By Jason C. Born
Coming to consensus. Agreeing to disagree. Finding a win-win solution. Whatever you call it, the art of negotiating and making decisions can be particularly tricky for families with a shared philanthropic mission but different – sometimes very different – ideas for how to achieve that mission.
Dealing with different views is challenging in any family. Beliefs, opinions, and practices can diverge in so many ways. Making collective decisions across generations and branches within family foundations – while taking into account differing politics and religions, different attitudes toward money, and varying comfort levels with how public to be about wealth and foundation gifts – often requires patience, flexibility, and compromise.
“One thing all family foundation boards have in common is disagreement. Rare is the board that never wrestles with differing points of view and even serious conflict,” writes GMA Foundations President Mary Phillips in a recent post for the Council on Foundations RE: Philanthropy blog. “A key to effective governance is addressing conflict and managing the discussion so that discord does not derail a decision. Not only can cordial disagreement be healthy, it can often lead to truly innovative grantmaking.”
Board decision-making and the role that family dynamics plays in these decisions are at the heart of much of the National Center’s work. A variety of resources in our Family Philanthropy Online Knowledge Center (see box below) provide a variety of tips, tools, and case studies of families wrestling with difficult decisions. In January, NCFP hosted a teleconference on the topic of “Finding Common Ground, Valuing Different Views,” featuring representatives from two family foundations, the Educational Foundation of America and the Roy A. Hunt Foundation. These multi-generational family foundations have worked hard to develop board procedures and decisions that honor different viewpoints, and their stories provide good examples for other families wrestling with these issues.
Making Grantmaking Decisions: Setting Aside Personal Opinions
The Educational Foundation of America was established in 1959 by Richard P. Ettinger, who clearly stated his wish that the foundation be a shared family endeavor:
“I pass to my children and their issue, a heritage more important than wealth measured in dollars, the opportunity to be involved in and to strengthen and keep alive a family philanthropic enterprise.”
While originally established with just a few individuals (the founder and his three children) involved, over the years the foundation’s board structure has expanded to incorporate four generations of family members. An increasing complexity of membership and board structure has been accompanied by a corresponding complexity in grantmaking decisions. Grantmaking focus areas often have political dimensions, like education (school vouchers); health (family planning/abortion), environment (climate change).
Christopher Renner, an adjunct board member at EFA, and great-grandson of the founder, explained on NCFP’s January Teleconference how the family’s method of decisionmaking has evolved over time to focus more on organizational capacity and project potential than personal opinions:
“Instead of relying on personal opinions to formulate a decision, we ask ourselves questions like, can this project be successful? Or, does this organization have a good track record in accomplishing their goals? Is the budget reasonable? Do they need our funding in order to get a specific project off the ground? We also invite outside reviewers that are experts in the field, from a pool of previous grantees, to answer specific questions and give their opinions on a grant. This is an excellent addition that we’ve actually implemented into our proposals – let’s face it, we can’t all be experts in every field.”
Renner notes that by focusing board discussions on the merits of a given proposal, the board is better able to involve individuals with a variety of perspectives, interests, and philosophies:
“Notice that there’s very little room for influence with personal ideology. In my experience, it’s wise for board members to check these at the door, and to judge a grant by quantitative measures rather than qualitative ones. Instead of asking myself how a proposal makes me feel, I ask myself how many people this will have an impact on, and what proven numbers and studies back up the success of a given program.”
Renner continues, “We have come to respect and embrace differing opinions. It can be a natural tendency to push those with different opinions out, or even to ostracize them, but in the long run you have to be cognizant of the fact that it is these members that can help a family foundation remain grounded. If you marginalize or push out those with a minority stance, who’s going to be left to ask the tough questions?”
Creating an Effective Family Culture: The Roy A. Hunt Foundation
The Roy A. Hunt Foundation, based in Pittsburgh and founded in 1951, provides another example of a family that has taken a creative and long-range look at how to find common ground in a context in which there are many different voices.
On NCFP’s January Teleconference, Hunt Foundation Executive Director Tony Macklin provided a bit of background on the current board structure: “The Hunt Foundation currently has 25 family members, ages 21 to 85, involved as trustees. Family members become a trustee upon turning 21, and are allowed to remain trustees as long as they wish (the Board of Directors is currently made up of Generations 2 and 3 of the foundation).”
The foundation has set up grantmaking committees for various initiatives – including community development, environment, and youth violence prevention – and has a 6-member executive committee to help guide the operations and policies of the organization. “The family foundation isn’t the only way the family gets together,” says Macklin. “Family members have the option of participating in some investment pools together, and there’s a family business which some of them have invested in. But the foundation’s probably the only piece, at this point, where all 25 family members are engaged all together at the same time.”
“Family members are spread across the country geographically, and they’re spread across the spectrum politically,” adds Macklin. “They’re also spread across the spectrum in terms of their grantmaking styles and interests.”
To help make sense of these varying family interests and backgrounds, long-time board member Terry Hunt, a practicing family psychologist, created a set of key principles that the trustees adopted as they seek to create an effective family culture.
On the January Teleconference, Hunt shared a series of decision-making rules described in the Foundation’s bylaws and operating policies. These included:
- Assent is presumed in board actions unless the Director asks to enter dissent in minutes
- Use of a “Consensus Vote” – defined as an affirmative vote of 80% – for approval of grants at the Committee and Board levels
- Use of a “Two-thirds Affirmative Vote” for votes on Committee memberships, grants budgets, and decision-making by the Executive and Investment Committees.
- Controversial Grants policies:
- A trustee who sponsors a proposal should withdraw the proposal if there is continued debate, but can bring it back with added homework
- Language used to override consensus: “Does anyone wish to block consensus on this grant?”
- Review of grant proposals sponsored by trustees:
- Boundaries are set on the size of grants and on giving to alma maters, etc.
- There are higher expectations of due diligence for the 1st proposal from an organization
Early in the Foundation’s history, the family adopted a resolution designed to encourage respectful interaction in all board discussions:
“The individual trustees recognize the family relationship among them, and pledge themselves to conduct themselves as trustees not only to achieve the high purposes of the foundation but also to be a credit to the family…They also promise that a majority will not ignore the advice and counsel of the minority, but will give them full and mature consideration.”
Both Hunt and Macklin caution that creating a supportive and effective family culture is an iterative, ongoing process for any family.
“We have defined ourselves as a learning organization,” explains Hunt, “and learning is trial and error – it’s not trial and success. If everything is working, there’s really no learning going on. Learning is trial, error, data collection, retrial. And to the extent that people are busy being right, they’re not learning. They’re not being open minded. They’re not encouraging people to consider divergent points of view.”
“And the extent that we get stuck in those right places, I think that we lose the closeness and the connection that is really our fundamental mission statement, which is to keep the family together.”
Additional Resources on Finding Common Ground from the Family Philanthropy Online Knowledge Center
Finding Common Ground and making difficult decisions are at the heart of many of the National Center’s programs and resources. A few of our most popular resources on these topics are available by way of the following links. (Please note that these items are available only to members of our Friends of the Family Program and subscribers to the FP Online Knowledge Center:
- Finding Common Ground, Valuing Different Views – January 2012 Family Philanthropy Teleconference
- Notes on an Effective Culture: The Roy A. Hunt Foundation
- Controversial Grants Policy: The Roy A. Hunt Foundation
- Demystifying Decisionmaking In Family Philanthropy
- Managing Conflict and Family Dynamics In Your Family’s Philanthropy
- Difficult Discussions at Difficult Times
- Families In Flux: Guidelines for Participation in Your Family’s Philanthropy
ABOUT THE AUTHOR
Jason Born is senior program director with the National Center for Family Philanthropy. Jason was founding editor of Family Giving News, the nation’s most widely read e-newsletter for family foundations, and also founded and edited the National Center’s Passages issue paper series. Jason is the author and editor of more than 40 publications on family philanthropy and related topics.