Lessons in family foundations from John and Susan Sobrato

John and Susan Sobrato have a singular philanthropic passion for their family foundation: Make California’s Silicon Valley a place of opportunity for all its residents. They are addressing their mission by promoting access to high-quality education, career pathways, and essential human services. 

The Sobratos earned their wealth through real-estate development—they are responsible for many of the commercial structures in Silicon Valley—and today operate their giving through Sobrato Philanthropies, an umbrella entity that includes their family foundation. 

The Sobratos take several approaches to ensure the fidelity of their giving through a family foundation:

1. They involved their children and grandchildren early on

The Sobratos involve future generations in their giving. They have three children plus seven grandchildren, and all three generations are represented on the foundation’s board of directors. Grandchildren are permitted to attend board meetings, and they may vote on grants after their twenty-first birthday.

2. They use donor-advised funds

The Sobratos also are giving family members the opportunity to pursue their individual charitable interests via donor-advised funds. Here is their approach: When the Sobratos donate appreciated real estate to their foundation, they deposit half the proceeds into these donor-advised funds. Children and grandchildren are free to make distributions from these funds without seeking board approval.

“We hope that by doing this we encourage the family to continue giving together rather than drifting apart,” John Sobrato told Philanthropy magazine in 2018. “Our giving keeps us close. Making decisions on our shared priorities creates a natural process for learning each other’s passions and opinions.”

3. They use trust funds strategically

In line with the family ethic of generosity, the Sobratos also are stewarding trust funds for their grandchildren. Sobrato heirs begin receiving distributions from their trusts at age 25, with incremental increases in payouts at intervals until age 50. The philanthropic twist is that in order to receive funds, each family member must donate an equal amount to charity—dollar for dollar.

“We thought it was important to encourage our grandchildren and children to do as we do,” John Sobrato says. “There’s enough wealth that they’re comfortable, but not to excess. And our kids aren’t selfish, so they’re okay with this.”