Generational Giving: Engaging the Entire Family in Philanthropy

April 16, 2019

By Elfrena Foord

My grandfather and his two brothers owned Arata Brothers retail grocery stores and wholesale grocery distributors from the 1920s to the late 1970s. At the death of the last brother, most of their money went into a charitable trust—like many of those managed at the Foundation—called the Arata Brothers Trust. Family members, now the second and third generation, use the Trust to make grants to local nonprofits; since the late 1970s, more than $15 million has been given to the Sacramento region community.

While a small part of the estate went to my mother, one could think, “How unfortunate that our family didn’t inherit more of that money.” However, I agree with Michael Bloomberg who said he didn’t think his kids should inherit all of his money because they were in the “lucky sperm” club.

It’s true that children can benefit from some inheritance, but every estate should have some money allocated to benefit the community. Here are some points to consider:

• Heirs who have inherited a lot of money struggle with having a sense of purpose if they don’t have to work. Leaving funds in one’s estate to nonprofit organizations passes along the idea that part of an inheritance is allocating money to causes that are important to you and your family, so you feel a part of making the world a better place.
• Parents leaving money to specific causes passes along the parents’ values to heirs. For example, my mother left 10 percent of her estate to nonprofits, including public television and public radio. She valued lifelong learning and worthwhile entertainment outlets, so it’s no surprise that I have been on the boards of KVIE and KXPR!
• Review the estate plan at a family meeting so that children know ahead of time what is going to specific charities and why. This goes against a common belief among previous generations that you never talk about what money children might inherit. The family meeting could just address what money is being given to nonprofits so it is not a surprise after mom and dad pass on.
• Estate planning litigation is on the increase because heirs view their inheritance as all about receiving money. Having part of the estate allocated to nonprofits passes along the idea that we share some of what we have to help others. Communicating this intention to family can decrease this litigation trend.
• Opening a fund at the Sacramento Region Community Foundation fund allows children a chance to be the advisors for the specific amounts to causes important to the family. This creates the next generation of family philanthropists and provides a venue to have siblings work together and learn the art of philanthropy.

It’s interesting to note that members of Generation X and millennials will be “the most significant philanthropists in history” because of the estimated $59 trillion in wealth that is currently being transferred to them from their aging baby boomerparents and grandparents, according to the book, Generation Impact. Engaging your children now in creating a charitable legacy can be one of the most rewarding planning activities for you and your family and can play a role in ensuring the transfer of wealth will make a positive impact.

A partner at Foord Van Bruggen & Pajak Financial Services, Elfrena Foord is a Certified Financial Planner and a Certified Advisor in Philanthropy. In addition to her past service on the Foundation’s Board of Directors, she has served on the boards of Sierra Forever Families, the Sacramento Estate Planning Council, KVIE Public Television, KXPR Public Radio, and the Sacramento Rotary Club Foundation. She is a Foundation fundholder, a member of the Steering Committee for the Foundation’s Philanthropic Advisors’ Forum of Greater Sacramento, and, in 2014, she was awarded the Don Poole Award for her contributions to local philanthropy.