David Andrés Kietzman

David Andrés Kietzman

Family foundations are on the rise. And you don’t have to be a Rockefeller, Kennedy, or Gates to have one. There is no standard definition for family philanthropy or a family foundation, which is not part of the IRS classification for nonprofit organizations and foundations; however, according to the National Center for Family Philanthropy, family foundation typically connotes the active involvement of members of the donors’ family in the foundation. But as the original donors die, their descendants may have various levels of involvement with the foundation.

The annual report on philanthropy from the Giving U.S.A. Foundation reports, “Not only did total giving by foundations grow 8.2% in 2014, gifts from all three types – community, independent and operating – also went up. The annual changes in this category are influenced most by grants from independent foundations; their 2014 gifts were 7.8% higher than in 2013 and accounted for 74% of the category’s total.”

As middle-class Baby Boomers and Generation Xers begin to inherit their families’ wealth, many are creating family foundations to serve philanthropic causes that resonate with the family or continue a relative’s legacy. And it isn’t as expensive as you might think.

Scott Nelson, certified financial planner for Sagemark Consulting in California, says that it’s possible to create a private foundation with an initial gift of $5,000, far less than most people assume. Family foundations can keep far-flung families connected and continue family values through the generations.

Meet the MacCreadys

Marshall MacCready, who along with his siblings established the MacCready Family Foundation shortly after their father died, says it makes sense to establish a foundation when assets pass to the next generation. “It was easy for us because we are a like-minded family. When we inherited the money, we sat down with advisors and spoke about our motivations. We could have taken a lump sum, and divided it between us, but when we saw the benefits of establishing a foundation, it made perfect sense.”

Molly Knox, a MacCready family member and president of the MacCready Family Foundation, shares the sentiment echoed by other Baby Boomers who inherit money. She and her husband, along with the other MacCready siblings, already had established careers and comfortable homes for their families. Her initial reaction was that nobody deserved this much money.

Creating Sustainability

The MacCready philanthropy strategy focuses on giving unrestricted multi-year operating grants to a handful of small, youth-focused nonprofits, instead of seeding many nonprofits with smaller grants. Larger grant amounts help often-overlooked smaller organizations make a greater impact on the community they serve. This giving strategy sets the MacCreadys apart from other family foundations that give grants earmarked for specific programs and to several organizations.

The MacCready Foundation currently supports three nonprofits in the Los Angeles area: My Friend’s Place, which provides homeless youth with resources and a safe space; Youth Speak Collective, which gives young people a leadership role in their communities; and RootDown L.A., where youth grow fresh produce for their peers in underserved communities and teach them about nutrition and cooking. The MacCreadys also support the Community Science Workshop Network that focuses on giving underprivileged youth the opportunity to discover science.

“One of the most important things the MacCreadys have done is to help us sustain ourselves over time,” says Megan Hanson, executive director, RootDown L.A. “They gave us an initial capacity building grant and have since provided consistent contributions that help cover core operating costs and have at times been leveraged as mandatory matching funds to win federal grants. There are few foundations that do these multi-year investments and the donation is integral to our sustainability.”

The MacCreadys, like many other families, have determined that they want to leave a legacy that is focused on giving. Giving your time, money, and energy can bring significant impact in any community and sets the tone for generations to come.

David Andrés Kietzman is a talented social impact leader, known for his ability to fuse management, fundraising, and marketing at Momentum Solutions, and as a professional coach. He serves clients, donors, civic leaders, and community residents by helping everyone create a stronger impact through clear communication, building partnerships to help increase their funding, clients, or participants. david@momentumsolutions.com, Twitter @dakietz

This article is reprinted from the Legacy Special Edition of Nonprofit Performance Magazine. Subscribe today so that you won’t miss other actionable articles that will help you run your nonprofit organization with less pain and more gain!

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