OCTOBER 08, 2020

When it comes to protecting your philanthropic legacy, the pitfalls are many. There is a reason so many foundations drift in their missions over time. Perhaps Jerry Hume of the Jaquelin Hume Foundation summarizes the perils of donor intent best: “Donor beware.”

Here are the top twelve mistakes donors commonly make that ultimately undermine their intent, both in the present and the future:

  1. Writing a vague and easily misinterpreted mission statement.
  2. Writing a mission statement that fails to include an explanation of your values and principles.
  3. Ignoring the weaknesses of your chosen philanthropic vehicle.
  4. Failing to establish a governance structure that supports donor intent.
  5. As a living donor, failing to make clear your role in decision-making.
  6. Bringing on board members and staff who don’t respect your values and principles and/or who view the resources of your charitable vehicle as their own.
  7. Failing to work closely with your board members to help them understand your giving preferences, philosophical outlook, and preferred grantmaking strategies.
  8. Establishing a foundation in perpetuity without policies and procedures to protect donor intent (for example, a sound process for succession and provisions allowing the board to sunset in the future).
  9. Opening a donor-advised fund without naming successor advisers who share your values and principles and without adding a sunset provision.
  10. Failing to establish a review process for board members and a removal process for those who are not faithful to your intent.
  11. Establishing a family foundation or family donor-advised fund when there are radical differences and few shared values among family members.
  12. Making endowment gifts to charities without establishing clear guidelines on their use and term.