Growing Number of Family Funds Set Deadline for Closing

As wealthy families are setting up new philanthropic foundations in increasing numbers, they are also shutting them down at an accelerating pace, reports The Wall Street Journal.

Donors closed 842 family funds in 2005, a rise of 55 percent from 1999, according to the Foundation Center, the newspaper reports.

Some family foundations are setting a timetable for their philanthropic operations because they believe they can have greater impact by spending their money over a short period of time rather than doling out the funds over decades.

Other foundations are shutting down because family members are quarreling over giving priorities and some donors worry that their heirs will not share their philosophy on choosing groups to support.

Closing a foundation can be tricky, the newspaper notes, especially for charities that have long received support from a grant maker and for staff members who have worked at the foundation. And for donors it means changing a mind-set that has usually focused on saving money for the future, and instead concentrating on awarding large sums in a short time.