Well, it appears to allow you to give money to someone/something else while still keeping control of the management of that money yourself.
So in theory, with a trust, the Charity is richer, but you’re still investing the money rather than giving it to them immediately.
This seems to guard against the failure mode of deciding to hold off on giving and instead investing the starter money, becoming very rich, and then deciding “Nah, my value system has changed. Now I want to buy a private island instead of saving thousands of starving children.”
Unless I just totally misunderstand trust law (Which is certainly possible.)
it appears to allow you to give money to someone/something else while still keeping control of the management of that money yourself.
Not “give money”—the charity still doesn’t get the money until it actually gets the money. What you give now is a promise that the trust in the future will give the charity something.
For example if the trust plans to disburse the money in 10 years, but the charity closes down in 5 years, have you given it anything?
seems to guard against the failure mode
Do you think the potential future you will also consider this scenario to be a “failure mode”? :-)
But yeah, you can use a trust as a precommittment device. However unless you’re committing at least $100K or so to it I don’t think it’s worth the bother. You will need lawyers to set it up anyway, you’ll have to maintain it, if you get cheap lawyers and they screw things up IRS might show up and be very unpleasant about it...
Well, it appears to allow you to give money to someone/something else while still keeping control of the management of that money yourself.
So in theory, with a trust, the Charity is richer, but you’re still investing the money rather than giving it to them immediately.
This seems to guard against the failure mode of deciding to hold off on giving and instead investing the starter money, becoming very rich, and then deciding “Nah, my value system has changed. Now I want to buy a private island instead of saving thousands of starving children.”
Unless I just totally misunderstand trust law (Which is certainly possible.)
Not “give money”—the charity still doesn’t get the money until it actually gets the money. What you give now is a promise that the trust in the future will give the charity something.
For example if the trust plans to disburse the money in 10 years, but the charity closes down in 5 years, have you given it anything?
Do you think the potential future you will also consider this scenario to be a “failure mode”? :-)
But yeah, you can use a trust as a precommittment device. However unless you’re committing at least $100K or so to it I don’t think it’s worth the bother. You will need lawyers to set it up anyway, you’ll have to maintain it, if you get cheap lawyers and they screw things up IRS might show up and be very unpleasant about it...