Establish your mission
By law, private foundations must spend at least 5% of their total assets each year for grants and charitable activities to keep their charitable designation. Beyond that, it’s up to you to define what it is you’d most like to accomplish and be known for.
“This is the time for asking, ‘What do we want to do? What inspires us?’” Sutton says. “Think about what makes you mad, and what is or isn’t right with the world.” Then, consider the resources and the “inventory of skills” that your family can bring to bear to effect positive changes, he suggests. One good first step is creating a mission statement. This need not be long or complex. In fact, brevity is a virtue with mission statements, Sutton adds. Too many details could constrict your ability to grow and adapt over time. “It can be as short, as targeted, and focused as you want it to be.” Still, the statement should clearly address what your priorities are.
In addition to guiding the foundation’s work, a clear mission can help potential grant recipients know whether you’re likely to support their work. Grants are in the public record, Sutton notes, so if your foundation has an unfocused giving pattern, it may be besieged from all corners. “Having a specific mission is a nice way to help people understand that while their ideas may be tremendous, your foundation might not be a perfect fit,” he says.