Family Foundations

The Council on Foundations defines a family foundation as one whose funds are derived from members of a single family, though this is not a legal term and has no precise definition. The Council on Foundations suggests that family foundations have at least one family member serving as an officer or board member of the foundation and, as the donor, that individual (or a relative) must play a significant role in governing and/or managing the foundation. Most family foundations are run by family members who serve as trustees or directors on a voluntary basis. In many cases, second- and third-generation descendants of the original donors manage the foundation.

Family foundations make up over half of all private (family, corporate, independent, and operating) foundations, or 40,456 out of approximately 73,764 foundations (Foundation Center, 2011). Family foundations make up approximately one-third of the Council’s membership.

Family foundations range in asset size from a few hundred thousand dollars to more than $1 billion. The holdings of family foundations total approximately $294 billion, or about 44 percent of all foundation holdings of $662 billion. Despite this, three out of five family foundations hold assets of less than $1 million. Family foundations gave away approximately $21.3 billion in grants in 2011 (The Foundation Center, 2011).

Below is everything on our site for family foundations. You can use the filtering options on the right to narrow these results.

Sample conflict of interest policies from the Community Foundation of Switzerland County and Triangle Community Foundation.

Ordinarily, established private foundations and public charity grantmakers would ignore the IRS's revision of Form 1023, Application for Recognition of Exemption from Federal Income Tax. After all, these groups have already received their determination letters. But the revised Form 1023 and the accompanying instructions that the IRS issued on November 1, 2004, merit grantmakers' attention.

This article focuses on conflicts of interest around foundation investments. May foundation board members (or other closely affiliated individuals or businesses) manage foundation investments? May they be paid for this service? What factors should foundation managers consider before they select an investment manager who has a close relationship with the foundation? When is it a bad idea? What special procedures should be followed when a board member or other close affiliate is also an investment manager.

This article explores one of the more common questions about conflicts of interest: May the foundation's lawyer serve as a trustee?

Foundation Lawyer/Trustee

With Congress and the media focusing on corporate governance and foundation administration, it is a good time to make sure that all grantmakers have a strong conflict of interest policy in place. Both private foundations and public charities (such as community foundations) should have clear guidelines on financial or other interests that must be disclosed and transactions that must be scrutinized or avoided. The policy should cover both board members and foundation staff.

Directors & Officers liability insurance provides financial protection for a foundation and its directors, officers, employees, and volunteers in the event of a lawsuit.

For boards of directors, trustees and foundation managers, there are few areas of operation that cause more confusion and uncertainty than indemnification and the purchase of directors and officers (D&O) liability insurance. And it is no wonder. Mixing the often impenetrable statutory language of the Internal Revenue Code with the highly refined wording of insurance policies creates fertile ground for confusion. To make matters worse, the rules are not static. State laws change, Treasury regulations are revised and insurance policy language is frequently amended.

There's more to closing down a private foundation than packing up and turning off the utilities. Here are some questions, considerations, and IRS direction.

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