The Wall Street Journal recently interviewed Duke Professor, Joel Fleishman, who recently wrote the book, "The Foundation: A Great American Secret; How Private Wealth is Changing the World", which highlights where much of our wealth is being directed through these philanthropic entities. What’s fascinating about the interview is that there is regulation that prevents private foundations from giving more than 5% of their wealth as it was a gating factor to ensure the longevity of the organization.
As Joel Fleishman mentions to WSJ reporter, Kelsey Hubbard, an organization can continue to survive in perpetuity by giving 6% of its wealth, and there is some discussion of the threshold being raised to that. Organizations that decide they will only exist for the life of the philanthropist or 10 years after his/her death, may certainly give more than that, but in general foundations sit on large assets and distribute only 5% each year.
Did you know that in North Carolina, the Reynolds family has several foundations that primarily give to North Carolina nonprofits even though their wealth was built with products sold around the world?
Do you know how much your local private foundation distributes and from where they received their wealth?
Where would you direct your wealth if you had your own private foundation?