Even for families with a long history of charitable giving to church groups, civic organizations, educational institutions, and other non-profit organizations, deciding to embark on a formalized philanthropic agenda may seem like a formidable task. Perhaps your family already has a giving vehicle—a donor-advised fund or foundation—and is considering launching a second one, or even a third, to accommodate increasing available funds, geographic dispersion of family members, or interest in new charitable initiatives. The myriad of choices available to families in both giving vehicles and giving strategies is enough to make the savviest entrepreneur or academic’s head spin. So where does a family begin? What questions should they consider when choosing a mission, a giving vehicle, or grantmaking process? How do they choose the options that best fit their family, their goals and their communities’ needs?
Certainly, there are many more factors that should be considered as a family prepares to launch an initial or additional philanthropic agenda than can be covered here in these few pages. This issue of Family Giving News is intended to get you thinking or re-thinking the important issues and processes involved in choosing a philanthropic agenda and getting it off the ground. For more on the first step in this process: crafting a mission, and on how donor preferences influence and direct giving strategies, please join us on Thursday, September 15, 2005, when Bruce Sievers, an adjunct professor at Stanford University and former Executive Director of the Walter and Elise Haas Fund, discusses “Choosing A Philanthropic Agenda: Five Factors To Consider.” Registration for this event is required. For more information on this and other teleconference presentations, please see the Family Philanthropy Teleconference Series.
Discovering Your Passion and Crafting Your Mission
Before embarking on a new philanthropic venture you and other participating family members should discuss what the scope and intent of your giving will be. For families with a well-established history of giving in their communities, this process will be an organic outgrowth of philanthropic goals they are already pursuing in an informal way. If your family is already giving in support of educational causes in your community, crafting a mission statement maybe as simple as writing a few lines defining the parameters of that commitment to your town’s students. Or it may be as easy as picking up the morning newspaper and being inspired by a troubling headline. For others though, discovering their philanthropic passion may involve more contemplation and soul-searching; a consideration of the family’s history and values.
Once you’ve discovered—or re-discovered—your passion, you’ll need to spend some time distilling the essence of your inspiration and your aspiration into a mission statement for your family philanthropy. Although there is no legal requirement mandating that foundations or other giving vehicles have a clearly-crafted mission statement, many families find them to be invaluable tools for setting their giving agenda, allaying fears about succession, and curtailing or preventing conflict over grantmaking decisions in both the long and short term.
In crafting your mission statement it may be helpful to consider these five questions:
Five Key Questions on Charitable Purposes
- How likely are my charitable objectives to evolve during my lifetime?
- To what extent are my objectives something that my children or other successors on the board of the foundation will want to pursue?
- What are the chances that my particular purpose may one day become obsolete or unnecessary?
- How well have I matched funding with purpose? Too little money? Too much?
- How can I ensure that later generations won’t quarrel over what I mean?
Excerpted from Splendid Legacy: The Guide to Creating Your Family Foundation.
Even if you, as the founding donor, will be the only person initially involved in the beginning stages of your philanthropic venture, you may want to include in your brain-storming about mission those whom you hope will participate in the future. Consider how to communicate your sense of purpose and also, to what extent their point-of-view and preferences will be reflected in the family’s giving. Although you may have a very clear idea of your mission, to ensure enthusiastic and on-going participation from family members or other successors it is important that they too have an understanding of your mission and feel invested in its success. For this reason you may want craft a donor legacy statement or ethical will, which can help you to lay out your goals for the family’s giving, as well as to preserve family history and collective memory.
For more on ethical wills, join us on October 20th when the Family Philanthropy Teleconference Series welcomes Susan Turnbull for “Ethical Wills: Passing on a Philanthropic Legacy.”
Choosing a Vehicle that Gets You Where You Want to Go
Now that you’ve got a mission to pursue, you’ll need to figure out what philanthropic vehicle will get you moving in the right direction. There are many factors that will govern what sort of philanthropy you choose to establish, including: the amount of funds available for donation, the amount of time you and your family have to devote to charitable giving, who wants to be involved, and how much input your family wishes to have in its grantmaking decisions. For a concise breakdown of the options available, see Determining the Appropriate Vehicle for Philanthropic Activities from Strategic Philanthropy.
When in doubt, call in the experts! If you are feeling overwhelmed by the sheer number of giving options open to you, and have questions about which road to choose, don’t be afraid to seek out the advice of a professional. Charitable giving is an intensely personal experience, and is intimately linked to familial bonds, history, values, and taboos against discussing a family’s finances, which may prevent some families from seeking help and advice from outside sources. With the growing number of philanthropic options available, there is an increasing number of philanthropic advisors who are ready and able to help you tackle all kinds of tough questions: from choosing a philanthropic vehicle and defining guidelines for family participation to defusing difficult family dynamics and engaging the next generation. Take the time to choose a philanthropic advisor who appreciates your goals, whose communications style suits the dynamics of your family, and who can help to guide you on your journey.
Finding Your Niche: Getting to Know Your Neighbors
For some families whose philanthropy is intricately tied to the geographic area where they live or from which the family came, the idea of crafting a mission before ascertaining community needs may seem a bit like putting the cart before the horse. Others, though, benefit from having their mission in place before going out into the community because the competing nature of equally compelling needs may make it difficult to make decisions and establish a unified giving agenda. While you should take care to establish a mission with some latitude in grantmaking that allows for changes in the community and its needs, having a clear idea of your mission can help you narrow the field and direct your attention to selecting an organization whose goals compliment your own.
Once you have your mission and your vehicles in place, go out and meet or re-encounter your neighbors who are in a good position to layout the state of affairs in your area. You may already have some idea of the organizations you’d like to support, perhaps you have even been supporting them already through annual or bi-annual personal checks. Even if you already support an organization, talking to folks within that organization about your plans can help you to direct your giving to a particular initiative or new project in need of support. Additionally, these organizations can be a gateway to other worthy causes within your giving purview, and can make referrals to future grantees.
Now is also a good time to expand your horizons: shake some hands, attend some meetings, and determine the most effective partners in the region and issue areas in which you will be working . If you haven’t already, you might speak to someone at your local regional association of grantmakers, who can connect you with other donors in your area whose interests match your own. If you and your family have established—or are thinking about creating—a donor-advised fund through the local community foundation as your giving vehicle, the donor services department can provide support and insider information regarding programs in your area. If your horizons are broadening still further, you can also seek out any number of organizations located in the United States that can facilitate giving abroad and help you navigate the new regulations governing international giving.
Making a Plan: Giving by Design
Designing a giving strategy requires a lot of consideration and planning, and involves contemplating your mission, your goals, your assets, and your family’s philanthropic dreams. Spend time thinking about what kind of giving program suits you, your family, and their hectic schedules. Who will be involved in the grantmaking? How much time can they realistically spend reviewing grant proposals or attending to other philanthropic business? You may also want to consider the following questions as a jumping-off point for outlining your grantmaking strategies and parameters:
- What kind of organizations will we fund?
- What kinds of grants will we give: program grants, general operating grants, matching grants, challenge grants, program-related investments?
- Are we interested in offering multi-year grants or only single-year commitments?
How will grantees apply: by completing an application, sending a letter of inquiry, or by invitation only?
- Who will evaluate prospective grantees and what criteria will be used in the evaluation?
- Will all of our grants be required to relate to our mission or will we consider discretionary grants?
- What kind of reporting, if any, do we expect from our grantees?
There are, of course, many more issues involved in creating an efficient, effective, and satisfying giving agenda, but what it boils down to is: how do we get the job done? For more detailed information on grantmaking strategies and determining which options would work best for you and your philanthropy, please see our resources list below.
Up and Running
Once you have launched your family giving agenda or your new philanthropic venture, one of the most valuable things you can do is periodically revisit the decisions you made in this early part of the process and evaluate how well they have served your mission. Amidst the many discussions of evaluation and effectiveness in charitable giving taking place today, it can be difficult to define effectiveness, let alone know whether your philanthropy is effective or not. One way to consider this question is to evaluate how well the processes and practices your family has developed work together to further your mission and facilitate change and growth within your family and in the community at large.