Charity begins at home

Stuart Davies, a wealth advisory director at Deloitte and Plum Lomax of New Philanthropy Capital (NPC), a charity that advises all types of donors on how to give more effectively outline the steps you should take to create a 'giving' strategy that involves the whole family.

It is generally perceived that the US is a more generous nation than the UK when it comes to philanthropy, and that wealthy Americans have a longer tradition of involving their families in charitable giving, through creating their own personal foundations.

Warren Buffet famously said that he wished to leave his children enough money 'so that they feel that they could do anything, but not so much that they could do nothing'. Accordingly, he has donated one-sixth of his fortune to the foundations run by his three children, who alongside their wealth have inherited their father's desire to contribute to society as thoughtful, innovative philanthropists.

As an investor in family philanthropy, Buffet is in good company. Increasingly, wealthy individuals want to make giving a family affair, citing the many ways that it helps to bring the family together, educate children, and make giving a more rewarding experience. It is certainly a proactive way of introducing children to the idea that they are the beneficiaries of privilege. By stimulating their children's interest in one or more issues - for example, helping other children who are struggling in school, or caring for orphans, or working to save the environment - parents can help children to see that they are members of a larger community and that they can make a difference.

A family concern
In our experience, many individuals feel that the conversations that take place around giving to charity help to bring the family together across generations and sometimes from across the world. The quest to bridge the separate interests and passions of different family members requires the family to bring focus to their giving.

There are so many different causes and charities that a 'giving strategy' is almost a prerequisite. Families often benefit from retaining an external adviser, such as NPC, to help develop a strategy for their giving, so that each family member's interests are reflected and giving is made more effective.

A giving strategy will help a family define its objectives and preferences. For example, what do individuals want their donations to achieve and how should they reflect their values? Are there specific causes or geographies that the family wants to support? To what extent will different members of the family be involved in decisions and the management of the giving?

Structured giving
A giving strategy will also address tactical decisions on how best to support each of the chosen charities and how to structure donations. For example, smaller, but longer-term, commitments are often more helpful, as they allow charities to plan more effectively.

Many clients, particularly those who manage family businesses, have found that involving the younger generation in philanthropy is an excellent way to teach business skills too. Children can be asked to research issues they care about, consider possible charities and work through investment decisions. As they grow older, their evolving interests can help guide the family's commitments so that their generation is ready to assume leadership of the family's giving when the time is right. Family philanthropy thus becomes a legacy from one generation to the next, a way to learn together, have fun and give back.

Organisations such as Deloitte and NPC can provide the expertise and experience to inform a family's decisions, from recommending the most tax-efficient ways of getting assets or funds to the family's chosen beneficiaries to recommending and reviewing investment managers to ensure that they follow the family's investment mandate.

Further information
Deloitte
Website: www.deloitte.com

New Philanthropy Capital
Website: www.philanthropycapital.org