Once thought to be the exclusive arena of the ultra-wealthy, charitable giving has become a national phenomenon across all tax brackets and households. In fact, charitable giving surged to a record high of over $400 billion in 2017 alone, and Individual giving accounts for the majority of those donations.

Philanthropy and giving are not only good for the charities and organizations receiving the donations, but for the givers themselves. Research has shown that charitable giving can help you feel better, improve life satisfaction and even activate the reward centers of your brain. [ii]

For any interest you may have, there is sure to be a group, charity or non-profit that would gladly welcome financial support. Donating gives you an opportunity to help charities and organizations you believe in meet their goals, improve communities, pursue research and myriad other things. Contributing to something bigger than yourself can help improve your relationships with your community and even reduce stress in your own life. On top of that, charitable giving may also offer tax benefits.

Creating a Family Tradition

With all the benefits discussed above, it’s a wonderful gift to build a charitable lifestyle for your family which can foster a legacy to carry on for future generations. Philanthropy is a great way to bring a family together, across generations, using their assets to make the world a better place. Establishing a Donor-Advised Fund, or DAF, can offer you and your family a simple solution for charitable giving.

To start, the family should review any and all donations made in the past. They should also discuss what values and priorities are most important to their giving. For some, it may be women’s causes, possibly organizations that prioritize education and furthering of women in business. Other families may have a passion for the arts or scientific research. Still others may want to focus on improving the lives of the poor or the environment. In the past, donations were often spread in small amounts over many groups. Current trends have shifted to larger amounts going to specific groups to make the most impact.

Related Article: Communication: How to Save Your Family in the Legacy Plan

Seeking Expert Advice

Once the family has established the focus of their philanthropic efforts, the next step is to establish clear long-term goals. With time and changing familial hands, values and culture change. Having flexibility in how decisions are made and what type of approvals need to happen before particular grants or donations are made will be key.[iii] Every family member will be bringing in their own values and opinions to the table. So, like with any sort of familial agreement, everyone will need space to be heard and roles within the family will need to be assigned to manage the family’s philanthropic efforts.

Seeking outside counsel may be the best and most effective way to charitably give in some cases. Expert knowledge of the various tax and regulatory elements is key, to maximize the tax benefits. [iv] Having an experienced outside advisor can be invaluable in managing the complexities of multi-generational families participating in charitable giving.

At Flourish, we take great pride in helping our clients realize their charitable ambitions by setting up charitable giving strategies like DAF’s. In fact, we are such fans of the DAF we set up one of our own with the Women’s Foundation of Minnesota (you can learn about it here).

A Legacy

No matter the size of the gift, creating a family culture of giving back to the community and paying it forward will benefit everyone. Philanthropy creates ties not only from the donor to the receiver, but to the greater community and to the world at large. By bringing your children and their children into the world of philanthropy and teaching them the values of giving wealth away to support causes that are important to them, you are creating a legacy and culture of supporting the community and helping to fund what you value through generations.

We are happy to provide more information about DAFs, help create a Donor-Advised Fund for your family, or simply answer questions about your financial plan. Contact us to get started.