We’ve heard a good deal lately about “family philanthropy”. What does that mean exactly and how does it differ from other forms of philanthropy?
We’ve turned to the experts at the National Center for Family Philanthropy to answer this reader’s question. Here’s their answer.
Family philanthropy describes charitable giving by a family through any number of options, including family foundations, community foundations, foundations tied to a family business, gift funds, banks, religious or ethnic federations, and collaboratives of donors. Like most donors, family philanthropists are motivated to give something back-- to make a positive difference in their communities. What makes family philanthropy unique, however, is the family philanthropist commits to working with family members to make this difference. Family dynamics shape this commitment, their passion for and understanding of their communities as well as their issues. Internal family struggles, both define and enhance their philanthropic goals.
Family philanthropy enables donors and families to build their experiences, traditions, and values into their charitable giving. The family foundations now passing the leadership on to the third, fourth, and even fifth generations are a testament to the lasting impact that family philanthropy can have on both the family and the community it serves.
Donors and families seek to meet a wide variety of goals through their philanthropy. Some of these include:
- Giving back to the community in which the family became a financial success;
- Creating a family legacy;
- Supporting an issue (or issues) about which the family cares deeply;
- Passing a tradition of giving onto their children and grandchildren;
- Memorializing a relative and his or her values;
- Uniting a family with a shared sense of purpose; and
- Securing tax and estate planning advantages.
Of the more than 45,000 private foundations in existence, at least two-thirds are family managed. More than 90 percent of these family foundations have less than $10 million in assets.
Current estimates suggest that family foundations give out grants totaling over $7 billion per year. For more information: National Center for Family Philanthropy 1220 Nineteenth Street NW Suite 804 Washington, DC 20036 202-293-3424 www.ncfp.org
Articles purchased or downloaded from Family Business Consulting Group® are designed to provide general information and are not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inactions made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.
The copyright on this article is held by Family Business Consulting Group®. All rights reserved.
Articles may be available for reprint with permission. To learn more about using articles for your publication, contact firstname.lastname@example.org.