Generations of Giving: Leadership and Continuity in Family Foundations

A thoughtful observer of philanthropy predicted that at least half of all family foundations would run into trouble within the first two generations, face more difficult problems in the third generation and probably cease to exist soon afterwards. This book is a study of 30 enduring, multi-generational family foundations that have defied Paul Ylvisaker’s pessimistic prediction.

The author’s stated desire to conduct a social scientific, international study of family foundations is somewhat hampered by an unrepresentative sample that has disproportionately large endowments and is entirely white and North American. But given the restricted nature of the case studies, the author provides a thorough exploration of important issues in a very readable format.

Four critical concerns form the backbone of the book. First, the need to constantly revisit the foundation’s mission to ensure it continues to honour the donor’s original intentions whilst also serving present needs. Second, the difficulty in managing family dynamics so that destructive battles are avoided but healthy debate is not restricted. Third, the importance of paying sufficient attention to both governance and grant-making – family members are likely to enjoy making gifts more than writing policy, but an organisation intended to last in perpetuity needs robust systems and infrastructure. Fourth, the attention that must be paid to succession planning; the founding donor receives a stern warning: “It is not enough to create something of value; it must also be valued by those whose efforts are required to sustain it”.

The lessons of this book are directed at the estimated 40,000 family foundations in the US that collectively oversee more than $175 billion in assets and disperse over $8 billion in annual grants. The marketing people responsible for selling this book in the UK have a harder job – of the 8,800 foundations in this country (of which, at an educated guess, around half are family-run) most make annual grants of £150,000 or less. To make the sell even harder to the intended readership of people who have, or are considering setting up, family foundations, the author is not an uncritical champion of this method of giving. Gersick suggests that other vehicles for philanthropy be explored before taking on the costs, administrative burden and risks involved in asking the family unit – which is often riven by personality clashes, sibling rivalries, jealousies and philosophical tensions - to act as a collaborative grant-maker.

The attraction of overcoming such obstacles is evident. Success with this form of philanthropy can provide significant benefits both to recipients and the family itself in which, “brothers and sisters reconnect with each other, recovering the appreciation and laughter that had been eroded by petty grievances or geographic separation. Cousins get to know one another. Grandchildren and great-grandchildren hear about their ancestors and learn what their family stands for”. Unfortunately the case studies also bring to life the opposite scenario, in which regular meetings are “absolute torture” because foundations are “a ‘theater’ housing and stimulating the family conflicts that had been unaddressed since childhood” and have “become the arena for finally voicing the core antagonisms about sibling competition, parental favoritism and exclusion from authority”.

The author’s strength lies in using his material to present an array of practical solutions to these destructive dynamics, including the use of professional non-family advisors and suggestions for planning the transition of leadership to the next generation. Such ‘how to’ elements are a core part of the book’s appeal, enabling others to emulate the more positive case studies in which the foundations’ work brings the family together “like a rock” and friendships develop between philanthropic parents and siblings as they “go on trips together, do site visits and learn together.”

Books are often described as ‘timely’ but for once this adjective is appropriate. The UK is undergoing a period of extended wealth creation and many of those who have become extremely rich appear to be concerned with their personal values as well as with the value of their bank account. As the newly wealthy families of the 21st century try to work out what to do with more money than they can spend, or their heirs can cope with, this book could prove a helpful guide. If all those choosing to create a family foundation read Generations of Giving, they may have a better chance of making a positive impact within their own family as well as in the wider world.