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| Philanthropy |
Laying a Foundation
Jan Alexander
07/01/2004
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Fractious Families
In a family divided politically or emotionally,
devising a foundation with a clear mission that speaks to the passions of all
and offends the views of none is a monumental challenge. We have all heard
stories about conservative grandparents who wish to establish a family
foundation, with the caveat that their children and their children’s children
never donate money to liberal groups. But even a family of varying persuasions
can coalesce if the founding generation avoids making one specific cause its
main priority. The successful foundation will instead focus on building
audacious philanthropic projects.
“If the goal is engaging future generations
in the philanthropic process, you have to build that into the foundation
mission,” says Peter Karoff, founder and chairman of the Philanthropic
Initiative, a not-for-profit advisory firm in Boston. He believes that the
overblown intent of some founders can be a roadblock, and suggests that the
founder be willing to build in a certain amount of flexibility by setting
guidelines with wiggle room for future generations. “Does it really matter, for
instance, that some people say Henry Ford’s original intentions went awry?”
Karoff asks, referring to the founding Ford’s modest, civic-minded foundation,
which has evolved into a global human rights powerhouse.
Although the option
still exists, few families set up an institution as a foundation trust, which
allocates money according to the founder’s intent, as stated in a binding
document. “Picture a trust from the 1880s set up for the welfare of carriage
horses—this is a true story,” recalls Karen Green, managing director of
Family Foundation Services at the Council on Foundations in Washington, D.C.
“When the cause becomes obsolete, the heirs have to go to court to determine
where the founder might have wanted the funds to go. So they will need a court
order to give money to, say, the Humane Society.”
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