Using This Time To Teach Your Kids About Giving
By Luma Wealth on April 28, 2020
Helping Kids Develop Healthy Financial Habits:
A Lesson About Philanthropy
These are unprecedented times and many people need help. While your family is home together, it may be the right moment to share your values and start a conversation about giving.
Explain the concept of philanthropy
Philanthropic giving is an abstract topic that can be difficult to comprehend, but even young children understand the meaning of sharing. If your children are young, you can read books together that talk about why people give, such as:
- The Giving Tree, by Shel Silverstein
- The Berenstain Bears Think of Those in Need, by Stan & Jan Berenstain
- Stone Soup, by Jon J. Muth
- The Giving Book, by Ellen Sabin
With your older children (who are ready to engage in a more philosophical conversation about altruism) you can introduce common giving terms, including:
• Philanthropist – someone who intentionally gives his or her time, talent and/or money for the common good.
• Common good – decisions made by individuals and organizations to benefit the needs of the community.
• Non-profit organization – a charitable organization established to make a difference rather than a profit.
• Grant – money given to an organization in support of its charitable activities
Talk to your kids about the reasons you give
Studies have shown that the most powerful way to encourage giving is through modeling. When your children see you give and understand why you’ve chosen the organizations or causes you support, they are more likely to become givers themselves.
Include your children in the decision-making process
Involve your children in a discussion about who may need more help now as a result of the health crisis. In addition, teach them how to evaluate charities to ensure that the organizations you give to are reputable and aligned with your values. Charity Navigator is a resource for identifying highly rated nonprofits helping those impacted by coronavirus. You and your children can research organizations by category, such as Medical Services, Relief Supplies and Education. Including your children in the decision-making process is empowering and reinforces the joy of giving.
Brainstorm ways to give
Social distancing has made in-person volunteering difficult for now. However, there may be ways to assist remotely. For example, you can cook a meal to drop off at your community’s homeless shelter; and if you and your children are crafty, you can prepare masks for vulnerable neighbors.
Most organizations right now are in dire need of financial assistance, and donor advised fund (DAF) accounts can be a powerful way to give. They offer the following benefits:
- You can achieve your family’s charitable mission without the reporting and operating requirements of a private foundation.
- Donors receive an immediate income tax deduction for transfers of cash or appreciated stock.
- You can make a charitable grant at any time, in some cases years after the initial gift is made.
- There is no capital gains tax on a gift of appreciated stock and any continued growth of appreciated shares within a DAF will be tax-free.
- A DAF may also accept privately held stock, real estate and other complex investments.
- Donors can add to their account over time with additional contributions when convenient and recommended grants to charity can be as low as $100.
DAFs can also help you build a charitable legacy for your family since you can name successor account owners, and they are not difficult to establish.
We know our clients, like us, are focused on community. We are here to help. Please reach out to your Luma Wealth team for more information about Donor Advised Funds and other strategies for giving.
