At some point in the life of most good-sized family foundations, the board will need to hire a chief executive officer. (For simplicity, CEO is used here to refer to the top paid staff person who may be called executive director, president, or a similar title.) The current CEO may retire or move on to other jobs or become incapacitated and must be replaced. Family members who become overwhelmed with handling the foundation’s work as volunteers decide it’s time to employ their first CEO. Whatever the reason, transitioning to a new leader is a critically important job for a board.

Much has been written about recruiting and hiring nonprofit chief executives and even some about foundation CEOs. But until now, there hasn’t been a manual on how to hire a family foundation CEO. The relationship between a CEO and the family that governs the foundation is unique. It’s a partnership that encompasses representing a family in a community, working within a family’s culture, and engaging in grantmaking in the context of a family legacy.

Many families faced with hiring a CEO ask the National Center for Family philanthropy questions such as: Where do we start? What kind of help do we need? Should we use a search firm? What if we have family members who want to apply for the job? How can we tell if the candidate will be a good fit with the trustees? Should we look for someone who already has family foundation experience? The list goes on and on.

The National Center’s new how-to guide, Help Wanted: The Complete Guide to Hiring a Family Foundation CEO, answers these questions and many more. Help Wanted is the first in our groundbreaking series of guides for family foundation CEOs and boards (see below for details). This edition of Family Giving News features an excerpt from Help Wanted introducing the many hats of family foundation CEOs, with tips and suggestions for boards thinking about how to identify the right candidates for this crucial role.

The Many Hats of Family Foundation CEOs

One of the only research projects on family foundation CEOs was conducted by the late Gary A. Tobin, president of the Institute for Jewish and Community Research. His conclusion was that “Few professional roles are more complicated—and less defined—than the family foundation professional.”

Tobin noted that the rapid rise in the number of family foundations was expanding the profession, but that few in the field had formal training, and, unlike other professions where there is a clear career path, CEOs often were hired because of personal relationships or employment in nonprofits related to the family’s interests. They are hired to manage the foundation, but quickly find that they are called on to play many other roles for the family such as advisor, mentor, ambassador, technical expert, visionary, truth teller, confidant, protector, and sometimes, therapist.

“The challenge for the family foundation professional,” he wrote,“is to accomplish the foundation’s important business, but to do so while accommodating the needs of a board made up primarily of family members.”

Tobin identified four levels of involvement that a family foundation professional had to operate in: emotional; intellectual; ethical/moral; and spiritual. Emotionally, the CEO must be able to connect with the family members in a caring way that generates trust while still maintaining boundaries between the professional role and personal relationships. Intellectually, the family relies on the CEO for ideas, options and advice on governance, management and grantmaking. Ethically and morally, the CEO may serve as a moral compass, helping the family sort out right from wrong in its grantmaking and other decisions. As for the spiritual aspect, Tobin noted that giving is a matter of soul and spirit.“Though it can be very difficult for the family foundation professional to communicate on this level…regardless of the subject matter discussed, the spiritual level is a subtext more often than any other.”

Start With Reflection

It’s only natural that when a foundation needs to hire a CEO, the board’s first thoughts turn to who might be a good candidate. But back up. There is an important step that should be undertaken first—a discussion of your foundation’s current culture, challenges, strategies, goals, and vision for the future.

It’s hard to identify the right person to lead your foundation if you don’t know where you are now and where you want to go. “No family or board should start a search process without taking stock,” said Virginia Esposito, president of the National Center for Family Philanthropy. “Ask how have we developed, how far have we come, and what does that say about where we want to go and who we want to take us there? In some cases, this conversation could result in course correction or an affirmation of general direction but with an eye to the future.”

This discussion could be done within the board or be extended to the broader family, particularly the next generation that will eventually lead the foundation. Seeking input from other stakeholders—for example the current CEO if there is one, other staff, grantees, community leaders, coalition partners—is optional but could be useful.

This discussion can be turned into a written organizational statement that will help you write a job description, prepare you to assess the candidates based on your foundation’s needs, and help potential candidates decide if this is the right job for them. Ask yourselves: “Given the situation and challenges we’ve identified, what skill sets will we need? Can we get that all in one person? If that’s unlikely, how will we handle the “extras?” For example, if you want someone with program expertise, you might not need someone who also has investment savvy when you can use an outside advisor for that function.

What Do You Really Want Your CEO to Do?

Another set of questions to explore during the reflection stage is about the role you want the CEO to assume. This is the time to be really honest, because one of the main reasons boards become disenchanted with the person they hire—or CEOs become disenchanted with the foundation—is because the board wasn’t clear from the beginning about what it wanted.

Be clear about the level of the position you are filling. Is it really a chief executive or more an executive administrator who will implement the decisions of the board? Boards sometimes want their CEO to filter grant proposals the foundation receives and present the best ones but not make recommendations on the grants presented. Other boards want the CEO to advise them on which proposals to support. It’s not uncommon for someone to be hired as an executive administrator and gradually be given more authority—and an executive director title—once a level of trust has been built.

A few foundations confer both management and governance roles on their CEOs by placing them on the board. This can be either a voting or nonvoting position. Having the CEO on the board follows a corporate model, but it also occurs sometimes when a family member who already holds a board seat is hired as the foundation’s executive director.

Who Can Help With the Reflection Stage?

In some cases, it is possible that a board chair with strong facilitation skills could lead this conversation. But most foundations will look to a consultant, someone who can bring objectivity to the process. It might be someone the board has used in the past to help them with their governance issues or a consultant to the family business. There might be a board member or staff person from another family foundation that could help lead such a reflection. But whoever you use should be someone who has experience with issues specific to family foundation governance and leadership. That’s because someone with that experience may help your foundation surface priorities that at first blush would not occur to the family.

Search firms will say they provide this as part of their services. They’ll help you look at where you are and where you want to go. however, their work will be limited to learning enough about your foundation to prepare a good organization statement and job description.

Planning Ahead

Assessing where your foundation stands now and where you want it to go takes time, so don’t delay. If you anticipate your current CEO plans to retire in the next couple of years or you are ready to shift from being an all-volunteer to a staffed foundation, start the reflection stage now. It might take your board a year to work through what the foundation will need in its next leader. That puts you in a better position when you are ready to go through the search process—which can also take several months. If the CEO’s departure is more sudden, you may have to compress the reflection stage, but don’t skip this step.

Interested in learning more? Visit the NCFP Bookstore to order your copy of Help Wanted: The Complete Guide to Hiring a Family Foundation CEO.