Moving Beyond the Familiar: How Family Foundations are Reimagining Power & Practice
The rains seem to be over, and there is evidence of new life everywhere: blooming flowers, budding trees, and chirping birds. Possibly because the weather has prevented me from getting out, this spring has caused me to be more reflective. I think it’s been too easy to stay in our spaces, comfortable and cozy. It’s been easy to let the world wash over us.
This doesn’t mean we’ve been neglecting our work. Instead, I think we’ve defaulted to the familiar — to the easy. It’s been some time since we’ve pushed ourselves beyond our established practices, known grantees, and trusted routines. Our comfort might prevent the sprouting of new ideas.
One thought that keeps nudging me is how, as a community of family philanthropists, we can refresh what we do and how we do it. In recent Family Foundation Information Exchange (FFIX) group meetings, our members have been wrestling with these themes and the fundamental post-pandemic and post-crisis question: now what?
I want to highlight some of the conversations SCG’s family philanthropy community is wrestling with today.
Don’t Be Afraid of Best Practices
Every convening and conference today seems to include a dialogue around “best practices.” Currently, flexible, long-term funding, reduced grantee reporting, and leveraged funding through partnerships are widely accepted as standard practices and are leveraged by many of our members. However, best practices don’t just happen — they earn this status because they are tried and tested.
Best practices are developed through constant iteration. Often, these trials produce monumental failures. But failure often opens the door to incredible learning. As our particular field of family philanthropy continues to evolve from what we call “checkbook philanthropy” to something more adaptive and relevant to our current moment, we cannot be afraid of new practices. We must trust the experiences, data, and success of our peers who dare to innovate and try new approaches. More importantly, we cannot be afraid to fail — for there is no such thing as failure, only learning. Success comes by stepping up and giving new ideas a chance.
Moving Beyond Capacity Building
The philanthropic community has been creating capacity-building initiatives for over a decade. Historically, foundations have unilaterally controlled the dollars and prescribed how community organizations can use the funding. However, thanks to the rise of trust-based philanthropy, funders have moved away from dictating what grantees need and how they should use their funds. More and more, funders are advocating that community leaders know best. We are seeing more grantmakers supplement their grants with no-strings-attached funds, leaving it entirely up to the grantee to decide how and when to use the additional funds. Today, funders are not only centering the expertise of grantees but also making the long-term investments needed for them to become resilient organizations.
However, these shifts have made some funders contemplate their roles and how to best support a grantee during the grant cycle. Some members have adopted new roles as convenors, coaches, and advisors. They have found that strong grantee relationships require frequent, open conversations that are primarily helpful for the grantee. For funders, these conversations also serve as excellent progress reports.
Funding During Economically Uncertain Times
I couldn’t fail to mention our uncertain economy’s impact on family foundations. Today, trustees’ positions run the gamut from increasing payout despite lower returns to holding the line. However, unstable economic times also raise the question of how long a foundation can sustain its current level of funding. Does it give the minimum 5% payout or increase it? Should the foundation continue in perpetuity, or is a spend-down strategy better, given the depth of community needs?
Regardless of the decision, it is not the foundation that is impacted — it’s the nonprofit organization. During the pandemic, nonprofits struggled to stay afloat. Many of our members leaned in quickly and continued to provide unrestricted, core support. However, to this day, their recovery has not been robust. They continue to need multi-year core funding now more than ever.
Final Thoughts & An Invitation
Having worked with many family foundation leaders, I firmly believe that family philanthropy is uniquely positioned to support change. We can’t address everything all at once, but we can take one step at a time toward building bold approaches.
To that end, I cordially invite each of you to SCG’s 2023 Family Foundation Town Hall, Reimagine Power & Practice, taking place Wednesday, June 21, at The California Endowment. At our annual convening of family foundations, we will explore how family funders can take bold risks and reimagine the long-standing traditions and practices that are preventing them from adequately responding to the needs of their grantees and the communities they serve. We are excited to host many incredible leaders and experts to discuss how we can rebalance power dynamics and challenge traditional family mindsets around governance, racial equity, community partnerships, and funding practices.
As a sector, we must continue to ask hard questions and hold honest discussions that include the voices of the community members, our next-gen leaders, and our family funders pushing our work forward. One FFIX member noted that family is the foundation of a family foundation; its legacy and values can either be a guiding light or a hindrance. Our members agree that kicking the can down the road and failing to have difficult conversations is not a solution.
As spring fades to summer, let’s continue to water at least one new seedling, one new approach or idea, and find ways to keep it growing in the months ahead!