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Thursday, May 7, 2009

Family Foundations Dwindle

According to a recent report by the Foundation Center and Council on Foundations, over one third of family foundations have either decided to or are considering spending down earlier than planned. At the same time, many of these foundations are closing down operations altogether and moving their assets to donor-advised funds. The move allows these family givers to free themselves from the burden of administrative costs and day-to-day management decisions.

Given the one million plus charities out there, the news that some family foundations are closing their doors earlier than planned could be viewed as a good thing if it translates into more money going directly to high-performing charities. By cutting out the intermediary, more money can be put toward the valuable programs that inspire your generous contributions without getting tied up in the foundation's administrative fees.

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1 comment:

Ellen Israelson said...

At Jewish Communal Fund, one of the nation's most respected donor-advised funds (DAF), we are witnessing this trend. As the corpus dwindles, family foundations find it easier and more cost-effective to terminate the foundation and transfer the assets to a DAF. The name of the foundation can be preserved, and at JCF funds can exist in perpetuity, preserving the family's charitable legacy. The donor still maintains the ability to recommend grants to the charities they have previously supported. Donor-advised funds are a good solution when heirs have funding interests that differ from the foundation's original mission.