Inspiring Your Family to Join You in Philanthropy and Making an Impact
- Adult children tend to have a broader definition of impact, viewing it as an essential thread woven into all aspects of their life rather than a separate act of charity.
- To further engage adult children and grandchildren in your family’s broader impact and philanthropy goals, families can consider leveraging multiple sources of capital to make a difference: philanthropic, consumer, social, business, and investment.
Today’s global challenges—from climate change to social inequality to economic instability—have shaped a new impact mindset among the next generation. Future changemakers tend to view impact not as a separate act of charity, but as an essential thread woven into many decisions and every form of capital they hold.
To engage adult children and grandchildren in your family's broader impact goals, one approach to consider is a total impact framework. This strategy can help future changemakers and families deploy multiple types of capital simultaneously, unleashing greater resources to achieve their family mission and impact goals. It’s also a powerful way to promote stewardship practices, continue the family legacy, and cultivate a broader shared sense of values and purpose.
Leveraging Five Types of Capital
A total impact framework describes “capital” as five distinct, yet complementary levers that can be used to drive meaningful change. Each type of capital can be used by families to engage adult children in their mission.
- 1. Philanthropic capital is one of the most common levers individuals and families deploy to make a difference. Giving can range from one-time or occasional donations, often made in response to immediate needs or appeals, or have a more strategic approach. Intentional planning and research can help to create a long-term philanthropic strategy that leverages your financial resources, time, talents, and networks to support causes you are passionate about. Philanthropic capital can be deployed quickly and at any scale, often reaching areas not covered by traditional social networks or financial markets.
There are many ways to engage children. If your family is looking to support a new cause, family members can research new organizations to fund and help decide how the family can make a lasting commitment—whether that’s setting up a reoccurring financial contribution or volunteering together at designated intervals. You could apply a similar approach to organizations your family already works with. Children can help decide which specific projects or initiatives within the organization to support, or they can leverage their professional skills and partner with an organization to strengthen its operations, strategy, or fundraising efforts. Another option could be to establish a grant directed by the children with a set dollar amount.
- 2. Consumer capital involves aligning purchases and lifestyle choices with brands and businesses that share your impact goals. Every dollar spent, whether on daily expenses or significant investments like real estate, can drive impact by contributing to market signals that can influence innovation, supply chain management, and corporate reporting decisions.
As an example of engaging the next generation via consumer capital, your family could decide to primarily purchase clothing from brands that use sustainable materials and ethical labor practices. Children can research and come up with a list of brands they want to support.
- 3. Social capital refers to advocating via your personal network to advance a cause. Social media platforms now play a key role in connecting like-minded individuals and disseminating information, amplifying the reach of social advocacy and organizing.
Your adult children and grandchildren may already be active on various platforms, so engaging them with this particular capital can leverage their social media skills. If children are passionate about a particular cause or organization the family supports, they could create posts or videos on social media platforms to raise awareness among their network—this could be content promoting an upcoming event or highlighting an organization’s recent successes.
- 4. Business capital relates to leading or leveraging a business to drive impact. It involves identifying product, operational, cultural, and governance mechanisms within a company that support both sustainability and profitability.
Families can engage adult children in business capital by involving them in the decision-making process of a family-owned enterprise. For example, children focused on the environmental impact of different business practices can suggest strategies the business can explore to become more sustainable. They can also participate in projects aimed at reducing the company's carbon footprint, such as implementing recycling programs, developing products made from more sustainable materials, or participating in a company-sponsored community project.
- 5. Investment capital may involve choosing investments that promote positive environmental and social impact, while simultaneously achieving risk-adjusted returns. Leveraging your capital in this way is a form of sustainable investing, a subset of traditional, market-rate investing that encompasses an array of tools and approaches.
A family meeting could include investment decisions to incorporate a sustainable company, such as a renewable energy startup. Children can be involved in the due diligence process, learning about different company missions, financial health, and potential impact. After an investment is made, you can also set up reoccurring time during family meetings to discuss the investment's performance and its contribution to environmental goals.
Business Capital: Leveraging a Family-Owned Enterprise to Support the Environment
Here's how an executive applied business capital in a family business to enact change in his communities:
Alfredo Ferre is a fourth-generation business leader who evolved the 75-year-old family business. He pivoted Recover Textile Systems to focus on recycled cotton and fibers, reshaping its purpose to transform the textile industry and provide scalable solutions for circular fashion models. Recover Textile Systems can reduce 93% of its CO2 emissions compared with conventional cotton production, while also saving virtually all water and land use typically devoted to production.
Young changemakers tend to view impact with a broader lens. While philanthropic capital is often the most thought of tool to drive change, consciously leveraging different types of capital can be a powerful strategy to engage children in your family’s impact goals, further your family values, and empower them to become highly effective agents of change.
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