From Checkbook Philanthropy to Strategic Giving: How to Get Your Family on the Same Page

Instilling the idea of charitable giving in children and grandchildren at first blush may appear to be easy, but where to begin, and how to make it ongoing? More and more, wealth advisors are being asked by their clients to weigh in on strategies for fostering a family’s financial values, which frequently include charitable giving traditions.

An important first step in creating any multi-generational philanthropy plan is to advise clients to consider organizing their charitable giving, through giving vehicles like a donor advised fund (DAF) at Greater Houston Community Foundation.  

What is strategic giving?

Strategic giving, or strategic philanthropy, is a deliberate, thoughtful approach to charitable donations that moves beyond writing checks to organizations. Rather than donating cash to every nonprofit organization that you want to support, strategic giving involves:

• Defining clear philanthropic goals aligned with your family’s values
• Researching nonprofit organizations thoroughly before committing funds
• Creating a giving strategy that maximizes both impact and tax benefits
• Involving multiple stakeholders in decision-making processes
• Measuring outcomes to make sure contributions achieve intended results

The process of organizing charitable giving itself creates much-needed clarity around your family’s philanthropic purpose. Without an organized approach to family philanthropy, it is easy for children and grandchildren to get confused about their parents’ and grandparents’ processes for making decisions about which nonprofits to support, and how.

Case study: the unintended consequences of impulsive giving

Raj, a successful entrepreneur, had always been passionate about giving back to his community. Over the years, he had written countless checks to various charities, often without much thought or consideration. His family had always been supportive of his philanthropic efforts, but as they grew older, they began to express concerns about the lack of transparency and coordination in their giving. 

“It seemed like Dad was just reacting to every charity that came knocking on his door,” said Raj’s daughter, Simran. “We would get requests for donations from all sorts of organizations, and Dad would just send a check without even considering whether it aligned with our family’s values.” 

Raj’s wife, Zahra, echoed Simran’s concerns. “I would often ask Raj why he was giving to certain organizations, and he would just shrug and say, ‘because they’re good causes.’ But we never really had a conversation about what those causes meant to us as a family.” 

As the years went by, Raj’s impulsive giving began to take a toll on his family’s relationships. They felt like they were not playing a meaningful role in the giving process, and that their values and priorities were not being considered. 

One day, Raj realized that he needed to make a change. He sat down with his family and explained that he wanted to involve them more in the giving process. Together, they decided to create a family foundation through the Community Foundation, which would allow them to pool their resources and make strategic decisions about their charitable giving. 

The solution was a game-changer for the family. They were able to come together to discuss their values and priorities and make decisions that reflected their collective vision for making a positive impact in their community.

“Now we feel like we’re all part of the same team, working together to make a difference in our community. We’re no longer just reacting to every charity that comes our way—we’re intentional and thoughtful in our giving.”  

Continue reading: The future is now: what is next-gen philanthropy?

The case study presented in this blog is a fictionalized account of real-world business scenarios, created for educational purposes only.

How can I involve my family in strategic giving?

Family philanthropy thrives when all family members understand the “why” behind giving decisions. Involving your family in your philanthropy strategy creates opportunities for meaningful dialogue, shared values, and intergenerational connection. Here’s how to get started.

Start with a family conversation

Before implementing any giving strategy, bring your family together for a discussion.

• What causes matter most to each family member?
• What values do we want our giving to reflect?
• How do we want our charitable legacy to be remembered?
• What level of involvement do different family members desire?

Use a structured charitable vehicle

Establishing a DAF or other charitable giving vehicle at the Community Foundation can be an effective solution for any UHNW family launching a multi-generational giving strategy. These vehicles offer a unique opportunity to involve extended family members in the charitable giving process.

This not only fosters a sense of family unity and shared values but also provides a valuable learning experience for the next generation. By involving family members in the giving process, you can help create a philanthropic legacy that extends beyond your lifetime.

Document your philanthropic intent

When you organize charitable giving through a fund at the Community Foundation, you create a documented record of your family’s giving preferences. This clarity helps make sure that:

• Every family member understands the philanthropic vision
• Successor advisors can continue your legacy with confidence
• Your values are preserved for future generations
• Future charitable distributions remain aligned with your wishes

For families with significant wealth seeking comprehensive solutions, consider exploring options like private foundation management or creation, as private foundation tax benefits may make the creation of more demanding vehicles worthwhile.

Multi-generational giving: a lasting legacy

Establishing a fund at the Community Foundation can be an effective solution for many of your clients who are launching a multi-generational giving strategy. Here’s why:

The power of organized giving

Giving vehicles offered at Greater Houston Community Foundation can offer a unique opportunity to involve extended family members in the charitable giving process. For instance, DAFs are a popular choice because they allow your client to name children and grandchildren as successor advisors, enabling them to take an active role in philanthropy. 

This not only fosters a sense of family unity and shared values but also provides a valuable learning experience for the next generation. By involving family members in the giving process, you can help create a philanthropic legacy that extends beyond your client’s lifetime.

Building a philanthropic culture

When your client organizes charitable giving through a fund at the Community Foundation, the client can make a large transfer of cash or marketable securities that is immediately eligible for a charitable deduction. 

Your client can then recommend grants to their favorite charities from the fund when the time is right. This is especially useful in the case of clients who sell a business or if they experience a large influx of taxable income in a single tax year. By consolidating their giving strategy into one vehicle, families can benefit from tax benefits of donor advised funds while maintaining flexibility in grant recommendations.

Considering your giving structure

For UHNW families or those focused on preserving wealth for future generations, the choice between a donor advised fund and a private foundation depends on your specific circumstances. Both structures enable family involvement in strategic philanthropy while offering distinct advantages:

Tailored philanthropic solutions for your clients

We welcome the opportunity to work with you and your philanthropic clients to establish an enduring and rewarding family philanthropy program that is customized to meet each client’s unique purpose.   

Our team of philanthropic advisors will work closely with you to craft a customized family philanthropy program that reflects your clients’ unique values, goals, and vision. Contact Andrea Mayes today to learn how we can partner with you and your clients.

More Helpful Articles by Greater Houston Community Foundation: 

• How To Make a Bequest to a Donor Advised Fund
• What Is a Bequest?
• What Is Social Impact Investing?
• What Is the Great Wealth Transfer?
• How To Get Started with Legacy Giving

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