Establishing a family philanthropy

Norbert Schwarz
Norbert Schwarz

Several of my clients have wanted to begin or continue a philanthropic culture with their families but have been hampered by the costs of establishing their own foundation. The advice generally given to them by the experts is that it takes an initial investment of $250,000 to $500,000 to make the foundation cost effective. However, there are vehicles that can accomplish the objective for far less.

Our family was recently made aware of Vanguard Charitable. It is a public charity that was founded in 1997 by the Vanguard Group and provides investment management and administrative services for charitable purposes. A majority of Vanguard Charitable’s trustees are independent of the Vanguard Group.  The minimum contribution to establish a fund with them is $25,000 and you can make grants to acceptable charities of $500 or more. We were able to fund our initial tax-deductable contribution utilizing appreciated mutual funds.

The process to establish a charitable account was very easy and the company was extremely helpful in working us through the enrollment process. Making grants to your favorite charities is also simple. Vanguard Charitable does the due diligence, and you can choose the charities for your grants. Grants must support recognized public charities. You can also designate how you want your remaining fund balance to be invested at Vanguard Charitable. The annual fee based on our initial funding was .6%

If you are looking for a vehicle to establish family philanthropy at a conservative funding level, this type of vehicle might be well worth investigating.


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