From the Balcony: Perspectives and Reflections on Trusteeship

“As I see it, there is no other way that as few people can raise the quality of the whole American society as far and as fast as can trustees and directors of our voluntary institutions, using the strength they now have in the positions they now hold.”

– Robert K. Greenleaf

One of the most compelling thought leaders on nonprofit governance, Robert Greenleaf is both inspiring and challenging in his reflections on the power of trusteeship. The trustee’s potential to make a positive difference in the world is significant. The challenges to effective governance are equally significant. For family foundation trustees, meeting those challenges and maximizing the opportunity created by their appointment include advancing the founder’s and the family’s charitable values and purpose in service to a rare and very special public trust.

Earlier this month, nearly 50 family foundation trustees gathered at the National Center’s 2nd annual Trustee Education Institute for a three-day overview of the legal, financial, ethical, programmatic, and governance requirements of the position. Their enthusiastic commitment for developing or renewing their knowledge of foundation governance was in striking contrast to what we learned in our 2005 Generations of Giving study about overall family foundation attention to governance:

• Family foundation boards tend to be more skilled and give more attention to grantmaking rather than governance;
• Participation does not equal collaborative governance;
• Grantmaking can succeed with good “mechanics” – without an overarching purpose and a guiding dream. Governance cannot.
• While board members are responsible for the overall quality of the grantmaking program, they are equally responsible for (though often less conscious of) the mission and dream for the foundation, the organizational structure and procedures, developing successors, and managing family dynamics.

Our participants arrived at the Pew Charitable Trust’s Washington DC Conference Center eager to embrace the total trustee experience. That was abundantly clear even as I teased them that perhaps they were chastened by Frederick Gates, an advisor to John D. Rockefeller, with the words he once spoke to the Rockefeller Foundation board:

“When you die and come to approach the judgment of Almighty God, what do you think He will demand of you? Do you for an instant presume to believe that He will inquire into your petty failures or your trivial virtues? No! He will ask just one question: ‘What did you do as a trustee of the Rockefeller Foundation?’”

In addition to workshops on the mechanics of good governance, participants had the chance to reflect on trusteeship: its qualities; its challenges; its power; and the environment in which family foundation trustees do their work. We spoke of family, of Congress, of staff and advisors, and of our grantee partners. Curtis Meadows, director emeritus of The Meadows Foundation, spoke powerfully of the trustees’ higher calling and their responsibility to the ultimate beneficiaries of their grantmaking. Patty Stonesifer, founding CEO of the Bill and Melinda Gates Foundation and now CEO of Martha’s Table, one of Washington’s most respected nonprofits, spoke of relationships within and without – within our boards and staffs and in the larger community of grantees and our fellow global citizens.

I had the chance to hold up some of the best thinking on foundation governance from Paul Ylvisaker, Merrimon Cuninggim, Margaret Mahoney, Alice Buhl, David Dodson, and, of course, the man who wrote the book, John Nason (author of Foundation Trusteeship).

I offered a number of tips – based on my research and trustee interviews – on advancing healthy, highly functioning family foundation boards. While I can’t include them all, here are six of them:

• Ensure that the structures you establish to get the work done serve the interests of the foundation as a whole. It is often easy in the first and second generation to develop systems and logistics for managing the work. Rarely do those same systems accommodate third and fourth generations and beyond. As more family members play a role, it can be easy to bend the systems in directions primarily to support family participation. One way to check in on whether the foundation’s overall needs are given due attention is to assess the extent to which you’re setting policy based more on principles or personalities.
• Ensure that you have a Board Chair able and willing to take on the hard jobs. Some family foundations look upon the role of Board Chair as an honorific. However, when staff challenges arise, when the board is in conflict, when the assets are in flux, and many more difficult things arise, you want to have a Board Chair able and willing to take on task. Rotating the Chair role among all members may seem reasonable, but we all have different abilities and personalities and not all are suited to navigating turbulent waters.
• Don’t be afraid of conflict but do pay attention to conflict avoidance. Conflict is not always a sign something is wrong; it can often be a sign that things are growing and changing in positive ways. Trustees who are comfortable with complexity, ambiguity, and controversy can be critical to helping a foundation steer through troubled waters while preserving trust within and without. Research shows limited actual conflict in family foundations but significant efforts to avoid managing it.
• Make successor development about organizational needs. Deciding who gets to be on the board based on personality, family branches, blood relatives vs. spouses, adopted and stepchildren, etc. is a direct path to upsetting someone (or many members) of the family. Look at what is needed on the board, how to keep participation fresh, mixing the generations, and how the board will stay informed and accountable. As our Generations of Giving research reported, “the foundations that were the most successful treated successor development as an organizational imperative, not a family prerogative. That meant they overcame emotional resistances, and dealt with continuity alongside of mission, strategy, program, governance design, and the overall collective dream for the future of the foundation.”
• Don’t “follow the fairness” to the extreme. Many families tell me they want fairness in their board participation strategy. Fairness is a fair goal (I had to say it!) but fairness for what purpose and fairness to whom or what? What about a higher standard than fair – a standard of excellence. I have seen family foundations pursue fairness over effectiveness and even logic. One family foundation rotates trustees every year to give more people a chance to serve but such a brief term allows no time for orientation, leadership or mentorship. Another allows every blood relative to serve (and hopes to exist in perpetuity!). Set goals to ensure you have the best possible board – the one your foundation deserves – and choose members, terms and rotations based on those goals.
• Keep your balcony perspective. I was glad to acquaint participants with a monograph by Richard Broholm and Douglas Wysocky-Johnson. They encourage board members to keep their balcony perspective as tempting as it may be to get down on the dance floor. Yes, it is fun to dance, re-arrange chairs, tell the orchestra what and when to play, and make sure your favorite refreshment gets served, but to do that you give up your special vantage point – the one only you can have. From the balcony you can observe where people are gathering, whether the placement of band and chairs obstructs or facilitates dancing, and assess the overall functioning of the dance floor. While this analogy hardly does justice to the authors’ book (A Balcony Perspective: Clarifying the Trustee Role), it does remind trustees that, although it can be tempting to find more pleasure in being part of the action, it would be a shame if your special observation and reflection spot were sacrificed.

Participants in the Trustee Education Institute 2013 embrace the responsibilities and opportunities of governance. Their commitment and enthusiasm were well in evidence. In fact, it reminds me of two things.

• First, the National Center for Family Philanthropy takes our obligation to offer the highest quality programming very seriously. As William P. McGowan of the William G. McGowan Charitable Fund wrote after the program, “I didn’t realize what I didn’t know before I got here. The seminar was very beneficial and has provided me a wealth of information.” Zachary Schruers, trustee of a small family foundation, commented along the same lines: “Through the Trustee Institute, the National Center is offering an opportunity to learn about all the duties and privileges that come along with serving as a trustee. The programming was well balanced and visited issues of governance, impact assessment, ethics and vision. Participants emerge with not only new skills, but with the ability to speak the language of trusteeship and contribute more effectively to those organizations they serve.”
• Second, while we strive for high quality programming, we recognize that the network created – the interaction and encouragement that takes place in the hallway – may be an Institute’s greatest gift. Melinda Mintz, trustee of the Jean and Saul A. Mintz Foundation came at a particularly difficult time. She attended with founder Jean and her sister-in-law only months after the death of founder, Saul. Melinda wrote: “We have been really isolated and now we know we aren’t alone. We now have a lot of new friends who we can rely on to help us along the way.” Another trustee wrote that, “I love the people who are here. I am really taking away a sense of community. Philanthropy can be very lonely and the opportunity to connect with people across the country who all have these amazing ideas is a beautiful thing.”

Maybe my favorite comments came from those who felt they would be reflecting on the experience for some time. The idea that content and community have provoked ideas for some time to come is very gratifying. It helps reinforce the concept that family foundations are ever renewing; that trustees pass values and vision across generations. And it reminded me of a quote from family foundation trustee David Dodson who also finds the Balcony Perspective insightful. Referring to the monograph’s chapter on the trustee’s responsibility to hold, build and fulfill trust, Dodson encouraged his trustee colleagues:

“If we as trustees can pay attention to holding in trust history and values over time, building trust internally and in our external relationships, and fulfilling trust through exercising moral imagination – fitting our values to changing circumstances and then rigorously assessing with the help of others whether or not we are living up to our potential – then we begin to create a culture of responsibility that is consistent over place, over time, and over generations.”

With gratitude for the service of all family foundation trustees and the promise to support your balcony perspective,

Ginny Esposito President, National Center for Family Philanthropy