Charity over family in will? How to go about it.

The recent demise of Ratan Naval Tata - who was the face of the Tata brand for the past few decades - has seen an outpouring of anecdotes about the man. While he has been credited with transforming the Tata Group into a dominant global force, a larger narrative about him has been of his philanthropic and humanitarian efforts to support several causes.
 

The largest conglomerate in India - which spans across industries ranging from salt to software, was founded more than 100 years back by Jamsetji Tata. While Jamsetji laid a large part of the foundation for India’s industrial build, what he is equally known for, if not more, is his philanthropy.
 

Known as one of the biggest philanthropist, Jamsetji is believed to have donated more than $100 billion. Bill Gates, the cofounder of Microsoft and his former wife Melinda Gates are reportedly the second in this list, having donated nearly $75 billion to several causes they support.
 

While the Tatas are widely recognised for their philanthropic efforts, there are several other Indians who have also been generous donors, pledging or giving away a significant portion of their personal wealth to charity.
 

This brings us to the discussion of whether individuals - especially those with a high net worth - should opt for charity or leave their wealth for their family. Let us discuss the two and how a combination of factors should be used to determine the choice one makes.
 

Charity

• Can be simply described as a humanitarian act where someone who has access to surplus helps someone who needs it. Charity is done the most in the form of funds, but at a smaller level can also be done via clothes, goods, medical equipment etc.
• Charity is often seen as the best way of giving back to society.
• Several religions, in fact, strongly advocate charity, mandating that charity must be a way of life and not just a choice made by an individual.
• There are several organisations which work for different causes, and these are run with the help of funds or materials given by those who believe and participate in charity.    

Providing assets to family

• While estate planning may be a relatively new concept, traditionally, a family’s wealth has always been left for their children and family members. 
• Giving away one’s wealth to the family members can often be helpful for them, as it can help them reach their goals faster, either short-term or long-term, if the funds are utilised well.  

 
In most cases, it is not a question of either charity or providing for the family. Typically, a high net-worth individual can plan their finances in a manner where they can make adequate provisions for both.

In the event, though, they want to decide which of these two should be receiving these funds, there are several factors which must be considered. Let’s discuss some of these.

The family’s requirement

If you think that your family needs the money more than charity, it should be given a priority. However it is important to distinguish between the needs and the wants of a family, because while meeting needs are essential and also a responsibility, wants are discretionary in nature and can be curbed to provide room for charity.  

Your beliefs

This is important given that ultimately it is a choice that one makes, and if giving back or charity is close to your heart or something that you truly believe in, then it becomes easier to follow that path.

Importance of the amount in a charity vs in a family

More often than not, the amount one leaves for their family may not make a very big difference to the lifestyle or wealth of the family members. But the same amount, if used for charitable purposes, can bring about a significant difference because of the scarcity of resources in such cases. Keeping this parameter in mind can also help choosing between charity and keeping funds aside for one’s family requirement.    

Cause being supported

• A lot of times, charity is driven through one’s life experiences. For instance, someone who has suffered because of the lack of medical facilities in their growing up years, may want to donate for the cause to ensure that they can do their bit in helping others not go through the same issues.
• If the issue or cause that one chooses to support through charity is something that one strongly feels for, then they would opt the route of charity, sometimes sacrificing their family’s needs or wants.

To summarise, choosing between charity and leaving funds for one’s family is completely a personal choice, which can be arrived at by taking a few factors into consideration. Planning finances carefully, though, can help individuals balance between the two, and allocate funds for both.