How to build a lasting family legacy

BEYOND accumulating resources and living comfortably, an important desire that is common among the successful is the desire to tackle important challenges that leave a lasting impact.

Many families aim to create a legacy that extends beyond themselves, something that will continue to benefit their communities and society long after they are gone. One powerful way to achieve this is through the establishment of a family foundation. A family foundation is a charitable organisation, usually a non- profit, established and funded by a family with the primary goal of giving back to community causes and making a positive difference in the world. There are numerous benefits to establishing a family foundation, for the family members themselves, the communities and causes that they support.

A family foundation is an excellent opportunity to create a shared vision and mission for the family. By working together to set goals, identify causes, and develop strategies for philanthropic giving, family members can strengthen their bond and create a sense of unity and purpose. This can help to build a strong family legacy and identity that can be passed down through the generations.

In addition to fostering family unity, a family foundation can also provide important educational opportunities for younger family members. By involving children and grandchildren in the foundation’s activities, they can learn about the value of philanthropy, develop a sense of social responsibility, and gain valuable skills in leadership, decision- making, and teamwork. These experiences can help to instill a sense of commitment to giving back and making a difference in the world.

Another benefit of establishing a family foundation is the ability to have a direct and meaningful impact on causes and communities that are important to the family. Through the process of carefully selecting and supporting specific organisations, projects, or initiatives, the family can make a tangible difference in areas they care about such as education, healthcare, environmental conservation, or social justice. This sense of accomplishment and impact can be deeply rewarding for family members and can help to create a sense of purpose and fulfillment.

Furthermore, a family foundation can provide a platform for strategic giving and long- term planning. By establishing a formal structure for charitable giving, the family can ensure that their resources are used effectively and efficiently to support their chosen causes. This can include developing a clear grantmaking strategy, establishing guidelines for funding priorities, and setting up processes for evaluating the impact of their giving. In this way, a family foundation can help to maximise the impact of the family’s charitable contributions and create sustainable change over time.

It is worth noting that family foundations can offer tax benefits and financial advantages for the family. By establishing a tax- exempt charitable organisation, family members can reduce their tax liabilities, and potentially pass on assets to future generations in a tax- efficient manner. In addition, a family foundation can provide a structure for managing family wealth and assets, ensuring that resources are preserved and invested wisely for the benefit of current and future generations.

Establishing a family foundation is an important undertaking that requires careful planning and consideration. Here are some key steps to consider when setting up a family foundation

Define the mission and goals

Before establishing a family foundation, it is important to clearly define the mission and goals. What causes do one want to support? What impact does the family hope to make? Having a clear mission will guide the decisionmaking process of the foundation and ensure that resources are used effectively.

Choose a structure

Family foundations can be structured in a number of ways. It is important to choose a structure that aligns with the family goals and allows for flexibility in funding and governance.

Establish governance and policies

To ensure the foundation’s objectives are prioritised and resources are appropriately channeled, it is important to establish governing documents and policies for the family foundation. These documents will help ensure that the foundation operates efficiently and effectively.

Seek professional guidance

Establishing a family foundation can be complex, so it is important to seek the guidance of legal and financial professionals. A lawyer can help with the legal aspects of setting up the foundation, while a financial advisor or Family Wealth Advisor can help with investment strategies and tax planning.

Involve family members

Finally, involve family members in the decision- making process of the foundation. These are critical stakeholders in the foundation whose buy- in will contribute to its success. Carrying them along helps to ensure that everyone’s voices are heard and that the foundation reflects the values and priorities of the entire family.

There are many successful family foundations that have made a lasting impact on their communities and the world. One example is the Bill and Melinda Gates Foundation, which was established by Microsoft co- founder Bill Gates and Melinda in 2000. The foundation’s mission is to enhance healthcare and reduce extreme poverty around the world. Through strategic partnerships and investments, the Gates Foundation has made significant progress in these areas, saving millions of lives and lifting people out of poverty. Another significant example is the Tony Elumelu Foundation. Established in 2010 by Nigerian entrepreneur and philanthropist Tony Elumelu, the foundation is dedicated to empowering African entrepreneurs and promoting economic development across the continent.

Through its initiatives, the foundation has supported over 10,000 entrepreneurs from 54 African countries, provided training and mentorship to help them build successful businesses, and created thousands of jobs in the process. Through this initiative, the Elumelu family has created a lasting legacy of empowerment and also demonstrated the positive impact that family- owned foundations can have on the society.

Undoubtedly building a legacy through the instrument of a family foundation offers numerous benefits and rewards for both the family members themselves and the causes that they support. Every family should consider this tool as a key part of its strategy to contribute meaningfully to society.