A very Happy New Year to you and all those who work with you on behalf of this wonderful tradition! The end of the year grantmaking and financial accountability are behind you and the opportunities of a brand new year are ahead.

This issue of Family Giving News offers new information and insights into our yearlong theme of Transitions in Family Philanthropy. Transitions are those moments in the lifecycle of your philanthropy – prompted by family, foundation/fund, or community circumstances – that signal some significant shift. The shift may be in leadership or participation, a change in your structure or process, or some new development in the causes or communities you support.

“Foundations change, like it or not. The fundamental issue is whether they will change by chance or for significant reasons. The latter comes about only through conscious effort.”

– Frederick deWolfe Bolman

Transitions are a product of change or evolution. They can be exciting and filled with possibility, but my experience proves they can also be cause for concern or in some cases even conflict. What accounts for the difference from one donor family to another?

To begin with, it’s how the family deals with change. Our Generations of Giving research proved that most families postpone any discussion or decision related to change until the ill effects of that change compromise both the family/board relationships and the giving together. My more recent interviews support that finding. Most organizations – particularly those with the emotional ties of family – avoid change until conflict or tensions are heightened and distinctly uncomfortable.

Conflict is always present when systems are growing and changing. Conflict, in and of itself, is neither inherently bad nor good. It’s more a matter of how we anticipate change and address the change with candor and with an eye on the greatest good and the highest goal. If family philanthropies tend to avoid conflict rather than address it, who can blame them? Who wants to think of the day when the beloved matriarch is no longer able to participate as chair? How can you think about moving on without the respected CEO who has provided such trusted leadership for so long? How do you plan for a significant increase in assets without realizing that such an increase will be prompted by a death in the family?

Kelin Gersick, principal researcher and author of Generations of Giving, once said “family foundations need to evolve – so they need to be able to evolve.” So how do families build this capacity?

  • Take time to think about the circumstances influencing your giving. Are there changes in the family ahead (births, marriages, retirement, etc.)? Are there changes expected in the foundation/fund in terms of board/staff leadership, assets, mission, or other?
  • Plan for change before that change is imminent, highly charged and overwhelming. Do you have a leadership succession plan for both board and staff?
  • Keep the focus of the planning on the shared work together, on the principles of what you have created and want to carry forward. Such a point of view can help you resist the temptation to plan in terms of individual interests and prerogatives. A sense of stewardship is a greater inspiration for planning in the best interests of the philanthropy than is a sense of ownership or entitlement.
  • Be willing to adopt new practices for participation and grantmaking. This doesn’t mean abandoning your founding principles. In fact, it’s very likely that your practices will be in the spirit of your founding values and policies while reflecting changed circumstances. This openness ensures you refresh and sustain the founding values and guiding principles rather than lose them to rigidity of form.
  • If your foundation is designed to exist in perpetuity, recognize that you have an even greater responsibility to plan for the future and for change. The foundation of your grandparents will look very different in 20, 50, 100 or more years and, quite possibly, will only thrive if you’ve been the architect of its evolution rather than the victim.

In future issues, I hope to share some of my work on the common mistakes made in transitions, some of the specific transitions you face and how those can play out, and – as always – some of the stories of those who are embracing change with optimism, creativity and dedication to the family tradition of generosity and giving.

Now back to that Happy New Year. My wish for you in 2013 is that you will take advantage of this new opportunity to think about where your giving is headed – both by design and by circumstance. What are the possibilities of change and where are the cautions? What kind of planning can you do now to make those changes more generative and easier on the family, board, staff, and grantees? What can you learn from other families to help you be successful (and to avoid the pitfalls others have found)?

You can absolutely count on the fact that I, and all the resources of the National Center for Family Philanthropy, will be dedicated to ensuring your success. Your giving and the well-being of all those touched by that giving depend on it.

Happy New Year and Happy Transitions!

Virginia M. Esposito President, National Center for Family Philanthropy