Bucks
Philanthropy
Dear Friends,
Good morning. This is the perfect time to write about philanthropy. It’s the Christmas season as well as the end of the calendar year. I serve on the Lehigh Valley Community Foundation, which makes grants to charitable institutions in Upper Bucks, Lehigh and Northampton Counties. Several of our friends are board members of the Bucks Foundation, which does similar good work. You’ll find their addresses and phone numbers at the end of today’s column.
If you name charitable institutions like college, church, or community organizations in your will, how can you insure that your wishes will be followed after you leave this world for the next?
Last month, I attended a National Philanthropy Day Awards Forum, which honored organizations, and people who’ve made a difference to the community. As I listened, I thought about a horror story, which I’d read in the New York Times.
“When Mamie Dues died in 1974 in El Paso, Texas, she left her fortune to a foundation controlled by a local bank,” the Times article began (Sept. 29). “The couple had no heirs and no other family. Three decades later, however, the foundation’s legal address is in Delaware, and a global bank, J P Morgan, manages it from an office in Dallas. While its assets have grown to almost $6 million, from $5.2 million in 2000, its giving has fallen sharply, and the local group that once decided who would receive its money no longer has a say in its operations.
“Such is the fate of many “orphan” trusts and foundations around the country that have been left in the hands of lawyers or local banks that have then been swallowed up by multinational financial institutions. With no family members to encourage gifts to the original donor’s favorite causes, the banks and lawyers have wide latitude to change the way the trusts operate and to decide which charities will receive grants.
“Banks can reduce gifts and increase the foundation’s assets, thus increasing their fees. At the same time banks and lawyers stand to gain personal influence and prestige by selecting new charities,” the Times continued.
It listed several problems, which the typical donor doesn’t consider.
“When large global banks take over, the number of grants often drops sharply, reducing the bank’s administrative costs,” the Times reported. “But bank fees, which are based on the amount in the trust, increase. Small local grant recipients that have historically received money are either dropped in favor of larger charities or receive money far more sporadically. And new grant recipients sometimes include the alma maters of trustees or organizations with which they and their families have personal relationships.”
Here’s the key paragraph in this story: “The issue is that with the consolidation of these assets that has occurred through bank mergers, bank trusteeships- which were largely a community role for the bank- have become profit centers and a way to enhance a bank’s philanthropic image. Law firms benefit in similar ways.”
That’s why it makes sense to choose a community foundation to run charitable giving after we die.
Carol Henn is the Executive Director of the Lehigh Valley Community Foundation. “Community foundations are at the heart of our cities and towns,” she said. “We know the places of need in our area, and we can direct resources to solve those problems. We can assure current and future donors that the intent of their charitable funds will be honored in perpetuity, regardless of what happens to a donor or grantee organization.”
Linda Goodwin presides over the Bucks County Community Foundation. “Banks may change their names, attorneys may retire, but community foundations make a commitment to be there forever- with a track record to prove it,” she said. “They give people the opportunity to continue their generosity and concern for their local communities in perpetuity.
“Your local community foundation knows your hometown strengths and weaknesses- and works every day with agencies and individuals to help meet the needs that exist,” Linda added. “If you want to make a permanent, positive difference in the lives, places, schools, or organizations that mean the most to you- a difference that will live on after you are gone, your community foundation is dedicated to helping you accomplish that goal.”
That’s why Mighty Betsy and I will name a community foundation with a sound reputation in our wills. We don’t want a repeat of the Mamie Dues story after we’re gone.
Here are two excellent foundations to consider:
Bucks County Foundation,
MB and I wish you the best for the Christmas season.
Sincerely,
Charles Meredith