July 13, 2023

Keeping Philanthropy in the Family

Author Natalie Pinon, Senior Director of Development

Multiple members of a family engaging in collective philanthropy is not a new concept, but with a tremendous amount of wealth set to pass between generations over the next two decades, the importance and opportunities within ‘family philanthropy’ are growing.

Giving as a family can help strengthen family ties, encourage leadership and responsibility among different generations, and can be the foundation of leaving a long-term legacy. Understanding the benefits of family philanthropy and the different methods to engage in collective giving, is helpful for all client advisors to know.

What are the main advantages of family philanthropy?

• Opportunities to strengthen bonds and work together. Family philanthropy offers a platform for families to make decisions together, fostering stronger relationships and a deeper understanding of each other’s values and priorities. It creates a forum for shared experiences and discussion, helping members of the family to get to know one another on a deeper level.

• Engaging the younger generation. Directing resources and efforts towards important social causes or community needs will help develop a sense of responsibility among the younger generation. It may also ignite a passion or interest in a certain cause that hadn’t previously been raised.

• A lasting legacy. Engaging other members of a family in philanthropy and the process of charitable giving will help create a platform for giving to continue beyond one single lifetime and could even start a legacy of generous donors among the family.

However, it isn’t always a simple process. Interests and motivations among family members may differ and so too do the methods of giving. Here are our top three things to consider when discussing family philanthropy with your clients.

1. Create a giving plan. This should be the first step of family philanthropy. No matter how expansive their philanthropic aspirations might be, encourage your clients to think about how they want to get involved as a family and what resources they wish to commit.

2. Decide on the right giving vehicle. Most families will choose between setting up a private charitable trust or foundation or setting up a donor-advised fund (DAF) to manage their giving. Donor-advised offers several advantages. For example, NPT UK works with a prominent family spread across three generations and based in three different countries, who have consolidated their giving into a single DAF and set up a family advisory committee that meets twice a year to decide which charities to support, all of which has streamlined their charitable giving.

3. Have a succession plan. Talking about the family’s legacy is important. Ask whether there are family members who would like to take a leadership role in the future. Explore if the next generation intends to continue with the same mission or pursue other causes. Equally, would your client be interested in setting up multiple DAFs for different family members during their lifetime too to allow for a greater degree of flexibility?

Participating in family philanthropy can be a deeply rewarding experience for your clients, where each generation of the family is involved in a conversation about their values and goals.

If you would like to discuss how NPT UK can help your clients manage their family philanthropy, please contact us.

About the Author

Natalie Pinon is Director of Development at NPT UK. She has over 15 years of experience working with philanthropists and impact investors to manage their giving.