Not surprisingly, given the recession and job uncertainty, two-thirds of those public charities receiving donations saw decreases in 2008. According to Giving USA 2009, charitable giving in the United States was an estimated $307.65 billion, a 2 percent drop in current dollars over 2007. This was the first decline since 1987 and the second since Giving USA began publishing annual reports in 1956, according to the annual report on philanthropy by the Giving USA Foundation.
In this season of giving, drawing on the notion that charity begins at home, I thought it might be appropriate to discuss how you can share your philanthropic interests with your children in order to create a rich legacy.
Like riding a bike or learning to swim, philanthropy must be taught, and there are many easy ways to make giving back a vital part of childhood. This can be as simple as having your children divide their allowance into three jars marked “spend,” “save,” and “share.” Your family also could adopt simple giving rituals, such as donating a book to the library on each family member’s birthday or hosting an annual holiday party where guests bring coats to donate to a local shelter. Also, hands-on volunteering activities like picking up trash at the local beach or school playground or working at a soup kitchen are perfect for young children and have a powerful impact on their future philanthropic interests.
Raising civic-minded children also requires engaging them in your charitable work. You might begin with something as simple as making sure you mention where you are going when you go out at night to attend a board meeting or work for an organization you support. You also might ask your child to accompany you to a fundraising event for a cause you support.
To share your philanthropic interests with your older children, you might organize a family meeting or a weekend-long retreat to discuss philanthropy. Although you may have the best intentions to talk about long-range giving over a holiday dinner, I find these philanthropic discussions are most effective if they are initiated in a more formal way. While you could call and moderate a family meeting on your own, some people hire a specialist or wealth coach to help them gain consensus and craft a guiding statement.
To prepare for this meeting, you might draft and share a family mission statement detailing the philanthropic work you support or even an ethical will. In its simplest form, an ethical will sets forth the moral and spiritual “capital” you wish to leave to the next generation. While the documents you complete in the traditional estate-planning process deal with your monetary assets, an ethical will addresses intangible wealth—your values, family history, personal experiences, and accumulated wisdom.
Ethical wills are not new. The Hebrew Bible first described ethical wills 3,000 years ago, and references to this tradition also are found in the Christian Bible and in other cultures. There’s no formal process to create an ethical will. Just carefully reflect on what you want to say to those dear to you. You can then create your will in any format that appeals to you. Letters are popular, but so, too, are videos. If you are interested in writing an ethical will, visit Personal Legacy Advisors. You can also order Susan Turnbull’s guidebook, The Wealth of Your Life, which provides a five-step path for you to create your ethical will. Or you might visit Ethical Wills, maintained by Barry Baines. Baines is also the author of a helpful book, Ethical Wills: Putting Your Values on Paper.
Often these family meetings result in the launch of a family foundation to provide multigenerational support for the causes a family is passionate about. To involve your teenage and young adult children in your foundation from the outset, form a Junior Board and allocate funds for them to distribute each year. In addition to feeling part of your larger mission, serving as a board member teaches children valuable skills—from how to read an annual report to how to set disbursement policies.
You can take a similar approach with a family donor-advised fund (DAF), a separately managed account we often help clients establish. If you establish a DAF with an initial irrevocable charitable contribution of $5,000, you could give each child access to $100 to $500 so they could direct money to a charity they choose. In order to grant money, however, you could request that your child do age-appropriate research and make a brief presentation on the charity’s merits.
If you’d rather keep charitable giving less formal, consider forming a family giving circle. A giving circle enables several individuals or families to pool their resources to leverage the impact of their charitable contributions. In fact, I’m proud to note that our annual tradition of making a holiday contributions to a variety of worthy charities in our clients’ names creates a multitude of giving circles. This year, we’ll collectively support Action in Community through Service, BEST Kids, CrisisLink, and Operation Homefront to name a few.
However you express your philanthropic interests, I’ve found that sharing your work with your children can both enhance your family relationships and lay the foundation for a rich legacy centered on your family’s values. Is there a greater gift you could give your children this holiday season?
If you are looking for more inspiration, you may want to read:
The Ultimate Gift by Jim Stovall
The Giving Family: Raising Our Children to Help Others by Susan Crites Price
Children of Paradise: Successful Parenting for Prosperous Families by Lee Hausner
The Financially Intelligent Parent: 8 Steps To Raising Successful, Generous, Responsible Children by Eileen and Jon Gallo
Raising Charitable Children by Carol Weisman