September 28, 2021
Family Philanthropy: One Generation to the Next
A formalized approach to philanthropic giving enables a family to build a lasting legacy that preserves the founding values. Such endeavors also provide a framework for learning and practicing important life skills such as collaboration, financial management, open communication and conflict resolution.
Many benefits, a few challenges
The involvement of the next generation can rejuvenate the process, leading to innovative ideas and a more global and strategic approach to a family’s charitable giving. Research by authors Morley Winograd and Michael D. Hais shows that the millennial generation (those born between 1982 and 2003) is the most civic-minded since World War II, having a “desire to serve their community” and a general willingness to defer their aspirations to do so.1 Not surprisingly, this group tends to lack the basic knowledge, skills and experience to get started. They find the prospect of inserting themselves into an existing paradigm challenging, and feel they have no meaningful input or role to play. Concurrently, more mature generations may find that involving children and grandchildren magnifies their divergent life experiences, values and funding priorities. The process of embracing a new group of decision-makers can also give rise to feelings of loss of control, as well as a hesitancy to unearth family dynamics. Nevertheless, despite these natural tendencies and concerns, families continue to navigate the obstacles, working cooperatively to develop and sustain their shared vision.
It is never too soon to expose younger generations to the ideals and disciplines of philanthropy. Some families engage in volunteer activities such as serving meals at a soup kitchen or visiting elders in a nursing home. Others create a family giving fund and have the children decide the gift’s amount and recipient/s. One innovative approach is to give children charity gift certificates (such as those available at CharityChecks.us or DonorsChoose.org) in place of a birthday or holiday gift. Each of these measures instills in children empathy and responsibility.
Many families establish a foundation or donor-advised fund, creating an enduring structure designed to engage multiple generations. A child may initially be invited to observe board meetings or be included on site visits with responsibility to report back with an assessment of the charitable organizations seeking funding. Some create a junior board or advisory committee with a specific amount of grantmaking dollars allocated each year. These opportunities provide a training ground for younger family members, practically exposing them to future roles and responsibilities. When the time arrives for the next generation to assume its role, hosting a multigenerational retreat helps to formally integrate them into the family’s giving. In addition, peer networking opportunities can help to further develop skill sets and confidence levels.
The key to successfully engaging the next generation is to involve them over an extended period, providing ample time for them to naturally become more interested and knowledgeable. Younger family members need age-appropriate preparatory experiences and meaningful roles that are consistent with their level of interest. For those families interested to learn more about the development of a family giving program, whether through a foundation or other means, Glenmede provides wide-ranging and comprehensive networking and educational opportunities to our clients.
1 Morley Winograd and Michael D. Hais, Millennial Momentum: How a New Generation is Remaking America (New Brunswick, NJ: Rutgers University Press, 2011).
This presentation is intended to provide a review of issues or topics of possible interest to Glenmede Trust Company clients and friends and is not intended as investment, tax or legal advice. It contains Glenmede’s opinions, which may change after the date of publication. Information gathered from third-party sources is assumed reliable but is not guaranteed. No outcome, including performance or tax consequences, is guaranteed, due to various risks and uncertainties. Clients are encouraged to discuss anything they see here of interest with their tax advisor, attorney or Glenmede Relationship Manager.