The Right Tool for the Job

In 1917, Julius Rosenwald, president of the Sears Roebuck Company, used $70 million of his personal wealth to form the Rosenwald Fund. Rosenwald chose not to endow this fund, but rather decided that all of the $70 million was to be used for charitable purposes so that by the year 1947, the Fund would be gone. Rosenwald explained that he wanted to avoid “the tendency to bureaucracy” and other shortcomings that he saw coming with permanent endowment funds.

Some people today agree with Mr. Rosenwald and donate substantial amounts of money to establish funds that are to be used up in a set period of time. This year’s Federal Budget changed rules governing foundations to make these types of gifts easier for foundations and charities to set up and manage. Perhaps this is why we see more articles recently in the media advocating for self-depleting funds like the Rosenwald Fund.

But not everyone agrees with Mr. Rosenwald’s theory that permanent endowment funds automatically bring bloated bureaucracy whose sole purpose is “to prolong their existence indefinitely.”  As proof of the vibrancy of the custodians of permanently endowed funds, we can turn to foundations such as the Winnipeg Foundation, celebrating its 90th anniversary this year and continuing to support the Winnipeg community vigorously and with great positive effect.

So, should you endow your philanthropic gift in perpetuity as many Canadians have done? Examples of these permanent endowments would be: the J. W. McConnell Family Foundation, the Metcalf Foundation, and the W. Garfield Weston Foundation.  Or should you set up a self-depleting fund as Mr. Rosenwald did?

My advice is this. Since you have the option of using either means to achieve your philanthropic goals, I suggest that you use the one that will work best. Is there a specific problem that you want solved? If so, then set up a fund that will be finished when the task is completed. If your cause is one that will continue in perpetuity, then set up the fund to match. You even have the option of using both types of funds if you have the financial resources to do so.

Great Place to Leave A Legacy logoI have one more suggestion for you. Since community foundations have the expertise in establishing the types of funds that will best achieve your philanthropic goals and since they have the widest range of options to offer each donor, why not use them as the stewards of your funds? Remember, community foundations are great places to leave your philanthropic legacy.


Glenn StresmanGlenn Stresman is the Executive Director of the WindsorEssex Community Foundation and has over 20 years experience in both writing and evaluating grant applications.


Transition Planning

Monica Patten, Executive Director: Community Foundation of Canada

Monica Patten, CFC Executive Director

Like it or not, transitions are a part of life. A media release from our national association, Community Foundations of Canada (CFC) reminded me again of that fact.

The media release announced that CFC Executive Director Monica Patten was leaving her position effective in 2011.The transition will be a significant one for the organization. The media release noted that Monica has been Executive Director for 17 years. She took over a brand new association and has helped it grow to a membership of over 170 community foundations across the country. At our national conference in 2011, member foundations will have the opportunity to express our appreciation to Monica for her service on our behalf.

Since transitions are a fact of life, whether we like them or not, we deal with them. Because community foundations always think in the long term (perpetuity is our favorite word), even significant changes such as replacing the top executive in the organization are handled with planning to avoid disruption. Philanthropy is too vital an act to let transitions stall its good work so we plan for changes to happen in good order.

The thought of transitions in our personal lives draws our attention to our own personal succession planning. Is our legacy of philanthropy to pass by happenstance to others without direction and the resources needed? Better to take the opportunity to pass our legacy of charitable actions on to the next generation through a well defined plan of action. Let us start that succession planning today. Send me an e-mail. I will be happy to discuss how you can set up an endowed fund at the WindsorEssex Community Foundation as part of your philanthropic legacy.

Glenn Stresman

Recent survey’s show that less than half of Canadians have a valid will.  Do you agree with that statement?

Post your comments below!

More on Legacy Planning visit:

10 Reasons People Choose to Work with their Community Foundation

Leave a Legacy Canada

Darrell J. Canby “How do you want to be remembered?”