Generosity Planning: Creating a Family Legacy of Giving
As the holidays approach, many of us naturally think about gratitude—and the ways we want to express it. For some families, that gratitude becomes something lasting: a shared vision of generosity that extends well beyond the dinner table.
At Birch Street Financial Advisors, we often call this generosity planning—an intentional approach to charitable giving that aligns your financial resources with your family’s values and legacy. It’s not just about donations or tax deductions; it’s about weaving giving into the fabric of your family story.
The Psychology of Giving
Beyond the financial and philanthropic benefits, giving can profoundly influence our sense of happiness and connection. Research led by Elizabeth Dunn, a social psychologist at the University of British Columbia, found that spending money on others leads to greater happiness than spending money on ourselves.
In her studies, participants who used bonuses or income to help others—whether through gifts or charitable donations—reported higher levels of well-being than those who spent solely on themselves. The conclusion was clear: generosity not only benefits recipients, it also nurtures the giver’s emotional health.
Dunn’s later work uncovered why: people experience a deeper sense of joy when they make a personal connection with those they help. When giving feels direct and meaningful—supporting a cause close to your heart or seeing your generosity change someone’s life—the happiness effect grows stronger.
“Humans have evolved to feel a boost of joy when we help others,” Dunn explains. “We can lean into that joy by making a personal connection with those we help, amplifying our happiness and inspiring us to do more.”
Why Generosity Planning Matters
Charitable giving is deeply personal, but it also has the power to bring families closer together. When you take time to reflect on what matters most—and why—you’re not just planning gifts, you’re shaping how future generations think about money, purpose, and community.
Thoughtful generosity planning can:
- Create opportunities to pass on values, not just wealth.
- Build a sense of connection and shared purpose among generations.
- Encourage younger family members to engage with causes they care about.
- Offer meaningful tax advantages when structured intentionally.
A Family Conversation Starter
One of the most natural times to begin these discussions is around the dinner table—Thanksgiving or any other family gathering. Between the stories, laughter, and gratitude, you might open the door with a question like:
“What causes or organizations do we each feel grateful for—or wish we could help more?”
It doesn’t have to be formal or financial at first. The goal is to spark a conversation about values. You might find that your children care deeply about environmental conservation, your spouse is passionate about local food banks, and you’re drawn to educational access or medical research.
Those insights can become the foundation for a family giving plan—something that reflects everyone’s priorities and creates a sense of shared legacy.
Ways to Bring Generosity to Life
Once your family identifies what’s meaningful, there are many ways to make giving intentional:
- Donor-Advised Funds (DAFs): Set aside charitable dollars now, receive an immediate deduction, and recommend grants over time—ideal for involving children in annual giving decisions. A donor-advised fund is a very affordable way to create a family foundation or legacy.
- Qualified Charitable Distributions (QCDs): If you’re 70½ or older, give directly from your IRA to reduce taxable income while supporting causes you value.
- Legacy Bequests: Include charitable gifts in your estate plan to extend your generosity beyond your lifetime. Name your favorite charity as an IRA beneficiary.
Teaching the Next Generation
Children and grandchildren learn by example. Sharing the why behind your giving decisions can leave a lasting impression. Even small gestures—like volunteering together or matching a grandchild’s donation—help cultivate empathy and perspective.
You might even make giving part of your family’s traditions:
- Nominate a charity each year as a family.
- Allocate a portion of your annual budget or RMD for giving.
- Write a short “family giving statement” outlining shared values and priorities.
Aligning Generosity with Meaning
The most rewarding giving happens when your financial resources reflect your personal and family values. The research is clear: generosity not only strengthens communities—it strengthens us.
At Birch Street Financial Advisors, we believe charitable planning isn’t just a tax strategy; it’s an act of alignment—connecting money, meaning, and joy.
If you’d like to explore ways to incorporate charitable giving or generosity planning into your overall financial life—or simply start the conversation with your family—we’re here to help.
