A Family Foundation Trustee “To Do” List

Meg Lassar Analyst Strategic Philanthropy 15 June 2012

A Family Foundation Trustee “To Do” List

In her quarterly column for Family Wealth Report on trends in the world of philanthropy, Meg Lassar runs through a list of “dos” for advisors discussing family foundations with clients.

Editor’s Note: In her quarterly column on trends in the world of philanthropy, Meg Lassar, analyst at Chicago-based Strategic Philanthropy, runs through a list of “dos” for advisors discussing family foundations with clients.

Being a contributing member of a family foundation board goes beyond fulfilling basic fiduciary duties. Ideally, trustees are engaged in the work of the foundation on various levels: from determining the overall mission and philanthropic strategy to codifying the procedures and policies that guide daily operations. Too often, however, for many family foundation board members being a “good steward” is defined by preparing for and attending board meetings, voting on policies and grants, and in some instances, providing investment oversight.

While these responsibilities are elemental to foundation stewardship, there’s more that goes into effective board service. Family legal and wealth advisors are well-positioned to help clients more fully understand the scope of foundation trusteeship. According to Charles Paikert’s article, The UHNW Market: ‘Soft-Side’ Services Now a ‘Must-Have’ (click here), training and education around trusteeship are the kinds of philanthropy and family governance-related services that advisory firms are offering to differentiate themselves in the market place and appeal to new clients.

So what should advisors be telling their clients about what it takes to be a successful family foundation trustee? Below are some of the more frequently overlooked aspects of foundation leadership. Many of these trustee “to dos” offer wealth and legal advisors additional opportunities to interface with clients. Several may require the additional professional expertise of a philanthropic advisor.

·        Distinguish between individual and collective philanthropic priorities.

Family foundations in which the focus is on “family” exist to carry out a collective philanthropic mission, not to fund each family member’s individual “pet causes”. An effective trustee will leave personal preferences at the door and consider “what’s best for the foundation and for the family?” when making important funding decisions. Often, trustees establish a discretionary grants policy which allows board members to designate a set amount to personal philanthropic priorities each year so that the main agenda of the foundation can focus on collective grantmaking priorities.

·        Articulate the foundation’s mission and priorities.

A mission statement—a few sentences that describe the foundation’s charitable goals—can serve as an invaluable tool for setting a family’s giving agenda and for preventing conflict over grantmaking decisions. The process of developing a mission statement allows families to come together to reflect on their shared values and to identify those issues—be it animal welfare, education or the arts—that they collectively wish to focus on. Both the mission and priorities should evolve with the foundation and should be revisited when new trustees are added to the board and/or when external social and political factors illuminate new areas of need. Therefore, trustees should ensure that the mission and priority areas should be specific enough to offer meaningful grantmaking guidance but flexible enough to enable future generations to adjust them as necessary.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes