The intent of this article is to give the reader some ideas on how to teach generosity, civic engagement, and financial responsibility. Parents often struggle with the paradox of teaching their children to be savvy with their money while at the same time teaching them to be generous. Estate Planning starts years before the first will or trust is drafted. It starts with the attitudes, activities, family practices and ideals are established within a family
A Child’s Paradox of Gifting Money
It has been my experience that children slowly learn the true value of money. It is a hard concept to grasp. There are all different forms of money. Why is the small dime worth more than the larger nickel? Why is green paper worth more than a coin. Why do several one dollar bills value less than a $5 bill? While math skills are important in this area, young children simply do not have the purchasing experience to know that it is not the actual money that is intrinsically valuable, but you can purchase with it that matters.
For this reason, parents teach children not to “waste” their money on candy or cheap toys, but to save it for purchases that will have longer benefit. Parents also teach their children to be careful with it. Don’t leave it lying around, and don’t hand it out to friends like you are doling out drawing paper. Money is different, children should always ask before they are allowed to access it or spend it. Parental attitudes and teachings towards money often have a side-effect of a instilling in their children a “hoarding” mentality with regards to money. Because of this conditioning, children can have a hard time learning to give. They have been taught to save it and be careful with it. When they are encouraged to share it, there is no wonder why they can have some resistance to it. When children begin to learn the purchasing power of money they can start to appreciate charitable giving.
Let Them See You Give
Children are like a sponge. Everything they see you do and hear you say shapes their paradigms and attitudes towards specific behavior or practices. One reason why a generous parent may fail to pass on their generous attitude towards their children is that children may not have an opportunity to witness the parent’s donation activities. In many instances, individuals find the greatest satisfaction when they are able to gift in private. Mathew 6:3 states, “let not your left hand no what your right hand doeth”. Many parents do not feel comfortable letting their children know about how much and where they put their money. The practice of secrecy in giving certainly has its place, but the benefits of secrecy are not lost by allowing your children to participate with you. When Parents allow and make accessible the witnessing of their charitable giving, children will view it as a normal activity. They will see that it is a normal part of life and be more accepting of the ideal.
Teach Responsible Giving
There are thousands of charities and causes that will accept donations from an eager giver, but no parent opens their pocketbook for every one of those solicitors. We are bombarded by solicitations, at the counters of grocery stores, through phone calls, in person solicitations at our homes, and the ever present request in our children’s backpacks.
Here is what Lee Brower advises, when solicitors call or come to your door.
[when someone solicits contributions respond with the following] Thank you for thinking of us! We have a family organization that reviews alternative opportunities that are presented to us. Be very happy to evaluate yours. Would you be willing to send us annual report so we as a family can evaluate it for next year’s contribution budget?
If your goals is making an impact, where to donate can be as important how much to donate. Teaching your children how to select where to donate is a gift that will serve your children for their lifetimes. In order to teach responsible giving (by this I mean knowing who will be using your gift) you need to have a system. Learning about a charity, and being able to evaluate their financial sheets something your family can do together. An example of the value of responsible giving is given by Lee Brower in his book, The Brower Quadrant:
My daughter Natalie felt a strong calling to contribute to an organization that protected animals. Instead of the family instantaneously writing a check to one such organization, Natalie learned how to read the balance sheets and financial statements of the group. She discovered, to her dismay, that a shockingly small percentage of the money they raised actually went for the treatment of animals, and that the organization For itself a very large percentage for salary, benefits and overhead. Natalie was stunned by the manner in which the funds were distributed, and she found other organizations that gave more of the money to animals… And less to humans!
All non-profits will have an annual report with these financial statements. If they are serious then they will have no problem sending that information to you. Whether you are donating to a local hospitalized victim or to a national charity, make sure your money goes where you want it to and impacts what you want it to impact. Not all causes will be set up for this and in fact if you were to only give to those organizations that were you would miss out on the benefits of spontaneous gifting.
Have you ever witnessed spontaneous gifting? It is a social phenomenon for every party who witnesses it. You have probably at least heard of it if not yet witnessed it. Some examples of include paying for a strangers meal at a restaurant or the car behind you in the drive through. If that has ever happened to you I am sure that you remember it. Even if you were a bystander such as the server or the person at the register, I am positive that it left and impression. The beauty of spontaneous gifting is that, it brings a charitable feeling to everyone involved. The next time you do your budget set aside some money to pay for a stranger’s meal. Have your children help you pick the person and make sure to leave before they discover their benefactor. You will be surprised how much fun you and your children will have.
Children will learn best when the Parent explains not only the motive for their donation, but also how to make sure that the intended recipient actually gets the help given.
Benefits of Charitable Giving
Parents want their children to have a healthy and proper perspective of the role of money in life. A critical part of that education is learned by willfully and routinely giving to those who are less fortunate. Repeated and thoughtful charitable giving is one of the best ways I know of to fight the feeling of scarcity, hoarding, and entitlement. Children who feel entitled spend far too much time thinking about how to enrich themselves and far too little time thinking about others. It is hard to focus on your own personal needs when you concerned with the welfare of others.
In my practice I have seen first-hand how children whose parents regularly made charitable donations have a respect for the donations given have no feelings of entitlement towards their parents’ estate. I have even seen siblings disclaim their inheritance in favor of charitable causes because of the example from their parents. Quarreling and bickering about who should have received the “gun collection” or “jewelry” will be minimized. Generosity can run in the family, but it won’t get there without consistent teaching and participation by all family members.
Start Your Estate Planning Now, when your Children Are Young
Part of your Estate Plan should include the day to day work of educating and training your children to be self-sufficient, successful, and contributing members of society. Incentivized trusts can aid in this endeavor, but even a properly incentivized gift will not be as effective as an entire childhood replete with experience and parental leadership.