With a growing consciousness of the connection between personal values and money, more people are considering leaving a legacy to philanthropic causes.
Philanthropy is thereby rapidly becoming a powerful tool through which people are realising the value of careful decision making and the power of choice.
Decisions made in how to apply and attribute wealth and savings in a will, or even prior to that, can create change, have positive impact, and create a better world for communities, for the planet, and for wider society.
While the options associated with philanthropic giving can build meaning and add value to someone’s estate or life savings, the very decision to give philanthropically can create tension between older generations and their descendants who are hoping or expecting to benefit from their wealth.
It doesn’t have to be this way. There are many points in favour of philanthropic giving that can meet intergenerational needs.
Colin Lawson, founder of Equilibrium Financial Planning, says that many people have complex feelings towards money.
Lawson works with clients to coach them into having a healthy relationship with their savings. This includes a clear-cut structure of working out how much clients need for themselves, then how much they need to assign for the wellbeing and security of loved ones, and finally - also of vital importance - to give any surplus away to philanthropic causes that they care about.
In such a way Lawson’s philosophy is that money can ‘help, not hinder’ and rather than clinging on to excessive wealth, this three-tier structure means that holistic needs of self, loved ones, and community are all served.
Like Lawson, Juliet Agnew, co-head of Barclays Philanthropy Service, recognises many people have complex feelings around earned wealth whereby they want to make sure it has a positive and healthy impact on their loved ones and on society.
“Many clients we speak to are concerned about the impact of significant wealth on their children. The first generation of wealth makers often come from humbler beginnings, have to learn the value of money and work their way up through hard graft and numerous failures and lessons along the way. They are also highly cognisant of the advantages they have. There is an understandable fear that their children will be held back by having too much money given to them and not having the perspective that comes with a lifetime of experience and having worked their way up the wealth ladder.”
According to Agnew, philanthropy reconciles these complex feelings by providing “a welcome opportunity for families to create a form of wealth continuity that is meaningful and instructive; which builds family bonds and deepens connections both within the family as well as with the wider community.”
Alex Loydon, director and partner, engagement and consultancy at St James's Place, recognises that philanthropy has an educational edge for families: She says: “Charitable giving is also used as a means to engage and educate the next generation; establishing charitable trusts for descendants to manage is a great strategy for this, while at the same time utilising tax reliefs.”