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Boulder Daily Camera
Making Money Matter
Enid Ablowitz

Multi-generational Philanthropy

Children learn what they see modeled.  When giving is a core value and is practiced regularly, they see the power of giving to change lives, to enhance our world, and to inspire.  There is a growing trend that bodes well for the future of philanthropy:  giving with more than one generation involved in the decision-making,

The National Center for Family Philanthropy studied this trend and recently reported that:

• Active grant-making by families increased by 50% in the last decade; the number of private foundations doubled (to over 60,000) and family philanthropic ventures currently control more than $200 billion in assets.
   

• Wealth transfer from the WWII generation to their heirs is stimulating conversations about passing the responsibility for continuing philanthropic investments as well.  Often the following generations have different ideas about how to use the funds. Will the “founders” prevail, or will succession planning allow for changes in mission for the next generation, and the next?
   

• Younger donors are becoming more philanthropically active, but they are more likely to be involved in "venture" or “high engagement” philanthropy that allows greater personal involvement.  They often want to work closely with non-profits and provide more through hands-on approaches. They often want to apply a business approach to their philanthropy and expect to see a return on their philanthropic investment.
   

• The definition of family is changing through divorces, remarriages, domestic partnerships, adoptions, surrogate family members, and geographic dispersion. The question “who is family?” may affect who will participate in making family giving decisions, or serve on boards.  It can also affect perceptions of legacy and entitlements.
   

• There are many more options for donors to handle their giving, whether through private foundations, supporting organizations, donor-advised funds, giving circles, donor collaboratives, or venture funds. In addition, the giving strategies to fund these vehicles are expanding, incorporating such mechanisms as charitable trusts or gifts of specialized assets.  The complexity has spawned a slew of advisors to help donors make decisions regarding not only wealth creation, but also wealth distribution including philanthropy. Accountants, attorneys, investment officers and family office staff have become more responsive to their clients’ interest in giving, especially in the nuances of legacy and multi-generational involvement.
   

• With increased scrutiny of the for-profit world, donors are looking to the non-profit world as well for more accountability and transparency when they make philanthropic investments. In addition, if the family has established their own non-profit grant-making foundation, there is increased pressure to assure appropriate payout rates, minimize overhead, and stay clear of questionable transactions that may involve potential self-dealing or other violations of law or ethics.
   

• “Giving while living” is a trend gaining momentum as younger donors combine their involvement in family philanthropy with the concept of making a difference now. Earlier generations may have been more concerned with perpetuity of principal and permanence of the entity, where foundations established in the last decade are more likely to spend not only earnings, but principal during the founders' lifetimes or by some specific date.  When perpetuity is part of the goal of the founders, they may find themselves at odds with other family members, or upon their deaths, the next generations may struggle over whether to maintain the founding donors’ original intent.
   

• Traditionally, private foundations were reticent to provide operating dollars to non-profits.  That is changing as multiple-generational involvement is open to the idea that effective grant-making with impact relies not only on flow of good projects, but on planning and persistence. There is more interest in providing stability to grantees so that they can build sustainable organizations that will have long-term impact.

The giving motivations that bring families together in philanthropy are complex and can alter the way philanthropic dollars are viewed and spent. You can create a dialogue with your family members that can be an extraordinary way to explore and test family values and create a sense of common purpose and connectivity.

Enid Ablowitz is the Vice President for Advancement at the University of Colorado Foundation, Inc., and Director of Advancement for the Coleman Institute for Cognitive Disabilities.  She has been working as a donor advocate for more than a dozen years.  Her book, Making Money Matter:  Eight Steps to Thoughtful Giving was recently published.  For information on how to obtain a copy, contact her at enidablowitz@hotmail.com.

You may contact Enid Ablowitz by email at enidablowitz@hotmail.com

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