In the early days of foundations, the transition from the first generation to the second often didn’t begin until the children of the founder were gathered in a lawyer’s office to read his or her will.
There, the adult children of the founder would often be surprised to learn that the founder had created a foundation. In some cases, they didn’t even know that their families had enough wealth to support philanthropy.
Thankfully, those days are largely over. Today, these abrupt transfers are becoming less common — and they are giving way to a much more deliberate approach to involving the next generation.
According to the National Center for Family Philanthropy’s recent 2015 Trends Study, nearly 3 in 5 U.S. family foundations engage younger family members in the foundation — and more than 40% say they expect to add to or increase the number of younger-generation family members on their boards in just the next four years.
This is an encouraging trend — especially for those of us who believe that these important institutions can have a much greater impact if they can keep the family productively engaged in their work.
But, for some families, the transition can be rocky. Many family foundations report trepidation about how to properly engage that next generation in their operations.
Today, I’m pleased to announce a new resource that will help families ease their fears about how to help their children learn about and understand the value of philanthropy and giving.
Generations Together — which launches today and is sponsored by U.S. Trust — is a new online resource that helps young adults, teens, and children explore family traditions and goals, learn about giving, and understand how philanthropy works.
This practical new resource provides a series of modules that families can draw from as they walk young people through the process of learning about their family’s history, understanding their values and traditions, and developing the skills and talents they need to become effective philanthropists.
Generations Together distills the knowledge we’ve gathered as we’ve worked with hundreds of foundations across the globe that have struggled with this sometimes complicated issue.
Through this work, we have identified a number of steps that the current generation of family leadership can take to ensure that they are preparing the next generation while maintaining their own philanthropic identities:
Introduce them to your family’s values
Whether you’re the founding generation of your family’s philanthropy or you’re carrying on the legacy of your parents or grandparents, it’s important to help the next generation understand your family’s history and values.
While each person brings his/her own values and personality to the role, he/she is more likely to be invested in and careful about the work if he/she sees how your foundation connects with your family’s history.
We’ve seen many successful multi-generational foundations take the time to create family histories, record and preserve interviews with family members, and set up regular opportunities to bring family members together informally to spend time together and learn from each other.
Give them the chance to explore their own philanthropy
The most successful multigenerational foundations find ways to give each successive generation an opportunity to learn about giving through their own activities.
That often means doing more than simply giving them a junior position on the board or a pool of money to give away.
It means encouraging them to pursue their own philanthropic interests.
Some families encourage their children to volunteer at a young age, with the goal of giving them an opportunity to explore and identify the causes they care about the most, to see the world’s challenges and problems firsthand, and to better understand how non-profits work.
Others provide matching fund pools or other giving instruments to help them learn how to make effective philanthropic decisions.
Each family is different, but those that help their children explore philanthropy at a young age are more likely to engender a passion for carrying on the foundation’s work.
Give them the right tools
To practice philanthropy well, you need to know more than just how to write a check. You have to understand how to properly manage an organization, people, and money.
As a result, families that are looking to bring a new generation to the table should also take steps to teach them financial literacy and prepare them to understand how to read a balance sheet. They should learn about proper governance and effective management.
You should also plan to have frank conversations about partnerships and power. The most successful foundations don’t just give away money. They identify high-performing nonprofits that are doing work that aligns with their missions — and they build partner-ships and relationships with other people and institutions.
Our new Generations Together resource is an important new tool for helping young people – and those who work with them - learn about these and related issues. We’re delighted to make it available for the field at large, and we expect it to help families extend their philanthropy into future generations.