Safeguarding traditions

A family foundation provides an ideal structure for applying a cross-generational approach to improving mutual understanding within the family. Through the family foundation, the younger generation tries its hand at cooperation and gains experience in finance and business planning. The senior generation maintains contact through values and connects to the concepts of the next generation. Philippe J. Weil discusses his personal experience.

You were at our round table “Unter uns” (between us) and told us about a family foundation.
Philippe J. Weil: That example was about a family foundation established in the 80s by a married couple. The couple decided that 10% of their total commercial and private income would be used for charitable purposes every year. The objective of the foundation was drafted in a very general way: education, nature conservation, religion, humanitarian aid, elderly care, historic heritage, etc. This led to multiple small donations and a large network of organisations supported. Following the death of first of the two, a representative of the next generation was elected into the foundation board to ensure continuation of the family tradition.

What changed?
Philippe J. Weil: As long as the second parent held the presidency, the foundation’s activities did not change significantly. The new member only initiated classification of the donations to standard categories: “Core” (large donations to four organisations), “important” (historically and ideologically apt) and “small donations”. A budget was defined for the second and third categories with floor and ceiling amounts determined. Thus the “impact” of the donation could be amplified. In addition, a cash reserve was earmarked, to ensure the continued support of projects even in years with diminished income.

What happened after the second parent died?
Were the children interested in the foundation-related work?
Philippe J. Weil: I worked with the three children to examine foundation history and available figures going back ten years, in an effort to pinpoint the leitmotif of giving. The heirs discovered that certain donations had been on-going for nearly fifty years, and decided to continue with those “traditional” gifts. They also decided to seek direct dialogue with these organisations and choose, together with each of them, a new project, which would be pertinent and close to the hearts of the current and future generations. For example, the donation to a university that had not been project-related hitherto, was converted into a scholarship fund for the socio-economically disadvantaged. What’s more, the heirs – all of whom were between 50 and 60 years of age – were already active in charity organisations and planned to continue working on their personal projects outside of the foundation.