Abstract
This paper examines how business families use family foundations to revitalize "dead money" while increasing the reputation of the business family and its firms through charitable giving. The Wang & He (2018) model is applied from 2001 to 2019 to a sample of 100 US family foundations (two for each federal state) with about USD 1 million in assets. Results indicate that business families revitalize "dead money" through family foundations by investing it across different revenue sources, namely bonds, cash investments, and stocks, generating inflows in terms of dividends, interests, and net gains due to asset sales. However, family foundations hold much of these inflows as disposable net equity. Therefore, their administrative structure remains too basic, preventing operating margins from growing. Nonetheless, family foundations stay highly involved in charitable giving to do well to the reputation of the business family and its firms while doing good to society. Overall, we conclude that business families, through family foundations, partially succeed in revitalizing "dead money".
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