After talking on the phone for a couple of hours, my colleague turned to me with a satisfied smile and said “she finally got the message.” He had been considering her application to be accepted as a charity and this phone call was his attempt to settle months of letters and emails back and forth with her.
This philanthropist was trying to establish a charity with the fortune she built through years of hard work and careful investment. But she didn’t want to risk losing control of it. She didn’t understand why there needed to be a committee of independent persons to oversee the institution she was going to establish. Not only that, there were a lot of other, to her mind, ‘minor nuisances’ that my colleague wanted her to comply with and which would put her money further out of her reach. Not that she would use the donations for her own purposes, but that the final decisions would be made by a committee.
Towards the end of their conversation, a light must have gone on. The lady started to thank him for refusing her original application and turning her plans upside down. She realized that for her charity to survive after her death, she had to give up control of it now.
It’s tearing to give up control of the money we worked so hard to build up. But there comes a time for all of us when we are no longer able to manage, and there is a time when we leave this world entirely.
How can we know that the charity we establish in our will is going to be run according to our vision? We can only put so much detail into the founding documents. We don’t know what might happen in the future to make the plans we made irrelevant.
I’m convinced that the only way to ensure our charitable bequest is used in the way we intend it to is to give up control of it as soon as we can. Doing so has the following advantages:
- Exert ‘soft power’. Although she is only one voice in a committee of three, the founder has a lot of influence in the decisions that committee makes. The other members know that was her money, her vision and her decision to invite them onto the board. Also, she only has to convince one of them to vote her way.
- See how the charity operates in practice. Things that seem good in theory are different in practice. If the charitable objects are loose enough, they can be amended to address a better purpose if the original one proves to be unfitting.
- Take pleasure in seeing it happen now. There is no need to miss out on the joys of giving. Our reward might be in Heaven, but why not get an advance on it while we’re on Earth? Why let the committee take the credit for disbursing your funds when you are gone?
- Ensure the survivability of the charity. If the charity is operating you can see whether you allocated sufficient funds to it. If it isn’t enough, you can address that. You can also set in place the operating procedures so that it is properly managed and the funds are used wisely.
- Enjoy collaborating with the committee members. In one of my cases, the founder of an art gallery was delighted when I told her she could and should invite an artist to her managing committee. Horses for courses, I’m not sure if I’d like to spend a lot of time with artists but she relished the idea of it.
I’m sure there are other good reasons for starting your charity now rather than later. I’ll add them if I think of any more (or if you suggest more in the comments).
In a way, charity is similar to investment because it is often the counter-intuitive action which is the best one. Our brain tells us to hang on to our money as long as we can because we don’t know if we will need it back. But if we wait too long before we engage in charity, the money will be disbursed in ways that we didn’t intend.