Succession Planning: Becoming New After 40 Years

By Mally Cox-Chapman, Benefactory Philanthropic Advisors LLC

Most conversations on succession planning turn to how to bring on the next generation or whether to sunset the foundation. Eldon and Betts Mayer thought differently. They wondered if their community on an island in Maine would be willing to take on their family foundation. Three years later, the fund has an engaged board of directors and over 450 donors.

Here’s how they did it.

Maine’s Chebeague Island has 350 year-round islanders and over 2000 summer residents. Three miles by five miles, the island has no bridge to the mainland. It does have a general store, a lovely hotel, and a thriving boatyard, where both lobstermen and recreational boaters coincide. Chebeague also has ten nonprofits that perform many functions that government usually does.

Over the past 40 years, Eldon Mayer has been a moving force for most of the island’s nonprofits, including a superb library, a recreational center that has both a basketball court and a pool, and a high-quality day care and early childhood learning center, open year-round.

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Perpetuity Doesn’t Have to Be Forever

By Carrie Avery, The Durfee Foundation

Foundation surveys often ask if the foundation is operating with a limited life span, or in perpetuity. The choice is typically presented as a binary one: Did you set a time limit, or are you going to be around for eternity? There is a third choice, however, if perpetuity is not mandated in the foundation’s charter.

At its biannual board retreat, trustees of the Durfee Foundation ask the perpetuity question in a different way. Do we commit to operating in perpetuity for the next five years? That is, for the next five years do we believe that our mission and purpose are best served by not setting a deadline for the foundation’s existence? If we answer yes, then we commit to maintaining assets, investments, and operations as though we are operating in perpetuity. We know that we will revisit this question in two years.

One of our independent (non-family) trustees came up with the “perpetuity for the next five years” framework at a retreat several years ago when the board was flummoxed by the notion of committing to operate forever. We knew that we didn’t want to set a deadline to sunset the foundation at the moment, but were we ready to say that we wanted it to go on until the end of time? Who knows what the future might hold? The five-year horizon allows us to make a meaningful decision about the foreseeable future without getting bogged down in speculation about what might happen in the distant future.

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Foundation Benchmarking Demystified

By Ruth Masterson, Exponent Philanthropy 

Are you uncertain whether your foundation is benchmarking to its fullest advantage? Do you wonder if you should do more?

Benchmarking can be a simple, straightforward process. Your foundation can benefit from it with minimal time and effort, and on any budget.

Common types of benchmarking include:

Reasons to Benchmark

Foundations choose to benchmark their practices for many reasons.

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Articulating Our Foundation’s DNA

dna-document_Page_1By Janis ReischmannHau`oli Mau Loa Foundation

We all know the important role the board plays in hiring and reviewing the chief staff person in a nonprofit organization, but I’ve been thinking recently about a second important role our board is playing that is critical to our evolution as a foundation. That role is defining, articulating, and transmitting the values of the foundation as well as helping us determine how those values are practiced across the organization. How did our board do this, and why has it been so important?

When I joined Hau`oli Mau Loa Foundation as the first staff person in 2008, the two founding board members who hired me were the only people affiliated with the foundation who had known its benefactor. When hiring me, they realized that they wanted to translate their knowledge of the benefactor’s values and her aspirations for the foundation, which had not been well-documented, to those who would be working at the foundation and responsible for carrying out its mission. They also had a sense of wanting to ensure, as the board grew and as they would eventually transition off the board, that the next generation of board members were firmly grounded in what our foundation’s benefactor valued and how she expressed those values.

As a result, the board, together with staff, developed a set of organizational values. Those values served us well for the first several years, and the communication of those values to staff were often accompanied by stories of the benefactor and how she practiced one value or another.

When we got ready to add a new board member, someone who would be joining the board with no knowledge of our benefactor, the founding board members decided we needed to develop a short document that could be given to new board members as well as new staff that summarized our benefactor’s values and how the expression of those values have helped to formulate how we behave. We now think of what’s in that document as “our DNA.”

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Help Your Board Members (or Anyone) Be Open to New Ideas

By Ruth Masterson, Exponent Philanthropy 

Is your foundation board stuck or complacent? Have you been wanting board members to consider a new strategy or project, only to find they just aren’t willing to listen? Perhaps you need a new approach—a fresh one—to create the space where board members feel willing to consider change.

I found a helpful idea in a book I’m reading, Intentional Leadership by Jane A.G. Kise. Within it, a chart outlines the elements of Carl Jung’s theory of personality types and makes suggestions for what individuals of different types might need to be open to change. 

The personality types have been popularized by the Myers-Briggs Type Indicator®, a questionnaire that aims to determine where individuals fall on Jung’s spectrums. This structure is something many of us are familiar with; briefly stated, the four spectrums are these:

  • I/E: Introverted (energized by down time) or Extroverted (energized by being around others)
  • S/N: Sensing (relying on sense perceptions) or Intuitive (relying on intuitions)
  • T/F: Thinking (preferring to approach situations with logic) or Feeling (preferring emotional understanding)
  • J/P: Judging (making quick decisions) or Perceiving (preferring to gather more information)

So, back to where we started: You want to be a catalyst for change on your foundation board.

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Top Resources for Philanthropists With Few or No Staff

Earlier this month, we created this resource for LearnPhilanthropy’s Knowledge Library. LearnPhilanthropy, powered by the Johnson Center for Philanthropy, is a marketplace of knowledge and tools, seeking to accelerate learning among newcomers to philanthropy and evolve how learning happens in the field. Explore LearnPhilanthropy’s on-demand learning

Across the country, tens of thousands of foundations, giving circle members, donor advised fund holders, and individual donors are intentionally keeping their operations lean and their ears to the ground. These “lean” funders seek to nimbly maneuver their dollars, skills, and influence to achieve the most good.

At Exponent Philanthropy, we’re dedicated to serving funders who choose to give big with few or no staff. We’re pleased to share the following top resources from our shop and trusted colleague organizations.

Get up to speed

If new to philanthropy or in need of a refresher, turn to Exponent Philanthropy’s Foundation Guidebook and Trustee Handbook, Council on Foundation’s Guide to Small Foundation Management: From Groundwork to Grantmaking and Complete Guide to Grantmaking Basics: A Field Guide for Funders, or LearnPhilanthropy’s 10 Things I Always Tell a New Grantmaker.

For more detail on particular topics, from administration to governance to investments, see Exponent Philanthropy’s 10- to 20-page primers or GrantCraft’s guides.

Stay in-the-know

Keep your finger on the field’s pulse with these top publications and blogs. Twitter is also a handy tool to scan news, learn from field leaders, and follow organizations and causes you support—even if you never tweet! See 3 Ways Any Funder Can Use Twitter.

Benchmark your philanthropy

Compare your philanthropy to peers’ with Exponent Philanthropy’s Foundation Operations and Management Report, Council on Foundations’ Grantmaker Salary and Benefits Report, Foundation Center’s Foundation Maps (subscription), or data from these research and information providers. See also 8 Sources of Data to Inform Your Giving.

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5 Fundamentals Foundations May Overlook

By Lauren Kotkin, Exponent Philanthropy

Mary Phillips of GMA Foundations at February's Foundations 101 Seminar

Mary Phillips of GMA Foundations at February’s Foundations 101 Seminar

Foundation trustees gathered last month for our daylong Foundations 101 Seminar, co-hosted by Southeastern Council of Foundations and led by colleague Mary Phillips of GMA Foundations, an Exponent Philanthropy Professional level Sustaining Partner, with support from U.S. Trust philanthropic advisor Mary Stokes and attorney Marc Lane.

More than a few points stood out as essentials that can be easily overshadowed or overlooked as funders go about the complex work of giving well.

Know where your founding documents are and what they say

A nonprofit’s articles of incorporation and bylaws, or a trust’s trust instrument, are legal documents that outline how a foundation will be governed. 

What ought to be in an organization’s bylaws >>

“The founding documents are the board’s blueprints for building the foundation,” says Mary. “These documents should be part of each board member’s orientation and a chapter in the foundation’s operating handbook. Trustees should be as familiar with the founding documents as they are with their own backgrounds.”

Trustees have a duty to understand what the documents contain and what they mean; staff members will also find them helpful in their work. Yet far too often, they are filed away and forgotten. In our recent survey of member foundations, 7% were unsure whether they represented a nonprofit corporation or a trust—a telling statistic. 

If faced with a governance question or quandary, consult your founding documents first. Guidelines on minimum number of board meetings, board member term limits, voting policies, and much more are often addressed in your founding documents. If your board amends its bylaws, be sure to notify the IRS when filing your annual tax return.

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Board Succession: From Planless to Inspired

By Ruth Masterson, Exponent Philanthropy 

Does your grantmaking organization have a succession plan in place?

If you’re struggling with succession—or haven’t dealt with this tricky topic on your board—you’re not alone. In our most recent member survey, we learned that 27% of members have completed their plans, 29% are working on one now, and 39% plan to complete theirs in the future.

I probably don’t need to tell you that a sound succession plan approved by your board is very important. Things happen, and simply having a plan in place can make everyone’s life much easier if something were to happen to you or another board member.

When it comes to succession planning, I find that our member organizations usually fall into one of the six groups below. Where are you, and what will you do about it?

The Don’t-Have-One-ers: Grantmaking organizations in this group have no plan at all. They’ve never had conversations about succession, and there are no instructions in their bylaws or other governing documents. Uh-oh!

Action: If you fall into this category, it is critical that you do something about it. Get a succession plan in place, even if just a rudimentary one. Many members who believe they fall into this group actually have a rudimentary plan in place—they just aren’t aware of it.

The Don’t-Realize-ers: Grantmakers in this group believe they don’t have even a rudimentary plan in place. In fact, they do—in their bylaws or trust document. Dust off your governing documents. Do you find a description of how directors are elected or trustees are appointed? If so, this is the making of a rudimentary succession plan. You can automatically claim status in the next category, The Good Stewards.

Action: Educate your board about the contents of your governing documents, and develop the habit of referring to them often, so they are “living” and useful.

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Building Trust Through Transparency

By Anne Wallestad, BoardSource, and Jacob Harold, GuideStar 

BoardSource and GuideStar announced a new initiative this week that will enable nonprofits to share critical information about how their organizations are governed, including CEO oversight and board orientation, composition, performance, and ethics. As of the announcement, nonprofits will be asked to share this information as a part of their profiles on the GuideStar Exchange. It will be publicly available in the coming months through a new “People and Governance” section of the organizations’ GuideStar profiles.

The following originally appeared on Exceptional Boards and the GuideStar blog (March 6, 2014).

There is much debate about how to measure the effectiveness — or strength — of a nonprofit organization. Some argue that measures like percentage of “overhead” or CEO compensation tell you everything you need to know about an organization. Others, including both of us, argue that organizational effectiveness cannot be reduced to crude financial measures — that to truly understand organizational effectiveness, you need to understand what the organization is trying to accomplish, what its track record of success has been, and what its plan for future impact is.

At the heart of this debate is the critical question of trust. Donors are asking, “Can I trust this nonprofit to do what it says it is going to do?” “Will it use my resources wisely and effectively?” “Is it stable and sustainable enough that an investment in it is an investment in the future?”

These questions are both emotional and rational, and get to the core of the delicate and essential trust between donors and organizations. And while there are lots of mechanisms to help donors and organizations build that trust, we often overlook the very important role of the board of directors. Continue reading

New Board Self-Assessment Tool for Small Foundations


Has your foundation had a routine physical lately?

By Ruth Masterson, Exponent Philanthropy

I think small foundation boards know more than sometimes they think they do. I’m not talking about individual trustees. Instead, I’m talking about the knowledge that the board holds collectively about what they as a group do well and what they don’t do well. This knowledge is often unacknowledged or difficult to name, a situation that creates an obvious barrier to improving the work of the foundation.

Practical Board Self-Assessment

Practical Board Self-Assessment, from Exponent Philanthropy

Board self-assessments are a way to get at that knowledge. A board self-assessment done well will result in this knowledge written down in black and white, will create a practical map to move the board forward, will heartily applaud what the board does well, and will ease tension and open doors to move forward in areas that a board needs to work on.

When should a foundation board tackle a self-assessment? When I interviewed Judy Healey, a consultant in California, she explained it well. She said that there are essentially two reasons to get started on a self-assessment: “First, if the board is already doing a good job and just wants to do better; this is a common and great reason for self-assessment. A second good reason is if there are major problems. The assessment won’t fix the problems, but it’s a start. It’s a process that will give the board some important information to help it move forward.” Continue reading