But if they're competent, they don't need the money, because they'll be able to work up to the point where they have as much as he did - according to the article, he started off as a "poor street hawker," so his belief that his children could do the same is certainly logical. They probably also have the advantage of his connections, better education, and so forth, meaning that they should be even more capable than he was. Also, if they're competent, lacking money might be good for their moral character, and encourage them to eventually do the same if they gather a lot of money, doing more good for society.
If they're not competent, it's better to give the money to the foundation he started, so that it can help as many people as possible, instead of being squandered. Sure, his children might need it more, but they wouldn't be able to do as much with it which would be useful to society, which is what he is trying to do.