Establishing a Family Philanthropy Program
It’s not necessary for a family to have a private foundation to establish a family philanthropy program. Studies have shown that individuals receive many of the same benefits from charitable giving regardless of the amount of money that they actually give.
Before engaging in family philanthropy, it’s important for the elder generation to first facilitate a family meeting, which should include a meaningful discussion about philanthropy with the entire family—ideally, one where each member of the family proactively participates. Research has shown that: (1) conversations between parents and children about charity have a greater positive impact on children than parents simply serving as a silent role model through their own philanthropic activity; and (2) talking about charity is equally effective regardless of a parent’s income level or a child’s gender, race and age. With the additional help of a neutral professional facilitator, this family meeting also could benefit from the inclusion of effective communication exercises as well as the use of tools to help the family members discover their common values and vision.
To maintain a strong family philanthropy program over time, the program should have the following four components:
1. Philanthropic projects should be chosen based on shared family values.
2. Family members should proactively participate in shared decision making.
3. Results should be reviewed and successes should be measured and evaluated.
4. The family should continually learn from experience in order to improve in the future.
Children can become part of a family philanthropy program as young as five years old and can begin to play a deeper role with respect to the actual administration and investments of the family philanthropy program before they’re teenagers. The family members could set standards for performance to accompany each grant given as part of the family philanthropy program, and selected charities that attain those standards might be allocated more funds in future years. Each child is capable of proposing and advocating a grant request, which could include site visits to the proposed grantee or even interviews. A family philanthropy program could even require each participant to make some type of personal investment in any organization that will be receiving funds, such as actively volunteering with the organization or making a small personal gift along with the larger donation from the family philanthropy program.
As part of the family philanthropy program, each younger family member might be given a relatively small amount to donate to charity on their own, and then a separate larger amount may be set aside for all of the younger family members (for example, siblings or cousins) to give away as a collective unit, in which case they will be required to discuss and agree together on the organization receiving the donation. Many organizations encourage children’s participation in philanthropic activities and would welcome the younger members to visit their facilities and even volunteer, which is often a terrific way to unite family members as they work together toward a common goal. For more substantial donations, particularly ones in which the family name will be recognized, involving the whole family can help instill a sense of pride in the family legacy. As long as the elder generation is not asserting too much oversight or control over the program, family philanthropy almost always is an extremely positive experience for the younger generation.