CHARITABLE FAMILY FOUNDATIONS©
The NAFEP, PREMIER VII Family Foundation Trust
& PREMIER VIII Private Foundation
A Family Legacy of Charitable Acts..
Why Create a Foundation?
Families often setup their own foundations to carry out charitable activities, rather than simply make direct, charitable gifts. The reasons that families manage charitable activities in this manner are:
- To provide the family a method of controlling both the disbursement of funds to charities, and the charities' use of those funds.
- To achieve influence and stature in either the local community or within a charitable or religious organization.
- To maintain a long term or even perpetual family institution, that carries the family name, wealth and legacy far into the future.
- To avoid unnecessary death, gift, capital gains and income taxes on excess family wealth(but, family foundations should not be viewed as first and foremost a tax reduction strategy).
- To provide income to current members and future generations of the family, either for their management of the foundation or as compensation for charitable activities they directly perform.
- To formalize the family's plans and goals with regard to charitable activities.
- To provide a means to involve family members more directly in the charitable activities.
A Choice Between Two Foundations.
There are two foundations that are applicable for most family needs. Both are available through NAFEP and described in this brochure. The most common and well known of the two is termed a “private foundation” under federal tax law. A lesser known, but more powerful family foundation is termed a “supporting organization” under federal tax law. NAFEP refers to these as the Premier VII Family Foundation Trust (supporting organization type), and the Premier VIII Private Foundation. Very generally speaking, the Premier VIII Private Foundation is best for smaller and simpler foundation needs, smaller in both dollar amounts being donated and in the level of charitable activity. The Premier VII Family Foundation Trust (supporting organization) is generally better for the larger and more complex foundation needs. In this brochure we will briefly explain the differences between the two foundations, along with the advantages and disadvantages of each. But only a consultation with a NAFEP Associate can help you determine for sure which of the two is best suited for your situation.
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