Video Transcript

Philanthropy takes many forms, and most require a certain level of administration. And good stewardship requires more than just cost-conscious operations.

Sound management of a philanthropic effort means meeting your mission, supporting your volunteers, staff and community partners and of course effectively using your financial resources.

Form Follows Function

How you choose to manage your philanthropy should be based on what you value, how much time, interest, and effort you and others want to invest, and the complexity of your efforts. Your key to effective operations is to remember that form follows function.

Function is about what you want to accomplish. Form is the structure for those functions.

Some of the major functions of your philanthropic vehicle are:

• administration: such as maintaining systems, records, and communications
• compliance: including ensuring  tax, legal, and fiduciary compliance of the philanthropy
• board and committee management: which often includes recruiting, educating, and evaluating members
• grantmaking and social impact: managing the entire funding process
• and family stewardship: fostering family engagement and legacy across generations.

Choices you’ve made in governance, philanthropic vehicles, and strategies will influence your choices for operations and management.

For example, if a philanthropy is run by the founders, with volunteer support from family, this keeps operations lean, it can lead to a lack of clarity around compliance and record-keeping.

In a Collaborative Model the founders are joined by family or community members and decisions are made together. The collaborative often reaches a point where additional help is needed, in the form of paid staff.

When a philanthropic effort has become too large or complex to manage with simple administrative support, more sop

Your choice of vehicle will also dictate a level of administration. Certain vehicles – such as donor advised funds – require far less time and operational infrastructure than private foundations.

Culture

Healthy operations go beyond form and function. The most effective organizational structures are supported by a healthy culture.

Here are some ways to build the culture of your social impact vehicle:

• discuss and document the building blocks of family culture (or small group culture) and organizational culture.
• share stories and life lessons that show your values and principles in action.
• for internal use, encode cultural expectations in a meeting conduct document, board and committee job descriptions, or a family constitution.
• name and discuss power imbalances. Ensure practices and reward behaviors that help people with less power speak up and tell hard truths.
• Build personal connections through small rituals, traditions, celebrations, and more

Moreover, your culture and philanthropic purpose must drive your operating decisions and practices.

Here are a few examples of how donors and funders have embedded these into operations and management:

• equitable hiring and employee policies and practices
• responsible purchasing
• green office practices
• socially conscious banking
• strategic office location
• and Creative work space.

So, no matter what your philanthropic goals are, effective operations bolstered by a strong purpose and culture can help you get there.

To learn more about operations and management NCFP.org

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