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LEAVING A LEGACY
Succession Planning
Family foundations often consider succession planning their most challenging issue. Many family foundations were founded over the last 15 or 20 years by successful business people of the WWII generation. Typically, the founder had a vision and clear set of values, and he provided most of the leadership for the foundation. Now, as these founders reach their later years, the next generation is faced with the task of taking over the foundation. In some cases this succession has been well planned; in many cases it has been ignored.
Neithercut Philanthropy Advisors works with family foundations on the varied components of succession planning, including training/mentoring the next generation. Often these foundations fail to formally adopt a mission, values and goals while the founder is actively involved. NPA works with family foundations to establish these important guideposts, without which the foundation may flounder in the years to come.
Sunset Dates
Many small family and private foundation will benefit from the adoption of a sunset date. A sunset date, or predetermined termination date for a foundation, has many advantages. Even if a foundation chooses not to adopt a sunset date, a discussion of this option can help clarify the mission and objectives of the foundation.
Small foundations are increasingly adopting a sunset date for a variety of reasons. Some founders are concerned that the foundation will stray from its original vision after a few generations. By establishing a sunset date of 25 to 50 years, a founder can be assured that the board will always be composed of advisors and family members who knew him/her and who were aware of the original vision and values.
Perhaps of more importance, some foundations realize that they can have significantly more impact by concentrating their grantmaking over a finite number of years. By adopting a sunset date, a board can focus more on achieving its strategic goals and less on perpetuating the institution. By focusing its charitable assets on a finite number of years, instead of spreading them thinly over many generations, a foundation can have a much greater impact at a time not too distant from when the assets were originally accumulated. Perpetuity is a very long time.
