Charitable Legacy - how to create one for when you are gone.
Not long ago, a philanthropic-minded member of the community was asked for their thoughts around establishing a private foundation. After some reflection, this individual responded that they didn’t feel comfortable with the idea of others carrying forward their charitable mission, as whoever is chosen to lead the foundation could try to steer its resources toward their own causes.
This makes so much sense. And who wouldn’t have this concern? But the fact remains that it’s simply not always practical or optimal to donate all your charitable dollars in your lifetime. Sometimes a foundation, a donor advised fund, endowments, charitable trusts, or some combination of the like can be a good fit for the express reason that these vehicles often do have a life beyond that of the original donor.
So, if you’re interested in leaving a charitable legacy, how can you navigate the tension between these apparently conflicting concerns?
Here are some steps to take, so that your mission will continue well pats your days.
Start by clearly defining your charitable mission.
If your plan calls for starting a private foundation, write your foundation’s mission definitively in your founding documents. Supplement your mission statement with a description of your preferences – what you like and don’t like in your charitable giving. Take advantage of technology and record a video to this effect.
Construct your team
Next, choose trustees and a team of financial and legal professionals who understand and generally agree with your own principles. Omit family members, friends and any professionals – including financial planners, accountants and lawyers – if they are not aligned with your viewpoints.
Set & Move on your Vision
Then continue to work on your giving plan and make gifts and commitments while living. Use the experience to shape the future approach and objectives of your foundation after your death.
Play the long game. Envision the generations ahead.
Instate procedures to appoint future trustees who share your principles, and have systems and policies in place to encourage future boards to consider a respect for donor intent as part of their fiduciary duty.
No amount of planning will guarantee that original donor intent – yours – will be fully maintained. Adverse and impossible-to-predict consequences that arise from trying to control too much down through too many years are a hallmark of failed legacy and estate planning.
Often it begins with being too specific and inflexible out of the gate. But taking prudent and reasonable steps to make your ideal wishes and outcomes known can increase the odds you hit your legacy homerun. Want to have a conversation about estate and charitable planning, let us know how we can help.
Copyright: Stonebridge Wealth 2022.
Article by Elliot Dole of Buckingham Strategic Partners. The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.