by Jeff Schaffer, President, JMC Philanthropic Advisors
When embarking upon next generation engagement, the following are key questions to consider:
- What is the motivation for next generation engagement?
- Who gets to participate?
- What will create excitement for next generation members?
- How free is the next generation to set its own philanthropic agenda?
- What is the long-term opportunity for next generation involvement?
Why Involve the Next Generation?
Families often grapple with how to engage the next generation in their philanthropic giving, with each family bringing distinct reasons for doing so. It’s useful at the onset to clarify intent, as that will impact the shape of this engagement.
Is it being done to prepare the next generation to take over the family philanthropy; to encourage community engagement and giving; as a vehicle to promote family bonding; or for some mix of these motivations? If the purpose is family bonding, then it may be desirable to create a low bar for participation, whereas if it’s training the next generation, then participation may be based on engagement and performance.
For next generation members, participation in the family philanthropy generally will be most fulfilling if they are given the opportunity to explore their own philanthropic passions and to enjoy hands-on experiences. This can be provided through:
- site visits to nonprofit agencies,
- dialogue with clients and consumers of services,
- visits with innovative leaders, and
- community service days.
Engagement in the family philanthropy also provides the opportunity to expose next generation members to current best philanthropic practices. Topics to cover include:
- venture philanthropy and impact investing,
- special initiatives and cohort funding,
- capacity building,
- conducting due diligence, and
- evaluation.
It’s not unusual for a family to utilize a donor advised fund (DAF), a family foundation and personal resources to support philanthropic giving. Some strategies that families use to award grants from their DAF accounts originated with family foundation best practices. The following are key points to consider:
Membership: Depending on family size and circumstances, it can be tricky to decide who gets to participate. For some families, engagement is limited to adults, whereas others include children down to 10 years of age or younger. Participation may be restricted to direct descendants, in which case each person can be given discretion to decide whether to involve his or her significant other (couples may still be treated as a single unit of the next generation).
Family Meeting: Following individual outreach to next generation members, seek an opportune time to bring everyone together at a family meeting to present the concept, and to hear about appetite for involvement (this may fall during a holiday season). This gathering is an opportunity for the senior generation to share its vision, and for the next generation to respond. It may be useful to engage the services of a skilled philanthropic advisor to help in planning and facilitating this family meeting.
Individual and Group Gifts: At first, a significant step to operationalize next generation involvement is enabling each participant to designate an individual gift. The size of this gift should be proportional to both the family’s total grant making budget, and the age and number of next generation participants. It also is desirable to assign next generation members to work collaboratively on designating a larger group gift. This will provide them with early opportunity to advance and advocate for their chosen causes, and to work collaboratively to reach a consensus.
Communication: Make sure that the next generation has enough bandwidth to participate in a meaningful way in the family philanthropy. Once this is demonstrated, stand clear and allow them flexibility in how and when they organize to meet and communicate as suits their academic and professional schedules—they generally know more about remote networking than their parents!
Philanthropic Focus: Of critical importance is determining whether the next generation’s grant making will be required to comply with the mission and focus of the original benefactors. Next generation members may be given flexibility to advance their own causes with their discretionary grants, with an understanding that the central mission will remain unchanged; other families give future generations the authority to refocus on the issue they find most important.
Education and Training: As philanthropic advisors, we seek to meet with each next generation member to learn about his or her life experience and philanthropic interests. We’re then able, as needed, to offer support in identifying funding opportunities that resonate personally. This includes providing guidance on analyzing the programmatic and financial soundness of potential grantees.
If you are grooming the next generation as eventual successors, you may want to invite them (or a representative) to periodically attend allocation meetings or to join in on site visits. While this is primarily to further their education, it also creates opportunity to bring their voices into the discussion regarding issues before the family. It may take a few years for next generation members to fully embrace and define their role in the family philanthropy—understand this and be patient!
Eventually, it may become helpful to define the pathway for deeper engagement in the family’s philanthropic giving, whether it is someday fully sharing in decision-making or in some other capacity. With a big family, while philanthropic service may not be an option for everyone, it is possible to create multiple opportunities for involvement (e.g., expanded discretionary grant making authority, participation on review panels, committee membership, advisory board, etc.) Whether donating $2,000 or $20,000, engaging the next generation in the family’s charitable giving can help develop both the heart and mind needed to steer future philanthropy.
JMC Philanthropic Advisors is a boutique firm based in Santa Monica, CA, that provides concierge services for individuals, families, and corporate donors. The firm assists its clients to define and achieve impact in realizing their philanthropic vision, while fostering the joy of giving. JMC Philanthropic Advisors is part of AEF’s Philanthropic Advisory Firm Referral Program. For further information, please visit www.jmcphilanthropy.com.