The Living Years

There is no topic more widely discussed and fretted about in family philanthropy than donor intent. Horror stories (both true and fabricated) are floated by institutions and endowments warning parents there is a high likelihood that their children will abandon their values and wishes almost as soon as both parents have been laid to rest.

The classic example is the Ford Foundation whose trustees, according to the story, were so blatant about diverting from Henry Ford’s instructions that his son resigned from the Board in disgust, claiming the trustees had betrayed their responsibilities by funding causes that would have been abhorrent to his father’s intentions. In fact, while it is true he resigned, it is not true that the trustees abandoned the intent of the founder. Waldemar Nielsen in his classic on donor intent reported, “After the most comprehensive combing of the family and company papers, these people from the law firm of Cravath, Swaine & Moore were unable to find a single sentence or a single note from old Henry (Ford) expressing any interest in, or ideas about, his philanthropy.”

In effect, there was no actual donor intent and the trustees were free to do much as they pleased. In other words, there was probably donor assumption but no stated donor intent. Henry Ford either had no interest in what they did, or he simply assumed his family and trustees would do as he would. They didn’t, and more than likely, neither will yours if you are making assumptions instead of clearly expressing your intentions in writing.

For some on the other extreme, that has been the motivation for crafting such an airtight and restrictive set of rules that the family and trustees have absolutely no freedom at all. The donor has done everything possible to “rule from the grave.” I remember vividly my visit to the office of one unfortunate son whose father had done exactly this. There was no joy in the work because the ever-present danger of drifting from the detailed mandates of the father kept everyone in chains. Far from being creative or energetic, the loyal son was hunched over his desk piled high with files as he went through every single grant request making certain there was not a penny spent on anything outside the demands of the trust. I cannot prove it, but I think the pressure and the overwhelming burden was part of the cause for his early death not many years after his father’s.

Many times, the stories and personal experiences of the parents determine the focus of their giving and they think it only natural to dictate the same for those following  them. For example, many successful people growing up with little access to education are supporters of scholarships giving others a chance to attend college. We all know people who are long-time advocates for research and treatment of a particular disease that has touched their loved ones. People who have had personal experience with poverty are likely to make that a priority in what they do with their giving. That’s how it works when we use our stories and circumstances to guide the values and priorities of a foundation. How can anyone argue with the importance of education, poverty relief and the eradication of disease? Ironically, that’s part of the dilemma for the next generation.

Different Stories

Our stories and personal experiences are not the stories of our children for the most part. Our children did not grow up in poverty or lack for education. They likely have had very little contact with those who have unless it has been through an “experience” such as a mission trip or community service. In some ways, they live buffered from the very things that motivate our compassion and giving.

Our children have different stories and interests shaping them but it is difficult for us to understand that when we write out the focus and boundaries of the trust or foundation we began. We assume they should naturally be loyal to our choices and causes that shaped our giving but then we are surprised and disappointed when they show little interest in these things.

Our children’s hearts are in other places but for many of the same reasons as ours. Something has touched them. If we discount those passions or do not give them the proper amount of credibility, we are not ensuring donor intent as much as we are creating discontent and, ultimately, disinterest. We have created a parent foundation—not a family foundation.

A wise friend told me that “the best donor intent begins in the cradle.” It begins with communication and trust early on and not waiting until we are sitting with the lawyers finalizing our estate planning. Donor intent means recognizing our goal is not simply to produce administrators of the assets but to help our children become creative and competent givers themselves.

True donor intent is neither what Henry Ford did or attempting to rule from the grave. It is building trust with your heirs so even if you disagree with some of their choices you are going to provide them the balance of guidance with latitude.

I would encourage you to begin now in “the living years” as the song goes to talk with your kids about why you care about the things you do and listen while they do the same with you. You will discover areas of their hearts and minds you may have never realized before. In that way, you are more likely to see your giving be nourished and fed generation after generation.

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