Involving younger generations can breathe new life into family giving and strengthen families, a new white paper says.
“At its best, family philanthropy provides families with an opportunity to reinvigorate their grantmaking, inviting the contributions of fresh and original ideas and approaches from younger generations, and bringing families together in pursuit of a mission inspired by common values,” says Funding as a Family: Engaging the Next Generation in Family Philanthropy.
The paper, published by Credit Suisse and the Institute for Philanthropy, looks at a range of family giving models in the U.S. and abroad, examines the benefits of engaging the next generation in family philanthropy, and suggests how to overcome challenges to their engagement, particularly as older generations try to involve younger family members in their grantmaking.
Family philanthropy represents a big part of philanthropy in the U.S., Britain, Germany and Italy, and creates benefits and challenges, the paper says.
Models for family philanthropy fall broadly into three categories, the white paper says, including family foundations, giving by family businesses, and a range of models including the creation of a family fund at a community foundation and more informal activities such as family-giving initiatives organized around the kitchen table.
It says benefits from engaging the next generation in family philanthropy include creating a forum for families to pass down values and build legacy together; offering younger generations a chance to develop key professional skills around communication, teamwork and financial management; and acting as a catalyst for reexamining philanthropic mission and approach based on younger family members’ new ideas and experiences.
Challenges include conflict and differences of opinion around philanthropic mission and strategy that can result from the generation gap and different life experience of children and grandchildren.
Strategies to engage younger generations include moving members of the younger generation onto the board of their family’s foundation or giving them the change to create a foundation of their own; giving young philanthropists an active role in the corporate foundation or corporate philanthropy program of their families’ businesses; creating junior boards or next-generation committees; and providing discretionary funding to let different family members pursue their own funding interests alongside those of the family as a whole.
“Philanthropy creates a forum for families to pass down values and build legacy together, and to address issues around wealth and inheritance,” Bill Woodson, head of family wealth management at Credit Suisse Private Banking USA, says in a statement.