Nonprofit boards regularly complain about their challenges in recruiting new members as well as replacing the folks who have been seated for many years (kind-of the same complaint-no?). The following Wall Street Journal article offers 5 recommendations for how to get young folk interested in and committed to their family foundation. But I think these recommendations can be just as useful to nonprofit boards faced with similar challenges - maybe not family members but constituents and others.
The 5 actions:
- Share the history (this means the board has recorded its history in the first place and recognizes its significant junctures likely in terms of people, events, and, outcomes which may include the first grant
- Train them early -- if you want your constituents to become a part of your leadership, you must provide them with experiences like serving on committees and volunteering
- Given them a voice and a vote -- this may include getting constituents on committees but there are other ways to hear your constituents including reading up on Engagement Governance
- Be open to change - if you really value voice show it with even demonstrating micro changes that show you are listening
- Give them time -- relationships don't happen over time - the cultivation period is lengthy - plan it out and spend the energy to let folks come to love what you do and want to play a role in continuing the work
How Family Foundations Can Pass on the Philanthropy Flame to the Next Generation
Five things foundations can do to inspire younger heirs to carry on the charitable mission
Many family foundations are set up to exist indefinitely. But “indefinitely” is going to come a lot sooner than expected if future generations have no interest in the family’s charitable work.
That’s a pressing issue these days as aging baby boomers look to their children and grandchildren to take the reins of the foundations they or their parents founded. Younger family members may be reluctant to step up, however, if they don’t feel a connection to the charities the foundation supports, are overshadowed by overbearing parents or lack the time and skill needed to run a nonprofit organization.
Here are five things foundations can do to empower the next generation of leaders and ensure that the family’s philanthropic flame won’t burn out:
Share the history
Passing down the story of how and why the foundation was formed can inspire younger family members to want to be a part of it.
Consider the Siragusa Foundation, which was established in 1950 and is meant to exist in perpetuity. The problem: No one past the third generation knew the organization’s founder, Ross D. Siragusa, who died in 1996, says Sharmila Rao Thakkar, executive director of the Chicago-based organization.
So to ensure that younger generations would hear the story of how Mr. Siragusa became successful and why he started the foundation, the family produced a monograph of Mr. Siragusa’s life. All of his children and grandchildren were given a copy and the document is also available online.
The publication has been crucial in helping the younger family members feel connected to the founder, Ms. Thakkar says. It has also helped them understand why the foundation focuses on funding Chicago-area charities.
“Although I never met my great-grandfather, I can better understand why he started the foundation and what his intentions were,” says Caitlyn Hicks, age 23, who works at the foundation. “It’s helped to show me how important it is to give back to the community and instilled in me a value of helping others.”
Train them early
Getting children involved in philanthropy from an early age helps set the stage for foundation service later on, says Nathan Dungan, a wealth counselor and owner of Share Save Spend in Minneapolis.
One family Mr. Dungan works with has created a “kids club” for younger children (ages 5 to 15) where they collectively decide and plan family service projects during the year. A foundation board member mentors the children.
The family also holds regular group discussions with younger children on issues such as transportation, housing and hunger to help them understand how different another young person’s day-to-day experience may be from their own and why the foundation’s work is important.
When “children/young adults develop the habit of giving early in life, it provides a huge advantage later on because they’re already in a pattern of discernment about who, what, when, how and why to give,” Mr. Dungan says.
Thomas Blaney, director of foundation services at accounting and advisory firm O’Connor Davies in New York, says the grooming of future leaders should be a gradual process.
He suggests having younger family members serve on foundation committees before joining the board. He also advises encouraging them to shadow veteran members to gain knowledge and once elected to the board, giving them time to learn the ropes before putting them in leadership roles.
Training programs such as Exponent Philanthropy’s Next Gen Fellows program also can help prepare younger family members for leadership roles within family foundations, says Marguerite Griffin, national director of philanthropic services at Northern Trust in Chicago.
Give them a voice and a vote
Without a voice and a vote, younger family members may lose interest in the family’s philanthropic work, says Scott Winget, senior managing director of wealth impact planning for Ascent Private Capital Management, a unit of U.S. Bank, in Denver.
Mr. Winget says he worked with a couple who set up a multimillion-dollar foundation partly because they wanted to bond with their adult children.
The couple held foundation meetings and invited the children to help make distribution decisions, thinking their heirs would be excited to be part of attaching the family name to gifts in their community, Mr. Winget says.
The problem was the couple wanted to support the major arts and scientific institutions in their town, while the children wanted to give to international humanitarian causes.
When the children weren’t permitted to give grants to their causes, they stopped coming to foundation meetings, he says.
“It’s a mistake to assume that just because one generation is passionate about a cause or issue that the next generation will follow suit,” says Mr. Dungan.
To avoid that kind of disconnect, the Tracy Family Foundation in Mount Sterling, Ill., says it has made it a point to give younger family members a real say in the organization’s business.
The foundation’s bylaws require that three of the organization’s 10 board seats go to third-generation family members. Two of those three seats are just one-year terms, providing more opportunity for younger family members to get involved, says Jean Tracy Buckley, the foundation’s president.
“You must give them meaningful work for them to remain engaged,” Ms. Buckley says.
The family also hosts an annual ”next gen” meeting during their family vacation at the Lake of the Ozarks in Missouri, and has a grant program that empowers younger family members to make grants to charities they like and gives them incentives to volunteer.
“Every family member’s contribution feels valued and appreciated,” says 33-year-old Rob Tracy, who served as the treasurer of the foundation from ages 25 to 31.
Be open to change
When the time comes for younger heirs to carry on the family’s philanthropic legacy, older family members need to be open to fresh ideas, says Sapphira Goradia, executive director of the Goradia Foundation in Houston.
Ms. Goradia, who is 31, says she and her parents were passionate about many of the same causes, such as health care, but they had different visions about how the foundation should go about supporting them.
Her parents wanted to write checks to the charities they believed in and attend their annual fundraising galas, Ms. Goradia says, while she wanted the foundation to take a more hands-on role with the causes it supported and become more strategic with its giving.
She pushed to create a mission statement for the foundation. Fortunately, she says, her parents were willing to compromise and collaborated with her on creating it.
After several discussions, they agreed that the percentage of foundation disbursements that followed the mission statement would increase each year. This allowed them to phase out nonstrategic funding gradually, she says.
Her parents’ willingness to be open-minded and move the foundation in a new direction was vital, says Ms. Goradia. “When involving the next generation, don’t assume that they will continue doing things the way you have.”
Give them time
Becoming a philanthropist is an “evolution” that often takes time, so it’s important not to pressure younger family members into taking on big foundation roles before they are ready, says Northern Trust’s Ms. Griffin.
Some younger heirs may show little interest in participating in the family’s philanthropic work, especially if they are building careers of their own or raising small children, she says, but that can easily change.
Foundations should provide enough flexibility to allow younger family members to stay involved with whatever level of commitment they’re capable of giving, she says.
“Over time, things can change and the pressure to participate should be minimized,” says Ms. Griffin.
Ms. Dagher is a reporter for The Wall Street Journal in New York. Email[email protected].