You may have heard about the many benefits of private foundations. And I bet that tax savings rank very high on your list. Yet there is a much more important issue you must consider before making the decision to start your own foundation. And that issue is the key to making it truly rewarding.

Don’t just jump into setting up a private foundation without very careful research and soal searching. It’s a big commitment. You and your family have to be very clear about what’s involved. And then, there’s that most important issue of all: You have to choose the right goals.

What are your true goals in life?

A foundation is forever, at least almost. So you’ll need to be ready to stick with your foundation for the long haul. That’s why it’s so important that you choose the right goals. And those goals must be truly yours — plus they need to have staying power.

What happens if you skip that step? The number one problem I’ve seen with people setting up foundations is that many of them neglect that crucial step and focus strictly on the immediate tax benefits, which can be substantial. Unfortunately, that can easily get in the way of developing a real philanthropic program.

Instead of selecting activities that are truly exciting to them, those people take on programs that they believe are more politically correct. As their enthusiasm wanes, their commitment generally wanes as well.

If you want to avoid having that happen to you and your private family foundation, you should think seriously about what exactly you would really like to accomplish. What are the activities they would like to be able to do as part of your work for the foundation?

Do you enjoy gourmet cooking? Are you interested in exploring other cultures? If so, you should work on finding ways to incorporate those into your foundation by building it around those activities. You could for example set up a foundation that provides international gourmet cooking classes for economically disadvantaged teenagers.

As you pursue activities that are of real interest to you as the founder and your families, your private family foundation becomes a mechanism where you can legally tax leverage and institutionalize your hobbies and passions.

If you get that part right and you have carefully integrated your foundation in your overall life plan, working with it can become so rewarding that the considerable commitment involved won’t be too much of an issue.

To find out more about it, just click on that yellow/golden square at the top right of the page and get your free sample chapter from the ultimate guide to using private foundations for wealth management, written by yours truly. And I’ll be very happy to talk with you if you should have any questions. Just call me at 702-247-6809.

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