As our family grows, how do we decide who gets to participate in the philanthropy?

In this month’s Ask the Center, we feature an excerpt from NCFP’s 2010 report The Power to Produce Wonders: The Value of Family in Philanthropy. Interested in learning more about solving the challenge of diverse and dispersed families engaged in shared philanthropy? Attend the 2015 National Forum for Family Philanthropy session, “Diverse and dispersed: Managing a large and far-flung family.”

In the early days of a family foundation, the numbers of family members are usually manageable and it is generally easy to convene the group, give everyone a hearing, and make decisions. For those using donor advised funds, there is often a mandated maximum number of fund advisors – or number of generations – who may serve. Further, with donors actively at the table, it is far easier to have clear guidance on donor expectations for participation and performance.

However, for new giving programs – and perhaps most especially for long-established ones – many of the challenges of participation focus on two questions: for purposes of the philanthropy, who is family? And, on what basis will family members be selected for involvement?

To manage expectations for participation, each family must address the question of just “who is family?” Who are we as a family and what culture are we trying to create? What is it we hope to accomplish with our giving – for our community and for our family? What kinds of talents and perspectives will we need to do that work? And, in terms of participation and governance, which members of our family (now and in the future) will be considered?

Increasingly, families are finding the first step toward this understanding is to take an enlightening and inspiring look at the past. Chronicling the family’s philanthropic history, having video or audio recordings of the donors and other family members, and making such histories available to the family and the public have been useful tools in getting a discussion started.

For others, the sheer context and complexity of family can be stressful. When it comes time to choose staff, advisors, or trustees, no one wants to make choices that seem to favor one loved one over another. Extended family members can add richness – and controversy – to the mix as questions of spouses, cousins, adopted and stepchildren arise. In the face of escalating family expectations and increasingly unwieldy numbers, and in the absence of Solomon, donors and family leaders must make difficult but necessary decisions about eligibility.

Experienced family grantmakers heartily affirm that articulating the basis for participation (eligibility requirements) and the method by which family members will be chosen for participation are key conversations – and the earlier in the formation of the philanthropy that these conversations take place, the better. Ideally, the challenge is to make these decisions in the best interests of governing the foundation or fund, and not on the basis of personality. It is easier to do that in the early days, before spouses or grandchildren or future generations are even around.

Additional Resources

NCFP’s Knowledge Center and Family Giving News archives include a wide variety of articles and resources on how to involve family members in an increasingly diverse and distinct family. Some of our favorites include (please note that selected items are available only to NCFP Friends and FP Online subscriber communities:

• Family Involvement: The Spectrum of Options: There are many levels of involvement in giving that any family foundation can choose to reflect the motivations, skills and personalities of the family. This collection of ideas are ranked on a “least involved” to “most involved” scale.
• Families In Flux: Guidelines for Participation in Your Family’s Philanthropy: Family members marry, divorce, remarry, form domestic partnerships and, in many cases, move far away from the family home. With families growing ever more complex, varied, and far-flung, foundations and donor-advised funds need clear guidelines regarding who participates in their philanthropy and in what roles. This Passages report addresses changing family composition and circumstances and how philanthropic families may deal with them.
• Creating Opportunities for Family Involvement in the Foundation Outside of Board Service. This list of options from ‘Families in Flux’ provides suggestions for involving family members who may not be able to serve on the foundation or advised fund board. Useful for larger families, and for foundations with strict criteria for board participation.
• Over the River and Through the Woods: Geographic dispersion in family philanthropy: Using stories of families, this webinar offers examples of how families have dealt with these issues including: honoring the legacy of the donor; defining a mission that accommodates individual interests and needs of different communities; maintaining high standards of grantmaking practices and evaluation strategies; and allocating funds equitably.
• Defining Family – Guidelines for Participation: In this entertaining and informative Webinar, consultant and family trustee Frank Merrick explores family composition changes and how philanthropic families may deal with them.