How to make philanthropy a family affair

Many families believe that philanthropy is an excellent way to teach the next generation about financial stewardship in the context of giving back. It also offers children a tangible project in which they can be actively involved, particularly if they are too young to participate in the family business or in other wealth planning activities. Research consistently indicates that proper modeling of family philanthropy can help children understand wealth not as an identity, but rather as a tool they can use to make the world a better place.

STRATEGIES FOR ENGAGEMENT

A deliberate approach to engaging next-generation family members is more likely to ensure the continuity of a family’s philanthropic goals throughout the decades to come. There is no one "right" approach to involving younger family members in philanthropic efforts, but the timing is relatively clear. Values are most easily transmitted from one generation to the next while senior family members are still living, so that children and grandchildren can learn directly from their elders.

The key to developing a strategy for multigenerational engagement is customizing activities that suit the particular personalities, skills and life experiences that family members bring to discussions about wealth and values. Such activities should:

• Provide a venue for sharing family history. For example, you can write a letter to each of your grandchildren describing your motivations behind your philanthropy, laying out the goals you hope to achieve. Your letter also can provide a mechanism for you to formally invite younger family members to participate in the family’s philanthropy, even if family members reside in different areas of the country.
• Create opportunities for meaningful hands-on learning. Families can set up a trust or a donor advised fund for heirs to manage as a training ground, helping the next cohort of donors learn and practice the governance and grant-making skills they will need to serve as leaders of their family’s formal giving vehicles.

Outline how multiple branches of the family, including spouses, will participate in charitable decision-making. Families with formal charitable giving vehicles might choose to draft succession plans that include specific criteria – age, education, volunteer service, geographic proximity, etc. – and define which family members are eligible to serve as trustees. Succession plans often include "job descriptions," which clearly articulate the responsibilities of trustees. If requirements for leadership are made clear from the start, there will be less room for conflict later on. Many of these activities can be undertaken in the context of family meetings or retreats to allow all generations the chance to collaborate in a shared vision for their philanthropy.