“Too often high net worth donors interested in establishing a private foundation to manage their charitable giving focus too heavily on the tax benefits and logistical questions involved in setting them up.
In doing so, they overlook the larger question of mission and the societal good they are hoping to accomplish. A case in point: The IRS requirement that foundations distribute 5 percent of their net assets to charity annually dictates the spending policies and investment strategies of most foundations. I strongly encourage these donors to define their mission separate from tax law, create corresponding spend policies while meeting the minimum distribution requirement and work with a financial advisor to select appropriate investment strategies.”
