New Resources for Those Serving Giving Families

Data Analysis by Nick Youngson CC BY-SA 3.0 ImageCreator

The late summer and early fall were a bounty harvest of new information useful for advisors, consultants, and staff to wealthy philanthropic families. I’ve already been quoting the data in presentations and proposals. 

Social Impact in Hundred-Year Family Businesses: How Family Values Drive Sustainability Through Philanthropy, Impact Investing, and CSR (Jaffe, Lescent-Giles PhD., Traeger-Muney) – This report dives into how families over multiple generations chose to “define, practice, and operationalize social impact as philanthropists, industry leaders, social entrepreneurs, and investors.” It shares insights from families around the world, discusses effective practices, and ends each chapter with questions for self-reflection by a family. 

Teaser takeaways:

Success means paying purposeful attention to both roots (the family’s shared legacy and values) and wings (the ability to allow each generation to reinterpret the values in new ways).

“Centennial families don’t view social and environmental impact as an add-on, peripheral set of actions, but as part of the core strategy. They use their core values and skills to solve the social and environmental issues they care about.”

In chapter five, there are five key decisions the families have made across generations to set the goals, nature, and effect of their social impact initiatives.

Stanford PACS Guide to Effective Philanthropy (Stanford Effective Philanthropy Learning Initiative) – This free guide helps “emerging philanthropists understand the essentials of improving their philanthropic practice in one easy-to-follow resource.” Sections cover crafting a focus statement for giving/granting, learning how to find effective organizations and conduct due diligence, gracefully exiting a relationship with a nonprofit, choices in collaborating with others (including family members), and more. 

Sample tools:

List of questions for a donor to explore motivations and values driving their philanthropy.

Red Flag Table – a list of possible red flags when evaluating a nonprofit and follow-up questions to ask.

Diagram of 5 ways to collaborate with other donors.

Trends 2020 (National Center for Family Philanthropy) – This is NCFP’s second survey of family foundations in the U.S., and unlike most surveys of foundations and DAFs, it is based on a scientifically weighted random sample. It looks at issues of founder involvement, donor intent, grantmaking, board decision-making and learning, family dynamics, governance, and more.

Teaser takeaways:

Family foundations that self-identify as “very effective” in operations, impact, and family dynamics are:  more likely to have at least one non-family member on the board, more likely to closely follow donor intent, less likely to allow discretionary grants, and less likely to compensate board members.

The number of family foundations involved in mission/impact investing has doubled over four years; newer foundations are far more likely to do this.

55% annually pay out more than the minimum 5% required by the IRS, and 10% are pass-through foundations.

Foundations primarily controlled by the Baby Boomer generation are more likely to report challenges with involving younger generations.

Philanthropy in Complex, Multi-Generational Families – In this pilot study, Lansberg, Gersick, and Associates interviewed nine families who have multiple generations using multiple philanthropic tools (foundation, DAF, corporate social responsibility, impact investments, etc.). There’s no accurate count of such families, but the consensus is the number has been growing more quickly in the past decade.

Teaser takeaways from the pilot group:

Families preferred privacy and separation across the tools over integration (probably a disappointment to strategic philanthropy consultants everywhere…)

Families are optimistic about the philanthropic values in the rising generation, but pessimistic about the availability of the next generation to continue the governance work in the existing foundation(s).

The families may be underestimating the value of the negotiation and collaboration process in collective grantmaking – learning to constructively make decisions together – as a way of sustaining family continuity. They may be giving up too quickly when faced with collaboration fatigue.

Nonprofit Impact Matters (National Council of Nonprofits) – Need a one-stop, easy-to-read resource on the nonprofit sector to help educate philanthropists and foundation board members? This site and downloadable report documents the size and shape of the nonprofit sector, how nonprofits touch our lives on a daily basis, their economic impact, and important trends and challenges facing the sector.

Teaser takeaways:

Nonprofits employ 10% of the U.S. non-government workforce

92% of nonprofits have annual budgets of less than $1 million

Smaller nonprofits are more sensitive to changes in the tax code than larger institutions

Happy reading!