For many wealthy people, philanthropy is not an afterthought but part of an overall strategic plan for how they'll leave a legacy. And although the majority of wealthy people in a recent study by U.S. Trust see philanthropy as a way to feed their passion for a cause and give back, 30 percent view it as a way to encourage the next generation to be charitable.
Raising philanthropic children helps alleviate the concern some parents have about leaving a potentially huge inheritance with few restrictions on how it will be spent, says Claire Costello, national philanthropic practice executive for U.S. Trust.
But being passionate about a cause can work against parents who try to impose that same passion on the next generation. "The idea is to contemplate philanthropy as a room with many different doors," says Costello. It might be a challenge, but parents have to allow children to develop their own passions around giving back if they want the effort to be sustaining. "Enforced philanthropy doesn't work."
Show and tell
Susan Colpitts is the founder and chief financial officer of Signature, a family-focused wealth management firm in Virginia. She says that day-to-day behavior and modeling is the best way for parents to let kids see the value of philanthropy and embrace it on their own terms. "It's much more valuable for kids at the dinner table to hear their parents talk about what happened at a philanthropic board meeting or who was helped by a charity the parents are involved in, rather than to have structured family meetings around a specific family charity," she says. Ultimately, "the kids see parents involved in making sacrifices of time and money day to day."
It's not that structured family meetings or charitable vehicles such as family foundations are ineffective, Colpitts adds. It's simply that the results can be just as effective when parents keep it simple. "I don't think a family has to have a foundation to be compassionate and philanthropic."
Colpitts also suggests allowing each child to make his or her own decisions about the causes they support instead of trying to get the family to coalesce around one idea and inviting disagreement. By asking each child to explain the reasoning behind a particular choice, they learn to appreciate each other's differences, she says.
The upcoming holidays are a perfect time to begin a philanthropic program with kids, says Colpitts. Even families who aren't wealthy can give each of their children a small amount of money and let them feed their passion for giving back by researching and selecting a charity. "It's easy to pull off and you'd be amazed at what kids come back with," she says.
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