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By Cybil Guess

For many donors, the importance of a multi-generational family philanthropy plan is high on the radar, especially as more families recognize the value of rallying around critical social issues and community needs.

How do you know when a client’s family is a strong candidate for more formal philanthropic planning beyond simply budgeting for annual gifts to charity? Watch for these candidates among your client base:

  • Families who have started to ask you about multi-generational participation in favorite causes but do not yet have formalized plans.
  • Families who have publicly demonstrated a long-term charitable commitment to at least three charitable organizations.
  • Families who own a multi-generational business create the opportunity for corporate giving and values to inspire the family’s charitable plans.
  • Families who can give more than $25,000 per year to charity and have expressed enthusiasm and willingness to do so.
  • Families in which at least five family members across two or more generations have shown an interest in philanthropy.

A comprehensive philanthropy plan often starts with establishing a structure, typically either a donor advised fund (DAF) or a private foundation. Although each has benefits and advantages, the DAF option has become increasingly popular because of its favorable tax treatment, simplicity of administration, and flexibility.

However, a common myth is that families who wish to collaborate across generations on grantmaking and impact are better suited for a private foundation. The reality is that families can work together to determine and execute a philanthropic vision, mission, and grants from the family’s charitable structures, whether a donor advised fund, private foundation, or both.

For example, when a family establishes a DAF at Austin Community Foundation, our staff supports the family in areas of expertise and impact well beyond the administrative duties built into fund services. The advantage of opening a DAF at the Community Foundation, as opposed to a commercial DAF at a large financial institution, is access to a more personalized approach to help donors achieve their charitable goals with maximum impact. Our staff builds relationships with donors that can guide the transition from one generation to the next through succession planning or engage multiple generations in charitable activities representing a family’s values.

Here are examples of comments you may hear from families who may be excellent candidates to work with the community foundation alongside you as their advisor:

  • “We are interested in engaging the next generation of our family in philanthropic conversations, but we are at a bit of a loss as to how to go about it.”
  • “We’ve thought about working with our children and grandchildren on community priorities and deploying philanthropy as a way to communicate our concerns and dreams for the region we all love, but we aren’t sure where to find tools and best practices.”
  • “As a thirty-something, I have a young family, and it is imperative to me to be able to engage my kids in the family’s philanthropy, working right alongside me, my parents, siblings, nieces, and nephews, and grandparents.”

If you’re hearing these and similar expressions of interest from your clients, please don’t hesitate to reach out. The team at the community foundation is your partner to serve your clients’ philanthropic endeavors.

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