Of all the charitable giving vehicles that exist for donors to accomplish good works, the private foundation is widely considered to be the most effective, flexible and enduring. From the Rockefellers, Carnegies and Fords of previous generations to Bill Gates, Jeffrey Skoll and Gordon Moore of the present era, a defining mark of financial achievement is the ability to make a difference in people’s lives through one’s own private foundation.
Yet many advisors resist recommending the private foundation model to clients who could benefit from it because they think it is beyond their client’s monetary reach. (Conventional wisdom holds not starting a foundation unless a client has $3-5 million in expendable assets). But you don’t have to be a Buffet or a Gates to have a foundation: the vast majority of all private foundations – nearly 70 percent – have assets under $1 million. What is more, the cost of operating a modern foundation is now on par with – and, in many cases, less expensive than – the cost of maintaining an equivalently sized donor-advised fund.