Family foundations are a great way for members of a family to come together in a joint effort to contribute to society and their communities. If not handled properly, however, they can also be a source of family strife. The latter is avoidable with good planning.
For a long time family foundations have been an excellent way for wealthy people to leave a positive legacy of philanthropy in their communities. Some foundations last for generations after the founder passes away and create a sense of purpose for later family members. Other foundations, however, become sources of family feuds and do not last.
Recently, Wealth Management wrote about the traits of those foundations that do last in "Top Five Traits of Effective Family Philanthropy."
The identified traits include:
- Mission – Foundations that work have clear missions so everyone knows what the purpose of the foundation is and they can all work towards it.
- Decision-Making – It is important to recognize that family members will not always agree. A clear and fair decision-making process should be put in place so those disagreements do not fester and spoil the foundation.
- Dialogue Across Generations – It is important that younger generations be brought into the process when they are capable so they can learn from experienced family members.
- Personal Passions – Different family members will be passionate about different charitable works. Allowing family members some freedom to pursue their passions keeps them involved and excited about the foundation.
- Outside Experience – It is important to be open to professional advice about foundation operations and the best ways to carry out the mission.
Ultimately, an experienced estate planning attorney can help ensure the long-term success of a family foundation by careful planning upfront. Please contact me to discuss family foundations and other charitable planning options.
Reference: Wealth Management (May 13, 2016) "Top Five Traits of Effective Family Philanthropy."