Across Canada, family foundations take many forms—from small, entrepreneur-led charities to large, multi-generational organizations with dedicated staff and professional advisors. How these foundations manage their investment portfolios can vary dramatically, depending on their size, history, and governance structure. Below are some of the most common approaches used by family foundations today, along with the strengths and weaknesses of each.
The Single Decision-Maker Approach
Many family foundations in Canada begin with a single founder—often a successful entrepreneur—who establishes the foundation as a natural extension of their personal or corporate philanthropy. In this structure, the founder retains full control over both investment and granting decisions, sometimes with little formal input from other family members or advisors.
This model has one clear advantage: speed and decisiveness. Entrepreneurs are accustomed to making bold, unilateral decisions, and they can move quickly when opportunities arise. However, this model can be fragile over time. Without a clear succession plan or written governance structure, decision-making can become reactive or inconsistent. Moreover, the opportunity to use the family foundation as a tool for values alignment and education across generations is often missed.
The Sole Wealth Manager Approach
As family foundations mature, control sometimes shifts from the founder to a trusted financial advisor or wealth manager. In this model, the family leans heavily on one professional or firm—often a private banker or investment counselor—to guide both the investment and administrative functions of the foundation.
This arrangement can provide comfort and simplicity for families who prefer to delegate, especially when they’ve inherited a foundation from a previous generation. However, it carries risks of limited transparency and oversight. Fees can be obscured within investment products, and without a structured governance process, families may not realize they are overpaying for investment management. A trusted advisor can be invaluable, but effective governance requires periodic review, fee analysis, and independent verification of performance and costs.
The Family Consensus Model
Some families see their foundation as a training ground for stewardship and a unifying force for shared purpose. In this model, family members work together to make investment and granting decisions, guided by documented values and policies. The foundation becomes a low-risk platform to practice governance, investment decision-making, and philanthropic strategy as a family.
This consensus-based approach fosters learning and engagement across generations. Adult children—and even younger members—can participate meaningfully without direct access to private family wealth. Advisors such as accountants and investment managers often serve both the foundation and the wider family, allowing consistency in oversight and shared expertise. The challenge is ensuring efficiency: decisions may take longer, and some families may struggle to balance differing opinions.
The Investment Committee or Executive Model
At the largest end of the spectrum, many substantial family foundations adopt a committee-based structure. An investment or executive committee, often composed of both family members and outside professionals, provides oversight and accountability.
This approach represents the highest standard of governance. Policies are formalized, decisions are documented, and professional expertise guides strategy and risk management. However, it also introduces complexity. Families must recruit and refresh committee members thoughtfully, maintain engagement among family participants, and balance professional rigor with family values. When well executed, this structure ensures continuity and resilience across generations—making it the preferred model for many of Canada’s largest family foundations.
Choosing the Right Approach
There is no single “best” model for managing a family foundation. The right approach depends on the family’s goals, size, and stage of development. Entrepreneurial founders may prioritize speed and control, while multi-generational families may emphasize education and inclusion. Larger endowments often require formal governance and professional oversight.
What matters most is intentionality—aligning the foundation’s governance, investment strategy, and granting priorities with the family’s values and long-term vision.
At Markdale Financial Management, we help families clarify their philanthropic purpose, establish effective governance, and build sustainable investment processes. If you’d like to explore how we can support your family foundation, contact us.
