Editor’s Note: As NCFP begins the celebration of our 15th year, one of the key overarching themes of our work will be the exploration of the many types of transitions that family philanthropies experience. To help kick off our Year of the Transition, we’re pleased to share an excerpt from one of the National Center’s most requested Passages issue papers, “Passing the Baton? Generations Sharing Leadership” by NCFP Senior Fellow Alice Buhl.

Moving toward new leadership can be difficult, emotional and sometimes frustrating. However, when it is done deliberately and thoughtfully, it can also be helpful for everyone. Families with foundations need to take succession issues as seriously as they take estate planning and drafting wills. Here we offer a number of options for positive transitions in leadership from the senior generation to the next generation.

Option #1: The senior generation starts the conversation

passing-the-batonIt’s definitely best if the senior generation can do what this couple intends to do: get the conversation going in as positive way as possible. In many foundations the next generation has a very deep respect for the work and role of the senior generation. They don’t want to upset their parents or aunts and uncles and imply in any way that they are no longer able to run the foundation.

In family businesses, the younger generation is often struggling with ambivalence and avoids the topic of succession. In family foundations younger generation members may not have had much experience working together, even though they have been active in the foundation. They often fear (or in some cases hope) that the senior generation will make the decisions about future leadership.

If the senior generation is willing to begin the conversation, that can be the best way to start. Sometimes that can mean a senior generation member who is not currently in leadership needs to convince her siblings or cousins that succession issues need attention.

Case Study: The Irving Foundation

The Irvings, John and Elizabeth, had four children. They were in their late 60s and very concerned because they saw very little interest on the part of their children (in their 40s) in the foundation although the siblings had been on the board for some time. They also believed that the siblings didn’t want to work together. The foundation meant a great deal to the Irvings and they were sad about its future.

The siblings, in fact were excited about the foundation but saw it as mMm and Dad’s. They didn’t see a significant role for themselves. However, the parents were quite willing to provide greater leadership opportunities for the next generation. First, everyone worked together to agree on both new and continuing directions. Then the siblings took over as officers and leaders while the parents stayed on the board. The siblings made many changes, ultimately moving the office from its home city and hiring new staff. The parents were supportive; both the foundation and the family were strengthened significantly. Twelve years later, the Irvings are just now retiring from the board since their health is fading. The foundation is very strong with active involvement by all of the siblings.

Option #2: The board takes responsibility

If you are an elected member of a foundation board you have a serious responsibility to consider its future leadership (if the foundation has chosen to exist into the future). Foundations might recognize this responsibility by including a statement in board responsibility such as, “Ensure the Foundation’s long-term strength and vibrancy as a family endeavor.”

The board’s responsibility is serious. It is particularly serous if the key leader is fading or his or her ability to lead the foundation is in doubt. Boards must step up to their responsibility to deal with the leadership transition in a caring way. This action requires senior members and younger members working together to plan for a transition to new leadership.

When seniors are healthy and able, the board still needs a succession plan for what happens if a major health problem or accident happens and for when a succession or shared leadership will take place.

Boards need places to have conversations about the future of the foundation and the people and structures that are and will be needed to support it. A governance committee––a body often recommended for nonprofit organizations by students of the field––can fill that function, much as an investment committee deals with the foundation’s financial responsibilities.

Option #3: The board’s governance committee does the work

The governance committee can be charged with nominating board members and officers, considering the long term leadership needs of the foundation, board development, and making sure the next generation has learning opportunities.

The governance committee can be active in helping all board members understand the importance of a succession plan. It can help direct the process to develop a plan.

The governance committee can also help figure out how to have a conversation with the senior members if that needs to be done. Sometimes a trusted non-family board member or advisor can help. The committee itself should include next generation members. Ordinarily, the chair is also a member of this committee, presenting a challenge if the chair is the problem.

Option #4: The family follows an agreed-upon process

It is important to have a succession plan in place even if it isn’t implemented immediately. Often a process can be negotiated to take place at a future time. Sometimes having agreed on a process, everyone relaxes because the tension has really been about who will decide future leadership. Besides, when you are 60, a retirement age of 70 may seem reasonable; at age 68, it may not.

Family members need to talk together about how a succession will take place, if not now, then in the future. This discussion is particularly important if there hasn’t been a rotating chair in the past or if decisions have been made behind the scenes by family members with the most influence.

The process for choosing future leadership needs to be clear. The next generation can often figure this out with much less angst than their parents. I have worked with next generation members of all ages who were able to talk together and decide who had the skills, the time or the interest to provide leadership at a particular time. When parents try to choose there is branch tension as well as “favorite child” issues that get in the way. Often parents and aunts and uncles are quite relieved not to have to make this decision.

The process for senior generation members giving up leadership needs to be discussed and agreements developed. Creative thinking can help assure that seniors maintain key elements that are important to them as they give up leadership.

In the end, succession planning is about the personal choices each member of the family must make in order to achieve more productive outcomes for their collective philanthropic work.

Practical tips for the senior and next generation

If you are a member of the Senior Generation:

  • Carefully and seriously assess your continuing role. Talk candidly with your siblings or the cousins in your generation. Talk with next generation members, and not just your own children or branch.
  • Figure out a role for yourself that will also allow the foundation to move ahead. Foundation work and leadership has probably given you many talents. Are there other places you might continue to use them?
  • Let go. That’s tough work. Have the courage to face change and look for new adventures. Let the next generation make its own mistakes. Mentor creatively. Trust them in the way that you were trusted––or wished to have been trusted––by your elders years ago.

If you are a member of the Next Generation

  • Respect and honor the senior generation. You may choose to make many changes over time, but doing things differently today doesn’t mean that what was done yesterday was bad or wrong, just different. Build on the strengths of the past and acknowledge them.
  • If you would like to be a leader of the foundation in the future, get as much related experience and education as you can. In the family business field, family members are often encouraged to get graduate degrees and/or work in other businesses. They also often learn the business first by working in the production or customer service areas. One of the best ways to really learn about philanthropy is to work for a nonprofit and understand their service and financial needs.
  • Be clear about the time you have available and be responsible about doing what you agree to do. Make specific suggestions about the leadership you and your siblings or cousins are willing to take on.
  • Develop a life and interests besides the foundation. Your parents and aunts and uncles lived in a different time when there weren’t as many opportunities, particularly for women. Remember that you will sometime be the senior generation and another younger generation will soon be waiting to take over.
By being thoughtful, creative, caring, listening and deliberate in their succession planning, family members can together assure the continuity of the foundation.

Conclusion: Leadership transitions as catalysts for renewal and growth

Whether you are a member of the senior or the younger generation, think about your role in helping to strengthen the family and the foundation. Whether you are currently a leader or not, or hope to be one of the family’s foundation leaders consider your role carefully. What can you do now to best help both those who need to let go, including possibly yourself, and how can you support those who take charge? What can you do to encourage shared leadership?

Times of transition are both a challenge and an opportunity for all family members. They require that family members consider together the role of the foundation in the family’s philanthropy. If the foundation is a key element that the family wants to support and preserve, members of each generation need to renew the energy that created, has kept and will continue to keep the foundation strong. By being thoughtful, creative, caring, listening and deliberate in their succession planning, family members can together assure the continuity of the foundation.