AiP Conference Chicago April 24, 2014

1. AiPConference Chicago April 24, 2014 Successful Transitions in Family Philanthropy

2. Introduction • The Great Generational Wealth Transfer: By 2052, at least$41 trillion in wealth transfer from one generation to the next • Transitions aren’t linear: players—and complexity—grow exponentially from one generation to the next

3. Transition: The Good • Opportunity to instill philanthropicvalues in next gen • Work together as a family toward commonpurpose • Ensure continuation of philanthropiclegacy

4. Transition: The Bad • Exacerbate differences in interests and values • Power struggles, fear of letting go of legacy • Further sense of obligation or requirement

5. Goals of this Session • Understand factors that contribute to positive, healthy transition—and common barriers and pitfalls • Understand how you can help pave the way for smoother transitions

6. What is Success in Family Philanthropy? • Family philanthropy’s “Double bottom line:” • Social impact: the desire to have a meaningful impact on the world • Family engagement: the desire to engage the family in collaborative philanthropy which is individually and collectively rewarding

7. Family Foundation Lifecycles • Family foundations generally aren’t born that way • Typically go through an evolution in attempt to balance social impact and family engagement goals: • Controlling trustee foundations • Collaborative family foundations • Family-governed, staff-managed foundations (Source: Gersick, Generations of Giving)

8. Controlling Trustee Foundations • Most foundations start here, some retain this model through transitions • Family engagement often a vague notion—want to offer access, without truly sharing control • Few policies and processes, especially regarding family engagement and succession • Core dilemma: Founder’s purpose vs. family dream

9. Collaborative Family Foundations • Transition from founder vision to family vision • Transition occurs during windows of opportunity • Founder’s realization • Death of founder • Inclusion of 3rd or 4th generation • Challenge: to identify that vision and develop structures to support it • Core dilemma: true collaboration vs. co-existence

10. Family-Governed, Staff-Managed Foundation • Staff hired to handle administrative and grantmaking responsibilities, family shifts to governance role • Challenge: retaining board engagement • Core dilemma: family governance vs. family management

11. Tips for Success • Be explicit about goals and motivations: • How critical is the achievement of particular programmatic goals—now and in the future? • How critical is family involvement? What does this ideally look like? • How important is perpetuity—and why? • How willing are you to cede authority, and in what circumstances?

12. Tips for Success (cont.) • Look for common ground • Start very, very early • Avoid stasis: engage in ongoing reflection, negotiation, planning • Be realistic and respectful of family members’ interests, values and resources, and adapt to accommodate as appropriate • Get outside help

13. Resources • TCC Group: www.tccgrp.com • Kelin Gersick: Generations of Giving (National Center for Family Philanthropy) • National Center for Family Philanthropy: www.ncfp.org • Benton Foundation: http://benton.org