The following is the third story in the Grandpa Moneybags series. The first lesson was "Patience and the 401(k)." The second was "Don't Plan on an Inheritance." Created by Hurlow Wealth Management Group, Grandpa Moneybags is a fictional character who shares lessons that parents and grandparents can use to align with monetary gifts and introduce financial concepts.
Grandpa Moneybags Lesson #3: The Gift of Charity
On the final night of their summer vacation, the Kest family gathered around the dinner table to share a delicious meal of salad, breadsticks, spaghetti, and meatballs. Charlie listened as his children and grandchildren recollected their favorite memories of the past week's beach adventure. During a lull in the conversation, he spoke up, "these stories are such a gift to me. Thank you all for joining me here this week. Now, if you will indulge me, 'Grandpa Moneybags' has one more lesson he wants to share. But first, I want to make good on my promise." Then, turning to his grandsons, he said, "Bobby and Keith, I offered you a deal at the beginning of the week, and now I owe you each $60. Do you remember what that lesson was supposed to teach you?"
"Patience?" Bobby answered hesitantly.
"Excellent!" Grandpa Moneybags replied. "Anything else?"
"The 401 something," Keith responded.
"That's right. The 401(k) is a powerful retirement savings vehicle. So here is your $60. Spend it wisely, or save it. That would be good too!"
"Thanks, Grandpa Moneybags!" Bobby and Keith stood and hugged their grandfather, then returned to their seats, putting the money in their wallets as he had taught them.
"Now, I want to talk about Thanksgiving. I hope you will all be able to come to the house this year. I've decided to put some of my money into a Donor-Advised Fund, and I'd like you all to help me determine which charities we should support.
During most of my adult life, I made ad hoc charitable contributions. Each year, I get dozens, if not hundreds of fundraising solicitations. Except for church tithing, I've never had a plan for responding to these requests. There are so many worthwhile causes. Now, with your help, I like to make some strategic charitable "investments." Over the next few months, I hope you will research some non-profit organizations and identify a project that needs funding. Then, on Thanksgiving, you can each present a pitch on behalf of your chosen charity. We will all vote on the most worthy cause. So, if you were to give $5,000 away, who would you give it to and why?"
"Me!" Keith jumped up, raising his hand. "I need an electric bike, a PS5, and a new Macbook!"
"Sit down, Keith. You are not a charity," his father, Mark reprimanded.
"Sorry, buddy. You can save up and buy those things, but there are people in this world who have real needs like food, clean water, clothes, housing.
"This is such a cool idea, dad. But, I have a question," Katie hinted. "Can we work together in teams? Maybe we could pair up?" She asked, looking at her sisters and then to her husband, Mark. He nodded.
"That's fine by me." Charlie continued. "The only rules are that the charity must be a 501(c)(3) non-profit organization and be funding a specific project rather than for a general fund. So what are some of the causes you care about?"
"Education," said Abby. Getting a degree is a game-changer. It can break the cycle of poverty for families.
"Since mom's diagnosis, we've been supporters of the American Cancer Society," Katie added.
"I did a project at school about ways to help the environment. There are lots of things we can do," Bobby declared.
"You're right, Bobby. We can help in many ways, and some don't even involve spending money! Now take the next few months, do some research on your favorite causes and prepare a little presentation to share at Thanksgiving."
The Mission Statement
"While you work on your projects, I plan to write a draft of our family mission statement to include what makes our family unique and what we aspire to become. Can we spend a few minutes brainstorming? What would you say if someone asked why you love being part of this family? And what traits in other families do you admire?
Here's an example. The author of Seven Habits of Highly Effective People is Stephen Covey. His family's mission is 'to create a nurturing place of faith, order, truth, love, happiness and relaxation, and to provide opportunity for each individual to become responsibly independent, and effectively interdependent, in order to serve worthy purposes in society.' So what are our core family values now, and what will they be in the future?"
"Speaking as someone who was once an outsider, I think we're a pretty inclusive group. We are accepting, understanding, and we get along pretty well. Some families argue and bicker, but I haven't seen that. Katie rarely complains about her sisters." Mark said with a wink to his wife, then kissing her on the cheek.
"I agree. We used to have disagreements when we were kids, but now my sisters are like my best friends." Abby replied, smiling.
"You're going to make me cry," said Jessica, wiping a tear from her eye. "I was going to say we're honest, hardworking, and love to try new things. I'm not sure how to phrase this, but dad, you gave us the room to find our way, and I appreciated that. You allowed us to make some mistakes, but we always knew you were there if we needed you."
"Supportive," Katie said, acknowledging her sister's comment, then turning to her dad, she added, "always supportive."
"Aww. I love you all. This is great. So what do you think about the Thanksgiving charity pitch session?"
"I'm in," Abby answered first, followed quickly by a consensus from the rest of the family.
We'll share more about the Kest family's journey of financial education and philanthropy after Thanksgiving. In the meantime, if you would like to know more about this topic, we encourage you to watch a recorded webinar from Tuesday, November 2, 2021, "What To Tell Kids And Grandkids About Investing."