Editor’s note: As the National Center for Family Philanthropy continues its ongoing focus on the topic of transitions, this month in Family Giving News we feature an excerpt from “A Legacy Lives On: The Kaplan Family Foundation’s Successful Leadership Transition,” the new Passages Issue Brief on the Mayer and Morris Kaplan Family Foundation’s experience with transition – the factors that contributed to their success and those that challenged them – in the hope of helping other families who will inevitably face leadership transitions of their own.

 

Ask any family member and they are usually able to identify the current family leader. This is the person around whom everyone gathers; the person who takes responsibility for family networking, intervenes in family disputes, reminds others of the family’s history and generally serves as the glue that holds the family together. And when this family matriarch, patriarch, or other family leader dies, sadly many families struggle to maintain their shared bonds.

The same holds true for family foundations. Vibrant and successful family foundations often have a family leader that inspires family involvement, manages family dynamics, and provides direction. When this leader dies, particularly if it is the founder of the family foundation, the emotional and organizational loss can be deeply destabilizing for the family and the foundation. Family foundations that wish to continue to grow and engage future generations must successfully weather this period of instability and reconfigure themselves around new family leadership. This is probably the most significant change a family foundation will experience and many family foundations fall apart after the founder dies.

passages-transitions-kaplan-2The Mayer and Morris Kaplan Family Foundation, which was established in 1958, recently experienced just such a leadership transition when its founder, Morris “Morry” Kaplan and his son Burt Kaplan, also an integral member of the Foundation board, both died in 2011. Morry and Burt were clearly the family leaders. They worked in the family office which housed the foundation and were the ones that family and staff looked to for guidance, motivation, and direction on foundation matters. When they died, the family foundation faced an uncertain future. As David Kaplan, a 4th generation board member put it, “There was a moment of holding your breath and wondering how the family was going to react to the change and whether or not they would continue to participate in the foundation.” Recognizing the significance of this transition, the family undertook a formal process for navigating the change and planning for the future.

Of course, each family foundation is unique and what has worked for the Kaplan family may not be appropriate or practical for other families. Family culture, values, size, and staffing are just a few of the variables that can influence how a family might navigate a leadership transition. But families facing leadership transitions will typically confront the same fundamental questions the Kaplans grappled with:

  • How will we work together moving forward?
  • Should we even keep the Foundation going?
  • How can we integrate the next generation?
  • What should we focus on, given our generational and geographic diversity?
  • How can we honor the family legacy?

Drawing from the Kaplan’s experience, the National Center’s new Passages Issue Brief shares several important ingredients that help answer these questions and ensure that a family foundation can live on (and thrive) following a leadership transition. These ingredients include:

  • A foundation that plays a central and positive role in family life cultivating and articulating shared values
  • Permission to evolve
  • Valuing and addressing family leadership
  • The presence of effective and committed staff leadership
  • Undertaking a formal process facilitated by an external consultant

In this month’s issue of FGN, we provide an excerpt of the longer issue brief, focusing on the formal process that the family went through. For a complete look at the other ingredients involved in the Kaplan Family Foundation’s leadership transition, download the new Passages Issue Brief on this topic.

Managing a formal planning and transition process


4th and 5th generation Kaplans working together

Undertaking a formal process facilitated by an external consultant was instrumental to helping the Foundation navigate its leadership transition and position itself for continued success (in the interest of full disclosure, the co-author of this article was one of the external consultants who worked with the Kaplans). Working with a philanthropic advisor helped the family and staff define their needs and goals and design a thoughtful and inclusive process for realizing them. “It was essential to explain who we are to someone else to define who we are to ourselves,” noted Trustee Beth Karmin. David Kaplan agreed, “Having a professional consultant lead the process brings energy, interest, and passion which can be exciting and motivating during a time of change.”

The facilitated process provided a structured framework that encouraged meaningful communication across generations, and promoted thoughtful discussion and decision-making, and led to positive outcomes. Professional expertise grounded family decision-making in good practice and provided a broad perspective relative to options and considerations. Families often find it helpful to know how other families “do it.”

Interestingly, when the Kaplans first decided to seek outside assistance, their purpose was limited to finding a facilitator for a family retreat to revisit the Foundation’s mission and put structures in place to prepare for the involvement of the next generation of Kaplans. The board had recently revised their grantmaking program and wanted to update the mission to reflect it. The board and staff had also begun to look at governance, formalizing the roles and responsibilities of board members, and clarifying the committee structure, and were looking to complete this work.

Taking a step back

Through conversations with the consultant to define the scope of their work together, it became clear that the foundation was at an important juncture in its life cycle. This was an opportunity to take a step back and take stock of the foundation as a whole and create a framework to ensure success and continuity moving forward. Therefore, a critical first step in the process was to conduct an in-depth assessment of the foundation and get a full picture of the family’s perceptions related to the foundation’s current construct and their hopes for the future.

passages-transitions-kaplan-3In addition to reviewing key foundation documents, the consultant interviewed each of the 15 Trustees, spanning 3 generations, and surveyed spouses, most of whom participate on foundation committees, as well as the next generation who will soon be ready to join the Board. The consultant also met with staff to garner their perspectives about all aspects of the foundation. Questions covered perceptions related to legacy, vision, values, mission, governance, leadership, grantmaking interests, family dynamics, and the foundation’s role in the family. This discovery process proved quite fruitful.

As Trustee David Kaplan observed, it was important for the foundation “…to take a top down approach, look at everything about the foundation, [ask] questions such as who are we now and how we should proceed…and look at the fabric and core of the Foundation to ensure that it still holds great value for us.” The discovery process helped family and staff reflect on and develop clarity about their hopes, questions, and concerns relative to the foundation, and provided a valuable opportunity for sharing perspectives with each other. Family members were hungry to know how other family members were feeling about the foundation. The discovery process also surfaced themes that clearly identified the issues the foundation needed to address to position itself for continued success. This was a critical step for designing a process to achieve positive and enduring outcomes.

Each family and family foundation will enter a leadership transition with different strengths and challenges and will therefore need to address different areas in the transition process. The key is to assess the foundation relative to what research has shown to promote success and continuity across generations and to address any gaps. For this part of the process, NCFP’s Generations of Giving, which provides an in depth analysis of leadership and continuity of family foundations, provided a helpful backdrop for helping the Kaplans understand their strengths and challenges and determine what areas they needed to address.

Preparing to move forward

Ultimately, over the course of two family retreats in a span of nine months, and work conducted in between meetings, the Kaplans worked on: understanding family history and legacy; defining shared values; developing a shared vision and mission; strengthening their current and preparing for future leadership; and aligning around a grantmaking program – all with an eye toward making the family foundation something that everyone wants to participate in moving forward.

passages-transitions-kaplan-1A family working committee was established to preview meeting materials and provide input into the process. This helped cultivate family leadership, move the work forward, and create buy-in. By the end of the process the family had fully recommitted to the foundation and had new mission, vision and values statements, a refined grantmaking program, a new leadership structure, a plan for bringing on the next generation of Kaplans and an action plan for implementation.

To successfully embark on this work, the family needed to commit significant time and resources into the process, and success required buy-in from the entire family before moving forward. What compels a family to invest in such an effort will vary and timing is everything. A family must be ready and motivated to embark on this sort of undertaking. For the Kaplans – with the loss of Morry and Burt, the next generation joining the foundation, and the recent shift in the grantmaking program – it was clear that they were in the midst of an important transition. The foundation played a valuable role in the family and they wanted to ensure that it continued to do so. For the Kaplans, this work wasn’t about making big changes, but instead, it was about strengthening and building on the foundation’s long and proud history.

Conclusion

Transitions can be accompanied by uncertainty, vulnerability, and anxiety, but these moments of change are also wonderful opportunities to reassess, reaffirm, explore options, and renew commitments. As Dinaz observed of the Kaplan’s experience, “Transitions are never easy and this process for the Foundation was no exception. The family had to be willing to be vulnerable and honest in confronting their emotions and vision for the future. Above all, they had to be willing to put in the time and energy. I’m proud of the work we accomplished as a group – it took courage and hard work and the family was engaged from beginning to end.”

Only time will tell whether the Kaplan Foundation will succeed in the long-term, but all signs are positive that they have successfully navigated this difficult transition and are well positioned for continued success into the future. While in many ways this process reaffirmed much of the foundation’s existing approach, it was also transformative. By revisiting and collaboratively making decisions about key areas of the foundation, the surviving family members reclaimed their sense of ownership and embraced their leadership of the foundation.

“Going through this process allowed each family member to ‘buy-in’ and have a voice in the Foundation’s future,” concludes Dinaz. “It gave everyone a shared experience that has led to greater engagement and investment, and a better understanding of the importance of collective thinking and action.”

Families who have a deep commitment to their foundations and a respect for each other, invest in a thoughtful and inclusive process for defining their foundation for the future, and ensure that their leadership needs are addressed, are well-positioned to make the most of a leadership transition and enjoy the act of giving together as a family for generations to come.