Engaging the Next Generation in Philanthropy
Trusts & Estates
By Patricia M. Soldano, Amy Davis, and Lauren Benenati
July 28, 2014
One of the most common values high-net-worth parents want to pass on to their heirs is the importance of giving. Many children of philanthropic families are raised in a consumerist culture, surrounded by affluence. Exposing them to the needs of the world at large can enhance their empathy for others and reduce judgment. Introducing children to philanthropic endeavors is an excellent way of demonstrating family values and attaching meaning to money. Philanthropy often brings family members together and encourages them to celebrate their family history and legacy.
Engaging in shared giving decisions, such as determining where charitable gifts will be directed, can enhance family members’ ability to work together and help them develop leadership skills and financial responsibility in other aspects of their lives. Above all else, giving allows children to experience the intrinsic benefits of helping others and making a difference in the world.
One example of a multi-generational family that’s thrived at engaging children in philanthropy started to teach the grandchildren about charitable giving when they were between nine and 11 years old. Each year, the grandparents, parents and grandchildren gathered in a room. The grandchildren were given a fixed amount of money and asked to determine how much and to where they wanted to give it.
In the early years, the goal (and challenge) was to have the grandchildren focus on the meeting and, at the same time, have fun. As the children got older, a more formal shared set of giving guidelines was developed to encourage them to conduct independent research and propose their own choices.
Many times, the organizations the grandchildren gave to were causes they had learned about at school, experienced through friends or worked on with their parents. For example, one grandchild’s friend’s mother was diagnosed with breast cancer, so he wanted to give to the fight against that disease.
Now in their teens and early 20s, the amount of money they’ve given away, as well as the levels of passion and involvement with their causes, which have changed through the years, have increased.
In a survey conducted by Nextgendonors, 89.4 percent of respondents cited their parents and 62.6 percent cited their grandparents as people who influenced their learning about philanthropy.1 To take the first step of engaging the next generation in philanthropy, it’s important to reflect on one’s own experiences with giving. Clients should consider the role charity has played in their lives and speak with family members about their experiences. They should consider questions, such as: What childhood memories do you have around giving? What was the most meaningful charitable gift you’ve given, and what made it so meaningful? Maybe it wasn’t a monetary gift. Perhaps it was something done for a charity or an event planned.
Clients should reflect on their own values. What are the core principles they (and their families) want to pass on to their children? Where did these values originate? How have they influenced your clients’ lives? How do your clients live these values? After reflecting, your clients can begin to explore the objective(s) for involving and engaging their children in charitable giving.
Practitioners who work with families and family offices should discuss these recommendations with their clients to help them make philanthropy a priority for the next generation.
There are a variety of ways clients can pass along values and teach the importance of giving to children. The following suggestions and examples come from 25 years of experience working with philanthropic families:
1. Start early. It’s never too early to start teaching children the importance of giving. Your client can provide young children an allowance, even early in elementary school. She can divide the allowance into four buckets: save, invest, spend and give. She can then allow children to determine what cause or organization will receive their “give” portion.
Or, your client might encourage young children to be entrepreneurial by running a lemonade stand and then donating a portion of the profit to a charity. She can then accompany children to the charitable organization to make their donation and encourage a conversation on how their donations will be used to make a difference. They can revisit the organization at a later date and check on the impact the donation is making. These types of activities begin teaching even young children about strategic giving and the importance of evaluating gifts.
2. Take advantage of teachable moments. Many children have no comprehension that more than half the world’s population lives on less than $2.50 a day.2 Many clients raise their children in an affluent community, which can create a bit of a bubble. Exposure to some of the more difficult realities of life can be beneficial when trying to convey the impact that philanthropy can have on the lives of others. Your client can consider the opportunities for conversation when driving past a homeless person, through a low-income neighborhood or during a visit to the local animal shelter.
Hardship doesn’t create the only teachable moments, however. Opportunities avail themselves when entering a library, art museum or hospital. Children often don’t recognize that it takes financial contributions and volunteers to maintain these facilities for everyone’s benefit and enjoyment. A lesson can even be learned when pointing out the colored rubber wristbands that many people wear in support of different diseases. They’re not just a fashion statement.
3. Share stories. Celebrating family history is an excellent way to pass values from one generation to the next. Clients can share childhood stories related to giving and describe the impact past generations have made. They can take children to places where their grandparents or great-grandparents donated and describe how, thanks to their family, these organizations have benefited and why the family chose these organizations. They can explain the connection and history of the organization to the family, so the child feels connected. This experience often sticks in a child’s memory, and not only does he feel pride, but also, he’s inspired to become a giver.
4. Show and tell. The saying, “Do as I say and not as I do” tends not to work very well in practice. However, years of experience shows the old adage, “Children are great imitators, so give them something great to imitate” has more impact in engaging the next generation. When aspiring for children to volunteer their time, your client should donate a portion of her own income and get involved with nonprofits to lead by example.
A young adult client once shared how her mother’s action impacted her. For her mother’s 50th birthday party, the mother requested that, in lieu of gifts, each guest bring a toy to be donated to Toys for Tots. Initially, the daughter expressed surprise. She later changed her mind when she helped drop toys off and realized the impact they would have on many children’s holidays. This anecdote is further proof that some adages do contain a lot of wisdom, as in: “Actions speak louder than words.”
5. Get dirty. Clients should make giving time and money a family tradition. They can take children to stock shelves at a community food bank (perhaps during the holidays) or to pass out meals at a soup kitchen. Other ideas include teaming up as a Big Brother or Big Sister and involving children in those interactions and activities or volunteering with older children to help build a home for Habitat for Humanity.
There are many more volunteering opportunities for children over age 10. Some families choose to engage in philanthrotourism, including volunteering as part of their family’s vacation. Looking back, a young adult shared: “Those (volunteer) experiences, at an age when my mind was still forming, completely shaped my worldview.”
6. Let them decide. Two of the biggest mistakes clients can make when trying to involve children in a family’s shared giving are: 1) forcing involvement (no one, at any age, enjoys something they’re forced to do); and 2) ignoring children’s own giving interests and suggestions. Clients should encourage children to research organizations that interest them and then make a family presentation on what and why they want to give, and, if a budget isn’t predetermined for the gift, how much the gifts should be. This process will allow them to ascertain how much of an impact their gift may make and how much of a sacrifice it may be for the broader family foundation, if one exists. The family should understand that children who complete this process successfully can become frustrated and discouraged if the family doesn’t follow through with a donation to the organization they selected or if the amount is insignificant.
One multi-generational family who engaged their grandchildren at an early stage developed a short list of questions and answers for the older grandchildren that they needed to incorporate into their presentations asking the family to give to their desired causes. The guidelines below helped empower the children, while teaching them the benefits of due diligence:
• Name and address of the organization and whether they’re local, national or international.
• Name of the executive director or person to whom the children wanted the funds to be directed.
• A description of the mission statement or purpose of the organization.
• An explanation, orally or in writing, of why this organization is important to the children and why they would like to fund it. Also, an indication of how much they would like to fund.
• If possible, a determination of how much money the organization raises in one year and an explanation of how significant the children’s contribution will be to it.
• An explanation of how the children found out about the organization and if they know anyone who’s associated with it.
7. Make it formal. Families should create a formal Philanthropic Mission Statement. While the statement itself is invaluable in guiding a family’s giving decisions, the process of developing it is equally rewarding. The process should not only encourage every family member to assess his own personal core values, but also identify the family’s shared values. Through a discussion of the family’s shared values, members can determine the areas or causes where the family should focus their giving.
8. Teach financial responsibility. Teaching children the value of giving provides an excellent forum for education in money management. Unfortunately, schools don’t provide sufficient education in this area and, too often, financial responsibility isn’t formally taught at home. Creating the financial freedom to give requires prudent budgeting. By starting the budgeting process when children are in elementary school, parents can begin the process of teaching children how to become financially responsible, which will provide them an opportunity to give to their causes. These skills will prove valuable as they learn to make well-informed decisions in prioritizing which charities to give to and how much, as not every charity can benefit in largesse.
Also, for families who use giving vehicles, such as foundations, donor advised funds or private foundations (PFs), it’s helpful to share the financial details of the vehicle and use the financial management of the vehicle as an opportunity to teach about investing. An additional opportunity comes with instilling the importance of conducting due diligence on charitable organizations. Reviewing a nonprofit’s financials with children will help them learn what to look for when evaluating where to give.
Not All Smooth Sailing
There will be times when parents disagree with a child’s giving decisions. This conflict is normal! Often generational differences—varying values and attitudes developed during formative years—help drive individual giving interests. For the younger generation, the top reason for engaging in philanthropy is “supporting a mission or cause that fits with personal values.”3 While these personal values might align with parents and grandparents during their younger years, the similarities tend to decline as the younger generation grows up and becomes more confident in their giving.4 Growing up surrounded by an emphasis on diversity and environmental sustainability will likely make an impact on the causes they’re inclined to support. They’re more likely to give to civil rights, advocacy, environmental and animal causes than previous generations. However, parents and grandparents are more likely to give to health, arts and culture and religious and faith-based causes.5
Technology and globalization play a large role in differences in giving between parents and their children. Younger generations are exposed to different ways of giving than their parents have traditionally used. Giving directly to an organization online is the most common form of giving for younger generations. However, the most common form of giving for parents and grandparents is to PFs. Networking is very important to the next generation of philanthropists. Technology allows their networks to expand exponentially over social media. If they support a cause, they have the capability to broadcast their interest and reach unparalleled numbers of likeminded peers and, potentially, increase the impact to the cause. This is a very public way of displaying their philanthropic interests, which differs from the way their parents and grandparents displayed their interests.
There are other challenges that parents may face. Many adult children are starting careers and/or raising families and may not consider involvement in the family’s philanthropic efforts a priority. Rather than dictating, a well-received recommendation is for clients to have the family decide together the format for giving, the goals and where and when meetings should take place. The difficulty of geographic dispersion can be mitigated through use of technology, such as FaceTime or Skype. Flexibility and patient consideration of busy schedules and individual life-stage challenges can drastically reduce the feeling of being pressured or required to do something and will pay off in the long run.
When encountering challenges, go back to the original objectives, and try not to allow frustrations to take over. If one of the goals was to bring the family together through giving, then make certain it doesn’t push the family apart. When striving to raise aware, generous children who value helping others and giving back financially, remember that the actual causes they choose aren’t as important as the act of giving.
1. #Nextgendonors, Johnson Center for Philanthropy and 21/64 (2013), at p. 18,https://www.gvsu.edu/cms3/assets/C6EE62EC-E0C1-54F2-D0212D5174A27DAF/nextgen_donor_brochure_6.pdf.
3. Supra note 1 at p. 14.
4. Ibid., at p. 25.
5. Ibid., at p. 3.