The 5 stages of charitable giving

For many of us, the desire to give back to our communities and the world is what gives our lives a sense of purpose. With the right kind of direction, this impulse can form the foundation of a lifelong mission — and be passed along to other family members, potentially becoming an enduring legacy. And it’s a journey you can embark on at any stage of life.

The vision for giving that you create for yourself and your family is determined almost entirely by your personal values. As the Bank of America Study of Philanthropy notes, that’s the basis by which nearly seven in 10 affluent individuals decide which nonprofits to support — the primary motivator by a significant margin. Philanthropy can be the means of articulating and transmitting to succeeding generations the things you believe in and hold most important. For more, see “Developing your philanthropic vision: From values to action,” below.

When your entire family is engaged in charitable giving, it can strengthen the bonds between you, draw meaning from your family’s story and create a positive legacy for your children and grandchildren to carry through their lives. It also encourages them to acquire a deeper understanding of the world, to forge connections — and to make philanthropy the cornerstone of the family’s wealth plan.

As you and your family members go through life, your desire to give will evolve. Your circumstances and priorities will change, and you’ll be ready for different lessons and responsibilities. As this happens, your advisor will be ready to act as an important sounding board, a source of ideas and a guide along your path.

By understanding the different life stages of philanthropy, you can be better prepared to recognize and maximize the power of your giving as a way to create positive change — and help succeeding generations do the same.

The process of raising children who give can start as soon as preschool. In these years, even young children are ready for lessons in charitable giving. You might, for instance, suggest that young children pass on toys they’ve outgrown or no longer play with, appealing to their innate desire to share. When they reach the age of allowances and cash gifts, encourage them to devote a portion to charity as well as saving and spending. And serve as a role model by talking about and involving them in your own giving and volunteering.

As kids get a little older, birthday parties can be an opportunity for them to ask their guests for gifts that can be donated, like children’s books or nonperishable foods. Proceeds from a lemonade stand can go to a nonprofit. During the holidays, you can give kids money to donate to a charity of their choice, either individually or with siblings or cousins — which can help build a collaborative approach to giving that can serve them later in life. Most important, by making charitable giving a positive experience from an early age, you’re building a foundation for the life stages that follow.

During the preteen and teen years, gifts from coming-of-age events (for instance, bat and bar mitzvahs, graduations, confirmations, quinceañeras, sari ceremonies) can provide a young person with meaningful money for the first time. Parents and grandparents can use this opportunity to encourage more substantial donations to charitable organizations — or, if the amounts are significant enough, even establishing a donor-advised fund (DAF) to make future contributions.

At this stage, another kind of giving, volunteerism, can also create a memorable impression. Many schools require students to perform a certain number of volunteer hours. This is an opportunity for your child or grandchild to gain an understanding of how volunteerism can help them express their personal values while addressing the broader needs of their community.

But even as you work to actively shape a teen’s philanthropic interests, be aware that they may be developing their own ideas — and that their favored causes may be different from yours. If you want children or grandchildren to be future stewards of the family’s wealth, make room for them to express their own values. Conversations about giving may reveal that the different generations’ interests are more closely aligned than they first appear. Your advisor can help you come up with the right questions to ask and ways to respond constructively.

The college years and initiation into the workforce can be an important turning point for young members of the family, with many of them starting to take more active philanthropic roles. This is a stage when you might consider inviting them to help make decisions about, say, which organizations should benefit from a family DAF. You might even ask young adults to join the family foundation’s board as an advisor or voting member, and perhaps take an active role in administering the grants it makes.

These responsibilities can give young adults an opportunity to strongly influence — and evolve — the family’s philanthropic mission. By including younger members’ interests, then building consensus and identifying values that align across generations, the family can broaden its impact on the community and the world at large.

What’s more, serving on a family foundation board can help them build valuable financial skills — such as budgeting, managing investments and upholding a high standard of oversight — that carry over to their personal financial lives. And hands-on philanthropic experience can help younger adults understand how they can give more effectively.

This is often a time of personal and professional milestones: marriage, children, career advances. It’s also the stage at which you’re likely to take a leadership role as a steward of your family’s legacy. Your philanthropic vision may lead you to establish and fund philanthropic vehicles, such as DAFs, charitable trusts and family foundations. An inheritance or sale of a business has the potential, with careful planning, to provide even greater giving opportunities.

In addition to any financial commitments, you may also want to deepen your relationship with your community and the causes that matter to you by volunteering — perhaps taking on a leading role on a nonprofit board or major gift campaign. Beyond the benefits to the community itself, volunteer work can help you develop leadership and other skills, build networks and find joy and fulfillment.

At the same time, this remains a period when you’re likely to be juggling multiple demands on your attention and resources. Having a firm understanding of your philanthropic vision and mission at this stage can help you make efficient choices. Your advisor can be an excellent sounding board.

At this stage, you’re in a position to prioritize your own philanthropic efforts as well as helping guide the next generation in theirs. To make sure family members aren’t in the dark about your family’s philanthropic intentions, revisit or write a founder’s letter to share your reasons for giving, family values, the issues you want to focus on and the potential impact the family’s philanthropy will have for generations to come. Providing family members with a “north star” enables them to make charitable decisions with greater confidence and inspire the next generation.

You’ll also want to address the topics of legacy planning and transferring wealth to succeeding generations, and how philanthropy fits in with those plans. Do you want to create perpetual giving vehicles to sustain a family legacy, or would you rather take the “giving while living” route and make sizable immediate gifts?

Finally, as your career winds down and your schedule becomes more flexible, volunteering can take on a more prominent role in your philanthropic life. You may even find that volunteer projects allow you to more easily bridge the gap between full-time work and retirement. And the sense of purpose and ongoing learning that volunteering provides have been linked to healthy aging.

And of course, one of the most fulfilling aspects of philanthropy at this stage of life is seeing the younger generations of your family — whether young or fully grown — following your lead in their own fashion. It’s gratifying to know that the journey you’re on and the values you hold are shared by the people you love.