| Members of wealthy families can utilize | | | | own level) and become an advocate of something |
| philanthropy to build and carry on the family | | | | they are highly interested in. |
| legacy as well as to teach values and provide | | | | Children 12 and older form an investment and |
| practical life experience to younger generations - | | | | administrative committee for the board - letting |
| but how do you organize to allow multiple family | | | | them learn and practice investment methods |
| members from multiple generations to participate | | | | along with learning business skills that translate into |
| in the same effort? | | | | the for profit world. |
| Here are 4 examples to aid you in determining | | | | Establish a Formal Family Philanthropic Foundation |
| what will work in your family. | | | | Families with 5 or more million dollars can consider |
| Use your Family Meeting | | | | establishing a public entity (Trust or Corporation) |
| The simplest way to involve family members is | | | | as an ongoing Foundation to carry forward their |
| to just discuss philanthropy at the family meeting. | | | | legacy of giving for many generations. |
| In this example, the family does not have specific | | | | A foundation is a family-controlled trust or |
| funds allocated to giving. Each immediate family | | | | nonprofit corporation that is exempt from federal |
| unit does their own giving, but the members plan | | | | and state income taxes. It's purpose is to make |
| and discuss the causes that support the family | | | | grants to publicly supported organizations that |
| mission and values. The family meeting agenda | | | | address the needs of the community - ones the |
| includes an item to review the family mission and | | | | family cares about. There are strict government |
| values and hear from family members on which | | | | regulated reporting requirements and rigid |
| charitable organizations best support them. Each | | | | restrictions on using the money for private |
| family is free to utilize the results of the | | | | individuals (including donor and family). |
| discussion as they see fit. | | | | Processes, objectives and reporting obligations for |
| Set up a Family Philanthropic Council | | | | a foundation should be formal and disciplined - |
| A more formal, but still a simple and private way | | | | including doing an 'investor profile' to determine |
| to engage across generations can be to set up a | | | | types of investments, levels of risks, etc. |
| family council (or committee) to focus on | | | | Here are some of the benefits of establishing a |
| philanthropy. In this example, the family | | | | Family Foundation: |
| establishes a pool of money each year to donate | | | | - the family's influence is felt and the family |
| as a group (using the money each individual family | | | | charity objectives are achieved for the long term |
| would have donated). The family at large then | | | | - no matter what happens to the rest of the |
| selects family members to utilize the pooled | | | | family fortune |
| family funds, and identify, investigate and | | | | - formal investment managers identify and use an |
| contribute to charities that fit the mission as well | | | | investment policy appropriate to gift giving (level |
| as provide informal reporting back to family | | | | of risk and etc) |
| meeting through the year and formal reporting at | | | | - proper governance and a dedicated |
| the family meeting. This council may well provide | | | | management team keep the foundation healthy |
| reporting to the family on how the pooled funds | | | | Drawbacks of establishing a Family Foundation |
| were invested and why. | | | | include: |
| Build a Grandparent/Grandchild Philanthropic Board | | | | - the cost of setting up the legal entity to hold |
| In this example, the grandparents mentor the | | | | the foundation as well as the costs of running it |
| grandchildren (without the parent's presence) in | | | | (salaries of the personnel involved) |
| the various things that are needed to give wisely. | | | | - the risk of loss of family involvement due to the |
| This fosters inter-generational communication and | | | | more formal nature of the Foundation |
| relationship building and gives the grandparents a | | | | In summary, four methods of involving multiple |
| continuing role in family governance without | | | | generations in family philanthropy are to a) use |
| treading on the children's domain in the family. All | | | | your family meeting b) set up a family council c) |
| grandchildren over the age of 6 participate by | | | | let the grandparents mentor grandchildren while |
| submitting a request to grant money to their | | | | the grandchildren handle the giving and d) set up a |
| preferred cause. This helps the child learn to | | | | formal family foundation. |
| organize material, make a presentation (at their | | | | Copyright 2010 Family Money Enterprises, L.L.C. |