Instilling the idea of charitable giving in children and grandchildren at first blush may appear to be easy, but where to begin, and how to make it ongoing? More and more, wealth advisors are being asked by their clients to weigh in on strategies for fostering a family’s financial values, which frequently include charitable giving traditions.
Creating a philanthropy plan is especially important for families who want to involve their children and grandchildren in a meaningful way. Many wealth and tax advisors notice that while the matriarchs and patriarchs might have a clear vision and plan for the family’s multi-generational approach to philanthropy, that may not always be clear to the younger family members. It can start small and doesn’t always have to be a 30-year plan right out of the gate. It might start with a simple family meeting around the table over the holidays. I have worked with many families that opened a family donor-advised fund and used that as the tool to begin to engage the next generation in giving. I love that this process not only allows the parents and grandparents to share their passions but also invites the children and grandchildren into the charitable space to begin exploring theirs as well.
Consider this scenario:
“Before we got everything organized through CCF, our family seemed to take a shotgun approach to charitable giving,” commented the daughter of an entrepreneur who formed a family donor-advised fund upon the sale of a business.
Her mother, the entrepreneur, had underestimated the confusion: “Nearly every check I’d ever written to a charity was aligned with my commitment to supporting a healthy workforce in our community. Without a healthy workforce, my business would never have been successful. Now, though, I see that because I was not involving the rest of my family in my giving and explaining why I was supporting certain causes, it might have looked chaotic to them.”
Establishing a fund at CCF can be a very effective solution for many of your clients who are launching a multi-generational giving strategy. Here’s why:
–Community foundation vehicles are extremely flexible and can be used to engage an extended family in the process of charitable giving. Donor-advised funds, for example, are popular because they allow your client to name children and grandchildren as successor advisors.
–Establishing a donor-advised fund at CCF can be a much better choice for your family-oriented clients than a donor-advised fund offered through a brokerage firm (such as Fidelity or Schwab). That’s because, at a community foundation, your clients, as well as their children and grandchildren, are part of a community of giving and have opportunities to collaborate with other donors who share similar interests.
– CCF can work with a client and the client’s family on a charitable giving plan that extends for multiple future generations. That is because the experienced team at CCF supports strategic grant making, family philanthropy, and opportunities to gain deep knowledge about local issues and nonprofits making a difference.
We welcome the opportunity to work with you and any of your philanthropic clients to establish an enduring and rewarding family philanthropy program that is customized to meet each client’s unique purpose.
This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.
