My kids regularly volunteer with me at a homeless encampment, and have since they were 3 and 4. They also have favorite organizations in the community that they regularly (with no input or control on my part) contribute to--both monetarily and in-kind. At ages 7 and 8 they're coming up with their own ideas now about how to give to others.
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To be really honest, I think that probably you should make this a year round thing, not just a holiday thing. I think a lot of parents get a lot of anxiety around the holidays because their kids seem greedy and/or unappreciative--but the problem is that EVERYONE is thinking of helping around the holiday and ignores stuff the rest of the year. The holidays are a very stressful time for everyone, esp. if you hope to deal with people directly--your children may see someone going off the deep end or dealing with a very dark depression or who is extremely cranky. Not that that's not a possibility at other times, but...in addition to that, most kids are sensitive and really overstimulated around the holidays.
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So for direct people-work, I would advise doing it during the "off season". It's more relaxed, it's very important, and you're not using other people as object lessons during the holidays when everyone is under more stress. I think it's also easier, especially for young children, for them to get stuff when it's not piled on to a ton of other celebrations. It's also less high stakes for you, so that when your kid don't seem to "get" it or verbalize it, you're not feeling let down after making time to do this in the middle of everything else.
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Or you can start by dipping your toe in slowly. Do you guys do giving trees/Toys for tots? Maybe it's time to step it up a notch. Sponsor a family at the Y next year to make it personal--if you don't have the means to do it yourself, invite some other families to go in with you. Call around local orgs, can you guys go help assemble goody packs that will be given out to other people? Again, you'll run in to agencies not really needing much help during the holidays because they get slammed with people/groups wanting to help, as you may know based on your previous experience. BUT, you can collect info, perhaps you can do it in January. Or if they need extra hands, great!
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You can also organize your own events. Maybe your family can do an open house, but your kids decide what charity they'd like to collect for (you mention that you're collecting items for the food bank/pet shelter/ect. and would welcome, but not require, people to bring them). Then the kids can come with you to deliver.
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You might also ask around and see if there are homeless agencies that run camps/shelters that sign people up to cook dinner. Then your family can have a dinner party--except you're making it, and serving it, for other people with the kids. (That's how we got started as a family, which led to a relationship with the camp, and has led to other activities for/with them.)
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Little kids can be tricky--they are not always allowed to help in distribution centers for liabilities and/or previous bad experience on the part of the people running the organization. I have found the home collection "parties", adopt-a-family/servicemember, ect. stuff to be the easiest way to ease back into volunteering as a young family. I am pretty proud of how my kids have really incorporated this into their lives over the years--last year all three did not want presents at their birthday parties (this was their idea, NOT mine), instead they collected donations for groups of their choosing (two chose a local food bank, one chose a local pet shelter)--they really enjoyed taking things in. This year they helped cook and serve 5 meals to our camp. They also participate in the community outreach at our school using things they've bought with their own money--because it's important to them.
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I think making community service a year round, non-high-stakes activity really helped lay the foundation. I never preached at them--just answered their questions honestly. It was really interesting to me how quickly kids can "get it" through their own perspective (none of mine are unusually empathetic, either). Giving them opportunities to grow into direct service and then, supporting them in that helped too.Â