Growing the Family Philanthropy Tree
By Nancy Opiela
Learn why cultivating a passion for charitable giving in your children and grandchildren can bring your family closer and lay the groundwork for an enduring philanthropic legacy
The resort town of Branson, Mo., has much to offer vacationers: world-class entertainment, championship golf courses, and easy access to the Ozark Mountains and pristine lakes. But for Johnne Syverson, his best vacation memory wasn't about taking advantage of those amenities — it was the time his family spent discussing philanthropy one evening after dinner.
"It was amazing to see how not only our kids, who are in their 30s and 40s, but their kids were engaged by the idea of pooling our charitable donations in an donor-advised fund to support a charity that helps needy families in Africa," says Syverson, a certified financial planning practitioner at Syverson Strege & Company, a wealth coaching firm in West Des Moines, Iowa.
Besides the obvious benefit of engaging the different generations of his family in a philanthropic effort, Syverson says the discussion yielded an added bonus: It brought the family closer.
"Because it's a nonconfrontational, feel-good topic, discussions of philanthropy lead to other family discussions that never would have otherwise taken place," he says. "Philanthropy provides a basis for improved communication within the family, and most families are eager to do better in that area."
A Family Affair
Like Syverson, David Bradbury, 61, has included his family in the giving process. He and his wife, Nancy, have established a donor-advised fund and invited their two grown sons and their families to make annual recommended grants.
The Bradburys' sons and their families recommend grants from their donor-advised fund to "Operation Smile," which provides dental reconstructive surgery and related health care to indigent children and young adults in developing countries and the United States. They also support the Vermont Food Bank and charitable organizations that protect battered women.
The Bradburys also have supported a program administered by Lawrence Academy in Groton, Mass., their sons' alma mater, that provides financial aid to students. Each year, two students from the Bradburys' former hometown of Littleton, Mass., receive financial support from the school. "We've heard some particularly gratifying and rewarding stories from some of the students who have participated in the program, several of whom have achieved great academic success," says Bradbury.
"It's been very rewarding to see our children and our grandchildren become involved in this process," says Bradbury, who has devoted more time and money to charitable endeavors since selling his business a few years ago. "We're thankful that we're in a position to help. We're also very thankful that we have sons and daughters-in-law who have the same values and want to do the same types of things."
Raising Good Wealth Stewards
According to Giving USA 2007, charitable gifts by Americans reached an all-time high of $295 billion in 2006. However, if this "Golden Age of Philanthropy" is to continue, it is imperative that many of those who are due to inherit an estimated $41 trillion over the next 50 years learn to appreciate the benefits of family philanthropy1. Like helping them ride a bike or learn how to swim, "parents may need to teach children how to be philanthropic," suggests Louise Cole, a managing partner with the Heritage Group Company, a Toms River, N.J.– based estate planning firm.
Many of Cole's clients belong to the "Greatest Generation," those Americans who grew up during the Depression, fought in World War II, and went on to create the baby boomers. "Brought up to understand values, faith, and tradition as the most important things in the world, this generation would always reach out and help their neighbor," she notes. "And because they wanted to give their families all the things they never had, the baby boomers generally had everything they needed in terms of material goods. Now, however, many of these parents worry they haven't fully conveyed to their children the values and work ethic that were instrumental in achieving their wealth, or their spirit of giving to others."
Cole's work often ends with a family retreat, where parents can teach family members how to work with the money they eventually will inherit. The key to teaching children to be good stewards of wealth, she says, is to put the family's wealth in context. "There's a point in the family retreat at which Mom and Dad tell their stories," explains Cole. "Maybe they didn't grow up with money. They worked really hard and saved 30 percent of everything they made. We talk about causes that are important to the parents––and why. By the end, the kids come to understand that their real inheritance is family values and traditions. I haven't worked with one family that hasn't come together in a very positive way."
Sow the Seeds Early
It helps for parents and grandparents to teach their kids from a very young age about the importance of giving back. If giving back has already been a part of their development, philanthropy is often an easier topic to discuss with teenage and adult offspring.
"This can be as simple as having children divide their allowance into three jars marked 'Spend,' 'Save,' and 'Share,'" says Ellen Remmer, vice president at The Philanthropic Initiative, Inc., a nonprofit consulting firm in Boston. Remmer also suggests families adopt simple giving rituals, such as donating a book to the library on each family member's birthday or hosting an annual holiday party to which guests bring coats to donate to a local shelter. Some children today are even forgoing birthday presents and asking their friends to make donations to a charity instead.
A hands-on approach often works best with children. "When your children are young, they can help pick up trash at the local beach or help build the new school playground," suggests Remmer. "As they grow, you might reach out to the broader community, by chopping vegetables at a soup kitchen or spending weekends building a house in a low-income community."
These early volunteer experiences have a powerful impact on philanthropic interests later on, says Tim Walter, CEO for the Washington, D.C.-based Association of Small Foundations. "When we work with trustees in their early 20s who are starting to work on a family foundation's board, they have a picture in their minds of a time when they volunteered as young children," he says.
Involving children in philanthropic activities is a rewarding way to pass on your deeply held personal values and to help prepare adult children to manage their future inheritance. Yet the demands of daily life can make it difficult to find the time to hold a conversation about giving.
"You may have the best intentions to talk about philanthropy over a holiday dinner, but the conversation never surfaces," says Syverson. "Philanthropic discussions need to be initiated in a formal way. We drive our kids back and forth to basketball practice and music lessons. Then they head off to college. And before we know it, they're married with kids of their own, and we haven't talked to them about the values most important to us."
1 Millionaires and the Millennium: New Estimates of the Forthcoming Wealth Transfer and the Prospects for a Golden Age of Philanthropy (1999).