philanthropy—this notion of giving back—as a kind of canopy that arches over all of the different individual interests under which the members of the family gather."

In addition to strengthening our families’ identities, philanthropy develops skills that contribute to the preservation of our wealth, values and missions. A family foundation operates in much the same manner as a business, and its board members, though giving rather than earning, assume the same responsibilities: They must understand the community (or market) they serve; they must consider both short- and long-term consequences of given strategies; and they must develop budgets, measure returns on their investments, and account for their decisions to the other board members, as well as to the rest of the family.

"It may seem counterintuitive," says Putnam, "but the thoughtful giving away of money requires a lot of the same skills as the thoughtful making of money. The skills are valuable however you accrue them. So in that sense, if the individual who generates the wealth wants to perpetuate those values that made him or her successful, philanthropy may be a good place to look."

Philanthropy unites us across the distance of time to future generations.

Though some families consciously eschew any type of philanthropy, its relative ubiquity among affluent families (even the Vanderbilts engaged in some charitable giving) has prompted some thinkers to argue that it constitutes a form of social selection, whereby those in possession of significant capital preserve their privileges by establishiing and funding public institutions and services. Yet, while this social symbiosis may have some basis in fact, the more compelling motivation is the sense of meaning we derive from giving. Philanthropy not only instills in each of us an active, day-to-day connection to values and ideals that transcend our own personal goals and concerns, but it unites us across the distance of time to future generations of family members, strangers to us now, in the very human enterprise of powering the great engine of civilization.

Illustrations by Jonathan Barkat