Family foundations can be a rewarding way to support worthy, charitable causes. That’s why it’s important for family foundations to decide if they’d like their foundation to exist in perpetuity or a specific period of time—and to plan accordingly.
For those who want to pass on their family foundation to the next generation, consider engaging and educating younger family members to become sound philanthropists.
Engaging younger family members in the operations of a family foundation helps them develop a sense of philanthropic responsibility and valuable business acumen. It can also reignite passion across multiple generations for why the foundation was created in the first place.
The next generation may have innovative ideas for making a charitable impact and solving charitable issues that are different from the foundation’s current methods of operations. For example, perhaps a significant impact on a charitable issue would be best approached with multiyear program-related investments or even partnering with a for-profit for a charitable cause. The possibilities are limitless.
Without a working knowledge of a family foundation’s mission and how it operates, it can be difficult for the next generation to move the foundation’s mission forward.
To help foster this knowledge base, one option available for family foundations is to set up a junior board of directors—an advisory position without voting rights.
Junior Board of Directors Roles
In this role, younger family members can participate in grant-making decisions—conducting research and presenting potential grantees to the legal board of directors—while gaining valuable, hands-on experience.
This provides them with opportunities to:
- Understand not-for-profit programs being conducted by public charities
- Discover their own philanthropic interests
- Learn about investment principles and grant making
- Conduct grantee sight visits, gaining insight to worthy programmatic activity
- Present to the board
Fulfill the Mission
Throughout the process, it’s important to encourage the junior board to be creative and not to force participation. Natural learning processes born out of genuine curiosity and interest will usually have the most significant impact.
Preparing for the next generation’s succession empowers those family members to carry the family foundation’s mission forward. It also provides a framework with tools, opportunities, and support for them to encourage their own children to do the same.
We’re Here to Help
For more information on family foundation transition planning, contact your Moss Adams professional.