Todd first notices that son Grayson, 11, and granddaughter Chloe, 5, are preoccupied with presents when they each show him a two-page wish list for Santa.
"Obviously we have raised very spoiled, entitled children," Todd confesses. "I think that comes from Julie and I growing up with very humble beginnings and wanting to give our children everything that we dreamed of, and we've done that. But is that the right thing to do? No."
The Atlanta native admits his older children Chase and Savannah may be a "lost cause," but dedicates his and Julie's holiday to making sure the younger kids understand the true meaning of Christmas.
"It's not about toys and what's under the tree," Julie tells Chloe and Grayson. "Because do you guys understand that there are millions and millions of children who have nothing, and you guys have been given so much that you don't even appreciate what you have."
The Chrisleys explain that the kids will each get a big sack to fill with toys they already have and once full, Santa will take them to kids who don't have as much."
"Papa, do you know Santa?" Chloe asks Todd.
"Yes honey, unfortunately I do know Santa," he replies. "Known him for a long time, and he's almost worn out."
The kids get to work filling the donation bags, but Todd and Julie soon see they're only giving away worn or old toys.
"Giving is sometimes giving something that means a lot to you so that someone else can have it," Julie explains to them.
The kids seem to get the concept, and when they come downstairs with the bags a second time, they've filled them to the brim with their most-loved toys.
"We just wanted to give away our favorite presents," Grayson tells his parents.
"You warm my heart," Nanny Faye tells them.
Chrisley Knows Best airs Tuesdays at 10 p.m. ET on USA.
Photo credit: USA