Philanthropy is a tradition for many affluent families. Many foundations still bear the names of their founders generations after they were created, even as the focus of their work evolves over time. Financial advisors who help their clients in their philanthropic planning can build strong bonds with their client families.
You can start by offering suggestions to your affluent clients on how they might involve their children in charity work. Affluent parents can start cultivating their sons’ and daughters’ philanthropic instincts when the children are as young as five. The goal for the parents is to teach the next generation to become stewards of their family’s fortune. Small acts of generosity can be a good start.
The following are ways you can suggest your clients demonstrate the importance of philanthropy to their children:
> Visit charitable organizations and events
Your clients can take their children to community events or have them visit a charitable organization.
“They get to see how other people live and what kinds of issues they’re encountering by making site visits to these organizations,” says Marvi Ricker, vice president and managing director of philanthropic services at BMO Harris Private Banking in Toronto.
To enhance the experience, parents can encourage their children to get involved and ask questions. Philanthropic work is about giving up your time as much as sharing your wealth, says Janice Loomer Margolis, philanthropy advisor at JLM Philanthropy in Vancouver.
> Make use of the child’s allowance
Margolis and Ricker suggest diverting a fraction of the child’s allowance to a charity of their choice. “Let the kids decide where they want to see their money used,” Ricker says.
This step can help impart the lesson of how money can be used to make an impact in other people’s lives, for the better, Margolis says.
> Explore their interests
Figuring out where to devote the family’s time and resources can be a challenge. Margolis advises parents to be supportive as their children explore their interests, but have several discussions before committing to a cause.
The experience will matter more if the child’s interest is genuine. “The parent needs to be open to listening,” Margolis says. “Sometimes, they think [children] should follow their [parents’] passion.”
Think of concepts that children can understand easily, says Jo-Anne Ryan, vice-president, philanthropy services at TD Wealth in Toronto. For example, many children are interested in animals, or helping other families.
The family can do online research together or flip through a catalogue to pick out a gift such as a goat or a cow to donate to a family in a developing country, she suggests.
> Make an occasion of it
Your clients can set aside a day for the family to discuss grant-making decisions together. The occasion can become a family tradition.
For example, one family that Ryan works with plans a day of golf, where members living across the country get together in one city to talk about how their funds will be allocated.
> Discuss lessons learned
Not every experience involving the introduction of philanthropy to children will end on a positive note. Children, and by extension, parents, may be disappointed with some outcomes, but your clients shouldn’t abandon their efforts.
“Sometimes, the charity doesn’t deliver or have the impact that was anticipated — that’s part of the process, too,” Margolis says. Your clients can turn things around by treating it as a learning experience, so they can understand how they might approach things differently next time.
This is the second part in a two-part series on philanthropy.
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