Creating a Family Philanthropy


Wonderful benefits await you when you decide to share the process of grantmaking with members of your family. You’ll have the opportunity to contribute to society in ways few ever experience and at the same time form new family bonds, based on a common purpose, that can endure for generations With this decision also comes a tremendous personal responsibility to serve the public good with your private wealth.

To help you think through the process, start by writing down your goals and objectives for your philanthropy and the results you would like to see for your community and for your family. Then discuss your plans with your family members so they are engaged from the outset.

Once you identify your goals, that will help you with your next key decision which is choosing the type of charitable giving vehicle you will use. These days there are more choices than ever. For example:

  • Private Foundation—a donor family creates an endowment from which to make grants. The family maintains control of the grantmaking and manages the assets.
  • Donor Advised Fund—a donor family can donate to a fund in a community foundation, federated giving organization or financial services firm, takes the tax deduction immediately and then advises the organization later on what charitable organizations to support.
  • Family Businesses—families can create a corporate giving program or a corporate foundation
  • Giving Circle—individual donors or families can pool their money with others to make charitable gifts from the income on the principle.

The vehicle you choose should be based on both on your goals and the amount of assets you have to give. It’s best to consult a financial advisor or attorney familiar with charitable vehicles before making a final decision.

Once you know how you will structure your giving, you’ll want to consider issues such as creating a mission, deciding how grantmaking decisions will be made and by whom, and a host of other topics.

For more detailed information, see our constituency section on Family Giving.

Related Reading

Reasons to Form a Private Foundation for Family Giving

2003
A list of 13 reasons that individual donors or families may be interested in establishing a private foundation to manage their family giving.

Where We Go From Here: Crafting a Family Mission Statement

February 2007
Unlike the intrepid Alice in Wonderland, today’s giving families care very much about where their philanthropic adventures take them and their communities. This is where mission statements, short descriptions of why an organization exists and what causes it will support, can prove eminently useful. Whether it’s a crisp declaration of a family’s shared values or a succinct manifesto for social change, a well written mission statement goes a long way to providing the kind of clarity of vision your giving family needs to be effective—regardless of the chosen philanthropic vehicle. This month’s Family Giving News explores mission statements—why families have them, how to create them, and how families re-examine them to focus, fortify and fulfill their philanthropic promise.

[FGN Feature]

Donor Advised Funds: Tools for Giving Families

October 2007
Wanted: Tax-Advantageous, Convenient, Flexible Way to Give Back. Giving Family Seeks Way to Make Difference Privately. Must Love Children.

Families looking for less time-consuming but still informed and effective ways to give back are increasingly turning to donor-advised funds, either exclusively or in tandem with other giving vehicles, such as private foundations.

This month’s Family Giving News looks at how donors are employing these vehicles in pursuit of their charitable goals.

[FGN Feature]

Building on Your Best Hopes: From Vision to Action

2002
Family values, philanthropic misssion and involvement of family members are the three great building blocks of a family foundation. This chapter offers a guide to the beginning steps of building a lasting family foundation. The chapter from 'Splendid Legacy' focuses on ways in which the founder and family can explore their personal and family values to fashion a mission statement for the philanthropy.