The Ancient Greek philosopher Aristotle never addressed the ethics of family foundations directly, but his writings provide vital insights on how such organizations should be organized and go about their work.  One of these insights concerns the nature and purpose of an essential attribute of every family foundation – namely, private property, without which the capacity to give freely and well would be compromised.    

Asked to justify the legal recognition of private property, many enlightenment thinkers such as John Locke might have invoked both natural rights and the increased effort laborers typically exhibit when they know that they will profit from their efforts.  Aristotle, however, points elsewhere, to the joy we experience when we are able to give well of ourselves for the benefit of others.

This has important implications for donors who acquired their wealth not through their own labors but through inheritance, a circumstance that can incite a sense of guilt in some.  Aristotle suggests that the effectiveness with which wealth is used to benefit others is every bit as important a justification for its possession as the excellences that led to its acquisition.

Private property exists, Aristotle asserts, at least in large part to enable us to be generous.  If we did not possess things – goods, money, and the right to direct our own labor – then we would not be in a position to choose to give. Furthermore, when a gift is freely given and received, says Aristotle, it opens up opportunities for friendship and community among people.

Based on Aristotle’s account, then, two of the principal reasons that family foundations exist – and two of the core principles that should guide their activities – are to promote joy in giving and to build friendships and community.  Merely giving away money is not enough.  In fact, it is impossible to determine how much good a family foundation is doing merely by measuring the amount of wealth it has dispensed.

A family foundation that is genuinely thriving will be doing several things.  First, its board and staff will work together as friends, people who delight in bringing out the best in one another.  Second, both will promote the good of the communities in which they live and work, in part by creating conditions under which those they help can become givers in their own right.  And third, their activities will manifest a real sense of joy.

The fruits of a thriving family foundation’s efforts will manifest not only in the lives of those to whom it gives, but also in the lives of its donors, thereby producing intramural as well as extramural benefits.  By embodying the excellence of generosity, such a foundation will set an important example for the family’s next generation, helping its members to develop their own generous habits.

If family members are part of a well-functioning foundation, the foundation’s activities will tend to build closer relationships within the family.  By contrast, one of the signs that a family foundation is not living up to its promise is increasing strife and conflict, to the point that family members regard one another with envy, suspicion, and resentment.  Merely having and giving away money is no good if doing so is sowing the seeds of strife among those responsible for it.

Excellence and joy do not exist, Aristotle might say, for the sake of wealth, but wealth exists for the sake of excellence and joy.  One – wealth – is a means and the other – excellence – an end, and confusing them can only lead to grief.  For this reason, family foundations have an important educational role to play, helping board members and staff better understand the nature of generosity at its best.  The mere fact that people give away money in no way establishes that they are truly generous.

Aristotle is all about excellence. He would regard as most excellent those family foundations that do the most to promote generosity within their walls, across their walls between foundations and communities, and within the communities they serve.  Doing good for others, at least when it is done well, is an inherently joyous activity, in which people feel increasing bonds of friendship and community and a growing sense of gratitude for the good they are privileged to do.