If you’re like most people, you had a piggy bank when you were young. Your parents probably encouraged you to only break into it to buy something special. Do you remember the first thing you saved up to buy? The purpose was saving to spend. Fortunately, the piggy bank concept has changed to include sharing. Some of the new banks have three compartments for categorizing money. They are labeled: save, spend, and share. What a great way to start young children learning about financial literacy!
When is the best time to start kids thinking about philanthropy?
While saving to buy something isn’t such a new concept for kids, I think it’s great idea to start them early thinking about a portion of their allowance money going to help others. With this type of bank, parents and grandparents are encouraged to give in denominations of three so the child can evenly and easily dispense it among the three compartments. Conversations would follow about the reasons for the different categories thereby providing balanced ideas about money. Eliciting the child’s thoughts about where and why to give their “share” portion could make for great family interaction. Of course, sharing money isn’t a concept just for children.
Philanthropy for the Whole Family
What philanthropic causes are you interested in? Since children follow what they see us modeling, talk to them about why you give to these causes. It can be a natural springboard for discussions around family values. Being intentional about including the whole family gives everyone an opportunity to take part in making a difference. It could include giving to community causes, supporting charities, or providing for needs where you worship. Speaking of family involvement, why not develop a family foundation as a means of making a lasting impact toward the positive changes you’d like to see in your world.
The Family Foundation—a Legacy of Giving
A family foundation is a private foundation funded by the family’s assets and can be run by family members following IRS guidelines. It can continue as long as you wish and can be adapted as your family’s interests change. There can be tax advantages but many people like the idea because control remains within the family. With the ability to continue generation after generation, the family’s values and legacy are perpetuated. It can be drafted to even include younger family members as junior advisors. What a great way to give them real world experience while doing good! Be sure to contact your financial, tax, and legal professional advisors* to see if this is best for you.
Benefits of the Family Foundation
The Foundation Source talks about the family foundation as an opportunity for making philanthropy a family affair. They mention five important immaterial benefits of a private foundation for families (https://www.foundationsource.com/learn-about-foundations/benefits-of-a-private-foundation/):
- They help instill values and traditions
- Maintain family ties
- Deepen social consciousness
- Increase personal fulfillment
- Develop “real-world” skills
With family members so geographically spread out, foundation meetings provide families with another reason to get together. It becomes more than an opportunity to discuss where to give, but to reaffirm family values and be supportive of each other. It is also a time to be grateful for God’s provision and giving to others is a way of giving thanks.
The Nitty Gritty of Family Foundations
I have a deep belief in giving back and philanthropy. As you have read, it provides a wonderful opportunity for your family to bond together, affirm values, and support something enduring. Aside from the tax advantages, its benefits are personally fulfilling. While I don’t recommend starting a family foundation purely for financial benefit, there are some tax advantages such as: income tax deduction, capital gains tax savings, estate tax savings, tax advantaged growth, and expenses can be written off including travel. Do you want to discuss more about how to best engage in philanthropy for your family and whether a family foundation is right for you? Call me and let’s talk.
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