Has anyone started a family foundation?

Recently came into some money after some unfortunate deaths in the family. I don't want the money nor do I need it. I'm hoping to do some good with it, but I'm having trouble finding proper guidance regarding it.

I'm hoping I can bootstrap most of it, but does anyone know how much of a commitment it'll be? In terms of capital needed, I should be at a point where it makes sense to start an official family foundation, according to some things I read online. I'll probably have to spend a lot to keep a lawyer on retainer, but otherwise, I think I can do most of it on my own. 

I identified some major charities (which were based on things my loved ones enjoyed, such as the Make-A-Wish foundation and some local wildlife organization), but what does DD on a charity look like? In addition, I heard I can only donate to recognized charities by the IRS, is it possible to still donate to local charities? If I can't, would a donor fund be a better option for me?

Outside of that, I know I have to donate at least 5% of my AUM every year, but is it possible to just allocate the money into market-tracking funds and not worry about it? Should I spend money on an investment analyst, or should I do it myself? I'm currently a 2nd year analyst and don't want to spend too much time away from work on this. Would it be possible to get kids from my college to work on this for free? Maybe by investing in one of the student-run funds and withdrawing once a year for donations? I remember the fund basically followed the market anyways when I was a student, so I should easily make up the amount I donate every year.

This isn't something I want to use to be an "exit op" or whatever, I literally just want to do some good in my life for once and not have this feel like blood money to me.

Comments (4)

1y
Anonymous244729, what's your opinion? Comment below:

Hey first off, I'm sorry for your loss. I hope you and everyone still around is doing well. Nice of you to want to honor your loved ones by making a charitable effort with some of what they left behind in this world.
 

in terms of hopefully sharing maybe some little bit of potential guidance/help, I think family foundations are mainly Just for tax purposes as far as I can tell? If you want to donate nearly all of it to charity I think you are more than welcome to do that. The paperwork/lawyer/foundation stuff I believe only comes into play when you want to use your donations in order to get a tax break I believe? I'm open to hearing if I'm wrong and am interested if anyone else has any knowledge / thoughts on this 

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  • Analyst 1 in IB - Cov
1y

From what I read, the tax benefits of a family foundation doesn't really make sense, at least at my level. Assuming it was 1:1, if I put in $100K into the fund and I get a tax break of $100K, I'm still out $100K because I'll never get the money I put in ever again and the tax break will not carry over into the next year. However, as far as I know, the biggest benefit of a family foundation is no taxes (especially capital gains tax) in my investments, allowing me to put in nearly 50% more into charities versus me donating as myself directly to a charity. I think the biggest benefit of a lawyer is that he/she would be my shield against the deluge of government papers. In that regard, an investment analyst would allow me to not have to disclose every investment I make through the family foundation to my bank's HR. I considered a DAF to circumvent all this, but I don't get nearly as much autonomy into which charities my money goes to. The last thing I want is my loved one's money go into an organization that I don't want it to go to, such as a deeply religious one or a fraud organization like the Komen Foundation.

  • Analyst 1 in IB - Cov
1y

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