Many donors prefer to set up private foundations rather than give money to an established charity since the foundation allows greater control and gives the donor the ability to target the causes they believe in. However, setting up a foundation is the easy part since an administrator is needed to manage the funds and seek out charitable opportunities which can be an expense beyond the means of all but the largest foundations. However, a new trend has emerged where one company provides day to day management of a foundation, along with multiple other charities, and actively seeks out new charitable ventures. A management set up such as this is advantageous since it offers professional leadership for the foundation at a more reasonable fee while giving the donor final say on major decisions.
See Sarah Murray, Donors Recognize The Benefits of Outsourcing, Financial Times, September 19, 2015.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
