Parents often see their children as a reflection of themselves and want to extend their best characteristics and values to future generations. If you are charitably inclined, you naturally want your children to share this characteristic. What better way to share this trait than to “give” as a family? You can use this opportunity to not only teach generosity, but introduce financial skills such as budgeting, investing, and evaluating financial decisions.
How to Get Started
Give some thought to what exactly you are trying to share with your children. What are the core principles that you want to pass from generation to generation? Where did you get these values and how have they influenced you? If the catalyst was positive, how can you repeat this process? What did your parents do right, or what would you change if you could?
Set an Example
If you are passionate about a cause, tell your family why you support the cause and what you do. It doesn’t have to be financial. Maybe you spend time volunteering at a homeless shelter or reading to the blind. Your adult children may not realize this, so take the opportunity to share what drove you to participate with this organization. Was it a specific instance or person? Did you participate in a run or fundraising luncheon and were then inspired by the other volunteers or the beneficiaries of the cause?
If you do give financially, tell your children. If you aren’t comfortable sharing the amount you give, then do not. However, you should share the charities you support, and why you do so. Share how the various organizations benefit from your gift. How do you evaluate your gifts? Do you engage in a formal process, such as an annual meeting with your spouse or an informal one, in that you simply respond to requests you receive in the mail?
Explain how these organizations are connected to your family. Children will feel a connection too, and not only will they feel pride, but they may also be inspired to give. If the gift is something you don’t want broadcast to the broader community then share this sentiment too, and why you feel this way. For example, you may not want to make others (possible beneficiaries of your gifts) uncomfortable.
When our kids are young, they always observe us, and try to mimic us. Bring them along in your philanthropic activities. If you volunteer, find ways for them to join in. If you give financially, encourage them to do so too. Use this opportunity to teach basic financial skills through philanthropy. You can give a child an allowance, but require that they divide the allowance into three buckets – save, spend and give. The parameters around these buckets are up to you and your child, but this very basic form of budgeting encourages conversation around a variety of financial topics, including how to become financially responsible and how to give back.
Giving presents opportunities for your children to evaluate their financial decisions. For example, the school may have a fundraiser where your child may choose not to wear a uniform one day in exchange for a five dollar donation to a local charity of the school’s choosing. Instead of giving your child the entire amount, have your child make all or part of the donation from their allowance. This requires that they evaluate whether or not this is a charity they want to support. Present other alternatives for the use of the money. You may be surprised at what they choose.
Make it Formal
One family has a tradition tied to their annual Thanksgiving family gathering. The grandparents contribute a set amount to a charity of the child’s choice. The grandchildren are expected to share with the family what charity they support each year and why. Older children can be asked to research how the charity may use their donation. This not only provides the child with the opportunity to examine what is important to them, it forces the child to prepare in advance and then allows them to practice presentation skills in a safe and embracing environment. If it is a charity they have given to in the past, how efficient or effective was the charity with previous donations? One family shared that their children were asked to evaluate their choices by volunteering at each charity. When one child noticed how much of the donations were used for volunteer perks rather than toward the philanthropic cause, she decided not to donate to that charity anymore, but to research other charities with similar missions but with more efficient use of donations.
My kids are adults – I think I missed my chance
No, you haven’t. If you have a formal family charitable entity such as a donor advised fund or a private foundation, consider allowing your children to become involved in allocating some of the gifting. If it is your intent for this fund to last beyond your lifetime, your family members should know what charities you support and why. This entity can serve as a great tool for teaching many life lessons including financial management, investment philosophy, etc. Maybe there is an interesting story about your family’s history.
By involving the next generation in your donor advised fund or private foundation you give them the chance to work with financial advisors while taking little risk of their own. It provides a safe place to learn not only from you, but from the advisors. If they are not already investing their own funds, it will encourage them to do so in the future. They will have experience to draw on.
We don’t have a formal charitable entity – now what?
Organize a family outing to volunteer at a charity your children support. Volunteer at your grandchild’s school. Ask what charities are important to the next generation of your family and why. Most importantly, let this generation decide for itself which charities to support. Encourage your children to research organizations that interest them and help them to become involved. If you say you will support their charity, then do it. There is nothing more frustrating than if the family doesn’t follow through on a donation or a volunteer opportunity.
You may have different ideals and interests than your children and grandchildren, but it is important to remember that the goal of this exercise is to pass on the value of generosity and the importance of giving back. As a bonus along the way, many other life skills can be gained.