Involving Your Children and Grandchildren in Family Philanthropy
Family philanthropy is the practice of making a meaningful impact in society by harnessing the resources of your family and focusing on a giving mission that engages multiple generations. Philanthropy can also foster family closeness and teach younger generations about the importance of helping others and being a good steward of the community.
As part of the Goldman Sachs Philanthropy Roundtable Series, Sue Schwartzman, a wealth and philanthropy coach with over two decades of experience working with high-net worth individuals and families, discussed key factors for long-term success and also shared the following interactive exercises, guided strategies and peer-learning tools that can help build and strengthen your family’s giving practices.
Engage with Fun Exercises
Sue says research shows that the next generation is influenced by the giving activities of their parents, grandparents and other relatives, which is why it is important to lead by example.
“How you talk about wealth is how your kids will learn about their relationship with money,” Sue said.
Encourage your children to volunteer, so that their experience of helping others will shape their perception of philanthropy. Sue also suggests simple exercises to teach your kids about the importance of giving, such as the “Share, Save and Spend Bank.” One way to teach younger children about the concept of giving is to set-up an allowance and create a bank with three different slots: share, save and spend. Upon receiving the allowance, the child puts a portion into each slot. This creates a habit and a disciplined and healthy way to think about money.
How you talk about wealth is how your kids will learn about their relationship with money.-Sue Schwartzman
Getting Started
When it comes to family philanthropy, the more inclusive the better. From immediate family to grandparents, aunts, uncles and cousins, Sue says all should be part of the discussion if they express an interest in participating. “Give voice and choice to everyone at the table,” she said. “Give everyone responsibilities that reflect their skills, talents and interests.”
For example, one family member might be a better note taker, while another could be responsible for fact checking, managing the accounts, recording the meeting, or even getting the snacks and food.
Once participants are identified, make meetings a regular practice, whether it be informal weekly dinners, quarterly discussions or annual retreats. Gather together as a family to learn, discuss, reflect, decide and take action. Also, make the experience fun and interactive. Pass around a giving box at dinner. Everyone can contribute and then decide how to allocate the funds.
Talk “Isn’t” Cheap
“Philanthropy and volunteering is a step forward, and one positive step can help your children snowball into a positive direction,” Sue said.
While giving is an action learned by doing, Sue says you should also talk about philanthropy and discuss ways the family can strengthen its giving behaviors. She says you should discuss family values, teach leadership and presentation skills, listen to the needs and concerns of all participants, especially children, talk about the importance of financial literacy and measure your impact.
As a leader of your family unit, encourage others to share their personal experiences and why they feel it’s important to support certain causes. Ask poignant questions that will help reveal how funds and resources should be allocated:
- What is the one thing that you couldn’t live without?
- Who inspires you to help others?
- What is your best talent, and how could you help others?
- What is the one thing you want to change in the world?
- What makes you happy?
Tackling Feelings of Shame
In this current environment, Sue shared that some of her clients’ children and grandchildren want to “shed their wealth skin” as issues surrounding inequality and social unrest have engendered feelings of guilt and shame.
“Kids are receiving negative messaging about societal wealth,” Sue said. “It’s important to learn how to embrace it and use levers to make a positive difference in the world.”
She said your children should know that your family unit is collectively working to solve a larger societal problem.
In this regard, its critical to be an active partner with a nonprofit, beyond funding grants and charity. If your children are engaged in helping to solve a problem, then they will feel that their resources are leading to a positive end. It’s also important to remind them that while no one person or family is capable of fixing a societal or global problem, you can make a meaningful difference by being part of the solution.
During your philanthropy journey, you will likely encounter hurdles and make mistakes — it is part of the learning process. However, avoiding pitfalls early in the process can go a long way toward successful family philanthropy.
Family philanthropy is about the unit, not the individual. Ensure that you’re engaging everyone and that the responsibility is shared. Making decisions together is what makes the experience special.
This material is intended for educational purposes only and is provided solely on the basis that it will not constitute investment advice and will not form a primary basis for any personal or plan’s investment decisions. While it is based on information believed to be reliable, no warranty is given as to its accuracy or completeness and it should not be relied upon as such. Information and opinions provided herein are as of the date of this material only and are subject to change without notice. Goldman Sachs is not a fiduciary with respect to any person or plan by reason of providing the material herein. Information and opinions expressed by individuals other than Goldman Sachs employees do not necessarily reflect the view of Goldman Sachs. Information and opinions are as of the date of the event and are subject to change without notice.
© 2023 Goldman Sachs. All rights reserved.
Goldman Sachs & Co. LLC is registered with the Securities and Exchange Commission (“SEC”) as both a broker-dealer and an investment adviser and is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”)