Q: We’re just approaching a liquidity event. How do I get my twentysomething children involved in our plans for philanthropy?
A: Stop right there. You might be 10-20 years late.
Many families do things in the following order: create wealth, extract liquidity, then give charity in a big way. Now, that makes plenty of sense. You can’t give charity in a big way until you have the liquidity. And creating a foundation as a vehicle to perpetuate giving is usually most tax effective when done in conjunction with a liquidity event. But this process leaves out the most important step: the “why”.
If you want children to be involved in family philanthropy, it needs to be aligned with the family’s collective values and purpose. And the philanthropic behaviour should be modelled by parents as early as possible in the lives of their children. That can happen even if the family wealth or circumstances are not yet at the level for the giving you’d ultimately like to do.
Our children are smart and super perceptive. They look at what we do as an indicator of what is important to us. They are quick to spot inconsistencies (which to them might mean making money from oil and then donating to save the planet). By the time they reach their early teens, these attitudes are largely well entrenched.
Note that I’ve evaded the original question. It’s never too late. It’s just a lot harder to start doing philanthropy and engage your children when they are already young adults.
Consider This: Does your family have a consensus regarding its philanthropic activities? How was that consensus reached? Do you discuss your philanthropy with your young children? How passive (writing cheques) or active (time and talent) are you in philanthropy?
Original articles: https://www.tapinto.net/towns/east-hanover-slash-florham-park/sections/business-and-finance/articles/raising-charitable-children, https://www.worth.com/how-to-find-your-voice-as-a-next-gen-philanthropist/, https://www.forbes.com/sites/francoisbotha/2019/07/28/three-ways-to-embrace-the-next-generation-of-family-office-leaders/#79c0cd6f6d90, https://www.forbes.com/sites/oliverwilliams1/2019/04/24/what-happens-when-billionaires-children-inherit/#107bf42f4e92
Actionable Generational Wealth Succession
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