Charity Series Part II – “Teaching to Give”
In discussing financial education, we often talk about spending, saving, and investing and the significant impact each has on personal finances. For many families, another important component of financial literacy is “giving”. If philanthropy is a priority in your life, a great way of passing on your values and strengthening family bonds and unity is to engage in family philanthropy. Furthermore, it enhances the connection between your rising gen and the community in which they live. It provides them with the awareness of issues outside of themselves and the impact they can have by the mere action of helping others.
The first step in helping your child understand the importance of philanthropy is to talk about it. Communicate your personal philanthropic experiences and goals such as:
- Why you believe it is important to be philanthropic and how you started to get engaged.
- What your most impactful or memorable experiences have been.
- How you choose the organizations to support.
- Why certain social issues are important to you.
- What values and lessons you hope to pass onto your child(ren).
Additionally, if you participate on a nonprofit board, discuss what the organization does, the role of a board member and the various issues that are addressed by the organization. These discussions will help lay the foundation for the purpose behind family philanthropy and what you hope to achieve.
How early should you start engaging your child in philanthropy? A study done back in 2013 by London’s Money Advice Service showed that money habits are formed as early as age 7. While financial comprehension in young children may be limited, they are learning through the modeling behaviors of adults, particularly their parents and other family members. Therefore, while your child may not be ready to help evaluate organizations to support, just talking about the fundamental importance of sharing and giving as well as demonstrating the act of giving will have a positive impact.
There are different ways and levels in which you can start to actively engage in family philanthropy such as:
- Participating in volunteering opportunities
- Setting aside some of your charitable budget to allocate to a family selected organization
- Providing your child with a small allocation of funds that they can donate
Volunteerism is a great first step in making the concept of philanthropy tangible as they can see the direct impact of their actions. Volunteering can be as simple as helping an elderly neighbor or participating in park clean ups. It is a unique and fun way of spending family time together and costs little to no money. It can provide for an eye-opening and meaningful experience that will embed in their memory and generate enthusiasm to be actively engaged. It can instill a sense of self-worth as they recognize their own ability to make a difference. Furthermore, sharing in that experience can bind a family to a common objective and purpose.
Providing financial support to an organization is equally important and in addition to “doing good”, it is an opportunity to share your values and to teach a financial lesson. Explaining your budgeting priorities and how you set aside a portion of income specifically for charity is a great way to pass on your philanthropic values to your child through living by example. You can also show your child how they can implement the same discipline with the money they earn. Getting them in the habit of allocating some portion of their income to charity will help cultivate their value of generosity.
Another great financial lesson is to show how the donation helps the organization. You can highlight the importance of the gift you made by discussing all the ways that charitable funds enable the organization to help others and carry out its mission.
When engaging in family philanthropy, it can be powerful to include your child in the decision-making process. It is important to teach them the ropes on selecting organizations to support, but it is also a chance to see what excites your child and what issues are important to them; a way of seeing how they view the world around them. This does not mean you have to agree with their choices. In fact, this is an opportunity for family teaming and learning about compromise. While you cultivate their voice, you can engage in a discussion of the pros and cons of their choices. It is important to remember that you want to find an organization that excites the whole family, including your child. To the extent they remain passionate about their choice, use this occasion to encourage them to donate some of their own money to their favorite organization.
As your child matures, continue to increase their involvement and responsibility in the decision-making process and immerse them in your family philanthropy journey. It is never too late to start, however, the earlier you can introduce philanthropy, the more it becomes an integral part of the family’s normal activity and something they will be compelled to include in their own lives. Furthermore, engaging your child in philanthropy can yield the following intrinsic benefits:
- Passing on your legacy of giving
- Building strong family bonds driven towards a common purpose
- Enhancing the financial literacy of your rising gen
- Exposing your rising gen to the positive impact of philanthropy
- Meeting the needs of the community around you