Engaging the Next Generation in Family Philanthropy: Getting Started by Gioia Perugini

In a recent webinar hosted by the Family Office Exchange, my colleague Nancy Gardiner and I presented on the topic of engaging the next generation in family philanthropy. This is an area we address almost daily in our practice, fielding questions from clients about what the right time is to engage their children or grandchildren in the practice of the family’s philanthropy, how to get started, and what they should do to get the next generation “ready.”

Room for Growth as Foundations Age and Mature

We know from the National Center for Family Philanthropy’s 2015 trends survey that nearly 70% of family foundations were created after 1990 – so they are still relatively “young” entities. Two thirds of family foundations still have founding donors actively involved, with fewer than 10 percent of foundation boards comprised of a majority of third- and fourth-generation family members.

As the age of the foundation increases, the number of third- and fourth-generation family board members will increase accordingly, so we can see that this generational change in leadership is coming to family foundations.

While the NCFP study also tells us that 56% of family foundations report engaging the next generation, as it currently stands, only 9% of foundation board members are under age 40, compared with 18% for public charities. Clearly there is room for growth here, as foundations age and mature.

Getting Started with a Needs Assessment

So given all of this, what can or should a family do to get started? We often start the conversation with a needs assessment. Just as you might start with understanding a client’s goals for investments or estate planning, we like to start with a discussion about the family’s goals in terms of size and scope of their giving “footprint.” Sometimes, this is clear; a family member has had a health event or formative experience that makes the focus of the family’s philanthropy crystallize. They might come to you already caring deeply about an issue, and having some sense of how they want to tackle it.

At other times, and frankly, more frequently, the goals are less apparent. In this case we begin by asking questions to elicit interests and potential scope. Conversations with other advisors often happen at this phase as well. The accountants and estate planners will often work together to determine how much, when, and what the best vehicle is to use for the family’s specific circumstances and financial needs. This would be the time to determine what vehicle or vehicles make most sense.

Then we can begin to address substantive questions:
• What are the issues about which you feel most strongly?
• What did your parents or grandparents value? How closely do we need to or do you want to adhere to their wishes?
• When is it appropriate to deviate?
• What is the geographical reach of your giving and how do you want to approach it (direct services, policy, advocacy, etc.)?
• How hands-on do you want to be in the process?

Defining and Developing Family Roles

After the needs assessment gives you a rough outline of your goals, we turn next to defining and developing family roles and sharing the eligibility criteria. Not to oversimplify, but it is important to clarify who will do what, both within the family and with outside advisors. As you can imagine, this part of the conversation varies, depending on the stage at which we meet the family.

Here are some of the questions we typically start with in helping families define roles: Is the founder still “in charge”? Would the family like to create a broader group of participants? Are there family members who do not want to, or should not, be part of the plan? How do spouses fit in? Are there specific eligibility requirements?

Developing clearly articulated family roles, and ensuring everyone knows them and agrees to abide by them, sets a level playing field on which to engage in shared family philanthropy.

Flexibility is Key to Engagement

How you approach this work is often as important as what you do. Maintaining flexibility is key to the success of multi-generational engagement. Given their different ages and stages, we know that different generations approach life with different outlooks. Many of us are familiar with the profiles and habits of Baby Boomers, Generation X, and Millennials, but do you know how to engage Generation Z? See our previous blog post on Igniting Generation Next for some insight.

Every generation is different. Just as every generation evolves and changes over time so does every family. The right idea is often the one for which those assembled are most ready and on which the group can agree. The “perfect” idea, if the group is not fully committed to it, will not succeed.

Stay Tuned…

We look forward to sharing more of our thoughts on this topic over the coming months. In the next installment on this topic, we will cover what you can do to get the next generation ready, including some successful activities to bring the family together and focus on their joint giving.

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Igniting Generation Next by Gioia Perugini

“Adults like us when we have strong test scores, but they hate us when we have strong opinions.”

“We are the turn of this century. We are the voice of change. We are here to fix what America is falling short of.”

“We, as youth, must now be the change that we seek. If you don’t stand for something, you’ll fall for anything.”

“In our generation, we feel we have to get out, make our decisions and decide whom we want to follow, whom we want to vote for, what we want to do , where we want to give back. I think that’s the power of our generation right now.”

These are the words of our young people. From Parkland to D.C. and in cities and towns in between, the past few months have confirmed that the power of youth and their ability to engage with the challenges in our communities is undeniable.

I spend a lot of time thinking about engaging the next generation, both as a parent and as a philanthropy professional who works with individuals and families. Having spent a lot of time working with Baby Boomers and their children, we are increasingly focused on Generation Z, which includes young people born after 1995. We are learning a lot from them.

Here’s what we know about this generation, thanks in part to Jess DeVlieger from CSpace. Born after 1995, this generation is 2 billion strong world-wide, and is on track to become nearly 26% of the U.S. population. They are the most ethnically and racially diverse generation in U.S. history. They are the most technologically literate generation, having literally grown up with an iPhone in their hands (the technical term is “digital native.”) It’s been said that they could swipe before they could talk.

Gen Z takes advantage of the resources available to them and are acutely self-aware of their ability to find the answers to anything they need. They grew up on community service, and have been civically engaged, with their Gen X parents and on their own, from a very early age. Among Gen Z, an impressive 26% have raised money for a cause, and the same percentage volunteer on a regular basis; 32% have donated their own money. As importantly, they focus on solving problems over serving needs. Gen Z also has an estimated $44 billion (and growing) in purchasing power. More interesting information about this generation is available here.

Whatever your politics, the power, technological savvy and perspective of young people is undeniable. We ignore them at our peril. Earlier this month, Hemenway & Barnes hosted a breakfast exploring how “Generation Z” engages with the world of social change, civic engagement, nonprofits, and philanthropy, during which we had the unique chance to hear directly from young people themselves.

I have several take-aways from this panel that I share for your consideration.

  1. Gen Z is building a truly inclusive youth movement. The participants spoke eloquently about the importance of including all voices in their call for change. Black or brown, gay or straight, city or country, young people want to work across traditional divides.
  2. They value peer mentorship and the exchange of ideas from within their peer group. They trust one another, sometimes more than they trust government, nonprofits, or their parents. As one of the young people passionately stated: “We are able to mobilize and make change on our own.”
  3. Their voices matter. While Generation Z may be more willing than previous generations to be identified as a part of the whole, they want to be seen as individuals worthy of the respect and recognition of nonprofit leaders, adult mentors, and government leaders.
  4. Athletics can provide a powerful pathway to civic engagement. My colleagues at Positive Tracks, and the youth they support, demonstrate first-hand that sport and physical activity deliver hands-on learning, ownership, personal challenge, leadership experience, community mobilization and an inclusive fun to engage peers and talk about “tough issues.”
  5. Family philanthropy can and must take into account the voices of its youngest generation. Even at very early ages, youth can understand complex social issues and work alongside the adults in their family to contribute to solutions, long before they enter the board room.

It seems fitting to end, as we began, with voices of young people, true and unfiltered.

“My generation needs to do something greater than ourselves. We’re here and we’re ready.”

“We are not slacktivists. We are activists. We don’t want adults to tell us how to do it. We’re making it inclusive. We’re making it count.”

“Allowing people who are already passionate to get involved – that’s inclusivity and where young people come in. If we want to move forward, it’s going to take everyone.”

About the Author

Gioia Perugini is Associate Director, Family Office and Philanthropy Services at Hemenway & Barnes. She works with individuals, families, advisors, charitable trusts and foundations to provide a range of philanthropic and client services. Read Gioia’s full biography here.

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Finding Inspiration in February by Nancy B. Gardiner and Gioia Perugini

Although February is the shortest month, it is mighty. We have Valentine’s Day, a bright red reminder to celebrate those whom we love. President’s Day is not far behind, honoring the legacies of honesty and character exemplified by presidents such as Lincoln and Washington. Black History month, during which we celebrate the accomplishments of black leaders throughout history, is also this month. The Olympics, now on the world stage, remind us of the Greek roots of both the Olympics and philanthropy. The first ancient Olympic games can be traced to 776 BCE at Olympia, on the northwestern corner of the Peloponnese in Greece. Although decidedly more modern it its etymology (ca. 1600 AD), the word “philanthropy” derives from the Greek philanthropia, translated roughly as kindliness, humanity, benevolence, and love to mankind. In short, February stands for giving and striving to be the best version of ourselves.

What Inspires You?

Just like the Olympic skier who defies the odds to win gold, so too can a donor drive her giving in this unlikely month. Sometimes it’s your heart that gets the workout when contemplating how to live up to the lofty ideals of “love to man (or woman) kind.” We’ve written before about the connection between head and heart in your giving. Have you paused to consider who inspires you? What are the causes about which you feel strongly? Where is your emotional connection to a particular issue? Many times charitable giving stems from a donor’s desire to give back, to honor the memory of a loved one, or to express gratitude or appreciation for someone special in your life. Some gifts are made to support the expression of love or beauty in the world, to protect a special place or to ensure that others can experience art or dance or music. Sometimes it’s to right a wrong. Many donors also give of their time to causes that inspire them, and deploy their values when making decisions about where to invest their money or where to shop for clothes or food or other daily necessities. Not all giving is tied to charitable causes; many of us hold out our hands to help friends, neighbors and family members out of love and to help them in times of need. We do not need to confine these thoughts to a single month, of course, and most don’t. But there is no reason why we can’t turn thoughts into action early in the year, in February, with the inspiration of the various holidays and events that occur this month.

Why February? Five Reasons to Consider

Whether you are making a gift to charity or to an individual, here are five reasons to consider February giving.

  1. Giving early in the year ensures that the gift will be made. If some reason you are unable to make your gift later in the year, or if the rush at the end of the year gets the better of you, an early start will make certain that your gifts to individuals or to charity have been made.
  2. Gifts made now can grow in the hands of the recipient. So, for example, a gift made in January or February can appreciate in value or can extend the impact of your gift.
  3. In the realm of charitable gifts, gifts made early in the year can be leveraged to attract additional gifts throughout the year.
  4. Gifts made early in the year allow for more gracious and meaningful communication between the donor and the recipient. There is more time to express gratitude for the gift and show the impact of it than there is for a gift are made in a flurry at the end of the year.
  5. Giving now eliminates risk of errors in delivery (of stocks or care packages) that can cause a gift to be late.

Make February the New December

Whether you are inspired by the historic legacies of Lincoln, Washington, and Frederic Douglass, or the feats of strength by Chloe Kim and Shaun White, give February its due and think about your giving now. If all else fails, turn to love and let that be your guide. With its generosity of spirit and good will to all, why not let February be your new December?

About the Authors

Nancy Gardiner is a Partner and Director of Family and Office Services at Hemenway & Barnes LLP. She works with families on legal, tax and investment aspects of governance, succession and all facets of family office creation, operation and management. Read Nancy’s full biography here.

Gioia Perugini is Associate Director, Family Office and Philanthropy Services at Hemenway & Barnes. She works with individuals, families, advisors, charitable trusts and foundations to provide a range of philanthropic and client services. Read Gioia’s full biography here.

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