Still, because of administration, compliance and tax issues, many people are still wary of foundations, saying they are too big a beast to baby-sit, even if different services have made it easier. Also, donor-advised funds offer more anonymity.
"We've had a number of clients look at setting up their own foundation," says Dan Moisand of Spraker, Fitzgerald, Tamayo & Moisand in Melbourne, Fla. "So far we have not had any implemented. They decided that they didn't need that kind of control or that kind of headache."
"In the past," says Snyder, "I got a lot of questions about what's the magic dollar figure to establish a private foundation versus a donor-advised fund. And we would say that there isn't [one]. Typically the industry has said 'a million' and we might say even higher than that to make it worth your while from a cost perspective and compliance perspective."
She adds, however, that increasingly it's not a question of either/or. Very often, the high-net-worth clients at GenSpring are cutting the Gordian knot and asking for both.
Glassman says it depends on the goals of the clients. If the family were going to give away all the dollars over the next five years or so, then a donor-advised fund might be the ticket.
"Now for something starting out with half a million, [if the family anticipates] adding $200,000 a year for the next 20 years and the goal is to set it up for the kids and grandkids to have a family foundation, then a family foundation makes sense. It really depends on the dollars put out and the longevity anticipated."