The majority of foundations are set up to exist in perpetuity. This means that control over the foundation and its assets can be passed to countless generations of family, perpetuating your values, continuing your charitable work, and burnishing your name far beyond your lifetime.
Today, Carnegie and Rockefeller are better remembered for their philanthropic legacies than for their accomplishments in the steel and oil industries. And because gifts are made from an endowment that generates investment revenue, the total gifts made by the foundation over time can far surpass the initial funding.
ENGAGING FAMILY IN PHILANTHROPY
A private foundation provides ample opportunities for teaching children and young adults about giving back while making philanthropy a family affair. Here are five of the most important benefits of a private foundation for families:
They help instill values and traditions: Involving the next generation in your philanthropy is one way to ensure that your family’s charitable legacy endures. The process of working together as a family can instill philanthropic values that last a lifetime.
Maintain family ties: In our increasingly geographically dispersed society, the family foundation can be the glue that maintains connections as family members move to pursue college and start careers and families across the country or even the globe.
Deepen social consciousness: The rapid pace of modern life offers few opportunities for families to work together on significant issues that are meaningful to them. For many families, the private foundation becomes the “hearth” around which multiple generations gather to discuss problems they would like to see resolved the world.
Increase personal fulfilment: Giving can make us happier. In a classic exercise, psychologist and researcher Martin Seligman asked his students to engage in one pleasurable activity and one philanthropic activity and then write about both. According to the students’ accounts, the perceived aftereffects of the fun activity paled in comparison to the altruistic venture (volunteering in a soup kitchen). Why was this? The research indicated that the process of giving took the students outside themselves. The total engagement and loss of self-consciousness they experienced when helping others had a stronger and more lasting impact than the short-lived stimulation of the “fun” activity.
Develop “real-world” skills: Involving the younger generation in the foundation can build practical competencies such as leadership, teamwork, investment management, negotiation, and social awareness. While the family foundation can provide young adults with significant opportunities for career development, even school-age children can benefit from the opportunity to apply their developing skills.