Posted on August 01, 2018
Have you ever wondered why some families are able to do more “good” with their philanthropic activities than others? Or why some families seem active in many causes and yet are not able to make an impact with any of their altruistic activities?
Establishing a cohesive philanthropic mission can provide an anchor-point for a family and can help overcome many challenges with a collective focus on the impact the wealth will have. By bridging the generational gap, a philanthropic mission can help to enhance communication, reduce conflict, and serve as the foundation for successful family philanthropy.
To make an impact, a family should have a cohesive philanthropic mission embraced by all.
ISSUES IN FAMILY PHILANTHROPY: AVOID “SPRINKLING”
Often times, one of the challenges families face in their family philanthropy is focus. Many families have an altruistic culture with deep involvement in their communities, and yet their efforts are sprinkled among various charities and “causes” that each family member may champion. This can lead to little impact in any particular area, which we call “sprinkling,” and can deepen generational divides that already exist in some families.
Families who intentionally establish a mission and vision for their wealth and their philanthropy can overcome this. They become a unified force by allowing their capital to make a stronger impact in the philanthropic mission of the family members. The first generation (G1) and subsequent generations have unified goals and objectives, thus providing them with endless opportunities for engagement and communication. Successful families find a way to honor the legacy of the past while creating a legacy for the future.
It is important to note that “involving the kids” does not mean adding the next generation to a static organization, but rather shifting the paradigm to become a multigenerational system that embraces the gifts of each generation. The more a family is able to do this, the better prepared it will be to evolve both as a family and in its philanthropy.
ENGAGING THE NEXT GENERATION
A significant challenge for many families in establishing a family philanthropic mission is that the younger generations (G2, G3, G4) do not always see eye-to-eye with the generation that created the wealth (G1). They often have difficulty communicating, and collective decision making can be a significant challenge.
So how can a family overcome communication challenges to establish a philanthropic mission and vision? The first step is a conversation. Hold a family meeting with all active generations to discuss what impact each family member actually wants to have with his/her wealth. Sometimes a professional may be needed to help facilitate and moderate the conversation, but the results can be fruitful!
The family’s philanthropic mission can be basic or complex.
HERE ARE TWO EXAMPLES:
After establishing the family’s philanthropic mission, many successful families establish some type of family giving vehicle like a Family Foundation. Whatever the chosen vehicle, family philanthropy can be a great tool to increase financial literacy and develop financial leadership within the next generation of family leaders. It can also provide an opportunity to transmit values to younger generations, establish a family tradition of giving back, and develop deeper family ties.
OTHER BENEFITS OF FAMILY PHILANTHROPY INCLUDE:
Giving away money in an intentional and proactive way is difficult; it often involves significant power dynamics and inter-generational family dynamics that can be sensitive and explosive. While the majority of philanthropy experts recommend that donors engage the next generations, and do so as early as possible, there may be some families that struggle. It is important to remember that every family is unique and has its own journey.
Many families experience roadblocks in their efforts to establish this kind of family-wide initiative. There is often a disparity in philanthropic knowledge across generational lines, differences in which causes to champion, and making everything even more complicated, different generations prefer different means of communication.
This can lead the rising generation of family members to feel isolated from the wealth. Upon joining the philanthropy program, some family members may even experience philanthropic culture shock.
SOME COMMON CHALLENGES AND DIFFERENCES INCLUDE:
To overcome these challenges, families should be flexible and approach challenges and differences with an open mind and willingness to compromise.
SUGGESTIONS FOR NEXT GEN MEMBERS GETTING INVOLVED IN FAMILY PHILANTHROPY
Next generation wealth owners often have a completely different set of skills/advantages than what G1 or G2 may have. Rather than alienating them because they communicate differently or have different priorities, we suggest bringing them into the fold, including them in the conversations, and making them a part of the philanthropic process.
Families should thoroughly explore and leverage the strengths, skills, talents and passions of each family member and give each member opportunities to learn.
HERE ARE SOME SUGGESTIONS WE’VE SEEN SUCCESSFUL FAMILIES EMPLOY:
ENGAGE THE YOUNGSTERS EARLY
We often hear families ask when they should start engaging their children in the philanthropic process. We say, the earlier the better! It’s never too early to start, and families who embrace this process from the beginning often find it easier than families who wait.
Families can start getting heirs involved at some level at a very young age – tools such as grandchildren’s grants and sub-committees can help teach skills and the general process early. By exposing young children to philanthropic efforts early, it becomes part of their mindset, and makes it easier for them to understand the family’s mission as they grow up. We’ve found many ways of including children as young as four or five years old in the family’s mission.
HERE ARE A FEW WAYS WE’VE FOUND TO ENGAGE HEIRS EARLY:
FAMILY PHILANTHROPY SUCCESSION
Eventually, it will be time to pass the baton. This can be one of the main challenges a family will experience because giving up control is difficult for many of us. Families might want to think about ways to share and trade power rather than transfer it.
SOME CRITICAL CONSIDERATIONS INCLUDE:
The best time to engage the next gen is early and before the death of the founder. This gives the next generations the opportunity to work alongside the senior generation while learning how to be a successful philanthropic leader. This also gives senior members the opportunity to find new yet equally meaningful roles. With thoughtful preparation and a willingness to embrace new adventures together, families can pass the baton to a new generation of philanthropic leaders who will carry on the family’s rich tradition of giving.
If we may assist you in your philanthropy journey, please feel free to contact our office.
The Bridgespan Group. “How Do I Work with My Family to Achieve High-Impact Philanthropy?” http://bit.ly/2rESMb7
Goldseker, Sharna and Michael Moody. “Introduction: The Most Significant Philanthropists Ever.” Generation Impact: How Next Gen Donors Are Revolutionizing Giving. Hoboken: Wiley. 2017. pp. 1 – 20.
Tuan, MT. “Families and Philanthropy: An Overview for Donors.” Goldman Sachs Philanthropy Fund. April 2016. http://bit.ly/1YaKPCC
BNP Paribas Wealth Management. “Passing the Torch: Next Generation Philanthropists.” April 21,2017. http://bit.ly/2j54KnO
Callahan, David. “Chapter 5: Disrupters.” The Givers: Wealth, Power, and Philanthropy in a New Gilded Age. New York: Alfred A. Knopf. pp. 112-135.
Callahan, David. “Chapter 9: Heirs to Influence.” The Givers: Wealth, Power, and Philanthropy in a New Gilded Age. New York: Alfred A. Knopf. pp. 212-234.
Esposito, Virginia. “Who Are the Next Generation of Major Donors?” The National Center for Family Philanthropy Family Giving News. February 2013.
Goldseker, Sharna and Michael Moody. “Chapter 8: Living Values Seamlessly.” Generation Impact: How Next Gen Donors Are Revolutionizing Giving. Hoboken: Wiley. 2017. pp. 175-191.
Goldseker, Sharna and Michael Moody. “Chapter 9: On the Shoulders of Giants.” Generation Impact: How Next Gen Donors Are Revolutionizing Giving. Hoboken: Wiley. 2017. pp. 193-213.
Goldseker, Sharna and Michael Moody. “Chapter 10: Fielding a Multigenerational Team.” Generation Impact: How Next Gen Donors Are Revolutionizing Giving. Hoboken: Wiley. 2017. pp. 215 – 237.
Exponent Philanthropy. Teen Philanthropy Café series. http://bit.ly/2A2KLfJ
Goldseker, Sharna. “Top Ten Tips for Charitable Advisors on Engaging the Next Generation.” http://bit.ly/2spSNzq
National Center for Family Philanthropy. “Planning Participation by New Generations.” Passages
Issue Brief. Family Philanthropy Transitions: Possibilities, Problems and Potential. Winter 2015. pp. 10-13.
Price, Susan Crites. “Engaging the Next Generation.” Splendid Legacy: Creating and Re-Creating Your Family Foundation. National Center for Family Philanthropy. pp. 252 – 265.
“The Rockefellers: A Legacy of Giving.” http://bit.ly/2qyWPBy
The Bridgespan Group. “Finding Your Philanthropy Compass: A Guide for Donors.” http://bit.ly/2rUpmp0
Rockefeller Philanthropy Advisors. “Talking to Your Family About Philanthropy.” http://bit.ly/25MfubU
Tuan, MT. “Getting Started with Your Philanthropy: An Overview for Donors.” Goldman Sachs Philanthropy Fund. April 2016. http://bit.ly/1UheLeP
Rockefeller Philanthropy Advisors. “Next Gen Philanthropy: Finding the Path Between Tradition and Innovation.” http://bit.ly/2rhrnbX
Kaufman, Joanne. “Learning to Bridge a Generation Gap in Philanthropy.” The New York Times. July 14, 2017. https://nyti.ms/2vl8dDc
National Center for Family Philanthropy. “Planning Participation by New Generations.” Passages Issue Brief. Family Philanthropy Transitions: Possibilities, Problems and Potential. Winter 2015. p. 10.
National Center for Family Philanthropy. “Tips for Ensuring Good Transition Management.” Passages Issue Brief. Family Philanthropy Transitions: Possibilities, Problems and Potential. Winter 2015. pp. 17-18.
National Center for Family Philanthropy. “Transition to the 2nd Generation.” Passages Issue Brief. Family Philanthropy Transitions: Possibilities, Problems and Potential. Winter 2015. p. 9.
National Center for Family Philanthropy. “Transition to the 3rd Generation.” Passages Issue Brief. Family Philanthropy Transitions: Possibilities, Problems and Potential. Winter 2015. p. 9.
Robles, Angelo J. “Working Across the Generations w/Sharna Goldseker & Danielle Oristian York.” Family Office Association Q&A. http://bit.ly/2rNByHe
Serini, Paul. “Coming to the Work as Equals.” Exponent Philanthropy, May 8, 2017.
* Goldman Sachs Philanthropy Fund, January 2018
NEXT GENERATION PROGRAMS/ORGANIZATIONS/RESOURCES
EXPONENT PHILANTHROPY NEXT GEN FELLOWS PROGRAM
The Next Gen Fellows Program is a 6-month training fellowship encompassing over 50 hours of learning for dynamic leaders roughly 18-35 years old who are involved in all types of foundations as current or soon-to-be trustees or staff. The program is designed for deep learning and peer networking to prepare the next generation for leadership roles.
Organizes young people with wealth and class privilege in the U.S. to become transformative leaders working towards the equitable distribution of wealth, land, and power.
THE PHILANTHROPY WORKSHOP
Provides ongoing strategic philanthropy education and networking to inspire individuals and families to give better. With offices in San Francisco, New York, and London, the TPW member network of more than 425 philanthropists is the largest of its kind and unique to the field of philanthropy as the foremost influencers of strategic and innovative philanthropy in the global community.
21/64 NEXT GEN DONORS
At Next Gen Donors, participants explore the messages and legacies they were raised with, articulate their current values, and develop their own philanthropic analysis and capacity for strategic giving and investing moving forward. Next Gen Donors offers retreats, ongoing in-person and online learning opportunities, as well as a peer network for its members; and, it helps other organizations build next gen networks for their own constituents.
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