Family Philanthropy Playbook for Community Foundations

Unit 2: Wealthy Families

Donors of all means want to pass on the spirit of generosity to future generations. What motivates the wealthier of those individuals and families to do so, and to seek help in doing so?

READ (6 minutes): The 6 Motivations for Family Philanthropy

NCFP President Ginny Esposito outlines the six most common motivations heard in conversations with hundreds of donors and families.

READ (60 minutes): U.S. Trust® Study of High Net Worth Philanthropy

U.S. Trust and the Indiana University Lilly Family School of Philanthropy co-sponsor this biannual nationally representative random sample U.S. households with a net worth of $1 m\illion or more (excluding the value of their primary home) and/or an annual household income of $200,000 or more. NCFP looked at the studies with 2015 and 2013 data. Key highlights:

In 2015, 49% of donors described themselves at novices, 47% as knowledgeable, and 4% as expert in charitable giving. Increased perceived expertise correlated with increases in: the likelihood of working with a philanthropic advisor (such as a community foundation), personal fulfillment gained from giving, time spent in monitoring gifts, and confidence in the impact of giving.
In 2015, the top challenges to charitable giving were: identifying what they cared about and deciding where to donate (67.3 percent), understanding how much they can afford to give (49.8 percent) and allocating time to volunteer with the organizations they care about (45.3 percent).
In 2015, 94% said they would like to be more knowledgeable about at least one aspect of charitable giving. Identifying the right volunteer opportunities and becoming more familiar with nonprofits were the top choices, followed by engaging the family in giving. Unfortunately, only 23% consulted with an advisor regarding charitable giving and community foundation staff were near the bottom of the list of options.
In 2015, only 21% of households had family traditions around giving and only 29% actively involved children or grandchildren in giving. Those percentage were much smaller than previous studies because the latest study had more young families participating.
In both studies, parents’ and grandparents’ primary worries about involving heirs in giving were inconvenience (time, geography), not knowing how to do so, lack of interest in participation, and differences in charitable priorities.

READ (45 minutes): U.S. Trust Insights on Wealth and Worth®

This annual study surveys more than 600 adults with $3 million or more in investable assets, augmenting the survey with phone interviews of a smaller sample. Though the topics vary each year, there are always questions related to philanthropy. NCFP looked at the 2015, 2016, and 2017 studies. Key highlights:

In 2017, more than half of respondents weren’t confident in their children’s capacity to responsibly handle family money. (Philanthropy is often seen as a tool to teach financial stewardship).
In 2017, Seven in 10 overall believe that giving back as a family strengthens relationships, and eight in 10 agree that familial charitable acts help instill a philanthropic drive into the next generation.
In 2015, 43% of parents gave back to society to set an example for their children. The reason was second to giving because of personal interests but ahead of moral obligations and tax strategies.
In 2015, just 10% of respondents had developed a family mission statement.
In addition to giving to charities and volunteering, participants also cited these ways to “give back to society”: creating jobs and opportunities for others by owning a business, investing in companies based on social impact, and pursuing social entrepreneurship. Do you include these options in your philanthropic conversations?
The percentages of all generations who owned impact investments increased and the percentages who assessed their portfolios for ESG impacts increased. In 2016, the leading interest areas were the environment and health.

READ (30 minutes): A Tradition of Giving: New Research on Giving and Volunteering Within Families

This study assessed how family members influence each other’s giving and volunteering. It combined longitudinal data from the Philanthropy Panel Study about 8,000 families and interviews with Vanguard Charitable clients. Key highlights:

The philanthropic giving priorities of parents and their children are more closely matched than are the philanthropic giving priorities of grandparents and their grandchildren.
Parents’ decision to volunteer with charitable organizations positively influences their children’s decision to both volunteer and give.
Overall giving by parents from intact families has a stronger influence on their children’s overall giving than parents from families who experienced a marital transition.