This holiday season teach your kids about charitable giving. They'll learn the value of money—and the importance of helping others.

By Celia Shatzman

There's no better time than the holidays to teach your teens the significance of making a difference. By helping them create a giving circle—a group of people who pool individual contributions to make a bigger charitable donation—you'll enable them to have a greater impact and pick up some valuable life lessons. "Kids become much better informed, not only as philanthropists but as active community members," says Ken Menkhaus, Ph.D., professor of political science at Davidson College in North Carolina, who helped launch a course as part of the Learning By Giving program. Classes at selected schools—including Tufts, Columbia and UC Berkeley—research local nonprofits and debate who should receive grant money. But you don't have to wait until your kids reach college. Just use this simple plan to get your teens to step up.

1. Get together. Have your teen invite 5 to 10 friends or classmates who are interested in doing good. Menkhaus suggests starting small, since too many members can complicate decision making. Next, create a name for the giving circle and determine how often it will meet and where.

2. Settle on a sum. Members should decide on how much they'd like to donate, and whether they will pool their own money or solicit donations, either individually or through fundraising events. Remind them that the point isn't the dollar amount but the effort and act of giving. Even a modest contribution can have a major impact.

3. Talk it through. When choosing a beneficiary, tell members they may have to agree to disagree. "Some might want to give to a food pantry, which isn't solving a long-term problem, while others might feel strongly about a cause that's sustainable, like job creation," Menkhaus says. "They'll learn a lot about themselves and one another's core values." Teens can research a range of charities, both national and local. "They could look into affordable housing, homeless shelters, health care and after-school programs, either by reading the local newspaper, contacting neighborhood charities or speaking with community leaders," he says.

4. Research and reconvene. Before making a final selection, the group should make sure the organization is efficient and effective with its money. For larger charities, there are monitoring services, such as GuideStar, that evaluate nonprofits. At the local level, the best way to find out how well a charity operates is to volunteer there.

5. Give—and keep giving. Put your kid in charge of collecting all the donations so that you can deposit the money in your account and write the check. Once their mission is completed, members can move on to another cause. "Because they'll have a greater awareness of the hardships around them and be able to think critically about philanthropy, they'll be more effective donors," says Menkhaus. Giving circles, in other words, can be the stepping stone to a lifetime of good works.

Originally published in the December 2012 issue of Family Circle magazine.