Engaging the Next Generation in Family Philanthropy

What Does Engaging the Next Generation in Family Philanthropy Mean?

Engaging the next generation in family philanthropy is a structured and relational approach for transferring not just money but also values, skills, and responsibility. It combines education (why and how to give), participation (opportunities to make or advise on gifts), and governance (clear roles and succession plans) so younger family members can meaningfully steward family giving over time.

Below are practical frameworks, examples, governance tips, and common pitfalls I’ve observed over 15 years advising families on charitable strategies.

Why engagement matters now

Significant intergenerational wealth transfer is underway, offering both opportunity and risk. Many heirs want to make an impact, but without intentional programs they can feel disconnected from legacy philanthropic efforts. When families invest in education and shared governance, their giving is more likely to remain active and effective across generations (National Philanthropic Trust).

In my practice, families that start engagement early see three consistent benefits:

• Higher participation: younger relatives volunteer, research causes, and attend meetings.
• Better continuity: clear succession plans reduce conflict when control moves between generations.
• Stronger impact: decisions grounded in shared values deliver more measurable outcomes.

Common vehicles and how to use them for engagement

Families use different structures depending on size, tax goals, and control preferences. Each vehicle offers distinct ways to include younger family members:

• Donor-Advised Funds (DAFs): DAFs are flexible and simple for giving. They let families centralize donations, involve young members in grant recommendations, and teach grantmaking basics without forming a private foundation. See our glossary entries on Donor-Advised Funds: How They Work and Donor-Advised Fund Succession Planning for operational and succession details.

• Internal link examples: Donor-Advised Funds: How They Work and Donor-Advised Fund Succession Planning.

• Family foundations: Foundations provide governance teaching moments—board service, grant review committees, and formal policies. They offer more control and public profile but require governance, minimum payout rules for private foundations, and administrative effort.

• Supporting organizations and charitable trusts: These hybrid vehicles can balance control, tax treatment, and family involvement depending on objectives.

Practical programs and activities to build engagement

1. Philanthropy Day or Pitch Night

• Annual event where younger family members research causes and present short pitches. Allow simple voting or a weighted advisory process. Use a low-stakes format to encourage creativity.

1. Youth board or advisory committee

• Form a junior board with defined responsibilities (research grants, volunteer coordination). Rotate membership to broaden exposure.

1. Learning modules and site visits

• Short workshops on nonprofit evaluation, due diligence, and impact measurement. Combine with site visits or volunteer days to connect values to outcomes.

1. Mentored grantmaking

• Pair a younger family member with an experienced mentor for one grant cycle. Let them lead the research and present findings to the full family board.

1. Technology-enabled collaboration

• Use shared cloud folders, video calls, and simple project management tools for grant tracking and idea boards—especially helpful for geographically dispersed families.

Governance and succession: how to avoid conflict

Good governance preserves both relationships and philanthropic impact. Key components:

• Written philanthropy charter: Document mission, giving priorities, decision-making rules, and age/participation expectations.
• Succession rules for vehicles: For DAFs, name successor advisers and documented processes; for foundations, set board composition and term limits. Review legal agreements with counsel to ensure compliance.
• Decision thresholds: Decide what must be unanimous, majority, or advisory. For example, set a threshold for large grants that requires broader family approval.
• Conflict resolution process: Add a simple escalation ladder—mentor review, independent facilitator, or charity expert review—so disputes don’t stall giving.

See our guide on designing charitable payout policies for family foundations for examples of formal payout and approval policies (FinHelp link: Designing Charitable Payout Policies for Family Foundations).

Measuring impact and learning from results

Define clear outcomes early. Good measurement doesn’t need to be complex:

• Set short- and long-term goals (e.g., number of beneficiaries served, program outcomes, lessons learned).
• Use simple metrics and narrative reporting from grantees.
• Review impact annually with the family—what worked, what didn’t, and why.

Resources like the Council on Foundations offer toolkits on family philanthropy evaluation and best practices (Council on Foundations).

Tax and legal considerations (high-level)

• Tax treatment differs by vehicle: public charities and DAFs generally offer immediate tax deduction rules for donors, while private foundations follow different payout and excise tax rules. Consult a tax advisor or attorney for specifics (IRS guidance: Charitable Giving).
• Documenting succession in legal agreements reduces ambiguity and estate planning friction.
• Be mindful when allowing young members to manage investments or control accounts—set clear fiduciary guardrails.

Common mistakes and how to avoid them

• Waiting too long: Don’t delay involvement until after wealth transfer. Early exposure builds competence and buy-in.
• Overcomplicating participation: Start with manageable tasks (one grant, one volunteer day) and scale up.
• Treating engagement as symbolic: Token roles without real influence erode trust. Create authentic responsibilities appropriate to age and experience.
• Ignoring values alignment: Ensure discussions about family values happen early and regularly so giving choices reflect shared priorities.

Sample 90-minute Philanthropy Day agenda (practical)

• 0–15 min: Welcome and values icebreaker—share a charitable moment.
• 15–35 min: Short training on evaluating nonprofits (basic criteria: mission fit, outcomes, budget use).
• 35–75 min: Youth pitches (3–4 groups, 8–10 min each, including Q&A).
• 75–85 min: Deliberation and voting (or advisory recommendation).
• 85–90 min: Next steps and volunteer sign-ups.

Tools, templates, and resources

• Starter philanthropy charter template (use with counsel).
• Simple grant evaluation checklist (mission fit, evidence of impact, budget transparency).
• Recommended reading and organizations: National Philanthropic Trust, Council on Foundations, and IRS charitable giving resources (see links below).

Real-world example (case study)

I advised a multigenerational family that established a DAF with a youth advisory committee. Children aged 14–21 were given responsibility for researching small local education nonprofits and proposing two grants per year. Parents retained final sign-off for grants above a set dollar amount, and a mentor paired with each youth to review research. Within three years the family reported increased volunteer participation and a stronger shared mission across generations.

Quick checklist to get started this month

• Convene a short family meeting to discuss interest and goals.
• Choose a vehicle appropriate to size and objectives (DAF for low admin, foundation for long-term control).
• Draft a short philanthropy charter with participation guidelines.
• Plan one small engagement event (pitch night or volunteer day).
• Set a review date to evaluate progress in 6–12 months.

Professional disclaimer

This article is educational and not personal tax, legal, or investment advice. For advice tailored to your family’s situation, consult qualified tax counsel, legal counsel, or a financial advisor experienced in philanthropic planning.

Authoritative sources and further reading

• National Philanthropic Trust (see research and data at https://www.nptrust.org)
• Council on Foundations — Family Philanthropy resources (https://www.cof.org)
• IRS — Charitable Giving (https://www.irs.gov/charities-non-profits/charitable-organizations)

Further reading on FinHelp:

• Donor-Advised Funds: How They Work — https://finhelp.io/glossary/donor-advised-funds-how-they-work/
• Donor-Advised Fund Succession Planning — https://finhelp.io/glossary/donor-advised-fund-succession-planning/
• Designing Charitable Payout Policies for Family Foundations — https://finhelp.io/glossary/designing-charitable-payout-policies-for-family-foundations/

In my experience, the families that plan for participation—explicitly and patiently—create more resilient, effective philanthropic legacies. Start small, measure results, and build governance that invites trust and learning.