with permission from Waldemar Nielsen's
Philanthropy: The Dramas of Donorship
University of Oklahoma Press, 1996).
very broad impulse of wealthy Americans to establish a
family foundation is an understandable and admirable reflection
of a national philanthropic spirit. Some 75 percent of
all American foundations are of this type. Yet, it is
a serious national problem that so many such foundations
are torn apart by family tensions or fall into decay from
neglect within two or three generations....
alternative to the traditional family foundations...is
the transfer of the assets to what is known as a "community
foundation." [Editor's note: Community foundations are
public grantmaking institutions serving a local geographic
area, typically supported by
a wide variety of donors and managed by trustees who are
prominent community leaders.] In fact, this has now become
a major national movement in philanthropy, one with vast
there are about 350 community foundations. They exist
in every part of the country, and their assets total some
$9 billion dollars, derived from eighteen thousand individual
and family gifts....
forces powering the extraordinary growth in community
foundations are only gradually coming to be understood.
One is the simple convenience in the formation of a family
philanthropy. All the legal, organizational, and financial
arrangements necessary to set up a new independent foundation
are simplified. In an attractive form of one-stop shopping,
one buys into an existing, on-going institution, and at
the same time one receives all the tax benefits given
to an ordinary charitable contribution.
second factor is the solidity and security of the institution
to which the funds are being committed: the high standing
of the members of the board, the typically good grantmaking
record and reputation of the local community foundation
over time, and assurance that the local foundation is
part of a strong and respected national movement....
recently, "donor advised funds" make it possible for donors
or the family to play an advisory role in the distribution
of grants from the funds they have provided. Thus families
have a satisfying degree of participation in the grantmaking
process... Somehow when the members of a family are in
direct and total control of a family-type foundation,
passions are often aroused, factions develop, old wounds
in relationships are reopened, and the foundation becomes
an arena not of healing collaboration but of bitter, even
deadly, conflict. On the other hand, donor-advised funds
administered by community foundations typically do not.
the operative forces may be, the evidence is compelling
that family participation in the procedures of community-foundation
grantmaking typically produces a more collaborative pattern
of family behavior. Given the huge number of family foundations
and their many problems, the growing number and the variety
of community and affinity-group foundations have to be
regarded as a major, heartening development.
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