OCTOBER 04, 2020

If you choose a charitable trust as a philanthropic vehicle, here are some basic guidelines to protect donor intent:

1. Be certain of your mission

Keep in mind that the same rigidity that may protect your donor intent will also prevent you from amending the trust instrument without legal action. Unless you are committed irrevocably to certain philanthropic goals, don’t opt for a trust vehicle.

2. Thoroughly vet financial institutions

In choosing a financial institution to hold your trust, don’t assume that the close relationships you currently enjoy for your personal or business banking will last through possible mergers and consolidation.

3. Put it in writing

Make clear in writing your philanthropic intentions, clarifying your values, your charitable purpose, and your operating principles (including spending policy and timeframe).

4. Correctly structure your governance

Design a governance structure in which the trustees you select hold majority control and establish a succession process with criteria tied to your donor intent.

5. Know your people

Work directly with your initial trustees for a period of time so that they better understand your values and principles and your preferred strategies for evaluating grantees. 

6. Provide alternatives

Don’t leave the mission of your trust to chance. Avoid potential court challenges by specifying alternative funding options for objectives that may be impossible to pursue in the future.

7. Know your jurisdiction’s laws

Take the time to understand the charitable laws and judicial treatment of trusts in the state in which your trust will operate.