In Family Philanthropy, Embracing Differences Can Pay Off

A family gives one another a big high five.

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Since charitable giving reflects an individual’s lived experience, values and perspectives, it naturally follows that philanthropic goals and approaches may vary across generations, and also between couples. Rather than avoid or suppress these differences, families may benefit from learning about and supporting one another’s philanthropic aspirations. Let’s review the research on common differences and then go over how families may enhance their philanthropy through their shared values.

Women and philanthropy

While philanthropy spans across cultures and gender, research has identified some common themes for female givers. In its 2021 Women and Giving report, Fidelity Charitable shares the following findings, which confirm patterns we’ve observed with our own clients:

Nearly 90% of women say they wish they could do more to create positive social change
Women don’t take advantage of charitable investment strategies as often as men do
Women aren’t as tax-savvy as men are in their approaches to giving (but in our experience, they keenly want to know more about tax-efficient giving)
Women are more likely than men to give back in ways that go beyond simply donating money to charities

To optimize their philanthropic impact on an individual and family level, women can:

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Volunteer with their valuable skills (e.g., marketing, technology guidance) as well as their time in advancing the causes they care about
Join donor affinity groups for specific issues of interest, to advance their education on the topic and network with peer donors
Specifically ask their financial adviser about ways to donate more tax efficiently, given the ability to save on capital gains taxes by contributing appreciated securities held for over a year instead of cash and invest through strategies that align with their values, such as toward environmental sustainability and/or fair labor practices

Philanthropy approaches across generations

Similar to female philanthropists, emerging donors express different perspectives toward philanthropy across generations:

Millennials (ages 28 to 43) "still give their time, talent and treasure," according to The Dorothy A. Johnson Center for Philanthropy, but also "want a closer and more active relationship with the groups they support, and with other supporters." They also "want to use their market power — as a particularly large generational cohort — to force change — e.g., by buying sustainable or fair-trade products, or taking jobs at socially responsible companies... They see giving to nonprofits as just one option — and often not the best one."
For Generation Z (ages 12 to 27), "its oldest members are now entering the adult and professional worlds," again according to The Dorothy A. Johnson Center for Philanthropy. While "Gen Z’s limited disposable income is a significant challenge to their philanthropic engagement, particularly among those who are still in school or early in their careers. … This limitation doesn’t deter them from contributing to causes they care about however they can."

We have also observed with all of our younger clientele the common use of social media to source, spread and advocate for ideas in effecting change.

For young adults, philanthropy doesn’t remain limited to writing large checks to charity. To optimize their philanthropic impact, younger family members can:

Research their areas of interest to advance their knowledge of root causes and learn from different perspectives. For instance, Giving Compass enables donors to customize their learning journey and identify organizations to support.
Align their consumer and lifestyle choices with their values, as a way to deploy capital beyond traditional charitable giving.
Become civically engaged through voting as another lever of supporting positive change in local as well as national elections.
Volunteer as a means of meeting peers with similar interests and experiencing the impact of a non-profit organization firsthand.

Parents and grandparents who wish to engage their Millennial and Gen Z family members in philanthropy may invite them to recommend family grants and also share what they’ve learned, to enrich the family’s collective philanthropic education journey. In many cases, the activity of giving remains more important to the senior generation than supporting specific organizations, and encouraging younger members to effect change as voters, consumers, investors and influencers can also support a broader spectrum of philanthropy beyond the traditional route of donations.

Unifying family philanthropic efforts

Family members with different approaches in effecting change may still share common family values and long-term philanthropic aspirations. For instance, younger generations of a family that has historically supported conservation may reinforce these interests through:

Supporting nonprofits that operate globally
Pursuing environmentally responsible investing and consumer choices
Voting for officials who align with their policy goals

Similarly, families with an education focus may encourage younger generations to volunteer for their local school, using their skills in areas such as marketing or design, to propel the organization forward.

In many cases, families will have disparate focus areas, based on geography and personal interests. Encouraging family members to pursue their individual philanthropy, and equipping them with the skill set to do so effectively, may cultivate independence and freedom, both qualities younger generations need to thrive.

Additional ways to solidify philanthropy ties, especially with younger children, include:

Volunteering together as a family. Children generally love hands-on activities, and many organizations encourage family volunteer participation. In advance of a holiday gathering, a family may identify and reserve a time slot to participate in a project everyone can enjoy, such as helping at a soup kitchen or delivering food and supplies to the elderly. Volunteering as a couple and as a family may enable you to affirm values in action, solidify family bonding and also serve as a role model.
Establishing a family giving pool. Whether to start or continue a tradition, families may create a dedicated budget for charitable giving. As recommended above, each child can suggest a cause to help everyone decide where and how to distribute the budget. The children can then narrow the field of possible recipients by researching their background and presenting those findings to the rest of the family. As a tax-free charitable account, a donor-advised fund (DAF) may serve as a convenient way to execute family philanthropy, with the ability to view online how philanthropic funds have been allocated. An annual holiday tradition of charitable giving enables the family to begin a collective discussion on how best to improve the world with its resources.

Encouraging generational diversity in a family’s philanthropic approach can expedite progress toward a long-term vision. Remaining open and curious to the perspectives of others can enhance a family’s unity, and do more good in the world, over time.

The views expressed are those of the author and do not necessarily reflect those of Neuberger Berman Group LLC, Neuberger Berman Trust Company, or any other member firm of the global Neuberger Berman organization.

This article is provided for general educational and informational purposes only and is not intended as an offer or solicitation for the sale of any financial product, service or other professional advice. Nothing herein constitutes investment, legal, accounting or tax advice. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. Neither Neuberger Berman nor its employees provide tax or legal advice. All information is current as of the date of this material and is subject to change without notice.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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As Head of Philanthropy & Family Governance Advisory, NB Private Wealth, a division of Neuberger Berman, Julia guides family members in proactively navigating their future and philanthropic journey together. Common topics covered with significant families include wealth communication and disclosure, succession planning and post-liquidity governance in determining a new common framework for the family and its wealth. Julia has lectured widely in the areas of philanthropy and family governance, with her perspective featured in The New York Times, Forbes, the Financial Times and Barron’s. Julia has authored articles for Trusts and Estates magazine and the Leimberg Estate Planning Newsletter and regularly speaks on charitable giving.