Spring Cleaning- Time to Organize Your Policies and Practices

Spring must be here. Washington, D.C. is showing off cherry blossoms and red tulips and my travel schedule has gotten a lot busier. This month I have been invited to speak at a few family foundation retreats and my hosts must all be in “spring cleaning” mode. Everyone seems to be dusting off their policies and practices in the interest of reviewing, renewing, or wholesale de-cluttering.

One foundation board wanted to know if there were practices that other foundations found enhanced their governance, their grantmaking, and their satisfaction. So I took a look at those foundations and funds that had shared particularly effectively practices and came up with 10 my hosts might consider.

Because both my hosts and I found the list illuminating, I share them with you – without all the explanation, stories, and jokes the board members had to sit through.

Effective family foundations and funds:

  1. Understand the critical importance of good governance. It all starts with a great board, yet many foundations look to improve their grantmaking, management, and financial performance without considering the effectiveness of their governance;
  2. Seek shared vision as well as accommodate difference. So many family foundations respond to differences of values, opinions, and styles by first seeking to accommodate those differences. It is more work – but infinitely more satisfying – to seek first to understand what you share. Build a richly rewarding grantmaking and management agenda on that;
  3. Articulate and renew values, mission, and program guidelines. Have the discussion and write down your results. Share them with new board members, other family members, and the public. Finally, from time to time, revisit them to see how well you’re doing and how well they still fit;
  4. Access needed resources and expertise. There is a lot of concern about whether foundations spend unnecessary administrative dollars. Our Generations of Giving study found that family foundations are often very reluctant to invest in their own organizations. However, when needed, a special consultant, a workshop, or a book can save weeks of frustration;
  5. Establish structures that serve the foundation/fund as well as the family. Many foundations set their policies to serve the needs of their changing families – but therein lies the problem: with evolving families you are never going to meet everybody’s needs at any given time. Set your policies to serve the foundation well. You may be surprised at just how much pride and joy your family will realize from being affiliated with a well-run, respected philanthropic foundation.
  6. Appreciate the long-term implications of foundation policies. If your foundation is going to exist in perpetuity, set your policies not only for what works this moment but for the long haul. If you have a policy allowing only blood relatives to be involved, what happens when there is an adoption, stepchildren, or marriages?
  7. Assess program performance as well as investments. You wouldn’t think of not knowing how your financial investments are doing. How are your grantmaking investments doing?
  8. Respect stakeholders. Your grantmaking program is likely based on your deeply held values. How your values as stated and your values as played out are aligned says a lot about your foundation and your family. How do you treat prospective and current grantees? Employees? Family members?
  9. Manage conflict. The Generations of Giving study revealed very little evidence of conflict in family foundations – but it found significant evidence of conflict avoidance. Often, the thing we fear to bring up is not as fearful in real life as it is in our imaginations. At least we have started a conversation that may help resolve long-standing concerns;
  10. Respect the legacy and the promise of family philanthropy as a personal commitment to a public trust. It’s not all about the “way we’ve always done it.” Nor is it about throwing out the old in order to welcome new voices. In a family foundation, it is both legacy and promise. Similarly, it is not about private money or public money. In a family foundation, it is both personal commitment and public trust. The powerfully emotional connection you feel to your family’s dedication to the public good means you can’t separate the two cleanly. The great joy of family giving is found in the complexity and in taking on the challenge.

Happy Spring!

Virginia M. Esposito
President, National Center for Family Philanthropy