How to protect your donor intent in a family foundation

Family-wide generosity can be a wonderful thing—a source of great satisfaction and multiplied good. But donors who establish foundations, donor-advised funds, or other philanthropic vehicles for their families must take precautions to protect their intent (not to mention the wellbeing of their familial relationships). Here are some ways to protect your donor intent in a family foundation:

• Be clear: Begin with a firm understanding of your own intentions and communicate them in clear terms to your family members, estate planners, and legal advisors. A willingness to tackle awkward conversations about core values up front will pay huge dividends in the future.

• Expose your family early and often to your values and priorities: If you seek an opportunity for your family to come together and experience the joy of giving, then engage your children in your charitable endeavors early on. It is a good idea to reinforce these lessons with oral histories and videos that enhance your family’s understanding of your intent.

• Make participation in your giving voluntary: Be clear with family members that formal participation in your family philanthropy is not obligatory. Your children may simply not share your interest in charity, especially when they are beginning their professional lives and starting their own families.

• Make service on your board a privilege: Treat board membership as a privilege that must be earned, not an automatic consequence of one’s DNA. Be clear from the beginning about who is eligible to sit on the board and the qualifications needed for board service. Will you include spouses or domestic partners? Adopted children? Stepchildren? Don’t wait to make those decisions until they involve specific individuals—think them through up front.

• Set term limits: If the pool of potential family board members is large—or if you want to restrict the number of family members sitting on the board at any one time—consider a system of three-year rotations.

• Consider less formal alternatives to board membership at your foundation as ways of engaging family members in philanthropy without handing them governance control, such as creating an advisory board where family members may serve or using a separate foundation or donor-advised fund for family giving.