3 Ways to Engage Children in Charitable Giving
By John R. Adams, CLU®, ChFC®, CASL®, RICP®, CFP®
Private Wealth Advisor
Adams, Gut & Associates
Charitable giving is more than an action; it's a mindset that can be passed down for generations. We believe philanthropy goes beyond just tax strategy, and we strive to help our clients make an impact that enables their values to live on for years to come.
We have found that the simplest way to create this lasting impact is to incorporate charitable giving into family traditions. This has a tremendous effect on the community and can help bring your clients' families closer together as they pursue one united goal.
Remind your clients that it begins by starting the conversation with their kids and family members. Encourage them to openly discuss finances and how charitable giving plays a role. It's never too young to start this conversation if they make it timely and fitting for the kids' age group. Your clients can also create opportunities for their family members to join in on the decision-making, get hands-on in their charitable endeavors, and provide them with the tools to continue the conversation.
Here are three strategies you can share with your clients to help them engage children of any age in their charitable giving:
Pursue Family Volunteerism
Sit down together as a family and choose an organization to get involved in. Then find hands-on volunteer opportunities for the whole family. This can be sorting food at a local food bank, helping at the animal shelter, or volunteering at an event. Find something the whole family will enjoy and make it a tradition.
Provide a Giving Allowance
Just as you would provide your child a spending allowance, allocate a dollar amount to each of your children for them to donate. Empower them to do the research and decide how the funds are distributed to charities. This can be incorporated into gifts during the holidays or on birthdays. No matter how it's done, it teaches children that giving should be an integral part of their finances and allows them to nurture a cause they are passionate about. These skills will be invaluable when they one day become the steward of your legacy.
Include the Family in Your Charitable Giving Plan
When you are ready to take the next step and implement a charitable giving plan, incorporate your children in that process. With their help, develop a family mission statement, vet charities, visit organizations in consideration, and make final decisions regarding donations. Akron Community Foundation's Center for Family Philanthropy is an excellent resource for developing a giving plan that reflects your family's values. In partnership with your advisor, the community foundation's staff can help facilitate these discussions and bring the plan to life.
Donor-advised funds and private foundations are great options for establishing legacies. They are both tax-efficient giving tools that allow you to educate the next generation. For donor-advised funds established through the community foundation, older children can be appointed as successor advisors, which can be a natural next step once you have formed a charitable giving plan. These funds can also be passed down through the generations, carrying on your family's name and legacy.
Although private foundations are generally more expensive and complicated to set up and administer than donor-advised funds, they are ideal for hands-on involvement. Adult children can be appointed to the board and assist with day-to-day operations.
There are many ways your clients can instill a philanthropic mindset in their families, but the most critical factor is finding something that will stand the test of time. Just like each family is different, each charitable giving plan will also look different. As your clients' trusted advisor, you can help start this simple conversation and watch as it grows for generations.
For more information about engaging your clients' families in philanthropy, contact Laura Lederer at 330-436-5611 or llederer@akroncf.org. We're always available to answer your questions about philanthropy or to schedule a personal consultation with you and your clients – all at no cost.
Additional Resources
This content is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.