Teaching Children Obligations Of Wealth

One of your greatest gifts to your children and grandchildren could be your spirit of philanthropy, an understanding that with wealth comes a responsibility to help other people. But charitable instincts may not come naturally, and the sooner you involve your heirs in your own good works, the more likely they’ll carry on your tradition of giving.

You might start by inviting them to help you with your contributions. Then, as they see what causes you support—and how much satisfaction it gives you—they can begin to find their own philanthropic paths. These suggestions can help.

Have a plan. A bit of structure helps kids organize resources, set goals, and learn to compromise with other family members about who should receive their charitable gifts. You can work with them to establish guidelines for when family members first get involved, how much they give, and what contact they may have with the recipients of the gifts. In 2005, Foundation Source released The Gifting Game, an interactive tool that helps families select organizations for charitable donations.

Call a meeting. The family that gives together is more likely to keep the momentum going. Gather everyone together annually and compare last year’s results with what you hope to accomplish this year. When the business portion of the meeting is over, celebrate together.

Consider a match. When children agree to donate some of the money you’ve given them—or to contribute part of their earnings from chores, summer jobs, or an allowance—a matching donation from a parent or other family member can reinforce the giving habit.

Give them freedom. When kids, with an adult’s guidance, get the opportunity to create their own programs of charitable giving, the projects may take on a life of their own. One wealth manager began a family tradition of giving each of his eldest grandchildren $200 a year to spend on that child’s choice of charity. Together, the children have created a structure for their fledgling foundation and are getting additional siblings and cousins involved.

Let them choose. Inviting kids or grandkids to donate to your favorite charity is one thing, but the lesson of charity is much more effective when children are allowed to choose their own causes and discover the joy of giving. Children can be deeply moved by disasters reported in the media and the people affected by them. In addition, many children are eager to give to organizations that have touched the lives of people they know, such as researchers for various diseases, hospitals, and nonprofit groups in their communities.

We can help you involve your heirs in your philanthropic initiatives, explain the financial aspects of charitable giving, and work with them to develop their own programs of giving.

This article was written by a professional financial journalist for integrated wealth llc and is not intended as legal or investment advice.

© 2020 Advisor Products Inc. All Rights Reserved.