Philanthropy is a common practice across many families that successfully sustain wealth across generations. A combination of deeper purpose and cooperating to align and project family values is a powerful practice that helps families live well with wealth.
Engaging the Next Generation for Effective Family Philanthropy
Engaging the next generation in a family enterprise is one of the most crucial parts of ensuring long-term and effective family philanthropy practices. Involving children, teens, and young adults in age-appropriate activities can help to make stewardship a normal part of life while also teaching key skills and establishing intergenerational links.
Good practices for next-generation philanthropy can help a family's legacy last for generations.
Educate the Next Generation
Next-generation children can join in the family's initiatives even before they can spell ‘philanthropy.’ The first step is education.
Let's take the case of a family client that donates to a program for disadvantaged children in a local informal settlement. We can suggest that the family spend time with the younger members of the family and explain to them how much it costs to cover the basics such as meals and space rental, and how the family's contributions help to meet those needs during a family meeting.
Asking the next generation of children about the issues they have seen is another possibility for a family gathering. Then let them come up with ideas for different ways to assist and lead a discussion about how the family may contribute to a solution.
A strong philanthropic mindset can be instilled by encouraging young members of the next generation of family to recognize other people's needs and determine how to meet them.
Respect Individual Interests
We encourage family clients to make time for children, teenagers, and young adults to follow their own charitable hobbies to keep them interested. A family giving program will be more likely to be successful if the following generation enjoys taking part and believes it can make a difference, rather than just repeating the practices of the previous generation.
If a client family donates to a nearby initiative, their teenagers' interest in volunteering may grow if they become more aware and think of their own suggestions for how to assist.
Create Adaptable Structures
A flexible giving structure is one of the best methods to encourage the next generation to participate in family philanthropy. Distributing monies to various organizations and enabling family members to make direct contributions can help everyone discover a personally fulfilling way to give back.
We might advise that the family determine how to distribute the majority of the giving for the year, but also set aside a specific portion to be directed by individual family members.
Encourage Family Members to Communicate Well with One Another
Families can get to know one another's interests; for instance, if a family encourages the eldest daughter to choose where a portion of the donations are made, she might be asked to give a presentation to the family outlining why she chose to support a particular cause, how the family might contribute its time, talent, and treasure, and the anticipated impact of the contribution.
The different generations can interact and learn from one another thanks to this practice. Learning about fresh giving opportunities and the interests of their children or grandchildren can inspire older generations.
Younger generations might learn about or be reminded of the points where their values and those of their elders align. Additionally, they can benefit from the flexibility to express themselves via their giving while improving their presentation and decision-making abilities in a low-stakes familial environment. In this way, family philanthropy can act as a classroom for lessons in leadership, management, and the value of money.
Flexibility in Design for the Development of Giving
We can’t necessarily foresee the social issues that coming generations may wish to solve through philanthropic contributions. Individual family members' environment, experiences, and priorities can have an impact on the family values.
However, a family's essential principles typically remain the same throughout several generations. As with family wealth more broadly, a key to succeeding across generations is the need to evolve while respecting what has gone before.
A charitable giving vehicle that a family might set up can support multiple causes or categories while allowing future generations to modify some of those categories. In this approach, newer generations maintain a connection to the charitable objectives of older generations while also avoiding feeling obligated to support a cause that may no longer be urgent for the family or that they may no longer find compelling.
We advise setting up regular meetings to review the family's charitable goals to see if they still ring true or if they need to be updated. It is crucial to promote a cooperative environment for family decision-making across generations.
The Role of Family Advisors
Families can be unsure about how to involve and inform the next generation about charitable issues. We often find a family's giving strategy can be discovered and put into action by facilitating discussion and highlighting ways that the next generation can contribute to the family's giving legacy.
We can assist families in finding meaningful methods to include the younger members of the next generation in family giving. They are then better prepared to carry on their family's legacy while making their own impact once they are mature enough to have a more active role in leading the family's charitable decision-making.
By: John McDonald Chartered MCSI
To find out how we can help you implement philanthropy into your family wealth management system, please contact us at info@waughmcdonald.co.ke