Establishing a vehicle for your charitable vision
Private foundations can help individuals and families reach their philanthropic goals while offering multiple benefits along the way. There are several important decisions that need to be made before committing to establish a private foundation. Knowing what questions to ask and obtaining sound advice can assist you with the complexities of developing a private foundation.
“I didn’t know where to start. The advice I received on creating a private foundation pointed me in the right direction, and now I’m confident that I’ve done the right thing – both financially and philanthropically.”
Accomplishing your charitable vision
If you think you might be ready to establish a private foundation, you must objectively consider why a private foundation makes sense for you or your family.
Do you or your family:
- Have a charitable vision?
- Want to control the timing and use of your charitable funds?
- Want to introduce children and grandchildren to philanthropy?
- Want to create a charitable legacy for your family?
If you answer "yes" to one or more of these questions, a private foundation could be right for you.
A private foundation is:
- A formal vehicle for charitable giving
- A non-governmental, non-profit organization
- A principal fund managed by its own trustees or directors
- An entity that maintains or aids charitable, educational, religious, or other philanthropic activities
- An organization serving the public good through structured grant making to public charities
- A separate legal entity that provides a formal structure to carry out a donor’s or family’s charitable intentions
The legal and tax requirements of private foundations require a disciplined approach to grant making and investment decisions. Establishing formal policies and procedures can help a family determine that the private foundation will be operated in accordance with the donor’s charitable intentions. Such policies may also drive families to build consensus and a shared vision for their charitable goals.