In 2023, following passage of the Donor Intent Protection Act in Kansas, Philanthropy Roundtable launched a monthly series on donor intent developments and controversies nationwide to better inform you about this important topic. The Donor Intent Protection Act has now passed in Kentucky, Georgia and Montana, and efforts on behalf of this legislation will continue in additional states in 2025 and 2026.
We encourage donors to contact us with any questions about our featured items and consult additional resources on donor intent at the Roundtable’s Donor Intent Hub. We also welcome any news about donor intent we may have missed.
This month’s Donor Intent Watch opens with a reminder to donors to develop clear and strong mission statements for their charitable giving, and then bolster those statements with other protections to preserve their intent. This is followed by the seventh in a series on the importance of choosing the right vehicle(s) for your giving. In this installment, we share the pros and cons of using collaboratives and philanthropic partnerships.
Mission Statements – necessary but not sufficient
Whether you intend to spend all funds during your lifetime, sunset your foundation, or establish an entity in perpetuity, a strong, well-crafted mission statement is indispensable. Although the IRS requires only a general statement of charitable intent in a foundation’s incorporating documents, donors are wise to include much more.
A powerful mission statement underpins the crucial decisions you make about the governance and operations of your philanthropy. It leads to greater focus and clarity by helping you discern what is central and what is peripheral to your giving. It enables you to define the geographic boundaries of your generosity, identify board members committed to your objectives, decide whether to involve family members, explain to grantseekers what you will and will not fund, and decline off-mission funding requests.
Crafting your mission statement may take considerable time. Some philanthropists arrive at a mission statement through a trial-and-error approach, learning from past mistakes. Others know exactly what they want to accomplish up front. In either case, defining a mission is a deliberative process that often requires multiple revisions. Consider Sir John Templeton, who created his foundation in 1987 but updated his charter over a dozen times during the next two decades before stepping down as chairman in 2006.
As his granddaughter, Heather Dill, has observed, one of the things Templeton did well was to provide specificity. He called for seven giving areas, established expenditure limits for each, and included guidelines for renewal decisions on grants. A well-written mission statement will let your successors answer the fundamental question: What would our founder have done?
Specificity about the “what” of grantmaking, while helpful, is insufficient to guide a foundation in honoring donor intent across generations. Templeton codified what is far more important and instructive—the values and principles he intended to drive his philanthropy: intellectual humility and open-mindedness, relentless curiosity, and individual and economic freedom. Although explaining a donor’s “what” is crucial, don’t stop short there. The “why” is also vital.
Wise donors also include in mission statements the core principles that will guide the operations of their charitable vehicles – essentially the “hows” of grantmaking. These include the lifespan of your philanthropy, the sort of spending rate you prefer, the types of grants you will or will not make, whether you prefer visibility or anonymity in your grantmaking, your preferred use of assessment and evaluation tools and other considerations.
Some donors find it most helpful to involve others in formulating a mission statement. These trusted individuals may be family members, professional colleagues, other philanthropists or nonprofit directors who share your values. You may also decide to use a consultant to help. Consider engaging potential trustees or staff members in the conversation. While the mission statement should reflect your values, talking early with those who will carry on your intentions will help them better understand you and your donor intent.
To add to the documentation of your donor intent, consider creating supplemental materials that convey your character, passions, goals and ideas. You might record a video in which you speak candidly about your values, principles, background and vision. Legacy statements, which are simply more comprehensive mission statements, help transmit donors’ sensibilities across time to directors, staff and family. You may also include notes, letters and speeches that enable others to capture your personal history as well as the nuance and richness of your intentions.
At the M. J. Murdock Charitable Trust, former executive director and now CEO Emeritus, Steve Moore, began shortly after his hiring in 2006 to assemble a wealth of material to understand and document the donor intent of founder Melvin J. “Jack” Murdock. Although the trust had been operating for three decades when he was hired, Moore began assembling a list of people who knew Jack Murdock the best, visiting them and asking about Murdock’s philanthropic wishes. Moore and his staff then assembled taped interview clips to provide an audiovisual record of Murdock’s donor intent.
Videos and oral histories are excellent ways to “embody” donor intent, Moore realized. “We all learn by stories. A good story illustrates your goals much better than a two-chapter document.”
Violation of donor intent is always a danger, whether through an abrupt turning of the ship or small incremental deviations over an extended period. A well-defined mission statement goes a long way toward preventing that.
As Bradley Foundation CEO Richard Graber has said, “In many ways, the easy part is putting those words on paper— that’s the first part. The second part—the harder part—is executing. But without that first part, I’m not sure you can get to the second part.”
The function of a mission statement is assisting those who come after you—whether family members, directors, a court or beneficiaries—to understand your goals. Yet you still must have successors who desire to carry out your wishes. By their very nature, the power of mission statements is limited. Even if you supplement the statement with legacy documents, videos and other supporting materials, these items, while necessary, cannot guarantee your donor intent will be honored. They put guardrails around donor intent, but the charitable vehicle can still crash.
Your choice of vehicles to utilize in your journey is certainly another important element to consider, as is the lifespan you mandate for your philanthropy. The most important function of a mission statement, however, is assisting those who come after you — whether family members, directors or beneficiaries — to understand your goals. You must still have successors who desire to carry out your wishes, so the “people part” of the equation is enormously important.
In carefully selecting the individuals to first bring on board to assist and succeed you, a strong mission statement is invaluable. It can be used to ask the right questions of potential trustees and educate those you select as you collaborate during your lifetime. The first generation of trustees is crucial in preserving the original wealth creator’s voice for future generations because they are the trustees with first-hand knowledge of the donor’s values and preferred giving strategies. Ideally, your mission statement will assist them to select equally aligned successors.
As part of our continuing efforts to protect donor intent, Philanthropy Roundtable is ready to help you develop or strengthen your mission statement, and we welcome your inquiries.
Collaborative Giving and Philanthropic Partnerships – Pros and Cons for Donor Intent
Earlier this year we published a two-part blog on predicted trends in philanthropy. In the first part, we reported on the expectation that collective giving would double in the next five years.
Collective giving has a long history in the United States, sometimes resulting from structured campaigns (the sale of war bonds in World War II) and sometimes as a spontaneous response to tragedy or disaster (this year’s wildfires in California). Increasingly, however, American philanthropy has included more formal examples of planned cooperative giving designed to bring together like-minded donors to increase the influence and effectiveness of their charitable giving around a specific issue or place.
These collectives range from giving circles and community foundation field-of-interest funds to national—and sometimes international—organizations like the Charter School Growth Fund, Climate Works and the Global Fund for Women.
The forecast of continued growth in this area seems warranted, and we will likely see increased interest and calls for collective giving as charitable organizations face increased financial and political pressure. What does this mean for foundations and individual donors committed to protecting donor intent?
Collaborative funding, by definition, limits your donor intent as each fund sets its own minimum contributions and rules for exercising preferences, based on its mission and investment style. Yet most options offer donors some degree of control over the grantmaking process. An intermediary organization, for example, can help philanthropists support an issue in partnership with other funders, using pooled funds and a portfolio approach instead of giving to a single organization.
If you are aligned with the core purpose of the fund, receive regular satisfactory reports and timely responses to any questions you have, that may be sufficient confirmation your intent is being honored. The Charter School Growth Fund is an excellent example of this sort of intermediary.
Blue Meridian Partners, launched by the Edna McConnell Clark Foundation in 2016, seeks “to transform the life trajectories of our nation’s young people and families in poverty by investing in solutions to the problems that limit economic and social mobility.” Blue Meridian searches out organizations, evaluates their effects and ability to be expanded, develops a growth plan, provides management support, makes investments, monitors progress, and reports back to funding partners. The fund has raised $4.5 billion to date for its work.
Donors to Blue Meridian come from across the country. Among them are the Duke Endowment, the Gates Foundation, the Knight Foundation and MacKenzie Scott. All donors to Blue Meridian (referred to as “Partners”) can access the full catalog of Blue Meridian’s sourcing and due diligence research. They may also take advantage of opportunities for site visits and connections with leaders in funded organizations. They belong to a cohort of philanthropists who share an opportunity to learn from the Blue Meridian team, but also from each other.
Blue Meridian does, however, distinguish among its donors in matters of decision-making.
- A General Partner commits to an initial $50 million grant contributed over time with the projection to deepen the investment as the partnership grows. General Partners, according to the website, “engage in decision-making across all aspects of Blue Meridian’s investment strategy, from individual investment decisions to portfolio allocation.”
- An Impact Partner makes an initial commitment of at least $15 million contributed over time. As Blue Meridian notes, “Impact Partners support investment decisions across Blue Meridian, as well as benefit from engaging with and learning from other Partners and social sector leaders.”
- Regional Partners make investments in communities, Blue Meridian explains. These partners are “helping scale strategies across states, regions, and within neighborhoods. Their capital is split between place-specific investments and Blue Meridian’s central pool.”
- A donor deemed a Contributor “directs their commitment to Blue Meridian’s existing approach, whether to individual investments or a full portfolio.”
Donors may also come together in informal ways, of course. In many instances, donors meet regularly in support of a particular place or in working groups focused on a particular issue such as homelessness or mental health. Donors who choose to join formal collaboratives, however, should understand fully the mission of the collaborative, its membership requirements and how its work aligns with your philanthropic intent.
In next month’s Donor Intent Watch, we will conclude our series on choosing the right vehicle(s) for your giving in a discussion of private non-operating foundations.
