Ask the Center: Who's Family?

As our philanthropic family grows more diverse and distinct – as well as more geographically distant from the roots of the founders – how do we decide who should participate in the family’s philanthropy and how they will participate?

In this month’s Ask the Center, we feature an excerpt from the recently released report, “The Power to Produce Wonders: The Value of Family in Philanthropy.” Members of our Friends of the Family program and subscribers to Family Philanthropy Online are invited to join National Center President Ginny Esposito in a special Teleconference conversation on December 9th to discuss more about this report’s most important findings.

In the early days of a family foundation, the numbers of family members are usually manageable and it is generally easy to convene the group, give everyone a hearing, and make decisions. For those using donor advised funds, there is often a mandated maximum number of fund advisors - or number of generations - who may serve. Further, with donors actively at the table, it is far easier to have clear guidance on donor expectations for participation and performance.

However, for new giving programs – and perhaps most especially for long-established ones – many of the challenges of participation focus on two questions: for purposes of the philanthropy, who is family? And, on what basis will family members be selected for involvement?

To manage expectations for participation, each family must address the question of just “who is family?” Who are we as a family and what culture are we trying to create? What is it we hope to accomplish with our giving – for our community and for our family? What kinds of talents and perspectives will we need to do that work? And, in terms of participation and governance, which members of our family (now and in the future) will be considered?

Increasingly, families are finding the first step toward this understanding is to take an enlightening and inspiring look at the past. Chronicling the family’s philanthropic history, having video or audio recordings of the donors and other family members, and making such histories available to the family and the public have been useful tools in getting a discussion started.

For others, the sheer context and complexity of family can be stressful. When it comes time to choose staff, advisors, or trustees, no one wants to make choices that seem to favor one loved one over another. Extended family members can add richness – and controversy – to the mix as questions of spouses, cousins, adopted and stepchildren arise. In the face of escalating family expectations and increasingly unwieldy numbers, and in the absence of Solomon, donors and family leaders must make difficult but necessary decisions about eligibility.

Experienced family grantmakers heartily affirm that articulating the basis for participation (eligibility requirements) and the method by which family members will be chosen for participation are key conversations – and the earlier in the formation of the philanthropy that these conversations take place, the better. Ideally, the challenge is to make these decisions in the best interests of governing the foundation or fund, and not on the basis of personality. It is easier to do that in the early days, before spouses or grandchildren or future generations are even around.

Additional Resources on this topic

See the October issue of Family Giving News for a discussion of the spectrum of options for involving family members in the governance and management of a foundation.  Friends of the Family and subscribers to Family Philanthropy Online can learn more about this topic from the following resources, available in our Knowledge Center:

• Families In Flux: Guidelines for Participation in Your Family's Philanthropy. Family members marry, divorce, remarry, form domestic partnerships and, in many cases, move far away from the family home. With families growing ever more complex, varied, and far-flung, foundations and donor-advised funds need clear guidelines regarding who participates in their philanthropy and in what roles. This Passages report addresses changing family composition and circumstances and how philanthropic families may deal with them.
• Creating Opportunities for Family Involvement in the Foundation Outside of Board Service. This list of options from 'Families in Flux' provides suggestions for involving family members who may not be able to serve on the foundation or advised fund board. Useful for larger families, and for foundations with strict criteria for board participation.
• Defining Family: Guidelines for Participation. In this entertaining and informative Teleconference, consultant and family trustee Frank Merrick explores family composition changes and how philanthropic families may deal with them.