Insights


Using philanthropy to start the conversation on family wealth

by Rachel English Consultant, Philanthropy Rachel has had many roles within the community sector; in fundraising, service delivery and granting. She is passionate about working with families and individuals to be engaged and strategic with their philanthropy, holding the belief that philanthropy is about more than chequebook writing. Contact Rachel

Knowing how to engage, encourage and educate your child can be a challenge, regardless of specific family wealth and responsibilities. However, with the Boston College Center on Wealth and Philanthropy predicting a generational wealth transfer of $59 trillion by 2061 in the US alone, it becomes very important for families to educate children from an early age; especially around family values, legacy and what money means to you as a family.

Knowing how to engage, encourage and educate your child can be a challenge, regardless of specific family wealth and responsibilities. However, with the Boston College Center on Wealth and Philanthropy predicting a generational wealth transfer of $59 trillion by 2061 in the US alone, it becomes very important for families to educate children from an early age; especially around family values, legacy and what money means to you as a family.

Often parents are hesitant to raise the conversation of wealth and inheritance with children, for the fear of demotivating them or inhibiting them from leading their own lives. And it is true, navigating money and relationships is rarely clear or easy, but the fact is that 60% of wealth transfer failures arise due to a lack of education and communication with wealth inheritors, which means families don’t have the luxury of avoiding such conversations.

Generally, families aspire to preserve wealth, values and legacy over generations, and research has identified that one of the key factors influencing a family’s ability to do that is having a shared commitment to community, service and philanthropy. Philanthropy can help children understand wealth not as an identity, but rather as a part of their purpose and an opportunity to make society a better place.

Three reasons young people get involved in a cause are passion, meeting people and enhancing expertise. This, coupled with the fact that millennials are found to be more conscious of social responsibility than other generations, leads young people to more easily engage in philanthropic giving and community welfare.

Philanthropy is often a less confronting framework to start these multi-generational conversations around what’s important as a family; it provides a natural way to discuss money alongside values and legacy while at the same time introducing younger family members to investment strategies and trust responsibilities. To assist in this, Mutual Trust established the Mutual Trust Foundation to make giving more accessible for all family members. The Mutual Trust Foundation reduces the time-intensive aspects of giving, allowing families to focus on working together to support organisations changing the world – often the most fun and interesting part of philanthropy.

Of course, this isn’t a silver bullet, there are, and always will be, hurdles to overcome when involving multiple generations in family affairs. Philanthropy is no different. Disinterest, differing ideas about who to support and even questions of motives can all be present, but engaging in philanthropy and giving at least opens up conversations that may not have happened previously. The Mutual Trust Philanthropy team is available to help navigate the rest.

If you need assistance with your own philanthropic goals or want to learn more about the Mutual Trust Foundation please email philanthropy@mutualtrust.com.au


Mutual Trust Pty Ltd ACN 004 285 330 (AFSL 234590). Liability limited by a scheme approved under Professional Standards Legislation. For participating members (other than for the acts or omissions of Australian Financial Services Licensees). This information is general in nature and subject to change. It does not constitute tax, legal or financialadvice. We recommend you seek advice specific to your circumstances before taking any action. Copyright © 2014 Mutual Trust Pty Ltd.
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