The Arthur M. Blank Family Foundation in Atlanta made a big move earlier this year when it added four new non-family members to its board of directors. 

For many family foundations, the decision to add members from outside of the family to its board is an important one — and it may raise a number of challenging questions about the long-term role of the family in the governance and grantmaking decisions of the philanthropy.

For the Blank Foundation, the timing just seemed right, says Penelope McPhee, the foundation’s president.

The foundation was founded in 1995 by Home Depot co-founder Arthur Blank — who still serves as the foundation’s chairman. As part of his estate planning, Blank, 73, worked with a team of experts to restructure the governance of the foundation — a process that led to the decision to add the four non-family members to the board.

The National Center for Family Philanthropy recently spoke with McPhee to learn more about how The Arthur M. Blank Family Foundation approached this important decision and to hear her advice to other foundations that are facing similar decisions.

When did you first start talking about the idea of adding non-family members to the board?

penny-mcphee

Penelope Mcphee, Arthur M. Blank Family Founation: We began talking about it in the spring or early summer of 2015. Arthur had been working for the past year or so to rethink the structure of the foundation as part of our long-term succession planning. He’s been thinking about how the foundation was going to continue at whatever point he steps down. As we started thinking about the long-term goals of the foundation, and its expected growth and the demands on Arthur’s children, who are now directors of the foundation, it seemed like the right time.

So Arthur worked with a very well-known and well-established legal firm in New York on the legal structure for the foundation, along with his senior vice president for finance and chief finance officer, David Homrich.

As you moved ahead with the process, how did you decide to structure it so that you maintained the family’s goals?

Up until now, the board has included Arthur, his adult children, their spouses, and myself. I’ve been the only non-family member. In the new structure, they all remain directors and the non-family members are being brought on as associate directors. These are non-voting positions but they will be completely involved in all of our board meetings and all of our programmatic and financial discussion. 

That was to ensure that the family’s voice comes first?

That’s exactly right. During the first year, as we invited in the four new directors, we were explicit in telling them that this would be a bit of a pilot. We don’t know exactly how this is going to work, but the directors were really enthusiastic about bringing some other voices on to the board.

We clearly want to remain a family foundation and we certainly want to maintain the family’s values and the foundation’s long-term values. I believe we’ve selected directors for whom that will be natural.

They already share the family’s values and know a great deal about the foundation, so I’m not worried about how it will work. I’m actually very excited about it. But the family wanted them to know if, at the end of the year, we didn’t think it was working or didn’t think it was working the way we expected it to, the terms were one-year renewable terms.

This will give us the opportunity to really make sure that we’ve created a structure that adds value to the foundation without taking away from the family spirit.

Can you talk a bit about the skill sets or attributes that you were looking for in choosing these new board members?

We wanted directors who share our values of philanthropy and service, but also the values of entrepreneurship and not creating a bureaucratic foundation. The hallmark, I would say, of our foundation is that we work on the ground with individuals, but we also work at the policy and systems level. And that’s important to us.

The folks we’ve brought in have individual passions for some of our program areas, but are also big thinkers.

So what have you learned so far through this process, and what do you think have been some things that have either challenged or surprised you the most?

I think it’s going to bring a new dynamic to our board meetings, which have always been very much family meetings. Before I arrived here, the board meetings were at Arthur’s house, in the family room and very personal. So this will clearly bring a new dynamic for the directors — which I think is very exciting.

I think the challenge for me will be twofold. One is to really get the best of their ideas, to be sure that they feel comfortable really offering ideas, criticism, and new ways of looking at things within the framework of our strategic plan. The second challenge is, in some ways, the hardest: How do I make sure that we are still a family foundation? We have these new voices and how do I make sure the family’s voice doesn’t get lost.

For example, I will be reaching out to the new directors for their opinions about grants, even though they don’t get a vote. So figuring out how to integrate their feedback into the process is going to be important. I don’t think it’s going to be difficult. But it’s going to be new for us.

What advice would you offer to other family foundations that have yet to go through this process?

There’s a moment when you know you’re ready for this — and I really think we are doing this at exactly the right time. If we had done it sooner, it might not have been as successful as I believe it is going to be now.

You feel it when you’re ready. You can tell when you need new voices on your board or that you need different perspectives — and when you’re strong enough and stable enough to admit new voices and new ideas into the board meeting.

The other important thing is to select people who you know will share your values, share your passions, and are with you for the long term. They should understand your foundation’s history, where you’ve been, and where you want to go.

How do you know what the right number should be in terms of new members?

It’s hard to add just one. We had a conversation about what was the right number and we were going to go with three. But then we decided that since we had another great candidate that we should add all four of them at once.

We were very comfortable with all four of these people, and it made sense to us. The number isn’t as important as who they are.

What are some other things foundations should consider when they make this move?

We talked a lot about whether we should pay these new associate directors, because our family directors do not get paid. We decided we would not pay them, but we would give them the opportunity to make some discretionary grants.

We’ve allocated a portion of the grants budget to them, based on the number of meetings that they come to. So, for each meeting that they attend, they will get to make a certain amount of discretionary grant recommendations.

Arthur was very generous about that amount and the new directors are very excited about it. They have said that this is more meaningful than receiving a stipend or honorarium. 


New leaders, new perspectives 


When the Arthur M. Blank Family Foundation added four non-family members to its board, it wanted to bring new perspectives into its meetings, while also promoting the integrity and values of the family and the foundation.

Here are the four people it chose to fill these important new roles:

Suzanne Apple: Former senior vice president of private sector engagement at World Wildlife Fund US, where she led the organization’s work around responsible sourcing and sustainable business practices, corporate philanthropy, and cause-related marketing.

Bill Bolling: Founder of the Atlanta Community Food Bank, where he served as executive director from 1979 through May 2015.

Rosalind Brewer: President and CEO of Sam’s Club, a division of Wal-Mart Stores, Inc.

Elise Eplan: Former vice president for special initiatives for the Blank family, and currently the principal at the Eplan Group, a firm that advises philanthropic organizations.


Featured NCFP resources on board diversity and non-family board members:

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