Background




In 2000 Kathy and Richard met with an estate planning attorney to setup a trust designed to protect assets and reduce tax liabilities. It was an excellent time to reflect on what was important, what was best for family and friends, how to insure that our inheritance would actually benefit those receiving it. In thinking about those ideas we decided to also establish a charitable fund which would be the primary giving vehicle for funds intended for non-family members. In the past we'd given routinely to various local groups. This time instead of giving it all away the hope was that we'd put that same amount in the charitable fund each year but only give away the gain. Eventually the fund would become self sustaining and could last beyond our lifetimes, and we could begin teaching our adult children ways to give effectively. Part of the estate assets would eventually go into the charitable trust at our death but in the meantime we would immediately begin using it.

There were several ways to go about it - establish a legal non-profit trust, join private associations that managed all of the paperwork for a fee, employ professional advisors who could do various tasks or join a new type of charitable trusts that were the legal giving entities but took guidance from those putting money into the funds. A simple way to accomplish our goals was important, time and money shouldn't be spent on administrative efforts given the relatively small size of the fund.

After a lot of research it was decided to use the last approach, specifically with the Schwab Fund for Charitable Giving. Schwab is a reputable company, many of the family assets are managed by them and the process seemed quite simple. There was also the tax advantage that the family could put money into the fund and gain an immediate tax benefit while continuing to think about the giving principles and process. The giving process is simply to nominate any United States 501(c)(3) non-profit organization. Schwab verifies their tax status and they technically give the grant while crediting the Beal Family Fund. An online form is filled out and the money is usually disbursed within a week. They handle all other paperwork and tax reporting. The family has on-line control of how the deposited money is invested and can view status at any time.

The Richard and Kathy Beal Family Fund was born in late 2000 and we spent approximately 6 months talking as a family about how we wanted to utilize the monies. The first grants were sent out in August 2001. Our two adult children and their significant others, along with Kathy and Richard became the Board of Directors. There is no formal legal document describing how the fund is run, but Kathy and Richard are the only ones who can request disbursement. On their death the children gain that control. We make all decisions based on as a family however and see this as a living process that we may well change as we gain experience.

The first task was to think about the mission statement. Two family meetings and many e-mails and conference phone calls over the 6 months were devoted to that effort. At first we had fairly vague save the world type mission statement. The children kept deferring to the parents saying it was their fund. The parents kept emphasizing that it was the family's fund and everyone had equal say in what we did. Eventually we began to add more specific meaningful words and began circling around the concept of being a bridge between the various communities that were of interest to individuals. We could not only serve two specific groups at a time but liked the idea of those groups helping each other. We had a pretty good statement after a while and then Kathy suggested that we consider it a draft mission statement and ask our potential recipients for their proposals as a way for us to consider specifics before we finalized the mission statement.

That decision forced us to establish a basic process. We arbitrarily decided to give grants twice each year, that proposals needed to be received 60 days before those dates to give us time to evaluate the proposals, that we needed to invite proposals 90 days before the deadline to give groups time to prepare. That fit the 6 month cycle very well and did not seem burdensome. One person volunteered to handle the logistics for mailing letters and copying and distributing the proposals. Another created many graphics for the logo icons and the family selected the favorites and build the web page. Another handled the financial investment decision (we started with a Schwab balanced mutual fund).

Each board member did research on various organizations they personally knew about or found through other means that seemed to fit the mission statement intentions. We eventually sent requests for proposals to 30 organizations and received 19 proposals back, 3 more coming in after the deadline. We asked for simple 3 page proposals (see the section on applying for grants) not wanting them to spend large amounts of time. The proposals were copied and assembled in binders which were sent to each Board member. Each person on the Board was asked to select their top 3 and write up a paragraph explanation about why it was selected. We shared those with each other and then had a one hour conference call to reach consensus. Interestingly the short combined list of 6 submitting organizations with a total of 8 proposals was common across the group and we shared the same basic values about why we selected those 6. The discussion then moved to whether to fund the top one with all of the money available for the 6 month period or to distribute it equally to the 6 or to weight the more popular groups but give some money to all. We eventually selected the last alternative, sent letters out notifying everyone and requested Schwab to disburse the funds. We also spent time talking about what we'd learned and ways to improve the mission statement.

After a year we moved to an annual cycle - just seemed more appropriate. One of the mysteries to us is that we rarely hear back from people we give grants to, or people who didn't get funded that year. We'd hoped for more ongoing interaction and are trying to find a way to make that happen.

This has been a wonderful exercise. We all learned a great deal about each other's values, about working together effectively as a family, about honoring differences and things we have in common. The parents feel very proud of the work done by their family and know that the fund will be in good hands going forward. Together we have built something permanent that will continue to help others while binding the family together. But the greatest blessing was to learn about the wonderful things people are doing around the country and to read their inspiring proposal ideas. We initially thought we would be the ones helping, but in the end the gift was to us. We look forward to future rounds.