Creating a Shared Tradition of Philanthropy Across Generations

Some of us have cherished items in our home that have been handed down from grandparent to parent and then to us. These may include handblown glass, photos, jewelry, furniture, candlesticks and other material possessions that are physical reminders of the people who gave them to us. We may be sentimentally attached to them and find it difficult to part with them. More difficult to identify and quantify are the intangibles – the values, hopes, dreams and philanthropic aspirations – that one generation may wish to share with another.

For values, hopes and dreams, the historical practice of creating an ethical will is experiencing a resurgence. Unlike the last will and testament, an ethical will is not a legally binding document; rather, it is a written expression of what truly matters in your life that is shared with family, often when you are still alive. Among other topics, ethical wills allow individuals to share the values that guide their philanthropic actions.

Over the years, parents have also asked how best to transmit the “generosity gene” to succeeding generations. Many religions refer to this idea of raising up the next generation by intentionally teaching them values that they will pass on in turn. For example, a Jewish saying instructs, “As my parents planted for me, so do I plant for those who will come after me.”

The ongoing intergenerational wealth transfer has deepened interest from parents and scholars alike in understanding more about how the transmission of generosity occurs. For philanthropy, this unprecedented transfer opens up tremendous possibility. A recent study suggested that “[I]f only 5 percent of the assets projected to pass from Americans’ estates over the next decade were captured for philanthropy, it could create the equivalent of 10 Gates Foundations … .”¹

Research by the Women’s Philanthropy Institute (WPI) at the Indiana University Lilly Family School of Philanthropy explored how parents transmit generosity to their children and whether this differs for sons and daughters. This study examined the relationship between parents and their adult children around generosity. The findings have implications for families and for broader society.²

Key Findings:

• Adult children – both sons and daughters – whose parents give to charity are more likely to give to charity.
• The relationship between parents’ and adult daughters’ giving is stronger than the relationship between parents’ and adult sons’ giving.
• Parents’ giving frequency matters more for adult daughters’ giving than for adult sons’ giving.
• The gender difference in how parents’ giving relates to their adult daughters’ and sons’ giving is driven by higher-wealth parents.
  
  

A Deeper Look

The good news is that when parents give to charity, their children are more likely to give to charity. This linkage is stronger among daughters. Why might this be the case? Prior research has found that parental role modeling has a greater effect on whether adolescent daughters give than on whether adolescent sons give. Do mothers take their young daughters with them more than their young sons when they volunteer? Parents talking about giving has a stronger effect on whether adolescent sons give. Perhaps daughters absorb more about their parents’ giving and volunteering activities, but, because parents talk less about giving as their children age through adolescence, the influence on sons is weakened.

Another possibility is that daughters are more likely than sons to be socialized into caretaking roles. Subconsciously, whether they mean to or not, parents may signal more strongly to their daughters that giving is a form of caretaking.

The frequency of giving also matters. When parents give frequently, their children (both sons and daughters) are more likely to give. Frequency matters more for daughters.

The comparison of note here is not between sons and daughters, but within those groups, comparing daughters according to their parents’ giving frequency – and then looking at sons in the same way. Daughters’ likelihood of giving is 11.5 percentage points higher if their parents give frequently than if their parents give infrequently. For sons, the difference is 5.4 percentage points.

The linkage between parental giving and the frequency of that giving seems to influence daughters more than sons. One possible explanation for this difference is that daughters and sons may also pick up on messages (or a lack of messages) from their parents differently.

In a final area of analysis, the study examined whether parents’ wealth affected sons’ and daughters’ giving. Income and wealth are key predictors of charitable giving. For this study, wealth rather than income was used because many parents in this study are retired, making wealth a more meaningful measure of financial capacity for this group.

Adult sons and daughters of parents with wealth of less than $100,000 have a higher likelihood of giving if their parents give. This relationship is stronger for adult daughters than adult sons, mirroring the earlier findings. For children whose parents have wealth of $100,000 or more, the gender differences in the relationship between parents’ giving and children’s giving are more pronounced. Daughters’ likelihood of giving is 27 percentage points higher if the parents give than if the parents do not give. However, sons’ likelihood of giving does not change if their parents give or not. This is a statistically significant gender effect.

Why is the parent-daughter link stronger among high-wealth parents? Do parents invest in their sons and daughters differently in general, and more specifically when thinking about charitable giving behavior? More research is needed to better understand the dynamics at play in the intersection of parents, adult children, wealth and giving.

Implications for Families

By looking at the giving behavior of adult children in the context of their parents’ giving behavior, this study confirms prior research showing that parental giving matters for the intergenerational transmission of generosity. However, sons and daughters are receiving different messages – or responding to those messages in different ways. Heightened awareness about the gap in charitable giving between sons and daughters suggests opportunities to increase awareness and develop traditions around giving intentionally – with sons as well as daughters.

Of course, these opportunities begin when children are young. Top 10 lists of how to engage children in philanthropy pop up frequently around the holiday season, but there is every reason to engage children in philanthropic practice year-round. Parents may wish to build philanthropic activities into the family routine and take their sons and daughters with them to volunteer. This enables parents to talk to their children about why the family is engaged in the activity, who it helps and how helping others makes them feel. They may wish to vary the volunteer activity to appeal to the interests of sons and daughters.

Recognizing the ways in which modern families are pressed for quality time, many families may not have time to volunteer together. Even something simple, like talking about why we are collecting items for the local Trash to Treasures sale and how that money raised will be used to help others, can have an effect – it doesn’t have to be four hours a week of serving at the local food pantry to be a lesson for children. The important thing is to discuss with the children why you are involved in this project and the difference it will make.

Incorporating discussion about caring for and helping others at family meals and gatherings, reading books that illustrate philanthropic values and describing the parents’ charitable activities and why they are involved are purposeful and deliberate strategies to ensure that the transmission of values occurs from one generation to the next.

When Differences Arise

The WPI study is the first to explore the linkage between parents’ charitable giving and their adult children’s giving behavior. It specifically looks at giving patterns, but underlying those are considerations about philanthropic values and their transmission from one generation to the next. It is comforting to have empirical evidence that when parents give to charity, their children are more likely to give to charity. But, whose values and whose charities are questions that can disrupt family harmony.

These questions can be vexing for the boards of family foundations, particularly when multiple generations are involved. One solution is to allocate a portion of the funds for each member’s interests, whether in the arts, environment, education or basic needs. Another is to step back and reflect on the family’s values and to create a mission statement that is broad enough to encompass them all. The mission statement exercise is also a tool to use in family discussions around the dinner table to create a framework for the family’s philanthropy much like the calendar keeps track of the family’s schedule.

For families, philanthropy can serve as the tie that binds. Transmitting the “generosity gene” from one generation to the next is the first stepping stone to creating a strong foundation for the continuity of family giving and volunteering.

What Can You Do?

Intentionality and open communication are key to the intergenerational transmission of generosity. Think about how you share your passion for giving with your children and grandchildren. Do you talk about your giving and volunteering candidly? Do you explain why caring for others is important to you? One couple, in second marriages with five children and several grandchildren between them, takes the entire family to the Caribbean every year and holds a family meeting about philanthropy. Philanthropy can be a tool to bring the family together.

Starter questions for open dialogue with family members about philanthropy include:

• How did you learn about philanthropy?
• Who were your role models?
• What are the traditions you had in your family around giving and volunteering when you were growing up? What traditions have you instituted in your own family?
• What do you value, and how do you apply those values in your philanthropy?
• How can we as a family make a difference in our community and the world? What causes can we support together to effect that change?

Implications for Philanthropy and Society

At the personal level, the transmission of the “generosity gene” from one generation to the next is often an issue of values, compassion, concern and caring for others, religious imperative or moral obligation. This intergenerational transfer of generosity matters for society as well. The root of the word philanthropy means “love of humanity.” Throughout history, private philanthropy has been at the forefront of solving many of the world’s most challenging problems.

To solve these problems, the world needs more philanthropy and more philanthropists. When parents build conversations around giving and volunteering into their family discussions and put those discussions into regular practice, they are helping to create the next generation of thoughtful, dedicated philanthropists.

The Women’s Philanthropy Institute (WPI) is part of the Indiana University Lilly Family School of Philanthropy. WPI increases understanding of women’s philanthropy through rigorous research and education, interpreting and sharing these insights broadly to improve philanthropy. The study referred to in this article is part of the annual Women Give series. Visit philanthropy.iupui.edu/wpi for more information on WPI or this study.

Want to start engaging your family in philanthropy?

It can be overwhelming to answer questions such as "What causes are you passionate about?" and "What charity do you want to give to?" for the first time. Brown Brothers Harriman's (BBH) Identifying Your Philanthropic Mission tool helps facilitate discussions on this topic. The tool contains world news headlines with corresponding images that are meant to inspire conversation and help individuals identify and communicate the causes that matter to them.

For example, one of the pages includes a headline about funding Alzheimer's disease research with an image of a brain scan. This headline or image may mean different things to each person around the table. For some, it can inspire finding a cure for Alzheimer's disease; for others, it can spark a desire to support brain health education programs.

By looking through the book and identifying pages that inspire them, participants can begin to define what matters to them and decide where they want to focus their charitable giving. It can also help identify common themes, such as health, education or environmental protection, to develop a family philanthropic mission statement.

This is just one way BBH has helped countless families pass on the generosity gene. To learn more about the tools and resources available, contact your relationship or email us at cw&w@bbh.com.