What is the best way to formalize the process of hiring and setting salary for a family member?

LIZ WALTERS: Off the top of my head, I can think of four things that we did. The first thing was to create job descriptions. I was the only staff member to begin with, but we also created a job description for board members. Many foundations also have a separate job description for the chair of the Board. We had new family members joining the board, learning about family foundations, and learning about their new role of governance. Having these job descriptions really helped us clarify the different roles of board and staff and how we would work together. So we did do that from the beginning.

Of the other three pieces, certainly the best way to approach salary is to use comparables to set that salary appropriately. [Note: The Council on Foundations does a salary survey that helps provide people with comparative data based on foundation size that helps you benchmark where you are both on salary and benefits.] The reality is that if you are a small foundation that has not previously had an executive staff person, hiring a family member (or anyone else) as a full-time executive may not be something you can do overnight, from a budget point of view. You might need to step it out over a few years to get someone up to the appropriate compensation level. That’s a discussion that’s going to have to happen, and the Board’s going to have to decide what they want to do. Regardless, from the beginning, you need to be looking at comparable salaries.

The third thing you will need is an employee handbook. We did not create an employee handbook until we hired our second non-family staff member. Creating the handbook was very helpful—it established policies around vacation, benefits, and all of the others things that are generally in a handbook. There are a lot of examples available from the various associations for grantmaking. It’s not a hard process to take the examples available and then craft your own.

And then, for the fourth thing, we’ve talked about evaluation, but again, I think an evaluation policy and process is really important to have in place from the beginning.

SARAH CAVANAUGH: The regional associations of grantmakers also have resources on what pay scales are in their area or perhaps if not that, they at least know other organizations that you can connect with that are your size.

Family members who serve as staff should not be shy about asking for market rate. This can be particularly true for women in this field – we need to stand up and say, “You know, these are my skills, this is what the market pays” and if you’re underpaid, make that point to your Board, and make that point to your donors.

Finally, the use of consultants to help define salary and benefits is absolutely wonderful. We have used them throughout the life of the foundation — it’s worth every penny to pull these issues out of the family’s dynamics.

LIZ WALTERS: I agree that it’s an excellent decision to have a consultant help with the setting of salary. You may also be able to utilize that person in the evaluation process as well – these things often go hand in hand.

How does the family foundation provide a performance review of a family member’s work when they are staff?

SARAH CAVANAUGH: We have a formal process of review. It’s called a 360 and it involves gathering feedback from everyone you work with who might have information that can inform the work you do. This approach requires that you interview grantees, family members and other colleagues in the field. It requires going outside the family as well as talking with those within the family to do the evaluation. When done right, it gives you a much broader picture, and can diffuse the dynamic of, “Mom’s only going to say nice things about me.” You really need to go outside of those family relationships to find the useful nuggets of information.

I remember one case when we interviewed a grantee who was not happy. Sometimes it’s hard for grantees to be honest about their relationship with the foundation, but we ask them to fill the form out as honestly as possible. We assure them that it will remain a confidential document, and that it may actually open up new avenues of communication with those grantees that might not otherwise happen. We really do want to remain humble to that and open those lines of communication. So, it has a secondary benefit.

LIZ WALTERS: The 360 approach is a great way to go. Another way to encourage candid feedback is to offer our grantees the use of an online survey tool where their responses can be anonymous.

If you’re looking for really candid feedback and you’re not using some kind of a tool like that, it may be worth making the investment in a third party who really is objective, who’s not connected to the work of the foundation or the grantee, and who can both receive the information from a range of folks and then deliver it back to the family staff member candidly and directly.

Another piece of the evaluation which we haven’t talked about, and which for me is a very important issue, is the need for ongoing professional development. I keep saying to my Board, you know, what can I work on? Where can I improve? How are you going to help me do that? Are there other folks we need to bring to the table, whether at the Board level or at the staff level, to be able to meet the needs of the organization?

So it’s very important to think clearly about what you will do with the evaluation results, whether it’s creating a professional development plan, or whether it’s thinking about gaps that might exist on your Board or within your staff and how you’re going to address them. Do you need to change or add to the policies and procedures you have internally? Evaluations are very, very valuable in answering these types of questions and in the end should support the family members in the staff role.

What recommendations do you have for boards and board meetings in which siblings from the same generation have significant animosities toward one another?

SARAH CAVANAUGH: Again, this is a situation where you probably want to bring in an outside consultant. Early on, we had some leadership training, and we had experts in the field of communication come and work with the board. You don’t necessarily need training on how to make a grant – but you may need training on how to communicate with one another. I think it’s especially important to resolve and understand bad feelings that are coming into the room. You don’t want to leave those elephants piling up on the board table. The people in the room need to either be able to separate those family differences from the board work, or if it’s really negatively influencing that board work, deal with it directly. Family foundations are a public trust, and you can’t move forward if you’re mired in the muck of family dynamics.

So, we learned about birth order. We learned about family dynamics. We learned about how different generations communicate. I now have children who are communicating by text message. It’s a completely different way to communicate. I have to get on board and understand this. Someone said to me, which I think is brilliant, “our children are natives of this culture of technology. I’m an immigrant and I need to learn the language in order to participate in my children’s lives.”

I think you can translate that to the donor population, many of whom are elderly. Their form of communication is very different from our middle-aged form of communication. We have a culture that we’re native to, but that they are immigrants to. We all have to learn one another’s language in order to communicate and be successful stewards of these public trusts.

And if that takes a psychologist or a communication leadership person, I highly recommend bringing in someone who is of the same generation as your donors, but who understands the language of subsequent generations. I grew up in a patriarchal family and then my mother joined the company and my parents really became a team. But the consultant had to be of their generation because he needed to speak their language, but also understand the second and third generation language as well.

So, these communication sessions, I think, were really important to drill in the fact that we needed to leave those family dynamics at the door. In our case, we have very different religious and political views. Those things we don’t bring to the board table, ever. And that was established very, very early on. If you’re in the midst of something that’s a bit of a crisis and is sort of miring your foundation, then you really need to bring in some outside help.

LIZ WALTERS: I echo all of that – our experience has been very similar. We brought in a family business consultant in 1994 that worked with us in our family business, around issues of succession, governance, communication and family roles. It was nearly six years later that we embarked on the foundation’s work. However, we had already learned as a family to work together in a professional manner to steward the family business – and that work has certainly benefitted the foundation.

I would also look at the flip side of this question. There can be another risk, which is that it is perfectly appropriate for Board members of any organization, whether they’re related or not, to disagree on key issues of policy and governance. Those debates can happen and should happen in a thoughtful and respectful manner – that’s how organizations grow and evolve. I think that sometimes in families there can be a strong tendency to not disagree: “I don’t want to put down, Dad’s idea or my sister-in-law.” Family board and staff members don’t want to be perceived as creating conflict. But when these really fundamental and important debates get squelched, people can start to feel they’re not really participating, or that they don’t feel a real bond with what the foundation is doing and a real commitment to its mission. So I think you have to be careful of both dynamics potentially playing out in your family board room.