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| Building Your Family's 100 Year Plan: The Series |
100 Year Plan Part III: The Practice of Charity
Brett Anderson and Thomas M. Kostigen
02/02/2004
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Putnam recalls one family in which the adult children, after their father’s death, explored the option of establishing discretionary sums to donate to charities of their choice. Having spoken with each of the individuals, she assumed this was an idea they would endorse. But the youngest sibling’s reaction surprised everyone. "He said, ‘Wait a minute, I’m not bringing my ideas here to have to justify them in front of all of you.’ But when we made it clear that he would have discretionary funds to give regardless, and that all he would be doing is sharing his thinking and why he decided to make a gift, his whole perspective on the occasion shifted." Interestingly, Putnam notes, the resulting openness of this exchange led to healthier interaction when the family came to issues of financial planning and wealth management, because the group had established a kind of mental "muscle memory" for working together as equals.
Despite this focus on family, however, the introduction of nonfamily members to a board offers advantages, as well. "I’ve seen many foundations benefit from having independent members on their boards," says Goldman Sachs’ Dye, "because of the expertise, knowledge and objectivity that those outside board members can bring to the organization. So many people think, ‘As a family foundation we’re going to have the family involved with this.’ And so they don’t tend to consider bringing in outside experts or outside advisors or board members. But oftentimes that is very enriching to the family and the entity itself."
The Supporting Organization
rivate foundations structured as corporations deliver the greatest flexibility to the board in terms of defining or redefining its mission. While this elasticity of interpretation may be regarded as an asset among those for whom philan-thropy serves as one component of the family identity, for venture philanthropists intent on a mission, this presents rather a grave prospect. The venture (or activist) philanthropist, after all, wishes to remain in control: He or she will make the decisions and is often reluctant to share power. Like Dorothy Chandler obsessed with her music center or Lee Iacocca in search of a cure for diabetes, this individual wants to determine to whom money will go and how. For this reason, when such a person chooses a private foundation as a vehicle, it is often structured as a trust, obliging the board members to heed (or at least consider) the founder’s intent as outlined in the founding trust document. But just as frequently, this individual elects to employ a supporting organization as a vehicle.
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