Five strategies for managing transitions in family philanthropy

Understand what “transition” means for your family. Over time, family philanthropy may involve many transitions; it makes sense to understand and anticipate these changes, so you can plan for them. In Generations of Giving, author Kelin Gersick and his team identify the most challenging transitions for many philanthropic families:

  • Inter-generational transitions. These changes come when roles and responsibilities pass from one generation to the next. Families must adapt as donors, trustees or leaders leave for other projects, retire or pass away.
  • Decision-making transitions. Decisions once made by one person or a few people are now made by several individuals. Families must find ways to collaborate, develop consensus and make decisions together.
  • Management transitions. Family members choose to govern while letting staff manage their philanthropic mission. Families must determine how to allocate their manpower to maximize their potential.

See the slide show below for additional tips and strategies for managing each of the above types of transition in family philanthropy.

Five strategies for managing transitions in family philanthropy

Set your policies and intentions before you need them.

Many of the changes in family philanthropy can be anticipated. That’s why families benefit from making a plan before something becomes an issue. Developing policies for board eligibility, roles and responsibilities, term limits and other aspects of governance provides a template to follow during transitions. So, too, does board discussion of donor intent, perpetuity, mission and geographic focus. The more clarity your board, family and staff have around these issues, the easier transitions become.

Example: If you are considering whether to allow spouses to serve on the board, you don’t want to make this decision when a family member becomes engaged to someone relatives don’t like. Making important decisions in the heat of the moment turns your choices into a referendum on a specific person rather than what is right for your philanthropy.

Get creative — there is more than one solution to any problem!

There are plenty of options and few right answers when it comes to family philanthropy. For example, many families have become adept at handling the multi-generational character of their organizations.

Creative solutions include setting up junior boards to educate younger family members; senior councils to capture the expertise of the family’s most experienced members; and discretionary grants to encourage individual interests of board members that may not be central to the foundation’s mission.

Stay open to new possibilities.

Rigid thinking or structures can have a detrimental effect on the evolution of your organization. For example, families who define family involvement only in terms of board membership, miss the bigger picture. If family involvement can also mean committees, volunteering, research, site visits, matching gifts and more, then board membership is no longer such a sticking point.

An open-minded approach allows families to create rotation policies, emeritus board memberships, adjunct boards and community advisory committees that suit their families and the communities they serve.

Make the best of both worlds.

Family foundations and funds are double-bottom line institutions—they represent a family’s charitable goals and their impact on the community. When the unexpected happens or tragedy strikes, family foundations can rely on both the “family” and the “foundation.”

Surviving spouses and children are extraordinary connections to wonderful donors past. Photo albums, scrapbooks, favorite family stories and even web posts become treasures. You have one another—lean on each other. You also have the foundation; families find that trusted staff and advisors are critical in times of transition.

Review, rethink, revitalize.

You may be tempted to believe that if something works smoothly, you’ve gotten it right. And that if you’ve gotten something right, it will be right forever.The truth is, that’s almost never the case.

There is always the need to review and rethink your policies. Doing so on a regular basis (plan to plan!) revitalizes your organization and ensures your practices remain responsive to both family and community needs.