It is now far more common
to design a foundation as a nonprofit corporation, thereby enabling the board to
vote on where the funds should go. However, if we want to avoid the possibility
of a foundation becoming a self-sustaining institution that eventually slips
away from our family’s control (as with Ford Foundation), we can instruct our
children or grandchildren to dispense all of its assets within their lifetimes.
Many founders today design their foundation to spend its endowment within 20 to
30 years—as Bill and Melinda Gates are attempting to do with their institution’s
emphasis on AIDS treatment. This enables the foundation to address large
projects in need of vast funding. Fortunately, we do not have to make this
decision at the outset; foundation spending strategy is flexible.Leading by Example
For Susan Ford Dorsey, instilling a legacy of giving in
her son is more important than the beneficiary of the family’s gifts. In 1995,
she set up a foundation with her first husband, Tom Ford, the developer who
turned Sand Hill in Menlo Park, Calif., into a tony haven for the financial
services industry. Tom died in 1998, and Susan, now remarried, employs the
$50 million foundation to demonstrate to their son, Tommy, now 10, the
importance of giving back to the community through the grants she makes to inner
city schools and children’s health programs. But she has no plans to give in
perpetuity. “I’d be disappointed if Tommy decided to run the foundation,” Dorsey
admits. “I’d like to see him support causes, but I want them to be his own
causes. If children get the message that mom and dad’s way is the only way of
doing philanthropy, the whole purpose of philanthropy is missed.”
Jim Self
handled his family foundation differently. He not only inherited one of the
largest textile manufacturing companies in South Carolina, but also control of
the Self Foundation, which his father had founded in 1942 with a broad mandate
to fund health care and education. The younger Self decided to turn the
foundation over to his four grown children, and scheduled a retreat to determine
the future of the organization. “But he said he was not going,” recalls Frank
Wideman, executive director of the foundation, which now has an endowment worth
approximately $38 million.
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