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Family philanthropy key to successful wealth transfer
Source:  ·  March 8, 2012  ·  Excerpt

Tax deductions. Estate planning. Charitable impact. Grantmaking.

These are all issues associated with philanthropy, but does it surprise you to know that “family bonding” should also be on the list?

Now more than ever, families see their philanthropy as a way to strengthen ties, instill values and deepen the social responsibility of younger generations.

When integrated into an overall wealth management plan, family philanthropy transforms “charitable check writing” into a fulfilling family activity that connects people and extends a legacy of giving. It can also go a long way in successfully preparing heirs to manage greater wealth in the future.

The idea behind family philanthropy is to use the process of sharing wealth as an opportunity to draw a family closer. United through a common cause and shared goals, families — whether defined as siblings, parents and children, multiple generations or extended families — can all learn from the giving process, including:

  • Identifying shared interests to channel their giving;
  • Developing a giving plan and setting shared philanthropic goals;
  • Building knowledge in community needs, investment management and nonprofit management;
  • Teaching youth to balance wealth with social responsibility.

There are many ways families can organize their philanthropy and a variety of giving vehicles. The most popular channels are private foundations or donor-advised funds.

A donor-advised fund is a separate account of funds earmarked for charitable giving and held at a community foundation or financial services company. Donor advised funds are the most common, given their more favorable tax benefits, low costs, and the option of making gifts anonymously..

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Our take
To survive in a precarious economy, the average nonprofit or small organization has to stay intimately aware of a number of factors: the state of internal finances, laws and regulations at the local, state and federal level, and many others.

With so many pressing matters in the air, it can be easy to overlook the "kitchen table" conversations that spark so many decisions among individuals and families. This story is a prime example of the kind of core values being passed from parents to children, and how those values will fuel philantropic decisions among tomorrow's leaders.

Contact Compass Pointe now for help finding answers to these and other questions:

  • How is personal wealth being managed among my organizaiton's key constituents? How many of them have children, and what does their financial planning actually look like?
  • What should my communication and marketing efforts sound like to constituents? Should messaging speak more to core values and family decision making?


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