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First, understand that the IRS holds foundations accountable to ensure their activities serve their charitable mission—not set up as a place to park assets indefinitely without distributing them for charitable purposes. This is why the IRS requires foundations to make their annual returns available to the public, including how much they distributed and to whom. Foundations also have a minimum 5% annual distribution requirement, which they can satisfy by making grants and paying certain qualifying expenses. They also can’t engage in lobbying, electioneering or voter registration drives—although they may undertake advocacy.

Another tip is to watch out for rules around self-dealing because the penalties can be big. The IRS’s self-dealing rules govern transactions between the foundation’s insiders, known as disqualified persons, and private foundations. The self-dealing rules are so strict that they even prohibit transactions that would be beneficial to a foundation, such as a disqualified person’s sale of property to a foundation at a below- market price. Click here to see examples of disqualified persons and the penalties.

Also, the rules around grants to individuals are…complex. For instance, did you know that some types of grants to individuals need IRS approval and others don’t? Two types of grants to individuals that don’t require IRS approval are grants designed to alleviate human suffering, such as those given in the aftermath of a natural disaster, and grants that are made in recognition of past accomplishments, such as an award for writing a brilliant and original poem.

Types of grants to individuals that do require advance IRS approval include:

• scholarships or fellowships.
• grants to individuals to achieve a specific objective, produce a report, or similar product that will be delivered in the future.
• grants made to individuals to improve or enhance a literary, artistic, musical, scientific, teaching or similar capacity, skill, or talent.

#2 Focus On Fraud Prevention

Unfortunately, charity scams are common and often increase after disasters and other emergencies when funders want to get money out the door quickly. The steps involved in preventing bad actors from getting grant funding intended for good works can be daunting, however, the right technology can automate much of this work and alleviate certain risks associated with human error. There are also a few key features to look for—including accounts locking after a certain number of failed attempts. Sometimes the number of failed attempts before lockout is determined according to an algorithm that’s looking at various factors like location or device. It’s also helpful to have a platform with an email notification feature, which can alert you when your contact information has been changed.

There are also “watchdog” organizations like CharityWatch, Charity Navigator, Give, and GiveWell, which can help you beware of fraudsters and fake charities trying to trick well-intentioned donors. Please note that it’s important when considering these tips that if you’re managing grant disbursements using your in-house staff, they should check the process they’re using with their legal counsel. If you’re already outsourcing these tasks or planning to, ensure they’re following these best practices.

TO LEARN MORE CLICK HERE

#3 When In Doubt, Opt For Outsourcing

Understanding the basics of how to avoid risk is a great first step in running a private foundation. But the rules governing private foundations can be tricky to navigate without a seasoned expert there to ensure you remain compliant with IRS regulations. The good news is you can avoid unforeseen penalties and still accomplish your giving goals compliantly by outsourcing your foundation management.

From compliance monitoring and oversight to guidance and consulting, you’ll sleep better knowing that experts are working in the background to handle the details that keep your foundation running smoothly. All that’s left for you to do is the rewarding part: focusing on your philanthropic goals.

READY TO TALK TO A PHILANTHROPIC SPECIALIST?

Schedule a call with us or reach us at 800.839.0054.

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• MDR Tracking
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Let us join you on your philanthropic journey with the experience and tools you need to reach your goals.

• Tax and Legal Specialists
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MODERN PHILANTHROPY STARTS HERE
Our tech-enabled solutions make giving – and having a foundation – easier.

• Grant and Expense Processing
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The post 3 Smart Things You Can Do to Manage Risk in Private Foundations appeared first on Foundation Source.

Technology

AMPLIFY YOUR IMPACT
Our tech platform was built with one thing in mind: more effective philanthropy.

• MDR Tracking
• Streamlined Grant Workflows
• Extensive Reporting

Expertise

YOUR PARTNER IN GIVING
Let us join you on your philanthropic journey with the experience and tools you need to reach your goals.

• Tax and Legal Specialists
• Philanthropic Advisory
• Advanced Grantmaking Support

Administration

MODERN PHILANTHROPY STARTS HERE
Our tech-enabled solutions make giving – and having a foundation – easier.

• Grant and Expense Processing
• Compliance Monitoring
• Tax Preparation and Filing

The post 7 Reasons to Start a Private Foundation Before the Busy Giving Season appeared first on Foundation Source.

ENTREPRENEURIAL PHILANTHROPY STANDS THIS CONVENTIONAL WAY OF DOING PHILANTHROPY ON ITS HEAD: IT’S NOT ABOUT FUNDING NONPROFITS; IT’S ABOUT SOLVING SOCIAL PROBLEMS. MOREOVER, IT PUTS YOU DECISIVELY IN THE DRIVER’S SEAT.

You pick a problem that you think is worth fixing. Then, you figure out the best ways to attack that problem, and, instead of putting out a “help wanted” sign and inviting all comers to apply, you go out and find the best organization or person to carry out your agenda.

As you might imagine, this “funder knows best” mode of philanthropy has as many detractors as it does proponents. Its critics contend that this approach gives too much power to funders and disenfranchises nonprofits, treating them like mere contractors or vendors, hired to carry out the funders’ ideas. Of course, the road less traveled is rarely the smoothest.

Obviously, this funder-directed approach isn’t for everyone. However, if it appeals to you, here are some suggestions to get you started.

Check Your Oil and Tires

Before you begin your journey, you need to conduct a thorough self-assessment to inventory the advantages that could make you a successful social innovator. Are there certain areas where you are uniquely qualified to make a difference? What attributes and skills do you bring to the table? After all, when it comes to achieving social impact, dollars aren’t necessarily the only—or even the most important—asset. We’ve seen countless examples where smaller funders, by virtue of their business know-how and professional connections, were able to accomplish goals that would even elude professional staff at billion-dollar foundations.

Take stock of the resources that you, your family, and your network of contacts might have:

• What unique expertise and special talents do we have?
• What issues do we truly understand?
• What important contacts and connections do we have that can help us?
• What’s our name recognition/credibility/reputation?
• How much time and energy do we have to devote to our cause?
• What level of assets can we afford to commit?

ARE THERE CERTAIN AREAS WHERE YOU ARE UNIQUELY QUALIFIED TO MAKE A DIFFERENCE? WHAT ATTRIBUTES AND SKILLS DO YOU BRING TO THE TABLE?

The next step is to choose a focus for your philanthropy on an issue that builds upon your strengths. How you spend your money is ultimately more important than how much you spend. Although your initial instinct might be to think of big, intractable problems like poverty, hunger and disease, you’ll be more effective if you pick an issue that has personal resonance, such as fast-tracking research for a rare disease that ravaged a beloved family member, saving a school district’s music education program threatened by budget cuts, or cleaning up a polluted lake in your hometown.

By championing an issue emanating from your own life experiences, you not only expand the menu of pressing social issues that receive attention, but may possibly address “orphaned” issues that have been overlooked by other funders or are too controversial for government or businesses to tackle. In thinking through where you can make a decisive difference, ask yourself:

• What makes me mad? “Every child in this country should be able to go to school without fear of being shot.”
• What gets me fired up? “When I see a veteran reduced to homelessness, it just drives me crazy!”
• What do I think is really insane? “Why do we keep buying bottled water?”

YOUR “LIGHTBULB” MOMENT

Philanthropic inspiration can strike when you least expect it. Let’s say that you are coming home from work, and while you’re on the highway, a car buzzes by you at breakneck speed, coming within inches of sideswiping you and then barreling ahead, swerving in and out of lanes. It seems ridiculous that you must take your life in your hands every time you get on the road. This time you are going to do something about….

THE EPIDEMIC OF ROAD RAGE!

Find Your Ignition Switch

Now that you have your issue in mind, you’re ready to take the next step. For the same reasons you wouldn’t embark on a long road trip based on outdated GPS software, don’t start your philanthropic journey without getting up to date on your chosen issue.

To get a handle on the contours of your chosen issue, go on a listening tour to interview a handful of individuals who are most knowledgeable about your topic. Undertake a literature review. Make effective use of consultants. Talk to other funders. You’ll want to know who else has been working on the problem, what’s already been done, and what impact that work has had. Not only will you avoid wasting money on ineffective approaches or duplication of other efforts, but you might find some likely partners and allies.

CAUTION: Don’t delegate the lion’s share of your due diligence to potential grantees. Although it’s a great idea to solicit input from those on the front lines, remember that it’s hard to get a candid assessment from people who may want your money. To get a more accurate picture, you’ll need to get input on the issue or problem from a broader spectrum of perspectives, particularly those directly impacted by your issue or problem.

GET A BIRD’S EYE VIEW

Now that you’ve decided to embark on the issue of road rage, you will want to know more about its dimensions, extent and history. In order to plot an informed, actionable strategy, you’ll need to find out:

• What do we know about road rage? What don’t we know?
• How many people does it impact?
• Is road rage more common in certain parts of the country than others?
• Are some people more prone to road rage than others?

Update Your GPS Software

Just like success in business, success in philanthropy is dependent on situational factors such as timing and market conditions. To what degree is the environment receptive to and ready for change? Some issues are ripe for action because people are aware of the problem, and they’re concerned about it. Other issues aren’t even on their radar. If you choose to work on the latter type, you may have a long and bumpy road ahead of you. You’ll have to put effort and money into educating relevant audiences that there is a problem before you can put money and effort into solving it. To determine if an issue is ripe for action, you’ll want to assess:

• SOCIAL URGENCY: Is this problem compelling enough to mobilize others around your cause? Is this problem a high priority for influential players?
• FEASIBILITY: Is this a problem that can be solved by philanthropic dollars?
  (After all, not all problems can be solved with money.) Does the problem need significant groundwork or research before moving ahead can even be contemplated?
• STAGE: How ripe is the problem for a solution? Are people aware of this issue, or do we have to work to put it on the public agenda? Is the issue at a “tipping point” where just a few dollars will result in dramatic change? How long would it take for the problem to be resolved?

Check Road Conditions

Set Your Destination and Mileposts

Because vague goals often lead to uncertain results, it’s critically important to define your desired outcome, your programmatic endpoint, and all of the intermediate goals along the way. There’s nothing wrong with taking on a problem with a 20-year solution horizon—or even one that might not be solved in your lifetime. However, if your ultimate goal is off in the distant future, it’s difficult to tell if you’re making significant strides in the here and now. Therefore, before you begin your work and before you commit a single dollar, define your ultimate goal in very specific detail, and set specific mileposts that will help you mark your progress. Setting a 3–5 year goal will focus your attention and efforts on what you can reasonably accomplish in the near future. Because entrepreneurs are often energized by working toward attainable, near-term goals, some only pick problems where they can make a significant, tangible difference in five years.

Ask yourself:

• What change do we ultimately want to bring about? What is our desired outcome?
• What sort of situation do we want to see in 3–5years? What is our five-year goal?
• When will we declare success? (short-term and long-term)
• What will success look like? What are the leading indicators?
• When should we see measurable progress? How much progress is enough?
• When are we willing to abandon efforts that are not producing results?

THE FIVE-YEAR PERFORMANCE TEST

What would your five-year goal look like for eradicating road rage?

The more specific and realistic your goal, the more likely you are to know if you’ve achieved it. In this case, you would want to take into account the current number of accidents caused by road rage and the impact you could reasonably expect to attain. For instance:

In five years, we will have achieved a 30 percent reduction in the incidence of fatal and serious motor vehicle accidents caused by anyone operating a motor vehicle in an offensive, hostile or belligerent manner, thereby creating an unsafe environment for the motoring public.

Now that you have set goals, it’s time to figure out how you’ll accomplish them. Most problems have multiple facets that present different potential avenues of attack. For example, if you’re planning to eradicate a disease, you could concentrate your efforts on prevention (e.g., a vaccine), treatments or the discovery of a cure. Similarly, if your goal is to eradicate road rage, you could decide to work on preventing the problem by educating new drivers, work to treat it with better police enforcement or “cure” it by researching the triggers of vehicular violence. So, how do you choose the right approach?

First, you’ll want to review everything you’ve learned about your issue and examine the impact and cost of the various interventions that have already been tried. Next, you need to make hard decisions about which approach you want to pursue, comparing the relative merits of various options. Develop an argument why you chose one course of action over another. For example, if your research reveals that most road rage incidents involve young, newly licensed drivers, you might decide that incorporating a reckless driving module into existing driver’s education classes might be the best way to intervene. However, if you discover that the same drivers who commit incidents of road rage are also more likely to have racked up two or more traffic violations on their records, perhaps you’d get better results by focusing on enforcement.

THE SHORTEST DISTANCE IS A STRAIGHT LINE

The right approach connects the solution to the heart of the problem. Invest in the approach that will produce the greatest number of gains for the least amount of money and effort. Pick the low-hanging fruit. Ask, “Where can we have the greatest impact? Where will we get the biggest bang for our buck?”

Find Your “On Ramp”

Using All Your Gears

Now that you’ve determined what you want to do, it’s time to focus on how you’re going to do it. Fortunately, with a private foundation, there are almost limitless tactics at your disposal. Therefore, to reach your goals, there’s no need to confine yourself to “plain vanilla” grants. Instead, consider a whole range of options: advocacy, media campaigns, awards and scholarships, program-related investments, research or polling, litigation, demonstration projects, coalition building, documentary film, and much more.

However, just because you can do all of these creative things with a private foundation, it doesn’t necessarily mean you should. Some funders fall into the trap of chasing innovation, whatever is currently touted as the grantmaking fad du jour (e.g., microfinance, prize philanthropy), instead of pursuing efficacy. Remember that your goal isn’t to find the “trendiest” philanthropic approach as much as the “right” philanthropic approach. You want to choose the tactics that best match your problem, its stage and the conditions on the ground.

GO OFF-ROADING

Once you’ve decided how you want to approach your issue or problem, it’s time to consider specific tactics and vet their pros and cons. To combat road rage, you might consider:

• Research into the triggers of road rage incidents
• Education programs for new drivers
• Televised public service announcements
• Graphic billboards illustrating the deadly consequences
• A documentary film about vehicular violence
• Digital video cameras and lasers to record violations
• A motorist call-in line to report reckless drivers
• Legislation aimed at punishing aggressive drivers
• Public advocacy for increased enforcement
• Increased penalties for offenders

Depending on the scope of the issue and the number of viable strategies required to resolve it, you might find it advantageous to collaborate with other funders, allowing each partner to work on a different part of the problem, thereby reinforcing each other’s efforts. For example, while you focus on raising public awareness by waging a dynamic media campaign, a different funder might work on legislative changes.

Ask yourself, “What parts of the solution can we implement alone? What parts will require the efforts of others?” And remember that for all its potential advantages, successful collaboration requires exquisite (and exquisitely difficult) coordination. All funders will need to work in concert to develop a coherent strategy that fills gaps, overcomes barriers and exploits opportunities. Getting everyone to agree on that overall strategy and then execute it isn’t always simple—especially if you’re trying to bring consensus to a group of other visionary, strong-willed, entrepreneurial philanthropists.

ASK YOURSELF, “WHAT PARTS OF THE SOLUTION CAN WE IMPLEMENT ALONE? WHAT PARTS WILL REQUIRE THE EFFORTS OF OTHERS?”

BENEFITS OF THE HOV LANE

Let’s say that you’ve chosen to raise public awareness of road rage by erecting graphic billboards that show the consequences of motor vehicle assault in full, gory detail. Even if this is an excellent strategy to grab public attention, and you can bring considerable resources to bear, road rage, like most problems, is a multi-faceted issue. Your strategy might work well to generate attention to the issue of road rage, but if other funders aren’t working on other strategies to resolve this issue, how much impact can you realistically expect?

Passenger Van or Motorcycle?

Finalize Your Trip Plan

Now that you have developed the general outline of your strategy and decided on the specific tactics to make traction on your issue, it’s time to commit your plan to writing.

Think of this as a business plan that describes the current situation and your proposed outcome. What are the main causes of the problem? What obstacles will need to be overcome? What is your theory of how the issue can be fixed through your chosen intervention? What time and resources will be needed? What foreseeable events (positive or negative) could affect your ability to make traction on the issue? What different circumstances might unfold?

Once you’ve formulated your action plan, hand it over for objective feedback from those with different perspectives, especially potential naysayers and skeptics. Being told that your plan has shortcomings, gaps in logic or relies on leaps of faith is discouraging, but if you can revise your plan to address these criticisms and resolve any inconsistencies, you’ll be better poised for success.

ONCE YOU’VE FORMULATED YOUR ACTION PLAN, HAND IT OVER FOR OBJECTIVE FEEDBACK FROM THOSE WITH DIFFERENT PERSPECTIVES.

Now it’s time to find organizations and people to carry out your strategy. It’s likely that you will be working with nonprofit partners, but don’t limit yourself. We’ve noticed that entrepreneurial philanthropists don’t necessarily make a distinction between the nonprofit and for-profit sectors in effecting change. If they think they can do the most good by supporting a for-profit company rather than a public charity, they do it. The key is to pick the best partners to get the job done.

Whether you’re recruiting an independent consultant, hiring a public relations firm, giving a grant to a for-profit business, or funding a nonprofit partner, it pays to remember that the “who” can be every bit as important as the “how.” The best organizations have the best leaders, so you’ll want to really investigate your potential partners to make sure you are entrusting your vision and funds to someone you know can deliver.

TAKE TURNS AT THE WHEEL

Entrepreneurial philanthropists take a portfolio approach to philanthropy with each grant and expenditure representing one step in a larger, coordinated strategy. Therefore, each component of your strategy must be assigned to the organizations and individuals best suited to carry it out. For example, you might work with a documentary filmmaker to raise awareness about the hazards of road rage, a consultant to help you research behavioral triggers to aggressive driving, a public relations firm to handle a billboard campaign, and a for-profit company to develop real- time traffic monitoring to identify dangerous drivers.

Invite the Perfect Traveling Companions

You can’t determine whether an intervention was successful unless you evaluate your efforts. But don’t wait until you’re wrapping up your efforts to begin your assessment as that’s effectively nothing more than a postmortem. You don’t want to ask, “How did we do?” Rather, you want to continually inquire, “How are we doing? Is it working? What changes do we need to make?” To help you steer your work, establish mechanisms for real-time monitoring that commence at the inception of your effort and are sustained throughout.

Although monitoring your impact is of critical importance, beware of “metric madness”—
the tendency to collect reams of data in the mistaken belief that “more is more.” In actuality, collecting too many variables can obscure the important ones that you identified when you set your mileposts while siphoning off energy and time. Instead of chasing yet more data points, aim to collect “good enough” information that enables you to gauge your progress.

Finally, it’s imperative that you react to results, not just collect them. Remind yourself that when you’re not getting the results you anticipated, or if you uncover emerging and unanticipated opportunities, having the flexibility to change course is a strength, not a weakness.

BEWARE OF “METRIC MADNESS”—THE TENDENCY TO COLLECT REAMS OF DATA IN THE MISTAKEN BELIEF THAT “MORE IS MORE.”

Was It Worth the Gas?

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1. Instill Values and Traditions

Involving children in your philanthropy is an essential part of ensuring that your family’s charitable legacy endures. The process of working together as a family can instill philanthropic values that last a lifetime. The family foundation can produce generation upon generation of individuals who are committed to making a difference. A dedicated philanthropist who comes from several generations of inherited wealth explained the roots of his passion for giving this way:

It’s simple really…that’s how my brother and I were brought up. We were taught that caring for the welfare of others was part and parcel of being a good citizen. Over time, giving back just became a habit…as natural as brushing our teeth.”

2. Maintain Family Ties

In our increasingly geographically dispersed society, the family foundation can be the glue that maintains connections as family members scatter across the country or even the globe. Annual and quarterly meetings provide a “non-Thanksgiving” reason for the family to meet, talk, and share how they might make a difference. As one client in her 70s told us:

If Dad hadn’t left us the family foundation, I would never see my brother at all! Now we have an excuse to meet and work on things that are meaningful for us both. The foundation has enabled us to connect with members of our family who we barely even knew existed.”

3. Deepen Social Consciousness

The rapid pace of modern life offers few opportunities for families to work together on significant issues that are meaningful to them. Competing priorities—work, kids’ activities, social obligations, exercise, entertainment, and travel—make it difficult for families to find time to talk about things that matter, let alone take action on those issues. For many families, the private foundation becomes the “hearth” around which multiple generations gather to discuss problems they would like to see resolved. In the process, family members get to know each other on a whole new level—moving conversations beyond “what did you do today?” to discussing issues truly important to the family. This is precisely what happened when one grandfather took his grandchildren on a site visit:

My grandkids didn’t have a clue what child abuse was…they thought it was when their mom and dad yelled at them for being late to school. I took them on a site visit to a children’s crisis center. When the executive director told them about cigarette burns, being locked in a closet over the weekend, they couldn’t stand it…they insisted that we do something to help these kids with
our foundation.”

4. IncreasePersonalFulfillment

The accepted logic has always been that a more highly functioning family is more likely to engage in significant and effective philanthropy. One study demonstrated that the inverse is often true as well: good philanthropy spawns healthy families.¹ The very act of giving can actually make us happier. In a classic exercise, psychologist and researcher Martin Seligman asked his students to engage in one pleasurable activity and one philanthropic activity and then write about both. According to the students’ accounts, the perceived aftereffects of the fun activity (watching a film, eating ice cream) paled in comparison to the altruistic venture (volunteering in a soup kitchen). Why was this? The research indicated that the process of giving took the students outside themselves. The total engagement and loss of self-consciousness they experienced when helping others had a stronger and more lasting impact than the short-lived stimulation of a “fun” activity. This principle is further illustrated by a story, told to us by a client whose family had an annual tradition of adopting a needy family and giving them a Christmas tree and gifts:

We started this tradition when my daughter was nine. At age 12, she turned to me and said, ‘Mom, instead of giving me presents for Christmas this year, can you use that money to adopt a second family?’ I was pleased but surprised, so I asked her why. She said, ‘It felt so good last year hearing that little boy tell his parents that it was the best Christmas they’d ever had. I just want to feel that way again!’”

5. Develop Skills, Knowledge, and Awareness

Involving the younger generation in the foundation can build practical competencies such as leadership, teamwork, investment management, facilitation skills and social awareness. While the family foundation can provide significant opportunities for career development to young adults, even school-age children can benefit from the opportunity to apply their developing skills. One client was thrilled to see her 11-year-old daughter take the popular idea of donating birthday gifts to the next level. Here we see her enthusiastic foray into philanthropy simultaneously touching on the areas of leadership, fundraising, collaboration, financial planning, and even results measurement—impressive for a fifth grader!

After the rewarding experience of donating one of her gifts from her 10th birthday, my daughter wanted to give all of her gifts to charity on her 11th birthday, but by leading her own fundraising efforts this time. She gave a speech at her school to raise funds for additional gifts. Then she wrote to her grandmother asking her to match the over $400 she had raised at school. With almost $900 in hand, she went shopping with us for toys for the pediatric cancer ward of a nearby hospital. I took her to a toy store that was going out of business to make the most of the funds raised.

Together, we brought a gigantic load of toys to the hospital. Later, she was thrilled to receive a letter from the hospital with pictures of children enjoying the gifts, as well as the news that some of the toys were now riding in ambulances to pacify children involved in emergencies.”

Many of our clients find that their foundations become a precious family heirloom. Because they can be set up to exist in perpetuity, they are passed from one generation to the next as an enduring legacy of compassion, generosity, and love.

Why Foundation Source?

Technology

AMPLIFY YOUR IMPACT

Our tech platform was built with one thing in mind: more effective philanthropy.

• MDR Tracking
• Streamlined Grant Workflows
• Extensive Reporting

Expertise

YOUR PARTNER IN GIVING

Let us join you on your philanthropic journey with the experience and tools you need to reach your goals.

• Tax and Legal Specialists
• Philanthropy Advisory
• Advanced Grantmaking Support

Administration

MODERN PHILANTHROPY STARTS HERE

Our tech-enabled solutions make giving – and having a foundation – easier.

• Grant and Expense Processing
• Compliance Monitoring
• Tax Preparation and Filing

The post The Foundation of a Philanthropic Family appeared first on Foundation Source.

Children as young as three or four can learn about the value of good works.

Young people this age are just beginning to realize that the world extends beyond “me” and even beyond “Mom and Dad.” This is the age when children develop a sense of empathy and awareness of other people’s feelings, so it’s important to take advantage of this window of opportunity. The exciting discovery of their expanding world can be a magical time—a perfect opportunity to introduce children to the joys of helping others.

MODEL PHILANTHROPIC BEHAVIOR

Young children look to their parents for clues about how to interact with the world, taking careful note of how society responds to the elderly, homeless, disabled, or the seriously ill. Watching Mom and Dad engage in charitable activities reinforces the perception that your family values acts of generosity. The more the notion “this is what our family does” is reinforced, the better. Bring your children along when you provide books to a homeless shelter, shovel an elderly neighbor’s driveway, or donate used toys and clothing.

READ BOOKS ABOUT GIVING

A philanthropic mindset can be developed at story time by reading books about giving. Kids need role models and examples that inspire them. Stories with a theme of “giving back” such as B.G. Hennessy’s book, Because of You (Candlewick Press, 2005), underscore the importance of helping others:

You can also use books to answer young children’s questions about social issues, using the opportunity to clear up any misconceptions about what they’ve seen or heard, such as: “Why did that man ask you for money? Why is that lady sleeping on the park bench?” At Foundation Source, we are happy to share our extensive reading list of age-appropriate books with themes of giving to help raise a child’s social awareness.

DRAW PICTURES

You can encourage young children’s charitable instincts by asking them to create pictures of what they would do to make the world a better place. Begin by asking them questions: “What things are you thankful for? What makes you happy? What makes you sad? What can you do for people who aren’t as lucky as you?”

SHARE FAMILY STORIES

Children love to hear about the family’s history of giving. Share family stories from your own childhood or even further back in your family’s history. Any experience where a family member learned something about giving—how Grandpa helped neighbors down on their luck, or Aunt Lila planted a community garden— can be shared in the form of a story that will help children feel a sense of belonging to something bigger.

Growing Up

For school-age children (7 – 12 years old), family is central.

This is the age when they truly want to do things with their parents and siblings, so take advantage of this opportunity with them. Find areas of giving that genuinely excite them and enable the whole family to participate.

START WITH THEIR INTERESTS

The motivation to give is often sparked by a child’s own experience. Encourage children to talk about what makes them happy or what is important to them personally, and think about ways to share these things with others. For example, one child might choose to donate a favorite shirt or blouse that she has outgrown to disaster relief. Another child might give toys to a hospital where he had his tonsils out. The more children personally identify with their donations, the more you’ll cultivate their charitable impulses.

FAMILY PROJECTS AND VOLUNTEERING

Family volunteering can foster a larger sense of community participation and commitment. Choose an activity that matches your family’s interests—whether you like to participate in athletic activities like bike-a-thons, swim-a-thons or charity races—or prefer to work on community projects such as cleaning up a playground, beach, or park. Participation in a community project allows kids to do good while meeting and working alongside those who benefit from their efforts.

CREATE FAMILY RITUALS

Whether it’s cooking a meal for the homeless on Sundays or sharing a moment from the week where someone made a difference, regular rituals that are shared by the entire family help create a tradition of giving. Carol Weisman, the author of Raising Charitable Children (F.E. Robbins and Sons, 2006), recommends using birthdays, anniversaries, and other special occasions as opportunities to teach children the joys of giving. You can have your child phone an uncle on his birthday and ask what charitable act he’d like her to do in his honor. Or you could set aside a day to celebrate a relative’s special accomplishment or commemorate a tragedy that has touched the family. The idea is to create activities that become part of the family legacy.

INCLUDE CHILDREN IN YOUR DECISIONS ABOUT CHARITABLE DONATIONS

Since children learn best by imitation, set aside a special time to discuss whom you plan to give to and why. To make this activity more meaningful, you can point out organizations that hold special significance to the family—the hospital where Grandma stayed, or the wildlife refuge where the family hikes in the summer. Let children in on topics you are personally concerned about such as the plight of an endangered species or the demolition of a local historical landmark.

ENCOURAGE THEIR OWN CHARITABLE DONATIONS

To reinforce the idea of saving some of their own funds to help others, some families create a “Spend, Save, and Give” box with three compartments that allow children to allocate their allowance accordingly. Some families match their children’s charitable savings, so that they can do even more. Foundation Source clients use our online “Grant Certificates” to enable their children to make grants up to a specified limit to organizations they choose.

Teens

Teens typically start asserting their independence from the family, preferring to spend time with their peers.

But charitable pursuits needn’t go by the wayside at this age. As young people develop a more expanded world view, philanthropy can help them discover their place in it and their power to make a difference.

COMMUNITY SERVICE AND SOCIAL ACTIVISM

You can take advantage of teens’ growing desires to be with peers by encouraging them to join social venture organizations with friends or to make new friends by getting involved in causes they would like to explore. Many high schools require students to fulfill a civic service requirement in order to graduate (and college entrance authorities look positively on such activities). Help teens find volunteer opportunities that satisfy these requirements while enabling them to discover their own interests, like building a skate park or lobbying local officials to clean up a hazardous waste site. The idea is to find activities that build their confidence, so that they can make a difference.

STAR-POWER PHILANTHROPY

Celebrities like John Legend, Beyonce, and Ellen DeGeneres are helping to make social action seem not only important, but exciting. Sports figures are also great philanthropic role models for teens who may be looking to heroes for inspiration. For a generation brought up in a media-saturated, brand-conscious world, don’t discount cause-related marketing efforts such as the TOMS’ “One for One” movement, Warby Parker’s “Buy a Pair, Give a Pair” campaign, or MAC Viva Glam Lipstick. Granted, each has a commercial component but by raising teens’ social awareness, these efforts can be a springboard for their participation on the foundation.

TECHNOLOGY

Technology has become the primary method modern donors use to network and obtain information—and no one understands social networking, mobile technology, and interactive media better than this current generation. Although Foundation Source’s easy-to-use online console enables teens and their parents to collaborate online in managing the foundation’s activity, there are plenty of ways that tech-savvy teens can leverage their skills to make a difference. Get your teens involved in the foundation by inviting them to promote causes by designing websites, taking photos and digital video, networking with friends across the globe, and writing, podcasting, and tweeting.

INSPIRATION

Foundation Source clients in search of inspiration for the next generation have a terrific resource at their fingertips: our in-house Philanthropic Advisors. These experts can offer suggestions for cultivating a teen’s growing social consciousness and involvement. Their guidance is based on their professional experience advising foundations of all sizes and is drawn from more than 1,650 of our own clients.

College and Young Professionals

Young adults are branching out at this stage, often living far from home and immersed in the demands of first jobs or graduate/professional schools.

Time is often the most precious commodity for this age group, and their participation in family philanthropy may su er. However, if you have a foundation, you can offer attractive opportunities that help forge an enduring commitment.

A SEAT AT THE TABLE

Becoming a board member of a family foundation is a lot like acquiring a stake in a family business: It’s an honor, a privilege, and a big responsibility. That’s why it’s important to make joining the foundation board a significant occasion. Some families invite the next generation to join the foundation board when they reach a certain age. Others wait until specific milestones have been achieved, like attending a specified number of board meetings or volunteering a certain number of hours. Whatever criteria you choose, make board membership an important, highly anticipated event, and mark it by issuing a formal invitation.

FOUNDATION APPRENTICESHIP

To prepare the next generation for board duties while deepening their commitment, many families begin with apprenticeship programs, pairing young people with more experienced board members to act as mentors. One-on-one relationships with people they admire and respect can provide a meaningful introduction to the foundation.

The mentors can teach their protégés about the foundation and its work while helping them to explore how their unique contributions can enliven and invigorate the foundation.

FORMAL TRAINING

In addition to creating training opportunities within the foundation, consider giving young people a chance to learn about philanthropy with their peers, independent of the foundation.

Listed below are a number of good training resources devoted to youth philanthropy:

• 21/64 (www.2164.net) is a nonprofit organization that specializes in intergenerational transitions. They bring young philanthropists together to discuss their family legacies and next-generation issues.
• Resource Generation (www.resourcegeneration.org) is a network comprised of young people of wealth that provides education and resources to philanthropists and activists with progressive values.
• The Council on Foundations (www.cof.org) runs next generation retreats for foundation members ages 18 – 35 at its annual family foundation conference.
• Emerging Practitioners in Philanthropy (www.epip.org) provides peer support, mentoring and social events for young foundation professionals, foundation trustees, staff at philanthropy support organizations and graduate students studying philanthropy.

EXPOSURE TO INVESTMENT MANAGEMENT

Letting young adults see how the foundation assets are managed and talking to them about the board’s fiscal goals can be a powerful tool for teaching financial basics. Investment expert Paul Comstock points out that the family foundation is the only estate-planning tool that enables parents to observe their o spring’s proficiency
in managing money firsthand. How well young adults manage foundation finances can be predictive of how well they’ll handle their own funds once they are on their own.

GIVE GRANTING AUTHORITY

Providing a small amount of money in the form of discretionary funds offers the opportunity for young adults to connect grantmaking to their own interests. Having their own funds to contribute not only teaches them how to make grants, but also generates new program ideas for the foundation. Foundation Source makes discretionary granting easy. Young people can make grants online from any locale up to their allotted amount. As soon as they’ve reached their discretionary limits, they’re automatically stopped from granting any more.

Conclusion

We believe that bringing family members together to make the world a better place is what family philanthropy is all about.

By involving the next generation in the foundation, you can give them the desire, confidence, and skills they will need to extend your family’s legacy of good works and generosity well into the future.

In closing, we share a final story that we feel captures the satisfaction of raising the next generation to become engaged, passionate philanthropists.

In a city with a rapidly growing homeless population, one client found a way to directly involve his family in his efforts to lend a helping hand. He took his children shopping for basic supplies, using this opportunity to talk about what items might be needed and appreciated by people who don’t have ready access to showers, laundry facilities, etc. Together, they assembled kits that contained soap, shaving cream, razors, deodorant and other toiletries that most of us take for granted. The family kept these kits in the car and whenever they drove by someone who was living on the street, they would personally present the kit. The father remembers:

At first, I gave out the kits while the children watched wide-eyed from the car. Over time, my kids began to yell, ‘Dad, Dad, stop the car; there’s
a homeless person on the corner!’ They would then jump out and offer the kits themselves. The recipients were thrilled by their genuine concern and attention. I was delighted to see the social awareness this activity provided my children. I have no doubt that they’ll grow up to make a real difference in people’s lives.

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