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How to Tell Your Philanthropy Money Story

Philanthropy offers an opportunity for families to connect in a way that may be less contentious than other potentially taboo money topics, such as inheritances and personal spending habits.

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In March, the Women’s Philanthropy Institute (WPI) released a report analyzing the first new data on household charitable decision making in 15 years. Many interesting trends were revealed by the report, and I was particularly surprised to see that 61.5 percent of couples make giving decisions together—a number that has actually declined since 2005. 

The report from WPI got me thinking about how philanthropy fits into a different aspect of the idiom “money talks”—defined by Merriam Webster as “money has a strong influence on people’s actions and behaviors.” If this is true, then families should be harnessing our philanthropic resources as effectively as possible to solve the world’s greatest social challenges. 

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I have previously delved into why it’s important for families to talk openly about money and make these conversations the norm rather than something to be avoided. This extends to philanthropy, too. Philanthropy offers an opportunity for families to connect in a way that may be less contentious than other potentially taboo money topics, such as inheritances and personal spending habits. Here are three steps families can use to build their money muscles.

Understanding the Difference Between Charity and Philanthropy

First, it’s important for families to come together with an understanding of what having a philanthropic strategy entails and the differences in various kinds of charitable giving. When we think about much of our charitable giving, it involves providing immediate relief and is often driven by an emotional response to particular events or situations. The cadence here is usually short-term or until the need subsides. Strategic philanthropy, on the other hand, is more long-term in nature because it seeks to target the root causes of social issues. Another key difference is that philanthropy often involves ongoing and deep engagement versus just “writing a check.” For example, a charitable donation may involve one-off support for relief after a natural disaster, such as fire or flood, while strategic philanthropy requires multifaceted ongoing work to affect climate change.

There’s no denying that both forms of giving are needed in today’s world; however, families with an integrated and sustained approach for how and why they want to give back will maximize their impact and create a legacy. Being intentional about “money talks” can bring families closer together and make a difference, realizing the proverbial “doing well by doing good.”

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On my podcast Money Stories with LDT, Theresa Edy-Kiene, CEO of Girl Scouts Greater Los Angeles, shared her perspective saying, “People are becoming more savvy about how they want their money used and ways in which they can use it for good.” With so much awareness about the need for social change, now is the time to integrate philanthropy into our family discussions about money. On Money Stories, Mary Spellman, a former college dean and current foundation executive said it best: “How can we teach people that there are ways to contribute that are meaningful?” This is where family engagement in philanthropy-centered money talks can be so important.

Building Philanthropy as a Value

For any family to work effectively, each member must understand the role they play in furthering their own and the family’s success. When it comes to philanthropy, we can start with making sure there is a unified understanding of what giving means to each individual and then incorporating those views into the family’s philosophy.

A great way to do this is by sharing your personal experiences and philosophy about philanthropy and how it has impacted your outlook on life. This will look different for different family members. You can start off by asking: What causes are important to you? How do you define philanthropy? Write down each response, and from there, create your family’s philanthropic mission statement—one that encapsulates the diverse viewpoints to ensure each member is heard.

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In The Business of Family, I share a list of questions you can ask at your next family meeting to help you create a giving strategy that works for your unique unit. Some questions to consider include:

  • Do you think it’s important for the family to be involved in philanthropy? Why or why not?
  • Do you want to support established organizations, local causes or global challenges?
  • Are you currently interested in a cause, movement, problem or question? And where is the help most needed?

Older family members can use this as an opportunity to mentor younger ones. Lara Tiedens, president of Scripps College, shared how she learned about investing from her mother-in-law’s involvement in a women’s investment club. This network encouraged her to dig deeper and determine how to make sound investments for her own financial plan. When she ultimately became the leader of a college, she drew on these early lessons about how money works to manage a complex organization that relies on charitable giving to keep its finances sound.

Giving as a Long-Term Financial Commitment

Throughout my career in the financial industry, I continue to be surprised by how few families integrate philanthropy with their broader financial planning. WPI’s research showed that only 1.1 percent of couples talk about philanthropy with an advisor, although this figure will vary for different levels of wealth. Still, it’s telling that many couples may not consider philanthropy a key part of their financial strategy. As a family, ensure that your meetings with your financial advisors include a section on philanthropy and regularly check in on how your strategies can be improved. Involving your advisor with family giving strategies can also serve as an entry point for younger members to learn about other topics in financial planning and management. 

Philanthropy is a means of bringing our values to life and a powerful tool to ensure that our voices are heard. As a family, start to evolve your mindset to see philanthropic giving as an inspiring adventure that achieves family wellness and unity—shaped and led by members’ interests and passions. If done with intention, a family will be able to create an ongoing story and legacy where each member is the hero of his or her own money story.

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