Preserving Donor Intent

Prevent Mission Drift but Retain Adaptability

Founders of private foundations are often concerned that one day, the foundation they created will stray from its original philanthropic mission. An oft-cited example of the “mission drift” phenomenon is The Ford Foundation. Critics believe that the foundation, as it exists today, would be unrecognizable and unacceptable to Henry Ford, the generator of the wealth that allowed for its creation. Created in 1936 with funding of $25,000, the foundation’s scope was greatly expanded by the board of directors in the 1940s following the deaths of Henry and his son, Edsel. Initially, the foundation’s grantmaking was focused on the United States, and the recipients were often institutions in the Detroit metro area. Today, with an endowment of over $10 billion, the foundation is principally focused outside the U.S., leading critics to charge that it is paying insufficient attention to needs at home, thereby departing from Henry and Edsel Ford’s original vision.

Although such dramatic examples of change in mission are rare, foundations do move away from the founder’s original priorities. To minimize this possibility, some individuals purposefully structure their private foundations to ensure that their core values are preserved. The term “donor intent” has become associated with instituting restrictions to discourage or actively prevent private foundations from straying too far from the founder’s original vision.

[callout]In our experience, the key challenge for founders is striking the right balance between too much and too little control.[/callout]

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