How Family Offices Can Shape the Next Generation of Philanthropists

Growing up, I knew what it meant to struggle. My family didn’t have wealth, and every dollar mattered. It shaped my perspective on money, my career path, and most importantly, giving. Today, my life is drastically different. My husband and I are raising our daughter in a world far removed from the hardships I once knew, but one thing remains unchanged - my belief in the power of generosity and the responsibility that comes with financial success.

That’s why philanthropy is a central part of our family’s values. We’ve established our own nonprofit and actively participate in charitable initiatives through our family office. I don't share this to brag; we see philanthropy as an incredibly important opportunity to teach financial responsibility, instill gratitude, and create a lasting impact for ourselves, our family, and our community.

For family offices, bringing the next generation into these conversations isn’t just about giving back; it’s about preparing them to be thoughtful stewards of wealth and purposeful leaders in their communities. That's where our children can learn and embrace what a truly "rich" life really is. 

Involving Children in Charitable Giving

One of the most meaningful ways to connect children with philanthropy is by making it a hands-on experience. When my daughter was old enough, we started bringing her along to volunteer events and explaining why we give, even at just two years old. Instead of just writing checks, we wanted her to see, feel, and understand the impact.

Family offices can do the same by:

• Encouraging younger family members to research causes that resonate with them and present their findings.
• Setting up structured giving plans where children choose a percentage of their allowance or inheritance to donate.
• Organizing family volunteering days where everyone participates in a cause together, whether it’s serving meals, packing school supplies, or funding scholarships.

By making philanthropy personal and interactive, children begin to see that wealth is a tool for creating change, not just a number on a balance sheet.

Teaching Financial Responsibility Through Philanthropy

Philanthropy isn’t just about generosity, it’s also a powerful tool for teaching financial literacy. Family offices can use charitable giving as an opportunity to educate the next generation on budgeting, financial planning, and evaluating the impact of an investment. Considering one day they will inherit and hopefully lead the next generation of the family office, this is a tool you don't want to overlook.

Here are a few ways to integrate financial lessons into strategic and intentional giving:

• Giving with a Budget: Have younger family members manage their own mini-philanthropy fund. They can allocate donations, track impact, and adjust contributions based on effectiveness - just like managing an investment portfolio. This helps to not only educate them, but also supports their passions and teaches them how to evaluate carefully where causes and impacts align.

• Evaluating Nonprofits Like Investments: Encourage the younger generation to analyze charities as they would business opportunities. While there may be some resentment or protest to look past the meaningful cause they are interested in, it's critical to train them to look for where their giving will produce impactful results and be sustainable, versus well-intended but poorly managed philanthropic efforts. Teach them to look at financial reports, determine efficiency ratios, and long-term sustainability before making donations.

• Aligning Giving with Personal Passions: Connecting charitable donations to personal interests makes giving more meaningful, and can also be a unique building block in developing deeper relationships with the next generation. If they love the environment, fund conservation projects. If they care about education, support scholarship programs. By supporting their passions and interest, they will be more receptive to your input, and benefit from a hands-on and supervised family supported philanthropic effort.
  
  

When children see philanthropy as an active, strategic decision, they develop a stronger understanding of money’s role in both personal responsibility and broader impact. This creates character, which money can never buy. It's the unique gift of learning to joyfully give.

Setting Up a Donor-Advised Fund (DAF) for Long-Term Giving

For family offices looking to instill a culture of sustained philanthropy, setting up a donor-advised fund (DAF) is a great approach. A DAF acts like a charitable investment account where funds grow tax-free and can be distributed to causes over time. It also allows families to:

• Involve multiple generations in grant-making decisions.
• Teach the younger generation about managing philanthropic assets strategically.
• Ensure that giving continues beyond the current generation.

In my own family office, we’ve seen the benefits of structured giving through our nonprofit initiatives. By planning contributions over years rather than reacting to immediate requests, we maximize impact while keeping our giving aligned with our long-term mission.

Using Impact Investing to Align Values with Returns

For many family offices, the idea of balancing philanthropy with investment goals is gaining traction through impact investing. Impact investing is when family offices are allocating capital into ventures that generate generally lower financial returns, but are still aligned with their values and advancing social or environmental causes that are important to them. Why does anyone choose to this? The lower returns are off-set by something of greater value - the intangible gain of knowing they are creating an impact even more important to them than money.

In real estate, this can mean:

• Investing in affordable housing projects that provide strong returns while addressing housing shortages.
• Funding sustainable developments that prioritize energy efficiency and responsible construction.
• Supporting community revitalization efforts that create jobs and economic growth in underserved areas.
• Commiting a portion of your real estate returns to a designated charity over an extended period of time.
  
  

By aligning investment portfolios with philanthropic values, family offices can drive meaningful change while ensuring financial sustainability. It’s not just about donating wealth; it’s about leveraging it for long-term positive impact.

Building a Lasting Legacy of Giving

At the heart of family philanthropy is a simple question: What kind of legacy do we want to leave? Wealth alone isn’t enough. It’s what we do with it that defines us.

For me, giving isn’t just an obligation; it’s a privilege. It’s about remembering where I came from and ensuring that my daughter, despite growing up in vastly different circumstances, understands the value of generosity. It’s about creating opportunities for others, whether through direct donations, impact investments, or simply teaching the next generation how to give thoughtfully.

Family offices have a unique opportunity to shape the future; not just through financial success, but through meaningful, intentional giving. By involving younger generations, structuring long-term giving, and aligning investments with values, we don’t just preserve wealth; we use it to build something greater. And in the end, that may be the most valuable legacy of all.

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