by Deanne Stone
Whether your family foundation is brand-new or has been operating for decades, the fundamental question you need to answer regarding board composition remains the same: What combination of knowledge, skills, experience and thinking styles do you need to fulfill your mission and best serve your grantees? How you answer this question varies depending on the size of your foundation, the number of funding areas and seats on the board, and whether you have staff. Once you determine what you need, the next step is identifying the best people for your board.
Many family foundations, especially those just starting out, prefer to keep the board "all in the family." Some define "family" strictly as blood relatives of the donors, others include spouses and stepchildren, and a few even have conditions under which live-in partners are eligible to serve. Virtually all set a minimum age requirement for participation, and those that allow lifetime appointments often impose a maximum age for retirement, as well.
Families use a gamut of approaches in setting qualifications for membership in all-family boards. At one end are the advocates of the "open-door school." They view the foundation as a family effort and welcome any and all family members who share their vision and are willing to educate themselves to carry out their responsibilities. At the other end are the advocates of the "track-record school." They list specific qualifications that family members must meet before they can be nominated for board service.
Criteria may include academic or "hands-on" knowledge of funding areas, familiarity with the geographical regions served, volunteer experience in nonprofit organizations, previous board experience, participation in board training programs or experience in making site visits.
Even family boards that value inclusivity and informality often discover the advantages of setting standards for board membership. Besides encouraging trustees to consider ways to increase board effectiveness, such qualifications offer the board protection against unforeseen problems. For example, a spouse may hold views incompatible with that of the foundation's mission or an interested family member may not have the experience or skills to serve on the board. Rather than risk hurting feelings by rejecting individuals on personal grounds, the board can point to the established criteria for membership.
Job descriptions offer boards another safeguard. Like setting qualifications for membership, writing job descriptions forces the board to spell out trustees' responsibilities. That way prospective trustees can determine whether they fit the board's needs and whether the board fits theirs. Often, for example, family members in their 20s and 30s would like to serve, but as they are busy launching careers and rearing young families, they lack the time required to prepare for meetings, make site visits or even attend meetings regularly.
Every family foundation must concern itself with succession planning, but the task falls most squarely on the shoulders of foundations that maintain all-family boards. Preparing the next generation to be grantmakers is a long-term process, and the earlier boards begin educating young family members, the better. Increasingly, families begin training children informally at home by giving them annual charitable allowances. On their own or with their parents, younger children learn about different charities, while older children are encouraged to get firsthand experience working as volunteers for nonprofit agencies. Then, at a prearranged time, adults and children can get together to talk about the charities that impressed them and how they will allocate their allowances.
The informal training sets the stage for a more formal introduction to grantmaking when the children become young adults. At a certain age, members of the next generation may be invited to serve a term-perhaps of one to three years-on an adjunct, or junior, board that has responsibility for reviewing certain proposals, doing site visits and recommending grants to the board of trustees. Junior boards are most successful when a knowledgeable adult-preferably, a family trustee, staff person or consultant who likes working with young people-acts as a mentor or coach. Young family members can further their education by attending professional conferences and workshops designed for the next generation and seeking a variety of volunteer experiences.
For many families, the discussion of whether to bring community members on to the board often arises in the third generation. At this stage of the foundation's development, family members may be more geographically dispersed or unavailable for board service. By then, the family has also had sufficient experience to assess their strengths and weaknesses as grantmakers. Moreover, the needs of the foundation's target populations may have changed, perhaps requiring board members who have firsthand knowledge of the communities served or can provide technical assistance to grantees. At these junctures, some family foundations seek out experienced community members-either as advisors or board members-to bring new perspectives to the table.
When first setting up a foundation, it is common for donors to include their attorney and accountant on the board. Often these individuals are longtime associates regarded as members of the family. For some boards, extending invitations to serve to community members who are not part of their intimate circle or those with different ways of thinking and doing things can be an act of courage. Those who worried that the character of the foundation might change or that the family might lose control usually find that their foundation is enriched by the cross-fertilization of ideas between community members and trustees. As an added bonus, they report that the presence of community members often helps to hold potentially disruptive family dynamics in check.
When adding non-family members, boards typically set up nominating committees that recommend and screen promising candidates, and then refer the final selection to the board. As far as the roles and obligations of trustees, some boards make no distinction between family and community members; all have an equal voice. Others set up a two-tier system, for example, allowing only family trustees to nominate board members or vote on grants and setting longer term limits for family trustees than for community members.
Finally, in composing your board, it is not enough to focus on the accomplishments of board members as individuals; group dynamics must also be considered. You can assemble a stellar group of individuals, but they are effective only to the degree they work compatibly as a team. Good grantmaking depends on intelligent debate. The willingness to listen to and learn from board members representing a range of viewpoints and backgrounds can make the difference between mediocre and excellent grantmaking.
This Family Advisor includes good tips from seasoned family trustees on how to build strong boards. Samples of board policies regarding qualifications and selection processes, suggestions on how family foundations can tap into the huge reservoir of talent in the larger community, and considerations in diversifying boards provide a good starting place for discussion for new and experienced trustees alike.