Takeaways Blog on Complexities of the Collective

This blog summarizes key notes from our February Fundamentals of Family Philanthropy Webinar.

For many, family philanthropy presents an opportunity to create a shared experience, unifying the family by working together toward a lasting legacy of impact. Family philanthropy can also give participants an opportunity to explore and cultivate their personal philanthropic passions. Yet there is an inherent tension between these two goals, and many families struggle with how to address it—especially as families become larger and more complex over time. In the National Center for Family Philanthropy’s February 2022 webinar, Ashley Blanchard, Andy Klingenstein, Melinda Oakes, and Wendy R. Ulaszek, Ph.D. discussed how families navigate this dilemma. Ashley and Wendy also shared the preliminary findings from a research project they are leading for Lansberg Gersick & Associates (LGA) in partnership with NCFP, on success and continuity in family foundations and also in the broader context of family philanthropic systems. The researchers are in the process of completing interviews and analyzing the data for the current study of 20 multi-generational US-based philanthropic families. The results will be presented in more depth at the 2022 National Forum on Family Philanthropy in October.

The webinar explored these questions:

• What are strategies to balance individual interests and perspectives alongside a collective family giving effort?
• How can you assess when to collaborate and when to pursue individual paths?
• What are the most important considerations for families as they engage in collective (and multi-generational) family philanthropy?

Below are key takeaways from the preliminary research findings and the discussion.

True collaboration in family philanthropy requires two things:

1. A choice: individuals must choose to subvert their individual interests for the sake of a collective process
2. A collective process: to identify priorities and manage grantmaking
3. 1. Planning: a participatory process to identify purpose, values, and priorities
   2. Strategy: development of a shared decision-making framework
   3. Professionalization: this collective process is often accompanied by increased professional support

Successful family philanthropy requires the following:

• Recognition that too much individuation erodes collaboration; individually-focused family philanthropy cannot be sustained over time
• An outlet for individual expression, either inside or outside the family philanthropy vehicle
• Clarity of purpose and distinction between collaborative and individual philanthropy
• Opportunities for varying levels of engagement—and a chance to opt out
• Recognition that the individual-collaborative tension is inherent and cannot be resolved, only managed—and must be revisited periodically

Do’s and Don’ts for Long-Term Success in Family Philanthropy:

• Don’t let “collaboration fatigue” lead to shifting the balance too far from collective to individualized philanthropy. While it takes time and communication to collaborate and to negotiate with one another, the outcomes are worth the effort.
• Don’t let the rising generation’s anxiety about the demands of governance trap them in smaller venues. Families who invite the next generation to the main decision-making table are often rewarded with new and rich multi-generational decision making and perspectives.
• Don’t underestimate the value of collaborative family philanthropy as a way to sustain family continuity. It can be a “glue” that strengthens the family.
• Do separate the work of the family from the work of the foundation. Keep historical family tensions or individual tensions out of your philanthropic boardroom. Create other governance forums, such as a family council, for those kinds of important and necessary discussions.
• Do engage in holistic planning about values, vision, purpose, and allocation of the family’s human capital. It is critical for the family to take a step back from the day-to-day operations of the family philanthropic organization and look at these issues from a more holistic perspective. This is sometimes achieved by taking time for a family retreat.

Growth in assets can be an inflection point: An influx of assets can be an opportune for families to increase their collaborative work, as it is a natural inflection point to have conversations about the family’s philanthropic impact and processes.

Collective versus collaborative: Collaboration requires more than working together as a collective. If there is a shared fund that family members use for their own individual projects, that is still essentially an individual exercise and does not constitute collaboration. In fact, such a practice can lead to more strife wherein family members are competing for their personal interests over a limited pool of funds. This can worsen as the family gets bigger and bigger. Working together collaboratively requires that all family members agree on the ground rules for their giving together at the outset. Collaboration requires a shared strategy and a shared decision-making process.

Collaborative work increases over time:  Research on multi-generational families has found that in many families where the collaborative work continues over generations, the proportion of giving that is individualistic decreases over time. This difference is often even more evident between the second and third generations and their approach. The third generation may determine that continuing to divide the family’s philanthropic resources doesn’t make sense or serve the common good. Researchers are seeing a common evolutionary story in many families, where the second generation may continue to work individually and have a portion of the funding go to their individual giving, but the giving is more collaborative among the third generation and beyond.

Prioritize learning: One of the components in some of the most successful philanthropic families is the degree to which they prioritize learning and how that learning becomes the central work that they do together. Meeting with beneficiaries, meeting with advisors and learning about the work together strengthens the family bonds. This shared learning experience connects individuals across family branches and generations.

To learn more, the recording and transcript of “Complexities of the Collective: Balancing Individual and Collective Interests” are available exclusively to NCFP Friends of the Family and Partner Subscribers.

Daria Teutonico is a Program Director at NCFP