Promise Daniel not to tell, which won't change anything...
First, go to the Sorrows Camp and talk to Waking Cloud about her family. She believes Daniel may be withholding information from her and asks you to talk to him about the matter. After much hesitation, Daniel will state that her three children survived their exodus, but that her husband died protecting them from a White Legs attack.
Daniel will ask you not to tell Waking Cloud about this for fear that her resultant grief will render her useless, but the player can convince him otherwise. At this point, the player can either tell Waking Cloud the truth or lie to her. Lying to her results in bad Karma and a bad ending for her. Telling her the truth results in no Karma change but a good ending for her. The player can also promise Daniel that they won't disclose the facts to Waking Cloud, which closes off dialogue options pertaining to the quest, making one unable to complete it and obtain an ending for Waking Cloud.
If she is told the truth, she will at first be angry with Daniel for keeping the news from her, but her ending reveals that she later forgives him. After her grief over losing her husband subsides, she takes a new husband, a member of the Dead Horses tribe, who stays close to home at her request.
If she is lied to, Waking Cloud will be resentful of Daniel and the New Canaanites and poisons her tribe against their teachings, making relations between the Sorrows and the New Canaanites very difficult.
Find out what Daniel knows about Waking Cloud's family.
Tell Waking Cloud about her family.
The player can only do this quest while Waking Cloud is in the party, otherwise the Speech option will not be available.