What’s Inside?

Our subject matter experts encourage us to look beyond the mechanics of giving and tap into the emotional and psychological benefits that true philanthropy can offer. It challenges us to think about why we give—what motivates us—and explores how we can create a giving experience that brings satisfaction, meaning and connection.

One of the key takeaways is the idea of giving with intention. Instead of giving because it’s expected or because a cause is trending, joyful giving is about aligning your gifts with your personal values and passions. When we give in a way that resonates deeply with our own sense of purpose, we’re more likely to feel connected to the cause and derive true fulfillment from the act.

Finding the Joy in Philanthropy

Philanthropy doesn’t have to be a heavy or burdensome obligation. When we give with authenticity and intention, giving becomes an expression of who we are. The joy in giving comes from the experience of knowing your contribution is making a real difference. By taking the time to understand the organizations we support—whether through direct involvement, learning about their work or engaging with those they help—we can create a more rewarding, personal relationship with our giving.

In practical terms, this could mean becoming a hands-on volunteer for a cause you care about, establishing a private foundation and/or setting up a donor-advised fund (DAF) to ensure your giving reflects your values over time. These approaches don’t just maximize the impact of your gifts—they enhance the joy and satisfaction you experience as a donor.

Giving as an Act of Connection

Another theme is the idea of giving as a tool for building connection. When we give to others, we are reminded of our shared humanity. Whether we’re supporting a local charity, funding scholarships for deserving students, or contributing to international relief efforts, our gifts foster relationships with others—both those who benefit from our generosity and those who share our commitment to positive change.

Far from being a solitary act, giving connects us to a larger community of like-minded individuals. It encourages us to seek out opportunities for collective giving and involvement, where we can collaborate with others to magnify the impact of our charitable actions.

Giving as Legacy

One of the most profound aspects of joyful giving is the sense of legacy it creates—and an opportunity to engage with your family on supporting causes you all care about. When you give with intention, you are not only impacting the present—you’re also shaping the future. Whether through establishing a foundation, starting a planned giving program or setting up a DAF, your philanthropic efforts can provide long-lasting benefits that endure for generations. By aligning your giving to your passions and values, you also ensure that your legacy reflects your life’s mission and purpose.

To dive deeper into these transformative ideas, download The Secret to Joyful Giving today and start exploring how you can elevate your own giving experience.

Have Questions This Giving Season?
We’re here to help! Schedule a call with us or reach us at 800-839-0054. Together, let’s #begiving.

The post The Secret to Joyful Giving: A Guide to Meaningful Philanthropy appeared first on Foundation Source.

The discussion covers topics such as:

• Involving the next generation
• Defining your legacy going forward
• How family can align on strategic decisions such as succession planning or sunsetting
• Finding unity in knowing what you don’t want to do as a family
• Values and how they manifest themselves in different ways

Watch the full webcast>>

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If you’re looking for an easier way to manage a foundation or want to start a foundation, our philanthropic specialists are here to help! To learn more, schedule a call with us or reach us at 800-839-0054. Together, let’s #begiving.

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Children as young as three or four can learn about the value of good works.

Young people this age are just beginning to realize that the world extends beyond “me” and even beyond “Mom and Dad.” This is the age when children develop a sense of empathy and awareness of other people’s feelings, so it’s important to take advantage of this window of opportunity. The exciting discovery of their expanding world can be a magical time—a perfect opportunity to introduce children to the joys of helping others.

MODEL PHILANTHROPIC BEHAVIOR

Young children look to their parents for clues about how to interact with the world, taking careful note of how society responds to the elderly, homeless, disabled, or the seriously ill. Watching Mom and Dad engage in charitable activities reinforces the perception that your family values acts of generosity. The more the notion “this is what our family does” is reinforced, the better. Bring your children along when you provide books to a homeless shelter, shovel an elderly neighbor’s driveway, or donate used toys and clothing.

READ BOOKS ABOUT GIVING

A philanthropic mindset can be developed at story time by reading books about giving. Kids need role models and examples that inspire them. Stories with a theme of “giving back” such as B.G. Hennessy’s book, Because of You (Candlewick Press, 2005), underscore the importance of helping others:

You can also use books to answer young children’s questions about social issues, using the opportunity to clear up any misconceptions about what they’ve seen or heard, such as: “Why did that man ask you for money? Why is that lady sleeping on the park bench?” At Foundation Source, we are happy to share our extensive reading list of age-appropriate books with themes of giving to help raise a child’s social awareness.

DRAW PICTURES

You can encourage young children’s charitable instincts by asking them to create pictures of what they would do to make the world a better place. Begin by asking them questions: “What things are you thankful for? What makes you happy? What makes you sad? What can you do for people who aren’t as lucky as you?”

SHARE FAMILY STORIES

Children love to hear about the family’s history of giving. Share family stories from your own childhood or even further back in your family’s history. Any experience where a family member learned something about giving—how Grandpa helped neighbors down on their luck, or Aunt Lila planted a community garden— can be shared in the form of a story that will help children feel a sense of belonging to something bigger.

Growing Up

For school-age children (7 – 12 years old), family is central.

This is the age when they truly want to do things with their parents and siblings, so take advantage of this opportunity with them. Find areas of giving that genuinely excite them and enable the whole family to participate.

START WITH THEIR INTERESTS

The motivation to give is often sparked by a child’s own experience. Encourage children to talk about what makes them happy or what is important to them personally, and think about ways to share these things with others. For example, one child might choose to donate a favorite shirt or blouse that she has outgrown to disaster relief. Another child might give toys to a hospital where he had his tonsils out. The more children personally identify with their donations, the more you’ll cultivate their charitable impulses.

FAMILY PROJECTS AND VOLUNTEERING

Family volunteering can foster a larger sense of community participation and commitment. Choose an activity that matches your family’s interests—whether you like to participate in athletic activities like bike-a-thons, swim-a-thons or charity races—or prefer to work on community projects such as cleaning up a playground, beach, or park. Participation in a community project allows kids to do good while meeting and working alongside those who benefit from their efforts.

CREATE FAMILY RITUALS

Whether it’s cooking a meal for the homeless on Sundays or sharing a moment from the week where someone made a difference, regular rituals that are shared by the entire family help create a tradition of giving. Carol Weisman, the author of Raising Charitable Children (F.E. Robbins and Sons, 2006), recommends using birthdays, anniversaries, and other special occasions as opportunities to teach children the joys of giving. You can have your child phone an uncle on his birthday and ask what charitable act he’d like her to do in his honor. Or you could set aside a day to celebrate a relative’s special accomplishment or commemorate a tragedy that has touched the family. The idea is to create activities that become part of the family legacy.

INCLUDE CHILDREN IN YOUR DECISIONS ABOUT CHARITABLE DONATIONS

Since children learn best by imitation, set aside a special time to discuss whom you plan to give to and why. To make this activity more meaningful, you can point out organizations that hold special significance to the family—the hospital where Grandma stayed, or the wildlife refuge where the family hikes in the summer. Let children in on topics you are personally concerned about such as the plight of an endangered species or the demolition of a local historical landmark.

ENCOURAGE THEIR OWN CHARITABLE DONATIONS

To reinforce the idea of saving some of their own funds to help others, some families create a “Spend, Save, and Give” box with three compartments that allow children to allocate their allowance accordingly. Some families match their children’s charitable savings, so that they can do even more. Foundation Source clients use our online “Grant Certificates” to enable their children to make grants up to a specified limit to organizations they choose.

Teens

Teens typically start asserting their independence from the family, preferring to spend time with their peers.

But charitable pursuits needn’t go by the wayside at this age. As young people develop a more expanded world view, philanthropy can help them discover their place in it and their power to make a difference.

COMMUNITY SERVICE AND SOCIAL ACTIVISM

You can take advantage of teens’ growing desires to be with peers by encouraging them to join social venture organizations with friends or to make new friends by getting involved in causes they would like to explore. Many high schools require students to fulfill a civic service requirement in order to graduate (and college entrance authorities look positively on such activities). Help teens find volunteer opportunities that satisfy these requirements while enabling them to discover their own interests, like building a skate park or lobbying local officials to clean up a hazardous waste site. The idea is to find activities that build their confidence, so that they can make a difference.

STAR-POWER PHILANTHROPY

Celebrities like John Legend, Beyonce, and Ellen DeGeneres are helping to make social action seem not only important, but exciting. Sports figures are also great philanthropic role models for teens who may be looking to heroes for inspiration. For a generation brought up in a media-saturated, brand-conscious world, don’t discount cause-related marketing efforts such as the TOMS’ “One for One” movement, Warby Parker’s “Buy a Pair, Give a Pair” campaign, or MAC Viva Glam Lipstick. Granted, each has a commercial component but by raising teens’ social awareness, these efforts can be a springboard for their participation on the foundation.

TECHNOLOGY

Technology has become the primary method modern donors use to network and obtain information—and no one understands social networking, mobile technology, and interactive media better than this current generation. Although Foundation Source’s easy-to-use online console enables teens and their parents to collaborate online in managing the foundation’s activity, there are plenty of ways that tech-savvy teens can leverage their skills to make a difference. Get your teens involved in the foundation by inviting them to promote causes by designing websites, taking photos and digital video, networking with friends across the globe, and writing, podcasting, and tweeting.

INSPIRATION

Foundation Source clients in search of inspiration for the next generation have a terrific resource at their fingertips: our in-house Philanthropic Advisors. These experts can offer suggestions for cultivating a teen’s growing social consciousness and involvement. Their guidance is based on their professional experience advising foundations of all sizes and is drawn from more than 1,650 of our own clients.

College and Young Professionals

Young adults are branching out at this stage, often living far from home and immersed in the demands of first jobs or graduate/professional schools.

Time is often the most precious commodity for this age group, and their participation in family philanthropy may su er. However, if you have a foundation, you can offer attractive opportunities that help forge an enduring commitment.

A SEAT AT THE TABLE

Becoming a board member of a family foundation is a lot like acquiring a stake in a family business: It’s an honor, a privilege, and a big responsibility. That’s why it’s important to make joining the foundation board a significant occasion. Some families invite the next generation to join the foundation board when they reach a certain age. Others wait until specific milestones have been achieved, like attending a specified number of board meetings or volunteering a certain number of hours. Whatever criteria you choose, make board membership an important, highly anticipated event, and mark it by issuing a formal invitation.

FOUNDATION APPRENTICESHIP

To prepare the next generation for board duties while deepening their commitment, many families begin with apprenticeship programs, pairing young people with more experienced board members to act as mentors. One-on-one relationships with people they admire and respect can provide a meaningful introduction to the foundation.

The mentors can teach their protégés about the foundation and its work while helping them to explore how their unique contributions can enliven and invigorate the foundation.

FORMAL TRAINING

In addition to creating training opportunities within the foundation, consider giving young people a chance to learn about philanthropy with their peers, independent of the foundation.

Listed below are a number of good training resources devoted to youth philanthropy:

• 21/64 (www.2164.net) is a nonprofit organization that specializes in intergenerational transitions. They bring young philanthropists together to discuss their family legacies and next-generation issues.
• Resource Generation (www.resourcegeneration.org) is a network comprised of young people of wealth that provides education and resources to philanthropists and activists with progressive values.
• The Council on Foundations (www.cof.org) runs next generation retreats for foundation members ages 18 – 35 at its annual family foundation conference.
• Emerging Practitioners in Philanthropy (www.epip.org) provides peer support, mentoring and social events for young foundation professionals, foundation trustees, staff at philanthropy support organizations and graduate students studying philanthropy.

EXPOSURE TO INVESTMENT MANAGEMENT

Letting young adults see how the foundation assets are managed and talking to them about the board’s fiscal goals can be a powerful tool for teaching financial basics. Investment expert Paul Comstock points out that the family foundation is the only estate-planning tool that enables parents to observe their o spring’s proficiency
in managing money firsthand. How well young adults manage foundation finances can be predictive of how well they’ll handle their own funds once they are on their own.

GIVE GRANTING AUTHORITY

Providing a small amount of money in the form of discretionary funds offers the opportunity for young adults to connect grantmaking to their own interests. Having their own funds to contribute not only teaches them how to make grants, but also generates new program ideas for the foundation. Foundation Source makes discretionary granting easy. Young people can make grants online from any locale up to their allotted amount. As soon as they’ve reached their discretionary limits, they’re automatically stopped from granting any more.

Conclusion

We believe that bringing family members together to make the world a better place is what family philanthropy is all about.

By involving the next generation in the foundation, you can give them the desire, confidence, and skills they will need to extend your family’s legacy of good works and generosity well into the future.

In closing, we share a final story that we feel captures the satisfaction of raising the next generation to become engaged, passionate philanthropists.

In a city with a rapidly growing homeless population, one client found a way to directly involve his family in his efforts to lend a helping hand. He took his children shopping for basic supplies, using this opportunity to talk about what items might be needed and appreciated by people who don’t have ready access to showers, laundry facilities, etc. Together, they assembled kits that contained soap, shaving cream, razors, deodorant and other toiletries that most of us take for granted. The family kept these kits in the car and whenever they drove by someone who was living on the street, they would personally present the kit. The father remembers:

At first, I gave out the kits while the children watched wide-eyed from the car. Over time, my kids began to yell, ‘Dad, Dad, stop the car; there’s
a homeless person on the corner!’ They would then jump out and offer the kits themselves. The recipients were thrilled by their genuine concern and attention. I was delighted to see the social awareness this activity provided my children. I have no doubt that they’ll grow up to make a real difference in people’s lives.

The post Raising a Generous Generation appeared first on Foundation Source.

Having supported thousands of private foundations for more than 20 years, our philanthropic experts found that our clients rely on the five following touchstones to help family members adopt a giving mindset and create a foundation that inspires younger generations.

1. Instill Values & Traditions

o Involve children in the causes you care about
o Work together as a family to give back
o Teach that giving is a habit, like brushing your teeth

2. Maintain Family Ties

o Hold quarterly or annual family meetings
o Schedule meetings outside of the holidays to stay focused on the purpose
o Provide virtual options for those who can’t attend in person

3. Deepen Social Consciousness

o Conduct a nonprofit site visit with family to better understand needs
o Use the foundation to discuss problems and how to solve them

4. Increase Personal Fulfillment

o Try psychologist Martin Seligman’s exercise to have the family engage in “one pleasurable activity and one philanthropic activity”
o Write about both experiences and have the family discuss

5. Develop Skill, Knowledge & Awareness

o Task young children with simple acts such as donating birthday gifts or toys
o Involve young adults in the foundation to develop skills such as leadership and financial management

Want to get the complete checklist?

Philanthropic Support Is Just a Call Away
Have questions about philanthropy? Want to talk about a specific client? We’re here to help! Schedule a call with us here or call 800-839-0054.

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To ensure continuity of your board, you know that you need a plan in place for members’ retirement— whether they leave as planned (e.g., after decades of service) or unexpectedly (e.g., relocating to a new city). Under any circumstances, a change in board membership can be disruptive. At the very least, others will need to take up the slack. At worst, the departure of an experienced, skilled board member could prove destabilizing, reverberating throughout the foundation and compromising your work.

Rather than scrambling to deal with the fallout of a board member’s departure, it’s clearly preferable to plan for succession, passing on your organization’s institutional knowledge to the next generation of leadership while the experienced members are still actively involved. Other reasons to plan now include:

• The need for training: Successors need competence building so they’re ready to take the reins and keep the foundation efficient at the time of the transition.
• The benefit of the process itself: Planning for succession necessitates an assessment of your current operations and perhaps a more focused discussion of your shared expectations for board membership. What qualifies someone to join your board? Do you have formal criteria for board service?
• The peace of mind: Having an agreed-upon, detailed succession plan assures everyone on the foundation that the next generation of board members will be qualified and well prepared. It also helps new leaders feel legitimated and empowered to carry on the work of the foundation.

Rather than scrambling to deal with the fallout of a board member’s departure, it’s clearly preferable to plan for succession, passing on your organization’s strengths to the next generation of leadership while the experienced members are still actively involved.

Obstacles to Planning

However necessary, succession planning isn’t always easy. The process can expose vulnerabilities and bring long-simmering controversies to the surface, even as it brings a fresh perspective and perhaps even badly needed improvements. Besides these inherent challenges, many foundations have other common obstacles to tackling succession planning:

• If it ain’t broke… Foundation boards that are happy with their current operations may be reluctant to even think about changing their composition. If they’re having a great time working on the foundation, the current members may want to hang on as long as they possibly can.
• The foundation is the “landing pad”: At some foundations, board membership is considered the “second career” for retirees or an alternative career for younger people who don’t join the family business. If board membership is reserved for these members of the family, why devote much thought to training and bringing on the next generation?
• Disengagement: You can’t train the next generation of family if they aren’t interested in and invested in the work of the foundation. Families may need to begin by cultivating their children’s interest in philanthropy and then, as they mature, translating that interest into involvement in the foundation.

Making a Plan

Your foundation might need not just one succession plan, but two: a short-term plan that covers the unexpected loss of key officers (chair, treasurer, etc.) and a long-range plan that covers expected board attrition.

The Short-Term Plan

Let’s pretend that a key member of the foundation is sucked off the face of the earth. Who would take over his or her work? How would the foundation move forward? To help the foundation withstand such a shock to the system, the board may want to designate one or two individuals to temporarily cover in the event that anyone on the board is unable serve. Such a plan might also detail how long these interim replacements will serve until permanent replacements are selected.

Succession planning presents an ideal opportunity for a foundation to assess its current bench of talent, reinforce its strengths, and cultivate its future.

The Long-Term Plan

Succession planning presents an ideal opportunity for a foundation to
assess its current bench of talent, reinforce its strengths, and cultivate its future. Some foundations go so far as to create a year-by-year plan designating who will come off the foundation board and who will come on, taking into account considerations around retirements, term limits, qualifications for service, etc. Getting this specific enables the foundation to coordinate training, mentorships, and planned wind-downs. You might not want or need to be this detailed, but the elements of a successful plan should probably include:

• Self-Assessment: This is an ideal time for the board to undertake a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats). What expertise do you already have, and where are the gaps? Your succession plan can name key people to serve as mentors to rising board members, ensuring that current strengths aren’t lost over time. And you can build out your recruitment and training program to address organizational weaknesses. If necessary, you might decide to look outside of the family for new talent that meets important needs, such as professional expertise or special knowledge of a current or proposed funding area.
• Eligibility Requirements: Becoming a board member of a family foundation is a lot like acquiring a position in a family business. It’s an honor, a privilege, and a big responsibility. So, what qualifies someone for board membership? Some boards consider board membership a rite of passage for children and invite the next generation to join when they reach a certain age. Others wait until specific skills or milestones have been achieved, like completing a site visit, attending a specified number of board meetings, or volunteering a certain number of hours.
• Formal Training: In addition to creating training opportunities within the foundation, make sure you prepare rising board members by providing formal training whenever possible. If young people will one day take the reins, consider giving them a chance to learn about philanthropy with their peers, independent of the foundation. Listed below are a number of good training resources devoted to youth philanthropy:
  • 21/64 (www.2164.net) is a nonprofit organization that specializes in intergenerational transitions. They bring young philanthropists together to discuss their family legacies and next-generation issues.
  • Resource Generation (www.resourcegeneration.org) is a network comprised of young people of wealth that provides education and resources to philanthropists and activists with progressive values.
  • The Council on Foundations (www.cof.org) runs next generation retreats for foundation members ages 18 – 35 at its annual family foundation conference.
  • Emerging Practitioners in Philanthropy (www.epip.org) provides peer support, mentoring and social events for young foundation professionals, foundation trustees, staff at philanthropy support organizations and graduate students studying philanthropy.

A Single-Source Solution

As board membership evolves over time, you might want to consider other options for administering your foundation. By having a provider external to your organization, you’ll ensure continuity and stability during periods of transitions. When seasoned board members or staff depart, you won’t lose key data or momentum; and as new members take their place at the table, important tasks won’t fall between the cracks.

Choosing a provider that offers comprehensive services such as Foundation Source offers an additional slate of benefits. By bringing together the services of attorneys, philanthropic advisors, tax experts, and foundation operations specialists, you can get a convenient, scalable solution for every foundation need in one place. Our online management platform ensures operational transparency and facilitates collaboration, even for members in different area and zip codes. Moreover, since Foundation Source takes care of grant processing, tax preparation, record-keeping, and other time-consuming tasks, you’ll have the bandwidth to focus on your mission.

Although planning for the next generation of foundation leadership can be challenging, it is also an opportunity for organizational growth. In our experience, foundations can emerge from this process with continuity, newfound purpose, and renewed dedication to their philanthropic goals.

The post Succession Planning for Board Members appeared first on Foundation Source.

Engaging the next generation presents a powerful opportunity for a family foundation and its continued legacy. Getting family involved is a pivotal chance to connect shared history and values across generations of your clan—whether it’s the stories that matter to your families or the ideals that you’re expressing through your foundation. For many families, next-generation engagement can also be an amazing moment that sets the stage for the kinds of growth, connection and maturing that family foundations experience when rising members step into leadership roles—or help evolve new ones.

Blending new voices brings diversity, new strengths and developing roles to your mission. And the more diverse your decision-making body is, the better decisions you make. In these ways, involving succeeding generations of family members becomes a learning experience that ensures continuity, too, which ultimately can enhance your grantmaking and lead to increased impact.

2. Acknowledge the Challenges

It’s a fact: navigating family dynamics is hard but necessary. You and your family members may not have identical values, so it can take some work to recognize and identify what your shared values really are. Reaching that point means taking stock of individual interests and beliefs and then creating a common, shared vision from which you all can move forward. Having different views is a given; the task is to figure out how to align them in the best ways.

To make this a success, it’s also important to recognize that family foundations are often mirrors of the family culture, dynamics and communication styles behind them. That defining trait makes the ability to communicate about differences and similarities alike—and navigate around any dysfunction—essential challenges of working together as a family.

One way to approach these inherent challenges is to start early with a learning emphasis. What do your children, grandchildren or other relatives really know about your foundation? As they grow, for example, perhaps they can get involved in the selection process of charities to fund. Or maybe they can accompany you to site visits or events sponsored by the organizations you help.

Another step is to think about how to work empowerment into your governance when onboarding new generations. There can be a certain tension, after all, as it naturally creates a mixed group, in which some people feel more empowered to make decisions and others feel less so. Family foundations that have been run solely by their founding generation, for instance, may find it difficult to transition to a more democratic process as new generations come on board.

Blending new voices brings diversity, new strengths and developing roles to your mission.

That’s why a more formal onboarding process is often preferable over, say, just family discussions, to smooth those crucial transitions. It can be hard to step into a leadership role if you feel that you don’t have clear authority to question, challenge and make decisions. So, having governance practices and decision-making structures in place brings more objectivity to a process that can be subjective—and that gives next-gen family leaders a solid base to lean back on in terms of how to engage, integrate and contribute.

3. Master Transition Planning

When managing transitions, taking the time to discover passions and identify roles that fit is a best practice to move forward successfully. Square pegs will never fit round holes, so don’t try to force them. Instead, it’s vital to match interests, responsibilities and leadership abilities to family members who have the desire, enthusiasm, education and drive for the roles that make the most sense for them to accept. The bottom line? Intrinsic motivations will maintain the foundation’s effectiveness and sustainability.

What about bringing outsiders into the multigenerational family mix? It’s a trend among most family foundations today, according to NCFP’s Trends 2020 study, but it’s also something that a lot of them grapple with. Before adding outside directors, prioritize effective family communication, a focus on values and operational direction.

It’s not always easy for an outside party to walk into a family setting, so make sure your reasons for engaging other voices bring value and new expertise to the table and that the advisory goals you set are clearly defined. Whether you’re actively bringing on the next generation, outside advisors or both, always remember to be mindful of the actions you take. You’re laying the groundwork for the next stage of your family foundation and defining what you want your message to the world to be.

To learn more about these key takeaways and other valuable insights, listen to the full webinar discussion.

The post Family Philanthropy: Thriving Through the Generations appeared first on Foundation Source.

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Planning for new leadership offers opportunities for family foundations to achieve a range of objectives that are important to the foundation’s future. Answering the following questions can guide successful decision-making:

Assess Needs

• What is the goal of succession?
• What are the foundation’s needs in a leader, particularly relative to family dynamics, grantmaking focus, and geography?
• What are the roles and responsibilities of the current leader?
• How will these roles and responsibilities change with a new leader?

Consider Process

• What will be the process for search and selection?
• Who will be involved in choosing the next leader? Will it be the current president, a committee, or the entire board?
• If the choice is subject to a vote, must it be unanimous, or will a simple majority suffice?

Re-articulate Goals and Mission

• Will the foundation examine its core mission?
• Will the foundation undertake an evaluation of current strengths, weaknesses, opportunities, and challenges?
• Will the foundation’s original philanthropic intent evolve to meet changing circumstances?
• How much of a say will the new leader have in determining grantmaking priorities?

Identify New Talent or Cultivate Existing Talent

• If the board is very small, or if more than one board member leaves, how important is it to expand the board?
• Are there current board members with interest and potential to take on new or expanded responsibilities?
• If grants are community based, how important is it to consider community representation on the board?
• Are there particular skills or expertise needed on the board?

Plan for a Seamless Transition

• When will this change in leadership happen? Is the foundation planning around a specific date?
• If relevant, what will the role of the former leader be after the foundation chooses a new leader?
• Will the former leader be providing training, support or mentorship for the new leader?

Conclusion

Succession is a critical juncture for the board and the extended family. It can be an opportunity to reflect and reimagine the organization’s future, and a time to consider the desired leadership skills to guide the foundation in a continued or new direction. Planning for a smooth, thoughtful and strategic transition is vital. With proper planning, foundations can emerge from leadership transitions stronger-than-ever—with renewed purpose, continuity and dedication to their philanthropic goals.

A sudden change in foundation leadership can have negative consequences that reverberate both with the family and with your grantee organizations.

The post Succession in Family-Led Board Foundations appeared first on Foundation Source.

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Pros

1. Reducing conflict

Board members don’t always share the same convictions, political ideology, or priorities. And when the foundation’s board comprises family members, these divisions may be sharp enough to imperil productivity and cause hurt feelings. Giving everyone his or her own funds to distribute can help keep the peace and preserve collective decision-making by providing an “escape valve” for dissent.

2. Fosters enthusiasm and engagement

Allowing individuals to support organizations of personal interest is an obvious way to keep them committed to the foundation.

3. Incubates new programs and projects

These individual “side projects” can serve as philanthropic laboratories, testing out organizations and projects outside of the foundation’s typical areas of focus.

4. Expands the foundation’s geographic footprint

Dispersed family members can make grants where they reside, making participation more relevant for them while bringing the foundation’s work to a much broader constituency. Having a broader footprint can also lead to new and useful partnerships in other areas of the country.

5. Provides rapid response capability

Because discretionary grants don’t need to wait for unanimous board approval, the foundation can respond quickly to urgent situations.

6. Provides a training ground

Discretionary grantmaking gives incoming members some valuable hands-on experience and training.

7. Rewards service

In lieu of compensation, some foundations give board members agency over their own pool of funds.

57%

of foundation source clients surveyed provide discretionary funds for members.

Cons

1. Diverts focus and resources from common mission

If foundation members are primarily focused on their own grantmaking, they may not be able to devote sufficient attention to the foundation’s core mission. Also, if too many funds are siphoned off for individual expenditures, the remainder might not be sufficient to achieve the foundation’s primary mission.

2. Confuses nonprofits and the public

If the foundation makes numerous grants that don’t align with its publicly stated purpose, expect some confusion—as well as a lot of proposals that fall outside the foundation’s mission.

3. Lacks accountability and could diminish impact

Because discretionary grants are often made without full board approval, it’s difficult to ensure that the foundation’s funds are being used consistently with its mission.

4. Might deter personal giving

If the foundation’s funds are used for individual charitable endeavors, board members might be less inclined to give out of their own pockets.

5. Increases compliance risk

When individuals are given control of grant funds, the opportunity for inadvertent self-dealing increases. For example, a board member might be tempted to grant to an organization that offers free tickets to a popular show. Without the scrutiny of the entire board, board members may stray into questionable legal territory, thereby exposing themselves and the entire foundation to potential violations.

6. Avoids necessary conflict

Discretionary grantmaking enables board members to sidestep conflict while denying them the opportunity of working things out together. For many foundations, conflict is a necessary and productive part of finding common ground. Avoiding conflict does nothing to resolve disagreements, which might fester while they’re ignored.

37%

of foundations allocate 5% or less of their budget to discretionary grantmaking.

Respondents told us that discretionary grantmaking typically accounts for less than a quarter of the foundation’s grantmaking funds. 29% said it accounts for 10%-25%. However, 15% said their foundations allocate 100% of their budgets to discretionary grantmaking.

A Balanced Approach

If your foundation is interested in pursuing discretionary grantmaking, you’ll probably want to put limits around it. For example, your foundation could decide to make almost all of your grants collectively but allocate some funds for discretionary grantmaking by individual members. Here are some other ways to make sure discretionary grantmaking is an added attraction to your foundation and not a distracting sideshow:

1. Develop a policy

Articulate your foundation’s reasons for pursuing discretionary grantmaking, and draft policies around how these grants are made. What percentage of the grant budget will be allocated to discretionary grants? Are there any prohibited issues or geographic restrictions for these grants? What is the approval process?

2. Keep your mission paramount

To prevent discretionary projects from distracting from the foundation’s core focus, ask foundation members to agree on one ground rule: Discretionary grants should be consistent with the foundation’s mission.

3. Make matching grants

Want to ensure that individuals spend the foundation’s funds as carefully as they’d spend their own money? Instead of giving each member foundation funds
to disburse, use your discretionary fund to match each member’s individual, personal gifts.

4. Reward personal commitment

To avoid having discretionary funds displace personal giving, consider a policy of awarding this type of funding to board members who give up their personal time to serve as volunteers.

Discretionary funding therefore becomes a recognition of personal commitment instead of its surrogate.

5. Make it a limited-time offer

How will you know whether your discretionary funds have been a success or failure? Rather than making a permanent commitment to discretionary funding, give it a trial run and assess its impact. Decide upfront whether the trial period will be one, two, or three years, and determine how you’ll measure its impact.

6. Put “guardrails” around grantmaking

If you’re contemplating instituting discretionary giving, consider engaging Foundation Source.

Our online technology enables individual members of the foundation to grant from any internet-en- abled device in any locale. Once an individual reaches their allotted discretionary amount, the system prohibits further grantmaking. And because the system can be configured to the needs of your foundation, designated individuals can be provided with viewing rights, providing complete transparency. As part of our comprehensive outsourced services, we alert members when we spot potential conflict-of-interest and self-dealing issues with pending grants, helping to prevent compliance violations before they occur.

Although discretionary grantmaking isn’t necessarily the right choice for every foundation, with careful planning and thoughtful implementation, it can provide numerous benefits.

35%

of our clients provide $20K per individual.

When asked how much they provide (or will provide) to each individual, here is how respondents replied:

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