Four Steps to Greater Impact for Your Family Foundation

Thank you. As an individual associated with a family foundation, you are playing a vital role in making the world a better place. Your family foundation is making a difference through the organizations and programs you support. And through this work, you are having a direct and lasting impact on the individuals and communities served by the sector.

Yet, for all the impact that your foundation has, we would like to suggest four ways that you can make an even bigger difference. You’ll find them in our new report, “A Guide to Good Practices in Foundation Operations.”

We  recognize the vital role foundations of all types play in philanthropy, and we embrace the diversity that exists across the foundation community. However, we also see how inconsistent grantmaking practices can place a burden on grantseekers and affect the impact of both foundations and the nonprofits they fund. In “A Guide to Good Practices in Foundation Operations” we offer four concrete suggestions foundations of any size, mission, and style of operations can implement to improve grantmaking efficiency.

Step 1. Be Transparent to the Public

Let people outside your foundation know what you do. For example, sharing the kind of programs you fund, and the nonprofits you award grants to, clearly makes life easier for grantseekers. We believe transparency correlates with excellence in foundations—the more open and accountable an organization is, the more responsive it is to criticism and vigilant it is about performance. The act of transparency can force an organization to be clear about its goals and strategy. In “A Guide to Good Practices,” we suggest ways your family foundation can be more transparent and links to several resources that can help you achieve this goal.

Step 2. Be Rigorous—But Remain Respectful of Your Applicants

The IRS has specific requirements for grantmaking. Many foundations supplement them with practices to ensure fairness in their grantmaking. Unfortunately, foundations often end up requiring nonprofits to provide extensive information to fulfill these needs. We believe in due diligence, assessment, and grantee reporting, but we also believe there are ways to reduce the burden foundations place on nonprofits. Is there someplace else you can get basic information and documents for a grant applicant? (Hint: GuideStar.) Can you streamline your application and reporting processes?

Step 3. Be Responsive to Your Constituents

In addition to being transparent and accountable to the outside world, foundations must look to be responsive to their constituents, including staff and beneficiaries. Does your family foundation have staff? If so, what do they say about your mission, strategy, operations, and organizational culture? An employee perception survey can help you gather this information. How can you gain feedback from your beneficiaries – your grantees and the individuals and groups served by the grantees? “A Guide to Good Practices” provides links to resources you can use to acquire and act on this information.

Step 4. Be Proactive about Diversity, Equity, and Inclusion

Diversity encourages innovation, energizes organizations, and widens perspectives. All foundations can embrace diversity. If your family foundation is a small organization composed entirely of family members, you can look at the diversity practices of the nonprofits you support. If your family foundation has paid staff, you can incorporate diversity into your hiring practices.

GuideStar recognizes the importance of these efforts and has created the first data collection platform covering nonprofit diversity. This feature on the GuideStar Nonprofit Profiles provides the recommended standard for nonprofits to voluntarily submit demographic data including gender, sexual orientation, race/ethnicity, and disability status for their board members and staff. “A Guide to Good Practices” provides more information and includes suggestions for accomplishing diversity, equity, and, inclusion goals.

Final Thoughts

We believe that by adopting these good practices in foundation operations, your family foundation can discover greater efficiencies while retaining its individual identity. We believe that greater grantmaking effectiveness will allow nonprofits to devote more resources to their missions. A more efficient grantmaking system will benefit your family foundation, the nonprofits you support, and, most importantly, those you and your grantees serve.

Download your free copy

Want to learn more? Register for GuideStar’s free webinar based on this publication being held on Tuesday, October, 17 at 12 noon ET.  Jacob Harold, GuideStar President & CEO, will be joined by Emily Wexler (Grantmakers for Effective Organizations) and Austin Long (The Center for Effective Philanthropy) for a thought-provoking discussion of ways to improve the efficiency of your foundation’s operations.