Pioneers of Conflict-Free Advice for Texas-Based Entrepreneurial Families
In a world where buzzwords routinely outnumber tangible results, Mosaic believes its commitment to conflict-free advice is unique. Mosaic’s inspiration came from a simple observation: while there is no shortage of competent professionals vying to assist business owners, few lead the diverse team of specialists required to effect meaningful change.
With nothing more than an untested idea and a copy of the Houston Business Journal’s Book of Lists, Mosaic started by cold-calling the leaders of family-owned businesses from a “borrowed” file room about 14 years ago. With a simple pitch, they explained to each prospect that many clients have an existing team of attorneys, CPAs, investment advisors, and insurance agents. However, even with all this help, there is often an enormous gap between where clients think they are, where they actually are, and where they want to be—often resulting in millions of dollars in unnecessary taxes, professional fees, and insurance premiums.
Sophisticated, Objective Guidance
Mosaic operates like a General Contractor, but instead of electricians and plumbers, it works with attorneys, CPAs, and investment advisors. For a flat quarterly fee, Mosaic provides objective guidance to its clients, earning the trust of over 30 Texas-based entrepreneurial families—the majority of which are first-generation founders.
Mosaic’s clients’ net worth is often tied up in illiquid, hard-to-value assets like operating companies or real estate, which requires both patience and a sophisticated infrastructure. By investing the extra effort, these families enjoy greater planning flexibility than those focused only on liquid assets.
When asked to share examples of illiquid assets that clients most commonly omit from their planning, Brandon Henry, Mosaic’s Founder & CEO stated, “Ironically, it’s the operating businesses themselves. Even if a family knows exactly where they would like to go, they can’t plot a reliable path forward if they don’t know where they are today. Though many families can articulate their goals and the major pitfalls they hope to avoid, virtually none actually know how their current plan impacts their family and business. As a result, they are left making poorly informed decisions that impact everything they own and everyone they care about.”
In 2012, a family was referred to Mosaic by their CPA to help move their roughly $5 million investment portfolio out of their taxable estate before the estate tax exemption potentially changed that year. Initially, the family hesitated to engage Mosaic, estimating their net worth was “only” around $13 million, based on their company’s fully depreciated book value. Recognizing that the company generated more than $15 million a year of income, Mosaic urged the family to reassess their strategy, suggesting that the IRS and potential investors would likely value this company significantly higher than the family assumed. Three years after their first meeting with Mosaic, the family sold their company for over $100 million. This family still works with Mosaic and has saved over $50 million in transfer taxes compared to their original plan to focus on their investment portfolio narrowly.
A Symbiotic Partnership for Impact
Philanthropy can be a powerful tax-saving strategy generating a positive feedback loop that compounds over time. Beyond the quantifiable benefits of tax savings, philanthropy also creates opportunities for families to work together, modeling values and sharing experiences that help rising generations appreciate the responsibility associated with significant success.
Henry noted, “Writing a check to a public charity isn’t hard, but transferring significant wealth that adapts to changing tax laws, shifting business climate, and evolving family dynamics is exceptionally complicated.”
“The partnership between Mosaic and Greater Houston Community Foundation has been symbiotic for over a decade, enhancing each other’s effectiveness in serving families with significant illiquid holdings. The Foundation’s team has the experience and sophistication required to integrate business, tax, and philanthropic plans. The Foundation is a part of our inner circle of trusted advisors, adding the depth necessary to complete sophisticated charitable giving, and accepting even the most complicated gifts with open arms.” – Brandon Henry, Founder & CEO
The Foundation understands the importance of trust and the long-term relationships professional advisors establish with their clients. Because of that, the Foundation allows investment advisors to continue managing their clients’ portfolios if they open a fund of $500,000 or more.
Henry closed by saying, “Collaborating with a trusted philanthropic partner like the Foundation helps Mosaic weave comprehensive charitable planning in from the start. The results have been a game changer for the families we serve. For instance, several families with significant illiquid holdings will likely owe zero estate taxes at their passing. The long-term benefits for these families, their businesses, and their community far transcend the millions in tax savings—the impact can’t be overstated.”
Your Partner in Philanthropy
As your dedicated philanthropic partner, Greater Houston Community Foundation is here to provide the tailored insights and solutions you need. With our extensive network and understanding of the Greater Houston area, we’re uniquely positioned to connect you with initiatives that align with your interests and the needs of the community.
Whether you are an advisor guiding your clients or a donor looking to open a donor advised fund to optimize your charitable efforts, we are committed to bringing your philanthropic vision and goals to life. Contact Kevin Pickett or Andrea Mayes to learn more about how we can help you achieve your philanthropic goals.
More Helpful Articles by Greater Houston Community Foundation:
- 30 Years of Amplified Giving: Insights from the CEO
- What Is the Great Wealth Transfer?
- Philanthropy for High-Net-Worth Individuals and Families
- Strengthening Your Philanthropic Giving Strategy
- The Growing Influence of Women in Philanthropy
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