A major report focusing on the family foundation chief executive—and the research behind it—marks a broadening of the National Center for Family Philanthropy’s sights as it seeks to understand and represent what makes family philanthropy not only unique but effective.
Recognizing how critical it is to a full understanding of family foundations, we have expanded our scope beyond the roles of donors, boards, families, and family members. Though they remain the central agents in the story of family philanthropy, there are many other members of the cast who play key roles. For years, chief executives of family foundations have shared with us the nuances, the joys, and the challenges of their work. Three years ago, we decided to undertake a study of the role of the family foundation chief staff person in ensuring family philanthropy’s effectiveness. It was time, we determined, to examine—and honor—their efforts with the same rigor we have dedicated to other research studies. That research has resulted in a comprehensive book published just last month entitled The Family Foundation CEO: Crafting Consensus Out of Complexity. This is an introduction to that research and to the book that resulted.
If the last few years of inquiry, intense conversations, research, and analysis have demonstrated anything, it is that the ability of family foundations to serve their public purpose depends in no small measure on the quality of their chief executives. Further, because these staff leaders are positioned between family and board and the communities they support, we have learned they play a pivotal role in advancing not only the family’s charitable leadership but also the contributions and leadership of their grantee partners. Of course, the ultimate responsibility for the wise, prudent, and ethical guidance of a family foundation lies with its board; our new report makes it clear that the board’s responsibility is best carried out when supported by intelligent, creative, sensitive, and unselfish executive leadership.
Indeed, this statement is true regardless of a family foundation’s asset or staff size. A chief executive may provide part-time support for a grantmaking budget of a few thousand dollars or oversee dozens of staff members and a giving program in the tens of millions. In all family foundations, the complexities of governance, community leadership, management, and family participation demand nuanced executive attention. Yes, significant resources can escalate the stakes, but so can a scarcity.
To say that staff leadership is important is not enough. How is it important? How are these leaders identified and supported? Where do they come from and what qualities do they bring? Are there particular opportunities and challenges attendant to family foundation staff leaders? What makes them effective? Are there resources and programs that could be developed that would enhance the ability of the family foundation chief executive to do his or her work?
The National Center ventured into uncharted waters. There was no baseline data on family foundation CEOs from which to build or to track differences over time. The barriers we had faced previously in studying family foundations once again made this work difficult: there is no legal definition for a family foundation; family foundations tend to self identify; many are staffed by intermediaries (law firms, financial institutions, etc.); many family foundations have volunteer management; others have a family member executive who may work full time with or without salary.
Not surprisingly, we discovered that some long-held family foundation concerns persist. The fear among family members of staff dominance is a case in point. Conversely, there are family foundation CEOs who worry that over-identification with family may undercut their own authority and ability to act in the best interests of the organization.
Any methodology had to factor in these and other vagaries. After all, according to the latest Key Facts on Family Foundations study from the Foundation Center, there are almost 40,000 family foundations in the United States alone. While no formal estimate exists, a reasonable assumption is that several thousand family foundations employ a chief staff person. But, the simple fact remains: as philanthropic families move from one generation to another, or even if some of them choose to limit the lifespan of their foundations, the need for capable family foundation staffs and executives becomes more urgent.
By 2009, we had determined that the time was right for studies, resources, and programming focusing on the staffing side of the family philanthropic equation. The Center created a national advisory panel to help guide the research, educational, and resource efforts of what came to be known as the CEO Initiative. To be clear, the terms “chief executive” and “CEO” are loosely used to identify the principal staff executive.We are mindful that a variety of titles are used including executive director and president, among others.
Having written the concept papers for both the Initiative and the research study, and fascinated with the subject itself, I took on the initial investigations by interviewing 60 current and 5 former family foundation chief executives. These CEOs were chosen because they represented a variety of foundation asset sizes, geographies, tenures, and experiences. Interviews generally lasted from one to three hours – about half conducted in person and half by phone.
Interviews uniformly focused on several critical aspects of the careers and specific organizational dynamics of these executives: their study and occupational backgrounds; how each became aware of and were attracted to the foundation (or advisory) position; the hiring process, orientation and early experience in the CEO position; the roles they play with the family and foundation; and their relationship with the board and board chair; the qualities that, in their judgment, help make them effective; the challenges they face as stewards of the families and institutions they serve; the courses of their professional development and renewal; how performance planning and assessment is conducted; and their future plans. In almost all categories, questions were intentionally open ended in order to ensure that interviewees raised and framed issues on their own, rather than feeling led to any response.
To provide broader perspective and context, we commissioned two parallel research efforts. National Center Senior Fellow Alice Buhl conducted fourteen interviews with family foundation board chairs and leaders to gauge their perspectives on staff leadership. Alice also reviewed the literature and research that had been developed for chief executives of family businesses. Since the founding of the National Center, we have often found important guidance on leading a successful family enterprise from our colleagues working with family businesses.
Second, we contracted with The Johnson Center on Philanthropy at Grand Valley State University (where I have served as aVisiting Scholar) to conduct an online survey of some 200 family foundation chief executives as well as to undertake a literature search.
To vet early findings, preliminary presentations were shared at a national symposium of family foundation CEOs, a national teleconference, and a special retreat for family members who serve as chief executives of their families’ foundations.
Listening to the incredible variety of roles described by interviewees, something of the range and complexity of the demands on family foundation CEOs was revealed. It was also evident that this range may not be fully grasped by boards, families, and other stakeholders. “My board has no idea what I do” was a fairly common introduction to the portion of the interviews where roles were described. Others spoke of presenting a face to the community that does not—and should not—communicate internal politics and pressures.
In addition to the lack of understanding of the demands on the family foundation CEO, five key themes emerged in the interview sessions:
- There are demands inherent to most CEO positions but also more family foundation specific demands involving board priorities, family preferences, community expectations, and grantmaking leadership.
- There is an apparent relationship between the time spent on governance and time spent on family matters.
- Families have very different expectations of the CEO role in preparing future generations of the family for philanthropic leadership.
- CEOs of family foundations learn to put out fires well but there is a risk to exercising that skill too often.
- CEOs’ attitudes toward the family nature of foundations influences the way they play their role and their satisfaction in the position.
In the end, our research unveils important findings and insights. Some confirm preconceptions; most reinforce our sense that family philanthropy is better understood as a result of formal inquiry into staff (and specifically in this case, CEO) dynamics; and, often we were led to new, even surprising, conclusions. All form the basis for a fuller appreciation of the family foundation chief executive, for new resources to support their work, and for additional research to come.