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:
- Writing a vague and easily misinterpreted mission statement.
- Writing a mission statement that fails to include an explanation of your values and principles.
- Ignoring the weaknesses of your chosen philanthropic vehicle.
- Failing to establish a governance structure that supports donor intent.
- As a living donor, failing to make clear your role in decision-making.
- 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.
- Failing to work closely with your board members to help them understand your giving preferences, philosophical outlook, and preferred grantmaking strategies.
- 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).
- Opening a donor-advised fund without naming successor advisers who share your values and principles and without adding a sunset provision.
- Failing to establish a review process for board members and a removal process for those who are not faithful to your intent.
- Establishing a family foundation or family donor-advised fund when there are radical differences and few shared values among family members.
- Making endowment gifts to charities without establishing clear guidelines on their use and term.