Wealthy Families Set Up New Foundations in Md.

BALTIMORE, Md. (AP) - The number of new foundations in Maryland nearly doubled in the past six years, fueled largely by wealthy families who see them as an increasingly attractive way to channel their giving.

Nearly 570 foundations were created in Maryland from 1996 to 2002, representing 41 percent of the 1,376 foundations in the state in 2002, according to the Association of Baltimore Area Grantmakers, using data from the Internal Revenue Service.

"This puts Maryland in sync with the rest of the country," said Cathy Brill, a consultant with Association of Baltimore Area Grantmakers. "Nationally, the number of active grant-making foundations doubled between 1990 and 2002" from about 32,401 foundations to almost 64,900.

"We think the growth may be due to the economic boom of the late 1/81980's 3/8 and 1/81990's 3/8, as well as an increase in awareness among wealthy people and their legal and financial advisors about the option of creating a foundation as both a charitable giving and estate planning strategy," Brill said.

Montgomery County led the state with 229 foundations created during the six-year period, followed by Baltimore City with 94 and Baltimore County with 83.

"By far, we are seeing the largest growth in family foundations," Brill said, citing preliminary findings. Specific data supporting this is not available yet, she added. "We have seen a lot of family members creating foundations from inheritance money," Brill said.

"The growth in family foundations throughout the country has been remarkable," added Douglas Freeman, chairman and national managing partner for IFF Advisors LLC, a philanthropic consulting firm in Los Angeles. "Foundations are much more visible platforms through which families are making their philanthropic donations," Freeman said.

Family foundations represent more than half of all independent foundations, based on data from the Foundation Center in New York. In the four years leading up to 2002, there was a 63 percent increase in family foundations, from 18,276 in 1998 to 29,710 in 2002.

"A general portion of the foundation is tax exempt and in many cases you can fund the foundation with assets held by the family," said Roy Barker, director of operations for the National Association of Financial and Estate Planning in Salt Lake City.

"In a sense you are creating a dynasty for future generations allowing the money to stay in the family," Barker said.

In the 1970s and 1980s, foundations were "a small and virtually unknown way to invest money," Freeman said. "For the most part, it was just an opportunity for the very, very rich to utilize. Since then, it has become a more accessible and visible means for philanthropy."

Information from: The Daily Record

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