How to engage your next gen around finances - Day 5

Written by: Archetype Wealth Content Team

 “Life is not about accumulation; it is about contribution” – Stephen Covey

day 5 - gENEROSITY

I. Why do we give?

  1. Because we are stewards of resources that have been entrusted to us - 1 Peter 4:10

We all have been given gifts. It is important to understand that we are not the ‘owners’ of these gifts. They are owned by someone else (God) and they have been entrusted to us to manage.


  1. Because we were created to do good works - Ephesians 2:10

In this verse God calls us his workmanship or handiwork. The Greek word here is “poiēma” – this is where we get the word poem. This is important because a poem articulates an author’s heart, mind, and character. In other words, we were created to articulate the heart, mind, and character of God. Generosity is one of the many ways we execute on this call.


  1. Because to much that is given, much is required - Luke 12:48

We have all heard the saying, “With great power, comes great responsibility.” Why is that? Because if we are not careful, we can be controlled by the very things given to us. If we put the things in this world before God, then they will rule our lives because we will never have enough. We will forever be trying to fill a cup that has a heaping hole at the bottom. Therefore, we must understand that what we have been given should be used responsibly and given generously.


  1. Because those that give, never want and become all the richer – Proverbs 11:24-25

Seems like a pretty good deal. Let’s be clear though, generosity does not necessarily mean a deeper pocketbook in the long run. What it will lead to is a richer life because there is no greater feeling than the peace and joy that comes from making a difference. The winners in life are not those that accumulate the most, but those that use what has been given to them the best.


  1. Because the result of generosity is joy – Acts 20:35

We have moments of happiness based on our circumstances, but joy is a much deeper satisfaction that goes beyond events in our lives or feelings we have. Joy is a result of generosity because we know the gift that we are giving is not what fills us up – it is not our purpose. The key is understanding that giving is something we do in order to fulfill our purpose. When we fulfill our purpose, we are filled with peace and joy.



Identify three areas that each of your kids would like to have an impact on. Examples: hunger, poverty, stray animals, adoption, etc.


II. How do we give?

  1. Give on purpose.

This involves truly sitting down and going over the things your family is passionate about. What areas of the world does your family want to have an impact on? Answers to these questions will differ from family to family but we believe there are calls on all our lives and our financial gifts should be aligned with those calls. You may hear a lot about being a “cheerful giver”. Part of being a cheerful giver is giving to causes and people your family is passionate about.

  1. Give wisely

There are times to give and trust and there are also times to verify before we give. Your giving is an investment into the causes you are passionate about. Once your family identifies the areas you want to give then you should ensure the organizations and people you give to are also being good stewards.

  1. Give creatively

Many families simply write a check or give cash and that is great, but there are other ways to give. Use this time to discuss with your family other assets you can give. It may mean clothes or sporting equipment. It may also mean more complex gifts like appreciated stock, real estate, or business interest if you own a business.


Discuss with your kids the areas where you currently give and why. Also consider setting goals for giving and even matching what your kids give to the various organizations they pick out.


III. Tax Benefits (Optional)

The purpose of this section is to cover basic tax terms and provide a basic example of how the tax code benefits those who are generous.

Tax Rate – Your tax rate is the percentage that your income is taxed. Our tax rate is a marginal tax rate, which means your income is taxed at a higher rate as your income increases.

Taxable Income – Your taxable income is also known as your adjusted gross income (AGI) and it is your total income minus any deductions or exemptions. This is the number that the IRS will use to determine how much you owe in taxes.

Tax Deductions – These are expenses that one incurs throughout a year that the government allows you to ‘write-off’ or deduct from your taxable income. You want to deduct as much as you can so you can lower the amount of taxes you pay. There are many kinds of tax deductions – charitable donations, travel expenses, office supplies, networking expenses, etc.



1a. If Sally’s taxable income $100,000 this year and her tax rate is 20% then how much will Sally owe in taxes? ($100,000 X .20 = $20,000).

1b. If Sally decided to give away $20,000 and her tax rate goes down from 20% to 15% then a) what is Sally’s taxable income and b) how much will she owe in taxes? a) ($100,000 - $20,000 = $80,000) b) ($80,000 X .15 = $12,000). Sally paid $8,000 less in taxes as a result of her generosity.

Note for parents: The CARE Act that Congress recently passed in response to COVID-19 has presented additional opportunities to save on taxes as a result of your generosity. Se how you can take advantage of this tax break here.






Archetype exists to help families thrive across generations by connecting their money with their purpose.


Disclaimer: Our intent in providing this material is purely for informational purposes, as of the date hereof, and may be subject to change without notice. This article does not intend to constitute accounting, legal, tax, or other professional advice. Visitors and readers should not act upon the content or information found here without first seeking appropriate advice from a trusted accountant, financial planner, lawyer or other professional.

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