Allen Zaring on Why to Start a Foundation
Mr. Allen G. Zaring III is the Executive Director of the Zaring Family Foundation. The Foundation funds grants pertaining to medical research, education, social justice, sustainability and city beautification; together with other activities as deemed appropriate by the Board of Trustees.
The Zaring Family has a tradition of providing service above self to our community according to examples set by our parents. This includes military service, educational initiatives, service clubs and various volunteer organizations supporting worthwhile causes. It was something we were expected to do, and we enthusiastically did it.
When I married Anne in 1968, our family's community service took on new energy and focus. As a young mother, she always found time to be a leader in civic endeavors and community service. She is respected for her advocacy in social justice, women's empowerment, education, and environmental sustainability. Anne is well known for planting over 5,000 White Blossom trees throughout the metropolitan area.
As a life-long entrepreneur, our great American economy provided ample opportunities for the family to prosper as we faced life's challenges. We were soon in a position where our needs were being well met, and assets were exceeding personal requirements. Then a tragedy struck our family. Two of our children at age 5 were diagnosed with Juvenile Diabetes. Diabetes is a very serious disease, requiring daily shots of insulin to survive and if not cared for properly, can lead to severe life-threatening complications.
Anne became a tireless advocate to find a cure for this insidious disease. She wanted people to not learn to live with it, but to live without it. We were approaching our 25th Wedding Anniversary and I asked Anne what she might want for a gift. She immediately re-affirmed that her personal needs were being well met, our children were being well educated, and we were living a rather charmed life with one exception. That's when she invited me to establish the Zaring Family Foundation as a 25th Anniversary present. Its first objective was finding a cure for Juvenile Diabetes through medical research.
Acting upon her desire, I presented her with the Foundation's first permanent endowment. I must emphasize that this funding was quite modest compared to the Fords and Rockefellers. However, it was substantial for us and has provided persistent funding that continues to create public benefits over the years and has inspired others along the same path.
The mission of the Foundation has expanded and now funds grants pertaining to medical research, education, social justice, sustainability, and city beautification; together with other activities as deemed appropriate by the Board of Trustees.
The Board of Trustees was originally comprised of Anne and me, but has expanded to include our children and their spouses once they graduated from university. This ethic of community mindedness among family members has been a way to strengthen family ties by engaging relatives in constructive, positive endeavors.
This continues the Zaring legacy of community service and charitable giving as family trustees are encouraged to give their time and energies to their causes as well as grant making capabilities. When a family member devotes time to a cause and has some "sweat equity" in its outcome, fellow trustees usually give the grant request the most favorable consideration.
As you can see, our reason to start a private foundation was to permanently fulfill a philanthropic mission of importance to our family: cure diabetes. We've made progress, but a lot remains to be done.
As the mission of the Foundation expanded and family members became a large part of its activities, it provided us with a high degree of fulfillment. The Foundation is a vehicle for educating children on sound financial values together with family responsibilities. As the funds in the Foundation cannot be diverted to non-charitable uses, children learn the importance of giving and the different purposes of many charities in the community. The Foundation can last in perpetuity for future generations as long as its funds have been properly managed. The formal Annual Meeting and periodic get-togethers are enjoyable opportunities to keep family members in harmony as we contribute to positive social organizations.
There are economic reasons to establish a small private foundation that extend beyond the social implications. Private foundations are tax exempt. They can collect contributions of cash and appreciated property without paying taxes on those contributions, and the contributors can claim their donations as tax deductions. Private foundations must make grants worth at least 5% of the foundations' investment assets each year, and generally provide grants only to other non-profits.
A private foundation is quite easy to establish provided one engages a competent legal advisor (ours is Marty Mooney of Frost Brown & Todd), and an excellent investment advisor (ours is done in-house). All of the major banks and trust companies are actively seeking this type of business and can handle check disbursements, accounting, and regulatory compliance (here again, we do this in-house).
Running a private foundation is similar to managing any business entity and there are ample professional advisors to assist to the extent desired. People always ask how much money do you need to donate for it to be worth the effort to start and maintain a foundation? There is no hard and fast rule but most family foundations have at least a few hundred thousand dollars according to the Council on Foundations. Some foundations have more than a billion dollars in assets, but 60% have fewer than $1 million.
The entire Zaring family believes that the small amount of time and expense of setting up and operating a private foundation is worthwhile. This is an effective way to meet philanthropic goals, and a good way to encourage family unity and civic responsibility.
Interested readers who would like to discuss this matter with me are free to call (513) 871-2345 or email at tredmond.zaring@zoomtown.com.