The Benefits of Starting a Family Foundation

Have you ever considered starting your own private family foundation? For those who have causes you are passionate about, creating a family foundation gives you the opportunity to benefit the people, places or things you care about most, and in a way that speaks to you. Not only can you benefit others, but there are benefits for you as well. 

Tax Benefits

There are several tax benefits to starting a family foundation, including:

  • Donors get an immediate tax deduction upon their initial gift
  • Avoids capital gains tax when donated appreciated property is sold
  • Any earnings from the  foundation’s assets are (nearly) tax free
  • Minimizes estate tax liability for the donor

Management Benefits

By setting up your own family foundation, you have more control in how the money is managed, who manages it, and where it is spent. 

  • You are able to directly hire the qualified professionals who properly manage funds and disbursements
  • Segregates designated foundation monies from your other assets so that your contributions remain intact should there be issues with your other assets
  • Provides more control over charities you will support and how you choose to support them
  • Provides greater ability to enforce the terms of restricted gifts – better protecting donor intent 

Familial Benefits

As we mentioned before, it’s a great feeling when you’re able to help others. By doing so through a foundation, you’re able to help your family as well.

  • Should there be concerns about how future generations will handle your money, a family foundation provides them an opportunity to learn to gift and to do so wisely
  • Provides employment opportunities for members of the family who wish to be more directly involved in foundation management
  • Establishes a charitable legacy that can live on with the family name

As you can see, there are many benefits to establishing and running a family foundation. If you’ve been considering starting your own foundation, I encourage you to reach out to Caritas Law Group today to discuss how we can help you create a family foundation.

Ellis Carter is a nonprofit lawyer with Caritas Law Group, PC. To contact Ellis, call 602-456-0071 or email us at info@caritaslawgroup.com.