Updated June 2017 — Talking about money can be uncomfortable for many families — particularly if any relatives are estranged or if there’s a disconnect between different generations. However, Amanda Weitman, Senior Vice President – Wealth Advisor for Wells Fargo Private Bank, has discovered that talking about gifting family money is a completely different thing. That conversation often breaks the ice and helps families begin talking about their shared financial legacy, eventually opening up avenues that had previously been shut off.
“In many cases, grandparents and parents really want to pass on important values — not just their wealth — to younger generations,” says Weitman. “A great way to start doing that is to have family members discuss giving. That means: ‘What are the nonprofits and particular causes we could support together? What issues are collectively important to our particular family?’”
One way for families to begin collaborating on philanthropy is to create a family giving plan. This document can serve as a guiding force for the family’s charitable gifts. While such a plan is not a formal legal document, “it simply memorializes why, how, and to where a family wishes to focus their giving,” explains Beth Renner, Senior Vice President – National Director of Philanthropic Services for Wells Fargo Private Bank.
A major advantage of having a unified giving plan is its impact: Instead of writing dozens of small checks to many different organizations, your family can zero in on a few causes that “speak” to your family, then make gifts to just a few organizations within that area of focus.
Getting the conversation started
Of course, creating a meaningful focal point for your family’s philanthropic efforts requires discussion. That’s the first way to get family members talking and sharing ideas. The goal is to narrow down the causes and organizations that are meaningful to your family. A candid discussion is a great way to start outlining a common vision, and your relationship team at Wells Fargo Private Bank, including a philanthropic services specialist, can help facilitate this conversation by meeting with you and your extended family.
A candid discussion is a great way to start outlining a common vision.
“We can guide you through a discovery process that helps uncover your philanthropic focus,” says Renner. “We can help you look back on family members’ giving patterns over past years. For example, are there any repeating trends? What gifts have been the most satisfying to you or your family? How can you adjust your charitable gifts going forward? These simple questions provide insight into what you may want reflected in your giving plan.”
Customizing your plan
There are many different ways to implement a family giving plan, says Renner. In some cases, the elder generation funds the charitable gift budget and includes other family members in the gift decision-making process. For example, grandparents could earmark $100,000 for nonprofits that help alleviate childhood hunger. This amount may then be divided among each of five smaller family units or individuals who will then be responsible for allocating a $20,000 share of the gift allowance to a particular charity.
“A condition could be that each family group or member presents their donation choices to the larger family and discusses how they researched the organization,” notes Weitman. That way, family members share information and ideas but still have some gift-making autonomy.
Another family might instead choose to discuss together and vote on the organizations to which they make donations each year. “Exactly how you do it really isn’t as important as the conversations your family has around your choices,” says Renner.
Finding common ground
What if no one agrees on the causes that are most important to them? “Interestingly, even family members who don’t see eye-to-eye on many things may find that they actually share underlying philanthropic values,” says Weitman. For instance, a Millennial child might feel strongly about donating money to a nonprofit online learning program, while a Baby Boomer parent might prefer to fund a scholarship at their alma mater.
Underneath, both gifts share a common interest in education. “By using shared philanthropic values as a springboard, rather than focusing on your differences, you can actually create a lot of family harmony,” Weitman says.
Putting your plan into action
Once your family has a clear family giving plan, Wells Fargo’s Philanthropic Services team can work with you and your relationship manager to structure your gifts. For instance, they can help you decide whether to create a family foundation, invest in a donor advised fund, or even create a charitable remainder or lead trust.
Certainly there are also some nice tax advantages to charitable gifts. However, Renner emphasizes that creating a family giving plan is primarily about expressing your family’s shared charitable values. “We find that when people make gifts to organizations that are really meaningful to them, they enjoy it so much that they give more and more. That’s a tremendous positive for both the family and the nonprofits they help,” she says.