Introduction
A Family Philanthropy Committee turns family values into repeatable charitable action. Rather than ad hoc donations, a committee brings structure — defined roles, transparent decision-making, regular reviews, and records — so giving is strategic, measurable, and sustainable over generations. In my work advising multi-generation families, committees often improve both impact and family cohesion when set up with clear expectations.
Why a Committee Instead of Individual Giving
- Consistency: A committee creates reliable processes so gifts align with long-term goals.
- Shared stewardship: Members learn philanthropy practice and stewardship together.
- Legacy protection: Formal governance preserves intent as family membership changes.
Governance Documents You Need
Start with three short documents that act as the committee’s operating backbone:
- Charter or Purpose Statement — One page describing mission, scope, and term length for members. See our related guide on Creating a Family Charitable Mission Statement.
- Governance Guidelines — Meeting cadence, quorum, voting rules (consensus, simple majority, or weighted voting), committee roles, and conflict-of-interest rules.
- Grant Policy or Payout Policy — Eligibility criteria for grantees, due diligence requirements, reporting expectations, and payment schedules.
These documents do not need to be legal contracts, but they should be written and agreed to by members.
Typical Committee Roles and Responsibilities
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Chair (or Co-Chairs): Sets meeting agendas, facilitates discussions, and ensures follow-through on decisions. The chair is a process leader, not an autocrat.
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Treasurer or Finance Lead: Tracks budgets, authorizes grants, maintains gift receipts, and liaises with financial advisors or accountants.
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Secretary: Keeps meeting minutes, maintains records, and ensures compliance with documentation requirements.
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Grants Committee or Program Lead(s): Reviews applications, performs due diligence, and recommends grants. For larger families, small subcommittees (e.g., Education Grants, Local Grants) keep work manageable.
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Next-Generation Representatives: Youth or younger adults who bring fresh perspectives and help with succession planning.
For smaller families, roles can be combined; for foundations or family offices, roles may be formal staff positions.
Decision-Making Models — Practical Options
- Consensus: Everyone agrees before a decision moves forward. Strong for cohesion but slower.
- Simple majority: Efficient for routine grants. Use when speed matters.
- Weighted voting: Assign vote weight by agreed criteria (e.g., primary donor vs. other members). Helps balance financial responsibility and inclusion.
Document the model and what counts as quorum to avoid disputes.
Budgeting, Funding Sources, and Vehicles
Common funding structures include:
- Direct family contributions: Annual gifts from members into a pooled account.
- Donor-Advised Funds (DAFs): Flexible, tax-efficient vehicle for pooled family giving — useful when donors want ease and tax receipts. See our internal explainer: Donor-Advised Funds: Flexible Philanthropy Explained.
- Private foundation: More control and complexity — required payout rules and more public reporting.
- Fiscal sponsorship: Work with an existing nonprofit that accepts gifts on your behalf if you want to test a program without forming a legal entity.
Work with a financial advisor or CPA to match vehicle choice to tax goals and administrative bandwidth. For basics on nonprofit types and responsibilities, see the IRS guidance on charities and nonprofits (IRS Charities & Nonprofits)[https://www.irs.gov/charities-non-profits/types-of-charities].
Legal, Tax, and Compliance Considerations
- Receipts and substantiation: Keep donor receipts for tax reporting. Rules vary if gifts are made personally vs through a DAF or foundation.
- Private foundation rules: If you set a private foundation, expect minimum distribution requirements, excise taxes on investment income, and public disclosure (Form 990-PF).
- Conflict of interest: Adopt a written policy. Family members should disclose personal relationships with potential grantees.
- Professional advice: Consult a tax attorney or CPA before establishing a foundation or accepting restricted gifts.
Authoritative resources: IRS Charities & Nonprofits (irs.gov) and the National Council of Nonprofits (councilofnonprofits.org).
Selecting Causes and Performing Due Diligence
Create clear selection criteria tied to your mission. Common filters:
- Alignment with mission and family values.
- Geographic scope (local, national, global).
- Evidence of impact (program outcomes, audited financials).
- Financial health and governance of the grantee.
Due diligence checklist (sample):
- Confirm 501(c)(3) status (IRS Tax Exempt Organization Search).
- Review recent Form 990 and audited financial statements.
- Ask for program metrics and references.
- Consider a site visit or pilot grant for new partners.
Measure results with simple metrics that matter to your mission (e.g., students served, meals distributed, outcomes achieved) and collect grantee reports annually.
Meeting Cadence and Operational Best Practices
- Meeting frequency: Quarterly is common; monthly is useful for active grant cycles.
- Agenda template: Approvals (previous minutes), financial update, grant recommendations, impact review, new business.
- Minutes and action items: Assign owners and timelines for follow-up.
- Record retention: Keep 7 years of grant files, receipts, and minutes. For private foundations follow IRS retention guidance.
Tools: Use shared drives, basic CRM or grant-tracking spreadsheets, and a calendar for recurring deadlines.
Engaging Younger Generations and Succession
In my practice, the most durable committees intentionally onboard next-gen members with phased responsibilities:
- Observation: Younger members attend meetings as non-voting observers.
- Project leads: Assign a research project or pilot grant to a young member.
- Mentorship: Pair younger and senior members as co-reviewers of applications.
See our guide on Engaging the Next Generation in Family Philanthropy for practical exercises and conversation starters.
Common Mistakes and How to Avoid Them
- Skipping written rules: Verbal understandings break down over time.
- Overly rigid governance: Leave room for occasional flexibility and learning.
- Ignoring administrative costs: Budget for evaluation, bookkeeping, and legal fees.
- Neglecting impact measurement: Track at least a few simple indicators.
Sample 12–Month Checklist
- Month 1: Draft charter and mission; agree on committee roles.
- Month 2: Choose a funding vehicle (DAF, pooled account, or foundation).
- Month 3: Publish grant criteria and calendar.
- Months 4–6: Solicit applications or nominate grantees; perform due diligence.
- Month 7: Make first grants and collect reporting requirements.
- Month 10: Mid-year impact review and budget refresh.
- Month 12: Annual meeting, lessons learned, and succession planning.
When to Hire Professionals
Engage professionals if any of the following apply:
- You plan to create a private foundation.
- You need investment management for an endowment.
- The committee will handle complex grants or programmatic activity.
A CFP® professional or charitable planning attorney can help align giving with tax and estate plans.
Resources and Further Reading
- IRS — Charities & Nonprofits: https://www.irs.gov/charities-non-profits/types-of-charities
- National Council of Nonprofits: https://www.councilofnonprofits.org/
- Internal FinHelp links: Creating a Family Charitable Mission Statement, Donor-Advised Funds: Flexible Philanthropy Explained, Engaging the Next Generation in Family Philanthropy
Final Practical Tips
- Start small and document learnings. Pilot one program before creating a full legal structure.
- Treat governance as an evolving toolkit, not a checklist — update the charter every 3–5 years.
- Prioritize relationships with grantee partners: good communication spurs better outcomes.
Professional Disclaimer
This article is educational and based on general best practices and my experience advising family philanthropies. It is not legal, tax, or investment advice. Consult a qualified attorney, tax advisor, or CFP® professional to tailor governance and vehicle choices to your family’s circumstances.
