Although tax advantages and giving efficiencies are incentives to establish a foundation, most donors say they formed their family foundation for two basic reasons. The first is to provide a vehicle that encourages the family to work together to make a better world and, second, to perpetuate a philanthropic family legacy through the generations. Our parents taught us to do the right thing and set a good example. By demonstrating values of giving and volunteerism, we set a good example for our children. However, when it comes to formal family philanthropy, our children may need an invitation and further preparation to participate in the foundation.
Family foundation donors and first generation boards should begin the continuity and succession discussion early in the foundation’s lifetime if perpetuity is the objective. In a succession plan, one trustee usually succeeds another. However, before succession can take place there should be continuity of governance where members of more than one generation are working together as peers. Whether the succession question is how to add the second generation to a board that is currently composed only of the donor(s) or how to involve multiple generations and branches, a plan for continuity and succession is essential.
This Passages profiles the succession planning experience of the Howard and Geraldine Polinger Family Foundation and the challenges faced when the foundation sought to add third generation family members to its Board of Directors.
Read the full article about grantmakers by Mary Phillips at the National Center for Family Philanthropy.