Ahhhh, family dynamics. I’m writing this article the week after Thanksgiving and reflecting on our family’s interactions on the “best” way to carve the turkey. There’s a lot of similarity to multi-generational fundraising. You come into a room and sit down with more than one generation of a family, trying to align your mission with theirs (hoping not to make a turkey of yourself along the way!).
I have always been fascinated by family philanthropists. Who has input? Who has the final say? How does the process work when it’s at its best? This interest started way back at the beginning of my fundraising journey, in the early 1990’s. I attended a United Way workshop on the immense transfer of wealth destined to happen in “the next ten years and beyond.” We fundraisers were urged to be ready for the changes ahead. These funds, in the millions of dollars, would change our ability to fund (not just) immediate annual needs but assist in long-range planning. It opened the door to major gifts at United Way and sowed the seeds for multi-year giving and then entire program funding as I moved into hospital and healthcare fundraising in the new millennium. Tied into this wealth transfer meant another adjustment; generational change within our donor pool.
Much has been written about the giving trends of the different generations, from the silent generation who originally made the money and started “philanthropy,” through baby boomers like me who supposedly inherited this wealth, through to the millennials and the current Gen Z entering the workforce. But for me, a “getting into the mind-set” of relationships busy body, understanding how people work together to make decisions in the donation decision process was most interesting.
Just as parents handing over the family business to the next generation is a time-honoured tradition, so too is the concept of inheriting the responsibilities of family philanthropy. I’ve had the good fortune of watching a donor start their foundation using accumulated wealth; building it into robust capital; and then, engaging their heirs in decision-making. I’ve witnessed the teaching of children (and on occasion) grandchildren what having a social conscience means, and why giving back to community is more than a responsibility, it’s an honour.
The rigors of establishing a family foundation are complicated, with established business protocols, government requirements, and the management of personal preferences when it comes to the direction of funding. Having all members of the Board in agreement takes a great amount of time and consideration at the outset, and along the way. What happens then, when leadership changes?
I posed this question to two colleagues, Jenny Foster, Senior Manager Foundation Partnerships CNIB, and Bhavana Varma, OOnt former President & CEO of United Way KFL&A. Both responded with similar experiences: the family foundation founders handed the leadership to the “next generation” while they were still in the picture, feeling they would be able to provide advice if asked, but pretty much stayed in the background. Interestingly, the original focus of each foundation had been quite specific, but in the new incarnation, broadened significantly to include many differing interests. This initially caused internal chaos and uncertainty for the charities who were applying for funds. Within a couple of years, the foundations found themselves in a state of confusion and took steps to realign again.
In another scenario, there was no transfer of control. The founder maintains control of the funds and direction of giving, with the grandchild providing trusted input. In this example, the relationship with my colleague’s charity continued to flow smoothly, and grow year-over-year into something bigger. We all agreed that this type of relationship, where mutual respect and cohesiveness exists, is the best for all parties. The expected outcome is that the transfer of leadership of the foundation will occur after the grandparents’ death.
Unfortunately, it seems that the first situation is more common. The next gen is waiting for the seniors to leave the building so that they can steer the ship in the direction of their interests and social conscience. My colleagues felt there is room for charities to use this to their benefit. Next gen philanthropists are willing to get ahead of root causes—more so than their parents and grandparents who were reactive in their philanthropy. Be proactive with this generation by:
• providing updates on new initiatives, achievements and shifting needs and priorities,
• using newsletters and social media campaigns to highlight emerging trends.
The more you keep your funders current to your organizational changes, the better your chances come proposal deadline and decision-making time.
The wealth transfer has changed dramatically, now becoming some $1 trillion according to a recent Maclean’s article which called millennials the “Jackpot Generation.” This surprised me and had me wondering what this means for fundraisers in the future, especially given the literature that says millennials are less philanthropic in comparison to their parents. Perhaps that will be the next article!
Contact me, eyrepurkin@gmail.com to continue the conversation.
