Engaging your family in philanthropy can have a significant impact on the family as a unit, on participants as individuals and on your family's lasting legacy. Giving as a family provides an opportunity to share perspectives and purpose and to instill the values of stewardship and service. Whether you are considering involving the next generation in your family philanthropy or contemplating joining in your family's existing philanthropy, engaging in intergenerational giving provides an opportunity to animate your family values and to begin to establish a lasting philanthropic legacy for your family.

Many factors, such as the birth or death of a family member, the sale of a family business or a galvanizing issue in the world, can lead to the decision to become involved in family philanthropy. Whatever your motivation, there are several items worth considering to help ensure a successful family giving effort:

  • How do you define "family"? Does it include spouses? Stepchildren? Cousins? Additional family branches?
  • What are your expectations for inclusion of additional family members? Are they realistic? Do they take into consideration outside commitments and your specific family dynamic?
  • How can you encourage the engagement of new family participants? Styles may differ among family members or perhaps across generations. How can new styles and views best be accommodated? Might a change in decision-making processes, a shift in focus areas or shared leadership be required?
  • How can family members who are new to the process best prepare for their new roles? Do they understand the relevant roles and responsibilities? Are they comfortable sharing their perspectives on philanthropy and the family's giving? Would they benefit from exposure to outside expertise and resources?
  • How important is it to leverage your family's philanthropy as a tool for financial education? Are you interested in sharing information about your family's wealth? What do you feel is appropriate to disclose?

THE REWARDS OF INTERGENERATIONAL PHILANTHROPY

Conversations surrounding values, family wealth and generosity can provide countless benefits for families. However, these conversations are not necessarily easy; they may reveal differences in values and interests, and may also prompt discussions about financial transparency and control. Nonetheless, the resulting personal rewards and societal benefits of family giving typically outweigh the challenges.

According to the 2016 U.S. Trust® Study of High Net Worth Philanthropy, families who engage the next generation in their philanthropic giving find it can lead to positive and lasting outcomes.1 Indeed, in our experience in working with philanthropic families, we have seen that families who give together flourish together. Giving as a family helps to deepen connections with each other and with the outside world, establish or strengthen family culture and identity, and create a sense of fulfillment and satisfaction.




The benefits of family philanthropy can also include Strengthening Family Values, Enhancing Inter-Family Communication and Connection, Creating Competencies, and Overcoming the Challenges of Inheriting Unguided Wealth.

STRENGTHEN FAMILY VALUES

Successful or effective philanthropy is grounded in personal values. Family members often have common values that contribute to the family culture and inform the purpose of the family's philanthropy. Identifying shared values facilitates their transmission across generations and contributes to a lasting family legacy.

ENHANCE INTER-FAMILY COMMUNICATION AND CONNECTION

Giving together as a family with common purpose and toward agreed- upon goals can be transformative. It provides a unique forum, distinct from a family business, that fosters deeper understanding, communication and connection among family members. A more robust family dialogue centered on philanthropy can have a positive effect across all lines of family communication — encouraging family members to respect differences of opinion and engage in conflict resolution, allowing decision-makers to be more inclusive of the rising generation, and empowering all the generations to contribute.

CREATE COMPETENCIES

Philanthropy provides an excellent platform for personal growth as well as the development of transferable life skills. The competencies gained and enhanced through philanthropic engagement include:

  • Developing an understanding of the potential to create positive change and the desire to do so
  • Encouraging creative and strategic thinking and problem solving
  • Cultivating a sense of responsibility for, commitment to, and passion about issues of concern
  • Gaining financial management and investment experience
  • Acquiring interpersonal and communication skills

OVERCOME THE CHALLENGES OF INHERITING UNGUIDED WEALTH

The longstanding adage of "shirtsleeves to shirtsleeves in three generations" persists today. Sustaining wealth from generation to generation can be challenging. Philanthropy can be an effective way to gain an appreciation for the worth of wealth. It also provides an opportunity to develop financial acumen and skills that can help ensure responsible stewardship of wealth.

FAMILY ENGAGEMENT: THINGS TO CONSIDER

As you begin to engage additional family members in your philanthropy, it is important to remember that they may or may not already be formulating their individual philanthropic identities or acting on their own philanthropic interests. With these possibilities in mind, consider the following steps:

  1. Start or continue the conversation. Share your family's history and wealth creation story, and be as honest about the family's financial situation as you feel is comfortable and appropriate when starting the conversation. Focus on the future: How do individual interests fit into the shared sense of family identity? Does including the additional family members involve changing or expanding your family's mission?
  2. Engage in skilled communication, conscientious listening and conflict resolution. Be conscious of collective group strengths and weaknesses, be aware of individual skill sets and personality differences and be mindful of past group experiences that may affect the present philanthropic process. Accept difficult conversations as a natural part of the process and try not to avoid them.
  3. Highlight "early and often" forms of engagement. In the same way that language acquisition is easier at a young age, we have found that instilling the "language of philanthropy" at an early age can help it become a lifelong practice. Consider activities that engage the whole family unit (all ages, interest levels and capacities) in philanthropy. These activities might include giving, site visits, volunteering and family activity days. Solicit suggestions for charitable activities and feedback once completed.
  4. Clearly articulate agreed-upon roles and responsibilities. Establish routines and clearly communicate expectations and roles upfront, taking into account the desires and interests of all the participants. Consider giving family members specific responsibilities or creating a generation-based committee (for example, a "third-generation committee" or another subcommittee consisting of a specific group of family members) that has a specific goal or mandate.

Every family philanthropy has its own dynamic and culture, and one need not look like another. Families may choose to expand who they include in their philanthropy for a variety of reasons: some families come together hoping to engage with each other in new ways, some unite around common issues and still others seek to establish a shared legacy across generations. You need not fit any one mold to pursue philanthropic success. As family philanthropy advisors, we can help you navigate these conversations and identify your goals, providing the custom support needed to help guide your family toward identifying and accomplishing your philanthropic purpose.

Institutional Investments & Philanthropic Solutions (Philanthropic Solutions) is part of U.S. Trust, Bank of America Private Wealth Management (U.S. Trust). U.S. Trust operates through Bank of America, N.A., and other subsidiaries of Bank of America Corporation (BofA Corp.). Bank of America, N.A., Member FDIC. Trust and fiduciary services and other banking products are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A. Brokerage services may be performed by wholly owned brokerage affiliates of BofA Corp., including Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S).

1 The 2016 U.S. Trust® Study of High Net Worth Philanthropy

2 Boston College Center on Wealth and Philanthropy, "A Golden Age of Philanthropy Still Beckons: National Wealth Transfer and Potential for Philanthropy," May 2014.

The information and views contained in this publication are for informational purposes only and do not provide investment advice or take into account your particular investment objectives, financial situations or needs. They are not intended as a recommendation, offer or solicitation for the purchase or sale of any security, financial instrument or strategy. Any opinions expressed herein are given in good faith, are subject to change without notice and are only correct as of the stated date of their issue.

Certain U.S. Trust associates are registered representatives with MLPF&S and may assist you with investment products and services provided through MLPF&S and other nonbank investment affiliates. MLPF&S is a registered broker-dealer, Member SIPC and a wholly owned subsidiary of BofA Corp.

AR-ARGRJ6XN-EXP-12/05/2018

"Conversations surrounding values, family wealth and generosity can provide countless benefits for families."
"Giving as a family helps to deepen connections with each other and with the outside world."
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