Decision Making when Founders are Present

This is an excerpt from Demystifying Decision Making in Family Philanthropy.

Founders accustomed to making their own decisions in a business setting may bring unilateral decision-making to the foundation, often using it inappropriately. Founders may think of the foundation as “theirs” and feel impatient with or dismissive of group decision-making. At the same time, they genuinely want family members to be engaged in and feel a part of the foundation. This situation may be difficult to shift, but family members have options for dealing with strong founders, including:

  • Decide what is an acceptable degree of authority you need to make it worth your while to serve on the board. If the founder does not agree, you can choose not to serve on the board.
  • Negotiate lines of authority for certain types or categories of foundation decisions, such as: hiring staff, making governance policies, or voting on grants. You may relinquish authority to the founder on certain issues and require a say in others. For example, the board may agree that the founder controls the largest share of the grants budget.
  • Agree to the founder having final say on most issues, as long as they are willing to consider the views of the board first.
  • Develop a persuasive argument for including board members in decision-making, such as, if the foundation was established in perpetuity, the founder’s children and grandchildren need education and experience to make good decisions in the future with the money the founder worked so hard to provide.
  • Encourage the founder to attend professional meetings where these situations are discussed and they can talk with other founders. Alternatively, provide them with a copy of this paper and ask to have a conversation about these issues.

Often just having these discussions can make a founder more aware of family members’ desire to participate in the foundation’s decisions. Many founders choose to establish a family foundation because they want to create a legacy of philanthropy for their family. How a founder includes other family members in the foundation’s decision making will shape the family’s involvement for generations to come.