Jason Franklin
One of philanthropy's most intriguing and impactful new leaders

Questions to ask before starting a foundation

May 14th, 2012

 

A friend of mine just sold her company and asked me a couple weeks ago if she should set up a foundation to manage her giving. It's a question that comes up regularly, as most people don't realize there are more options than giving from their checkbook/portfolio or creating a foundation.

Honestly, when I hear the question I cringe a bit...because it's not the question I wish people would start with. As I said to her and others, the first thing I encourage people to ask is "what do I want my giving to achieve?" The often complicated answer(s) to that question will then lead you to decide other key practical giving questions:

  • What Vehicle? - If you're planning to give a large amount (at least $5M in my opinion) and want to focus on multiple or complicated issues over time, a foundation may be the way to go. If you're giving less or have more straightforward giving priorities, a donor advised fund or just giving directly can often be a better solution,.
  • How Long? - Another question I always raise is how long you want your giving to last. If you're giving to an urgent problem like climate change, giving big now probably makes more sense than a 5% payout from a foundation in perpetuity. Conversely, if you want to support a need that will continue, such as classical music education, than a longer time horizon may make more sense.
  • Who Decides? - A final question I wish was asked more often is who you want engaged in your giving. Do you want to do it alone, with your partner or spouse, or with your family? Do you want to bring in expert voices or people from the communities you are supporting? New voices can make your giving more effective and powerful, but changes the dynamic considerably from a family process and can require more work.

These are just some of the key questions I suggest people think about before they try to decide if starting a foundation is right for them...deceptively simple questions who answers will have a dramatic impact on the future of your giving. 

I'm curious, what other questions do you think people should be asking?

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