Most family wealth is earned and lost in just three generations. One way to thwart this, is to engage the members of the younger generation in philanthropic efforts to prepare them for future financial responsibilities, while at the same time passing on your family values of charitable giving.
The Pacific Coast Business Times, in its recent article, “Involve your children in philanthropy,” notes that the best way to involve your children in philanthropic activities, is to start early. You should identify opportunities at every age to include them in your family’s giving and volunteer work. Many younger families are already giving of their time and money, with 84% of millennials making a charitable donation and 70% volunteering their time in 2014.
Creating a more formal charitable giving plan helps emphasize the impact of giving and can create a culture of philanthropy that will carry on the family’s legacy. Start by laying the groundwork with these ideas:
Document the family’s giving history. This will lead to better engagement by the family of your philanthropic strategy and help to build interest for family causes.
Create a family mission statement. Developing family mission statements can be valuable. Work with your children to define the family’s mission and purpose for giving, and use it to outline the principles and behaviors that will guide your charitable giving now and in years to come.
Include everyone in philanthropic work. Start involving kids in volunteer work and decision making, as early as possible. Allow children to direct philanthropic funds. You can ask your kids to select a cause they’re passionate about and encourage them to research charitable organizations to develop a plan focused on how they will use donation dollars. Do research on charities and then, as a family, discuss a charity’s merits to decide whether or not to donate your funds.
There are many ways to give, from volunteering time, donating directly to a charitable organization, or using donor-advised funds. Partner with an experienced estate planning attorney to learn the benefits and limitations of each strategy. That will help you better focus your resources to drive your family’s efforts towards philanthropic causes and maximize the impact of your generosity.
Reference: Pacific Coast Business Times (September 8, 2017) “Involve your children in philanthropy”