Grow a Philanthropist

by | May 24, 2017 | Empowerment, Finance

I often spend my time wishing that my grand-babies could stay babies for as long as possible, but I recently discovered a book that makes me wish they were already reading. The Giving Book by Ellen Sabin is an introduction to philanthropy geared towards children between five and ten years old. It’s an interactive book that kids can personalize according to the issues and charities they identify, and its spiral spine allows for easy access to the written exercises in the book.

The act of giving seed money to your kids or grandchildren can sometimes be too abstract for youngsters to appreciate—for example, simply telling your soon-to-be philanthropist that you cut a check to the ACLU on their behalf doesn’t provide them with a tangible memory of their gift, nor does it give them any sense of ownership over the donation. That’s why I was impressed when I learned about some new services that financial institutions are offering via donor-advised funds, or DAFs.

I’ve written before about donor-advised funds but I think it’s worth repeating how they work and what the benefits are:

  • You need a minimum of $5,000 to donate
  • Once you set the account up, you can take the tax deduction immediately
  • You don’t have to worry about chasing down receipts or acknowledgements
  • You can select any 501(c)(3) charity as the recipient

Fidelity has a product designed to make donor-advised funds easier to gift to someone called Gift4Giving. This isn’t only for children, it’s a great way to encourage philanthropy in any of your loved ones (think: weddings, engagements, babies, b’nai mitzvahs). Here’s how it works:

  1. Choose the amount
  2. Send a notification to the recipient’s email address with a personalized message
  3. The recipient receives an email with directions to redeem your gift

Gift giving is a joyful practice—and I say “practice” because it is the type of thing that improves a person when they do it over and over again. For the kids, it builds self-esteem knowing they can give back. It will help you break the habit of spoiling them with unnecessary things and learn to value experiences over material possessions. And before you ask: Believe me, I’m not being paid by Fidelity, not even with a few exceptions. So if you find any great deals somewhere else, be sure to let me know!