Giving Compass’ Take:
• Foundation Source breaks down the pros, cons, and best practices for bringing non-family members into a family foundation.
• What could non-family members bring to your foundation?
• Read more about involving non-family members into the family foundation fold.
Benefits of Non-Family Member Involvement
As a first step in making this decision, we advise our clients to clarify their reasons for bringing on outside members. Adding non-family members may help the board:
- Supplement skills, expertise, and networks: Family members may not have specialized legal, accounting, or investment management skills.
- Augment diversity: Adding a variety of backgrounds and experiences (professional, personal, cultural, and ethnic) to the board can open it to fresh perspectives and insight.
- Prevent family dynamics from derailing productivity: The presence of outsiders tends to encourage more “professional” family interactions.
- Enhance the foundation’s public standing: Bringing on outsiders fosters public confidence, ensuring that the foundation adheres to standards of professionalism and fairness.
Although there are numerous advantages to having outside board members, it is helpful to be aware of the potential downsides or conflicts that some families have experienced in bringing on non-family members:
- Outsiders may not be particularly focused on planning or involving the next generation. They tend to focus on the here and now rather than the legacy of the donor or family.
- Non-family members who were chosen specifically to represent the interests of their community tend to be conservative regarding the geographic focus of projects. Quite naturally, they may resist efforts to diversify granting regions or expand the scope of the foundation’s giving.
- All board members have voting rights and vote as equals with family members. As with any democratic structure, board decisions are made by a majority vote. If you bring on outsiders to the foundation’s board, it’s certainly possible that those additional votes could effectively override the founder’s and family’s wishes.
- Family members are usually more polite to non-family than they are with one another. The collective desire to maintain decorum in front of outsiders may stifle frank discussion.
- In some cases, family members might be intimidated by an outsider’s status as an expert or disinterested party. Although each board member enjoys equal voting rights, an outsider might exert undue influence.
- Once involved, non-family board members are difficult to remove. Service on a foundation board is an attractive position and some non-family board members may wear out both their welcome and utility.
We have discovered several practices that lead to a more successful integration and use of non-family board members:
- Articulate in specific terms and in writing why you seek to add non-family members to the board and outline the role you wish them to play.
- Consider alternative ways to involve non-family members in the foundation (see the section on “other ways” below).
- Elicit and welcome the different perspective non-family members bring to the board. Ask that the family members listen to, consider, and involve the non-family member to ensure their effective participation. It often helps to seek input from the non-family member between board meetings to get the full benefit of their observations, ideas, and perspectives.
- Set parameters on grantmaking policies as a board so that you agree to geographic focus and program scope as well as procedures for changing those parameters.
- Set term limits for non-family members. Although rarely set for family board members, term limits provide a structure to rotate talent and avoid burn-out among non-family board members. In addition, put in place a review process to evaluate the contributions of non-family board members that provides an option to extend that board member’s term if so desired.
Read the full article about involving non-family members from Foundation Source at Exponent Philanthropy.
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