Family Giving News - October 2003 - Successful Succession



FAMILY GIVING NEWS Successful Succession in Family Philanthropies October 2003, Volume 3, Issue 10 Click Here to Send This Page To a Friend! PLEASE NOTE: To print a PDF version of Family Giving News, please go here. TABLE OF CONTENTS: [Click on the section title to jump immediately to that section.] UP FRONT... SUCCESSFUL SUCCESSION WHAT'S NEW AT THE NATIONAL CENTER PASSAGES SPECIAL AND FORTHCOMING RESEARCH FRIENDS SPOTLIGHT SPOTLIGHT ON... TRUSTEE FEES AND ABUSES SPOTLIGHT ON... EFFECTIVE COMMUNICATIONS WHAT'S GOING ON: CALENDAR OF UPCOMING EVENTS




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	UP FRONT: SUCCESSFUL SUCCESSION

	For philanthropic families - those both new and more experienced - there are few constants. Giving, like families themselves, changes with time and circumstances. Stock markets may rise and fall, general operating support may give way to funding capacity building, and geographic dispersion may prompt trustees to reconsider the direction of their grantmaking. The questions that families pose to the National Center for Family Philanthropy most frequently - by far - are those concerning generational succession: How do we raise charitable children? How do we decide who will be involved, when they will be involved, and on what basis we make these decisions? And how much should the foundation or advised fund's mission or grantmaking focus accommodate personal - rather than shared - interests? Resources on these and other related questions are shared in this edition of Family Giving News.

SINGLE ISSUE: $20	SUCCESSFUL SUCCESSION: INSPIRING AND PREPARING NEW GENERATIONS FOR PHILANTHROPIC LEADERSHIP In conversations with families who have thought about generational succession, several consistent themes emerge. This recent edition of Passages shares a collection of 12 Tips for Successful Succession from National Center President Virginia M. Esposito. How do we raise charitable children? Which of our children, nieces, nephews, (others?) should participate, and by what basis do we make this decision? How much should the foundation’s mission accommodate personal – rather than shared – interests? These and many other questions are addressed in this thought-provoking paper on one of the core issues in family philanthropy. By Virginia Esposito July 2003, 12 pages

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Source: National Center for Family Philanthropy	TWELVE TIPS FOR SUCCESSFUL SUCCESSION This checklist of twelve strategies for successful succession includes suggestions such as: encourage children in their personal accomplishments; embrace all the family in the work of the philanthropy; and articulate your family's values and develop a mission statement, guidelines, and practices based on these values.

Source: National Center for Family Philanthropy	STARTING EARLY: THE HITE FOUNDATION This short profile of the Hite Foundation describes the establishment of the foundation, and the strategies used by the founding trustees to engage their two teenage daughters in the work of the foundation.

Source: National Center for Family Philanthropy	RAISING PHILANTHROPIC CHILDREN Teaching philanthropy and raising responsible children is a central and, in many ways, lifelong parenting role. This back issue of FGN features checklists, tips, and tools for teaching philanthropy and financial responsibility to your children. Children in affluent families often face special challenges in managing and understanding the role of money within their lives. We share several resources to assist you in sending appropriate messages and modeling responsible behavior, from a variety of sources including Children Today, Families First, Trusts and Estates, and Bloomberg Wealth Manager.

Source: Foundation News & Commentary	A MOVEMENT WITHIN A MOVEMENT Youth involvement in philanthropy is growing by leaps and bounds both domestically, and worldwide. That’s a win-win situation for foundations, youth and communities. It is no longer unusual to find youth working in community foundation offices, going on site visits, making grant decisions, assessing community needs or paying calls on donors. Youth philanthropy projects are growing so fast they've been dubbed "a movement within a movement." Those who have tried it say that kids can: Help a foundation make better decisions about grants for youth services. Be excellent spokespeople for the community foundation. Effectively solicit donors. Perform research such as community needs assessments. Provide needed help to overworked staff. Train other youth in grantmaking. Bring new perspectives and energy to a community foundation's committees or board. This new article from Foundation News and Commentary magazine explores additional trends and stories in the youth philanthropy movement.

SINGLE ISSUE: $20	OPPORTUNITY OF A LIFETIME: YOUNG ADULTS IN FAMILY PHILANTHROPY This issue paper addresses one of the most important opportunities in family philanthropy— encouraging young adults to both take part in the family’s giving process and to become philanthropic in their own right. What are the reasons that families involve young adults? What are some of the strategies that families have used? And what can young adults themselves do to become more connected to the family’s philanthropy? By Alison Goldberg May 2002, 8 pages
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Source: National Center for Family Philanthropy	TWO FAMILIES PROVIDE TRAINING OPPORTUNITIES FOR YOUNG ADULT Involving young people in family philanthropy is by no means a one-size-fits-all proposition. These short case examples illustrate the strategies that two family foundations have used to include young people. Strategies mentioned include matching grants, discretionary grants, associate programs, and other training and orientation opportunities.

Source: National Center for Family Philanthropy	SUGGESTIONS FOR FAMILIES SEEKING TO INVOLVE YOUNG ADULTS What are the best ways to involve your young adult children in philanthropy, either as individuals or with the rest of the family? This short checklist, developed by a young adult foundation trustee, provides suggestions and considerations for families looking for ways to effectively engage these future leaders.

Source: National Center for Family Philanthropy	SUGGESTIONS FOR YOUNG ADULTS LOOKING TO BECOME MORE INVOLVED What are the best ways that you as a young adult can become a participant and leader in your family's philanthropy? This short checklist provides suggestions and advice from other young adults about how to prepare for becoming involved in family philanthropy.


	WHAT'S NEW AT THE NATIONAL CENTER FOR FAMILY PHILANTHROPY

	*EXCLUSIVE PASSAGES* OFFERS COMING SOON FOR SPECIAL INTEREST SUBSCRIBERS - SIGN UP NOW!**
	Interested in getting back editions of "Passages" at a fraction of the cover price? Sign up now for one of FGN's "Special Interest Categories" and you will receive invitations to purchase several best-selling back editions of Passages, including *Opportunity of a Lifetime: Young Adults in Family Philanthropy* and Managing Conflict and Family Dynamics in Family Philanthropy. To take advantage of this special offer, click on "Update Your Profile" at the bottom of the email you received directing you to this page, and then sign up for one or more of the interest categories indicated on your profile page.

SINGLE ISSUE: $20	DEMYSTIFYING DECISION-MAKING IN FAMILY PHILANTHROPY The notion of selecting a method to use in making a decision is foreign to many family foundations and advised funds. Getting board members to agree can be difficult enough. Why would foundations and advisory boards want to add yet another step to the process? Many family foundations follow the decision-making procedures established in their bylaws. Typically, the bylaws require a majority vote or consensus to set or change policies, and foundation boards use these methods to make all decisions. This current edition of Passages describes different kinds of decisions made under varying conditions and circumstances requiring different decision-making methods. By Ann Shulman September 2003, 12 pages

	NEW RESEARCH ON FAMILY PHILANTHROPY NOW AVAILABLE!

*To receive a copy of Family Philanthropy: What We Don't Know, subscribe now to Passages:*	FAMILY PHILANTHROPY: WHAT WE DON'T KNOW How has family philanthropy been defined? What is the extent of family philanthropy? What patterns of giving characterize family philanthropy? What are the motivations for family philanthropy? How are family philanthropies governed and managed? In 2002, the National Center for Family Philanthropy commissioned The Urban Institute to identify, review, and assess existing empirical research on a set of broad questions concerning the sources, nature, and consequences of family involvement in philanthropy. We cast a wide net, seeking research on giving or volunteering by any two or more individuals related by blood, adoption, or marriage. We not only sought research explicitly focused on family philanthropy, but also work on related topics (such as foundations or individual philanthropy) that might include material on family philanthropy. This paper provides those with research, policy, and practice-oriented interests in the field – including nonprofit administrators, fundraisers, advisors, and donors themselves – with a compilation of available knowledge about family philanthropy. By Francie Ostrower October 2003, 12 pages

	PORTRAIT OF FAMILY PHILANTHROPY BIBLIOGRAPHY This new bibliography from the National Center's current edition of Passages, "Family Philanthropy: What We Don't Know," includes a comprehensive listing of research explicitly focused on family philanthropy and related topics. The report, part of the National Center's Portrait of American Family Philanthropy project, provides an overview of the best research and available knowledge in the field. Request your complimentary copy of this bibliography here.


	FRIENDS SPOTLIGHT

For additional information about Friends of the Family, please click above.	The National Center for Family Philanthropy is pleased to announce a new feature for Family Giving News: the "Friends Spotlight". Each edition of FGN will highlight families and foundations that are part of the National Center's Friend of the Family network. Families and individuals belonging to our Friends of the Family program have shown an ongoing commitment to the values, vision, and vitality of family philanthropy. If you are interested in learning more about this special leadership circle of partners, please contact the National Center at 202.293.3424, or view the information flyer via the link at left. This month's "Friends Spotlight" features the Roth Family Foundation from Los Angeles.

	ROTH FAMILY FOUNDATION, LOS ANGELES Friend of the Family since 2002 Harry Roth, Louis Roth, and Fannie Roth founded the Roth Family Foundation in Los Angeles, California, in 1966. The Foundation was funded upon the deaths of the founders and the sale of the family business, Louis Roth Clothes. The Foundation continues to include all family members, with two generations actively involved at present. Philanthropy has always been a strong family value: to help others who may be less fortunate, to protect freedom and human and civil rights, and to be able to give back to the community and support causes that the family cares about deeply. Compassion, justice, fairness, access, and respect for others are part of the family values, which inspire and motivate the Foundation’s giving. The Foundation’s mission is commitment to progressive social change. The Foundation invests in organizations that inspire hope, dignity and creativity, primarily in the Los Angeles area. Grounded in a legacy of social justice and civil rights, the Foundation helps connect communities to the services, opportunities, and tools for self-empowerment and self-expression. Program Interests The Foundation seeks to improve lives through a variety of programs. Specifically, it looks for programs that fall into the following six focus areas: Youth Development: including programs focused on school dropout and delinquency prevention, after-school enrichment (i.e., arts, music), reading and literacy, teen parenting and youth leadership. Civil and Political Rights: including the promotion of women’s rights, especially in the area of reproductive health and family violence; racial and religious justice; and support of international and national civil rights organizations; human rights; peace; violence prevention; legal clinics. Arts and Culture: including music, museums, and libraries Economic and Social Justice Environment Public Broadcasting In addition, the Foundation selects specific priority issues that it targets each year. For additional information about the foundation, please contact: Rachel Roth Executive Director, Roth Family Foundation 12021 Wilshire Blvd., Suite 505 Los Angeles, CA 90025


THANKS TO OUR SPONSORS! Effective grantmaking starts here. *Foundation News & Commentary,* the flagship publication of the Council on Foundations, offers in-depth discussion, peer-to-peer commentary and profiles of best practices to help grantmakers be more effective in their work. Subscribe online at www.foundationnews.org. See the new article "A Movement Within a Movement" on the growing trend of youth involvement in philanthropy, featured above in this edition of Family Giving News. And, sign-up for our free e-mail newsletter, FN&C Now, for timely alerts on breaking foundation news.


	SPOTLIGHT ON... TRUSTEE FEES AND ABUSES

	WARNING: Reading the following articles may be damaging to the morale of those offended by selfish and inappropriate use of charitable funds. Included here are several new articles about unscrupulous practices within foundations, as well as a link to the National Center's look at the issue of trustee fees, "Board Compensation: Reasonable and Necessary?" Also featured is the Georgetown Public Policy Institute's new study, "Foundation Trustee Fees: Use and Abuse." We remind you - as reporters often do not - that the vast majority of foundation trustees do not receive excessive compensation for their activities on behalf of the foundation, and that most pay their own expenses and do not receive compensation of any kind. These stories make clear the growing need for family foundations and philanthropists to be more transparent in their activities, whenever possible. These and other stories also make clear the need to share information about the important work of the nonprofits they support, and about their own personal commitment to these efforts. With few exceptions, family philanthropies focus on providing rewarding opportunities for the individuals, families, and the communities they support. Families are encouraged to share their stories with the media and general public. We offer several strategies and resources below on how to establish an effective communications strategy.

Source: Boston Globe	SOME OFFICERS OF CHARITIES STEER ASSETS TO THEMSELVES This article profiles several instances of alleged abuse of the federal rules governing compensation of foundation trustees, including situations where compensation to foundation officers has exceeded the annual charitable donations of the foundation. Several of the individuals profiled are portrayed as seeing no difference between the foundation's assets and their personal funds. "You have this mindset in some quarters that if you need the money, you dip into it,'' says author and lawyer Bruce Hopkins. ``That's not the way it works. These are charitable dollars, and they ought not to be spent that way."

Source: Copley News Service	FOUNDATION LOSES MILLIONS UNDER BIELFELDTS This profile of the Illinois-based Bielfeldt Foundation takes a hard look at the activities and compensation received by several of the Foundation's trustees over the past 17 years. The articles notes that, according to tax returns filed by the foundation, "While the Bielfeldt Foundation has given $25 million to charities over the years, it has paid the Bielfeldts $21 million." "Certainly, if the IRS were to conduct an audit, I guarantee you that they would be requesting additional information about compensation and financial relationships between the officers, the founders and the foundation and also on those fees and the nature of the investment portfolio,'' the article quotes Marcus Owens, a Washington lawyer.

Source: Georgetown Public Policy Institute	FOUNDATION TRUSTEES FEES: USE AND ABUSES This new report is based on a review of 238 foundations, including 176 of the largest foundations and 62 "smaller" foundations. The report documents the number of trustees receiving fees at each of these institutions, as well the aggregate cost of fees and the number of grants distributed. The report asks three questions related to the practice of paying trustee fees at some foundations: Why should trustees be compensated for their charitable work, while board members of nonprofit organizations are not? Why should the standards for compensation be so different between foundations and nonprofits? What is the rationale for foundation-trustee fees? Are the fees viewed as essential to the effective performance of the institutions that pay them? The report disputes arguments used to defend the use of trustee funds, and provides a series of policy recommendations regarding trustee fees, including: Limit annual trustee fees to no more than $8000 per trustee. Bar trustees from receiving compensation beyond the minimum fee for services to their foundations. Prohibit foundations from counting trustee fees as part of their annual payout.

Source: National Center for Family Philanthropy	BOARD COMPENSATION: REASONABLE AND NECESSARY? Deciding whether to compensate or reimburse family foundation board members can be a difficult and complex decision. This comprehensive issue paper from the National Center for Family Philanthropy provides guidance on the legal regulations regarding compensation, suggestions for how to initiate a conversation among your board members about whether or not compensation is appropriate, and suggestions for how to develop a written policy based on this conversation. Available Online Exclusively for Family Giving News readers!


	SPOTLIGHT ON... EFFECTIVE COMMUNICATIONS

	The fact that philanthropy consistently gets such a bad rap in many of the nation's leading media outlets is an ongoing dilemma for those active in the field. What are the reasons for this negative coverage? What are some ways that families and their advisors can help to change this dynamic? This issue of FGN features an overview of a new report on the coverage of philanthropy and foundations in the media, along with tools and resources for becoming more effective communicators of your philanthropic message and accomplishments.

Source: Douglas Gould and Company	TRUTH ON THE SIDELINES: PHILANTHROPY AND FOUNDATIONS IN THE MEDIA This new report provides an in-depth analysis of what policymakers and opinion leaders are learning about foundations through coverage in the print and television media. The report include a series of suggestions for foundations seeking to create a positive image for the field and to guard against the current trend (as the above articles illustrate) of negative media coverage. The report includes an analysis of how the nature of media coverage of philanthropy and foundations has changed over the past five years. "News coverage of the good work of foundations... is somewhat overshadowed by reports of foundations giving away too little and spending too much on salaries and expenses," notes the report. "This problem is compounded by the fact that too often foundations fail to speak for themselves. Foundation staff remain on the sidelines of debate, allowing outside actors to shape public perceptions of their work and their role in society. This tends to result in a distorted view of foundations and philanthropy. The good news is that foundations are not portrayed overall as greedy or corrupt. Rather, readers are given the impression that a few foundations are 'bad apples.' " The final section of the paper, Conclusions & Recommendations, provides a series of suggestions for steps that foundations can take to enhance and improve their communications with the media.

	TOOLS AND CASE STUDIES FROM SPLENDID LEGACY: THE GUIDE TO CREATING YOUR FAMILY FOUNDATION

Source: National Center for Family Philanthropy	IDEAS ON COMMUNICATIONS FOR NEW OR SMALL FAMILY FOUNDATIONS Eight suggestions for thinking about options and considerations of developing one or more communications strategies for a new foundation.

Source: National Center for Family Philanthropy	POSSIBLE ELEMENTS OF A COMMUNICATIONS STRATEGY This case study shows how one fictional family foundation advanced its mission over a three-year period by connecting with key audiences throughout the communities it served.

Source: National Center for Family Philanthropy	A CLASSIC SET OF COMMUNICATIONS TOOLS The Mayday Fund employs a set of communication tools to help it fulfill its charitable mission, which is "the alleviation of the incidence, degree, and consequence of human physical pain." This sidebar provides a description of these strategies and tools.

Source: National Center for Family Philanthropy	THREE KEY QUESTIONS ABOUT USING A COMMUNICATIONS FIRM Questions to consider when thinking about engaging the services of a communications firm to share your philanthropy's message with others.

Source: The Communications Network	RESOURCES FROM THE COMMUNICATIONS NETWORK This collection of resources from the Communications Network provides information and research intended to help foundations communicate their messages consistently and effectively.


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	WHAT'S GOING ON: CALENDAR OF UPCOMING EVENTS

	Read about upcoming meetings for donors, families, and advisors, and check out the National Center's comprehensive Calendar of Upcoming Events including our new section devoted to programs and seminars from Regional Associations of Grantmakers. Is your organization or another you know of planning a meeting that would be of interest to families and donors? Please let us know by sending details to jason@ncfp.org.

	FEATURED EVENTS:

	Conversations on Philanthropy Sponsored by Shaking the Tree Interactive Productions November 19 and 20, 2003 ~ New York and Philadelphia Shaking the Tree Interactive Productions will be hosting two evening events this November, in New York and Philadelphia, featuring the first play in their new “Conversations on Philanthropy” series, a new set of short plays depicting the many challenges family foundations are facing today. The series will be a new and meaningful way for families and foundation executives to discuss critical issues impacting the both the technical and relationship side of family philanthropy. These unique events, exclusively for family members, single family office executives and family foundation executives, will include an opportunity for discussion as well as a short talk by a speaker on intergenerational issues in family philanthropy. For more information, contact Maryann Fernandez, President of the Board, Shaking the Tree Interactive Productions, at 212-580-8411 or visit their website at www.shakingthetree.org.

	Creating Change Through Family Philanthropy Conference Sponsored by Resource Generation December 5 to 7 ~ Boston This two day conference will bring together 50 young people, ages 15-40, from across the country to gain skills, connect with peers, and become more engaged as social change agents in their family¹s giving. Through workshops, plenaries and small group discussions the conference will invite participants to explore intersections of family philanthropy and the opportunities to create progressive social change. The conference is a program of Resource Generation, a national organization based in Massachusetts that promotes innovative ways for young people with wealth to align their personal values and political vision with their financial resources. For more information about the conference, contact Alison Goldberg, Donor Education Coordinator for Resource Generation, at 617.225.3939 x203 or alison@resourcegeneration.org.

	ADDITIONAL EVENTS:

	2004 Family Foundations Conference Sponsored by the Council on Foundations February 6 to 8 ~ New York For additional information about registration and agenda for this conference, please go to: http://int2.cof.org/conferences/family2004/index.htm.

	Trustee Leadership Seminar Sponsored by Association of Small Foundations and *The Philanthropy Roundtable* November 12 to 13, 2003 ~ San Diego For more information about this seminar, please go to: http://smallfoundations.org/events/san_diego__ca



THANK YOU for reading this month's edition of "Family Giving News." We encourage you to share this resource with your colleagues and associates: please sign up below if you are not already a subscriber to this complimentary resource. Be on the lookout for the next edition of "Family Giving News" in late November. HAPPY HALLOWEEN!


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© 2003 National Center for Family Philanthropy

Program Interests The Foundation seeks to improve lives through a variety of programs. Specifically, it looks for programs that fall into the following six focus areas:

Program Interests
The Foundation seeks to improve lives through a variety of programs. Specifically, it looks for programs that fall into the following six focus areas: