CHARITABLE TRUSTS and foundations are a striking feature of modern American society, and the role played by the great foundations is particularly salient.1 These trusts and foundations, created either by will or by gifts made during the lifetimes of the rich, give away, year after year, a great deal of money—in 2005, 68,000 foundations made grants on the order of $33.6 billion.2 This is serious money. Of course, the American economy amounts to trillions of dollars; compared to that, $33.6 billion is not that impressive. Yet universities, the arts, some religious organizations, and some forms of research would have difficulty carrying on without the money they get from trusts and foundations. This chapter concerns these long-term trusts and foundations.
Americans, to be sure, make gifts to charities all the time. They do it mostly during their lifetimes; and they can also leave money to charity at death, in their wills. In fact, however, most people leave nothing to charity; their money goes at death to members of their families. Billionaires may be different; but the percentage of ordinary people, even ordinary rich people, who leave money to charity is quite small. This is a consistent finding of all of the studies of testamentary behavior. An old study of wills in New York County from 1880