By Rose Bradshaw for the Fort Worth Business Press
A recent Boston College study projects that $59 trillion in wealth will be transferred across generations over the next 40 years. Traditionally, the philanthropic baton was passed upon the death of the last surviving parent. Now, thanks to longer life spans and greater understanding of the benefits of family philanthropy, several generations are coming around the table for essential conversations about family values and philanthropic giving. The North Texas Community Foundation invited nationally acclaimed philanthropy adviser Danielle Oristian York of 21/64 to share her insights on how to make multigenerational philanthropy work for families and the communities they support. Rose Bradshaw, president and CEO of the North Texas Community Foundation, interviewed York.
Bradshaw: What is prompting different generations to work together on family philanthropy?
York: The transfer of wealth projected to occur through 2061 will usher in “a new era that will exceed in size and influence the Gilded Age of a century ago, when modern philanthropy was invented.” The Boston College study estimates that more than $27 trillion will be designated for philanthropic purposes. There are currently more than five adult generations over the age of 21 in the United States. This unprecedented experience of multiple generations at the decision-making table compels philanthropic families to innovate, experiment and learn together.
Bradshaw: What does success look like?
York: Multigenerational philanthropy involves two or more generations of a family working together as peers to discuss their values, volunteer and make donations. For some, the discussion about where to direct grants happens at the Thanksgiving table, while others elect to use a board structure with quarterly meetings facilitated by a philanthropic professional. Regardless of the structure, what lies at the heart of success is a shared sense that each generation and individual family member has something to contribute, that they are better by working together, and that succeeding in family relationships is just as important as successful philanthropy.
Bradshaw: What are the keys for one generation to engage the next in philanthropy?
York: Consider the ages and stages of the next generation in the family. For young children, volunteer together at a place of their choice. Tell them what you support and why it matters. Help your children express their concerns about the world and consider what they can do to help. Allowing young children to articulate what they want to change and feel the agency to do something about it plants the seeds for a great philanthropic mindset.
For older children and young adults, decision-making becomes more important, so it’s helpful for parents to share the values that inform their decisions. Consider making joint donations in a way that reflects your family values. Whether discussing a family gift at the Thanksgiving table, providing children an allocation to grant on their own, or by connecting them to nonprofit leaders and community foundation professionals in their own communities, parents can support awareness and generous activity.
Finally, to engage adult next-gen family members, treat them like grown people. Offer a sincere and clear invitation that communicates what you’re inviting them to do and how you hope they can contribute. Common mistakes include extended “observation” periods, invitations to participate that lack clarity about responsibilities, and limited pathways for earning opportunities to engage more fully.
Bradshaw: What is the biggest hurdle for successful, engaged multigenerational philanthropy?
York: A lack of philanthropic identity. With 1.5 million nonprofit entities in the United States alone, the abundance of choice can be challenging. Before diving into questions about grant making, spend time exploring and clarifying your philanthropic identity. Consider:
· What legacy have I inherited from my family and community? How does it inform how I see the world?
· What values drive my decision-making?
· What challenges do I want my philanthropy to address?
By reflecting on profound questions, families can narrow their focus and clarify the outcomes they seek to achieve.
Bradshaw: Tell us about the next generation’s funding priorities.
York: While next-generation donors do not entirely differ from previous generations in the causes and issues they want to support, they do want to revolutionize philanthropy to make it more effective. These leaders want to 1) be more strategic, 2) innovate, and 3) invest deeply in the organizations they fund.
How can professional advisers facilitate family philanthropy?
Many families aim for their wealth to build, grow, sustain or change the world around them. Advisers who facilitate the financial and human side of wealth are truly excelling. Beyond offering products and services, they are asking questions, hearing what families need, and building relationships with the next generation.
To help clients establish a tradition of giving that makes an impact on issues they care about and deepens family relationships, create a plan and clear process for developing consensus and mitigating conflicts that may arise. The North Texas Community Foundation can help your clients:
1. Identify stakeholders
2. Plan for decision-making
3. Define roles and responsibilities
4. Plan for dispute resolution
5. Develop guiding principles
6. Explore values
7. Focus philanthropic priorities
8. Set geographic parameters