Are you involving the next generation in your charitable decision-making? A surprising result from the 2014 US Trust Study of High Net Worth Philanthropy suggests that many families are not working together to make giving decisions.
Fewer high net worth households report having family traditions around giving (41.3 percent) than those that do not have family traditions around giving (58.7 percent).
Among those households that have younger relatives (92.7 percent), only 31.5 percent involve these children, grandchildren, or other younger relatives in their giving. Those that do not involve their children cited the convenience of making charitable decisions separately (37.8 percent) or geographical separation (25.0 percent).
While these traditions may not be as common as one might think, many parents are still keen to have their children share their philanthropic inclinations. A donor-advised account offers a convenient tool for teaching the next generation the value of giving.
Involve the Kids
One way to use a donor-advised account for family charity is simple – include the children when you are making decisions about where to recommend grants from your fund. Remember that the actual work or making donations will all be done by the fund provider. That means your focus can be on instilling the principles of charitable giving in the next generation while going through the enjoyable process of collaborating with your family on how to improve society with your giving.
Of course, the hardest part of having a family conversation about philanthropy is getting the family together! Remember, though, that often a family will already have charitable dollars available in a fund. With the funds already given into the donor-advised account, the pressure is off to rush decisions before the end of the year. That means it’s easier to find that “right” time to have those conversations. It can begin with a simple phone call or an email chain.
Around this time every year, one DonorsTrust client in Illinois brings his family together to review the gifts they’ve given in the past. Each family member comes with his or her own recommendations of what should be funded. As a family, they make a final decision of how to allocate that year’s gifts. They send along those recommendations to DonorsTrust and we manage the grants from there. The client’s children are now in their early twenties, but this is how they have made their giving decisions for many years.
Make a New Family Tradition
Giving as a family does not have to be an overly formalized or dramatic event. A simple conversation or two will not only engage your family in the act of giving, but will allow you to share why you believe the organizations you support are important. Your donor-advised fund offers a simple platform to make the technical work easy, so you can focus on how to have an impact – together.