Updated November 2016 — Peter and Carol Kern of Monroe County, Pennsylvania, run a family foundation with assets of $15 million. The Hommer Foundation was established in 1996 through the estate of Carol's late parents, Julius and Katheryn Hommer of Newark, New Jersey. The foundation makes grants of several hundred thousand dollars a year to arts, education, and social-services agencies primarily in four northeastern Pennsylvania counties.
"We are not the Warren Buffetts or Bill Gateses of the philanthropy world; the problems they seek to solve are not problems we can begin to tackle," says Peter, who serves as Chairman of the foundation. "On the other hand, we're not exactly buying baseballs for Little League teams. We lie somewhere in between. We find we can make a difference in our community when we follow our grant-making principles."
Having read intently early on about the nature and function of family foundations, the Kerns offer these 10 guidelines to those considering the establishment of such an entity:
- Define your community. Is it where you grew up? Where you live now? Where you work? Narrow your focus to what has special meaning to you. Then get involved in that arena.
- Serve on nonprofit boards where it is a good fit for you and for the organization. This provides networking opportunities and insight into community challenges and needs. Encourage your children to serve similarly.
- Ask what organizations have made a difference in the life of your family. This provides a starting point in determining the kinds of organizations you want to support, the Kerns say.
- Keep your list of grantees manageable and tailor the size of the gift to the needs of each grantee. Some gifts need not be large to be effective, according to the Kerns. Look beyond the specific request and try to anticipate future needs.
- Grantees may, and in many cases should, receive regular grants. Encourage strategic, long-range thinking. Funding strategic planning initiatives is often vital to a grantee with whom you plan on having a continuing relationship.
- If you (and often your children) are active in your community, it is not necessary to advertise for randomly submitted grant requests. Word will get out among your network and grant inquiries will follow. You can request specific applications when you perceive a need.
- You can't say "yes" to every request, no matter how worthy. Your funds are limited and you can dilute your potential impact by spreading your support too thinly. However, the Kerns suggest that you offer written explanations to those denied requests. They might become worthy applicants in the future.
- Make site visits to assess grant requests. The Kerns believe in following up with organizations to gauge the impact of the funding, but they recommend avoiding the temptation to become overly involved. You should be guided by the outcomes, not by the mechanics of the organization.
- Keep your ego in check. If you require public attention for the grants you are making, you are probably running the foundation for the wrong reasons. Recognition is only beneficial when it encourages others to give.
- Remember that the funds disbursed are the foundation's — not your own. Disbursing foundation funds does not relieve you of the responsibility of being charitable with your personal wealth, the Kerns say.
With these principles as their guiding light, the Kerns regularly assess their foundation's performance and document the results. Annual reports are dutifully compiled. They also keep a clear eye on the future, mindful that they are both in their 70s, and that their foundation may not have or need an indeterminate lifespan.
"At some point, you have to ask, 'Is this foundation viable as an entity going forward?'" Peter Kern says. "If not, there are a variety of ways to plan a reasonable exit. These, too, are options that we explore from time to time."