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.

Many foundation board members wear more than one philanthropic hat. In addition to serving on the board of a grantmaker, they may also serve on the boards of grantseeking charities—or even on their staffs. Several issues may arise when board members find themselves on both sides of a grant request.

In the May/June 1998 issue of Foundation News & Commentary, Jane Nober wrote "That's the Ticket"  about using foundation funds to pay for tickets to fundraising events. Six years later, questions about tickets and other tangible benefits paid for by the foundation are still among the most common inquiries received by the Council on Foundations' legal department. We thought it would be helpful to review the basic rules for private foundations and highlight some recent questions we've answered.

Accepting and using tickets and other tangible benefits of more than minimal value raises questions for foundation managers. Here's what the general Tax Code rules say is acceptable.

This Document Retention and Destruction Policy of the Council on Foundations (the "Council") identifies the record retention responsibilities of staff, volunteers, members of the Board of Directors, and outsiders for maintaining and documenting the storage and destruction of the Council’s documents and records. You can use this as guide for your own policy.

Every organization exempt under Section 501(c)(3) of the Internal Revenue Code is required to disclose certain information to the public:

Tax-exempt organizations must make annual returns and exemption applications filed with the IRS available for public inspection and copying upon request. In addition, the IRS makes these documents available. These FAQS relate to the public disclosure and availability of documents filed by tax-exempt organizations with the IRS.

Can we pay our board members? Should we?

Always a controversial topic, the issue of whether to pay foundation board members is likely to get even more attention. The precipitous decline in foundation assets has everyone trying to make the most effective use of their resources. Expect the media, regulators, general public, and even your grantees to scrutinize the decisions you make.

The Internal Revenue Code provides excise tax penalties that can be imposed by the Internal Revenue Service whenever unreasonable or excessive compensation is paid to high-level employees of charitable organizations.

The Council receives numerous inquiries each year about the amount of compensation paid to directors or trustees (members of the governing board) of foundations. Since 1969, board members of private foundations have been subject to excise tax penalties for receiving unreasonable compensation. In 1996, Congress passed the “intermediate sanction” rules that enable the Internal Revenue Service to apply similar penalties for excessive compensation paid by public charities.

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