Why Some Families Start Foundations — And Others Don’t

Reflections from a Banker Who’s Sat With Hundreds of Families at Their Crossroads

I still remember one afternoon in Hong Kong, sitting across from a family I’d worked with for years. The parents had just sold a stake in their company. They were proud, a little overwhelmed, and deeply reflective. The father turned to me and said, “I don’t want to be remembered just for building something. I want to be remembered for giving something.”

That’s often when the question of starting a private foundation comes up — not as a technical tax maneuver, but as a deeply personal turning point.

Over the years, I’ve seen families from all walks of life wrestle with the same decision. Some go on to create foundations. Others choose different paths. I’ve come to realize: there’s no single right answer — just a series of conversations worth having.

The Moment Comes in Many Forms

For some, it’s after a liquidity event. A business sale. A big IPO. Suddenly, the numbers on the screen are more than they imagined, and the question becomes: What now?

For others, it’s something more emotional. A health scare. The loss of a loved one. Or watching the next generation ask, “What are we doing to give back?”

One client — a second-generation daughter of immigrants — told me she felt a “weight of gratitude.” Her parents came to the U.S. with nothing. She had gone to Harvard, then Wharton. When she came into wealth, she didn’t just want to preserve it. She wanted to honor the sacrifices that built it.

Foundations Give Structure to Intention

A private foundation isn’t always the answer, but when it is, it’s usually because a family wants to formalize their giving.

They’re tired of reactive donations. They want to be more strategic. They want their kids involved — not just writing checks, but making decisions, understanding causes, and learning how to ask tough questions.

One family I know sets aside a portion of their annual giving for each grandchild to research and propose a cause. It’s become their version of Sunday dinner — gathering around shared values, even if the table is virtual.

But Some Families Decide Not To

On the other hand, I’ve had conversations where we decided a foundation wasn’t the right fit. Sometimes it’s because the family is still finding their focus. Other times, it’s because the administrative burden outweighs the benefit, especially for those who prefer simplicity.

One American family living in Singapore decided instead to use a donor-advised fund. “We’re not ready for our own institution,” they said. “But we’re ready to start giving with purpose.”

And that’s perfectly okay. Starting a foundation is a big step. It doesn’t need to be rushed. What matters is having the conversation — as a family, with trusted advisors, and often with a little soul-searching along the way.

What I've Noticed Over the Years

1. The Second Generation Often Leads the ConversationThey’re thoughtful, educated, and want their giving to reflect more than just their family’s name. They ask harder questions. They push for alignment — between mission and money.

2. Foundations Become a Tool for Teaching, Not Just GivingWhen used well, a foundation is a living classroom — where young people learn about responsibility, community, and impact. It’s not just about tax returns; it’s about identity.

3. There's No Perfect Time — Just a Willingness to StartSome families wait for clarity. Others begin and evolve. One thing I’ve learned: giving is a journey. You don’t need to have it all figured out before you take the first step.

Closing Reflection

In my work, I’ve learned as much from my clients as they have from me. Whether they’re founders in Shanghai, physicians in Palo Alto, or immigrants who built everything from scratch, they’ve reminded me that wealth isn’t just what we accumulate. It’s what we pass on — in values, in vision, and in how we show up for others.

So if you’re standing at that crossroad, wondering if a foundation is right for your family — don’t worry about having the perfect answer. Start with the conversation. The rest, in time, will follow.