New Generation of Philanthropists

A look at their environment, from the Wall Street Journal.

An excerpt.

“Her grandfather, Max M. Fisher, founded the Speedway gasoline station chain and gave millions to big causes like the Detroit Symphony Orchestra and the United Jewish Appeal.

“Caroline Cummings Rafferty, 29 years old, is being groomed to help run the $235 million Max M. and Marjorie S. Fisher Foundation in Southfield, Mich. But for now, she is running a tiny $1 million foundation and making gifts of a few thousand dollars to charitable organizations.

“Ms. Cummings Rafferty reflects the struggles facing family philanthropists—one old problem and one new: How do parents foster proper stewardship of family foundations among their children? And with an economic downturn racking charitable giving, how do heirs manage to do more with less?

“U.S. foundations lost nearly $150 billion in assets in 2008, or almost as much as they had given away during the four years prior, according to the Foundation Center, which tracks information. Nearly one in five foundations cut back their funding in 2009 and expects to give less in the next few years.

“Facing a brutal environment, parents have to be especially diligent in imparting skills their children need to carry on the philanthropic tradition. Some, like Ms. Cummings Rafferty's family, set up minifoundations with smaller amounts of money for their heirs to manage. Some parents direct 70% of foundation grants while the remaining 30% go to charities the kids choose. Other families are forming junior boards of directors or foundation committees, where children are put in charge of individual tasks such as developing a foundation Web site.”