You’re about to start on a new philanthropic adventure with a brand-new foundation. Perhaps it’s a family foundation that you’ve just created. Perhaps you’re taking the reins of a new corporate philanthropy. Or maybe you’re part of an exciting transition of assets from the sale of a public hospital into a new foundation.
Whatever the circumstances, there are five key questions you can ask yourself now that will set your foundation on a successful course.
1. Is a foundation the best charitable-giving vehicle for us? Individuals who have created great wealth often want to establish foundations as a way to extend the family legacy into philanthropic endeavors. It is natural to want one’s name to live on and be honored with good works. But foundation donors should be careful not to confuse ego with effectiveness. Foundations operate within specific parameters and under regulations that may hamper a donor’s ability to achieve his or her vision.
For example, if you want to make philanthropic gifts to a handful of institutions that have great meaning to you, then direct giving to those institutions may be more effective than funneling them through a foundation. You can still put the family name on a new university building or hospital wing, after all.
Foundations also come with a level of administrative effort and cost that could make giving more of a hassle than you bargained for. A donor-advised fund at your area community foundation might give you the same tax benefits and giving flexibility at a fraction of the cost and headache.
However, if you wish to cultivate a growing corpus of charitable assets and want to be deeply engaged in how they are invested (in both the markets and your community), then a foundation is likely the right choice for your philanthropy. And if your foundation is already established, use the next four suggestions to make it as effective as possible.
2. What do we want to accomplish? It’s one thing to enter your work with a charitable intent, but another thing entirely to identify a set of clear, realistic goals based on your assets and your environment. This means thinking through some hard choices about what to prioritize and what to let go.
It also means recognizing where you might make an impact and where your contributions might not even make a ripple. For example, many foundations are interested in improving health or education, but these are huge systems with myriad contributing factors. You won’t be able to have an impact on the entire healthcare system, but you may be able to improve the training of nurses or support cancer research. It’s daunting to try to improve the entire public education system, but you may be able to help raise the reading abilities of third graders in your school district. It should be no surprise that foundations with a clear sense of purpose are usually the ones that demonstrate the greatest impact.
3. How will we continue to learn? Some funders seem to have taken to heart that line from Fiddler on the Roof: When you’re rich, they think you really know. However, funders usually know much less about the issues they wish to address than do the nonprofit grantees and experts who are enmeshed deeply in those issues. And new funders rarely begin with a solid understanding of how their own processes and priorities can be most effective. Philanthropy is a fluid undertaking, and smart foundation trustees and staff recognize that they should find a way to continually learn and improve – both in their internal practices and culture and in their grantmaking strategies.
Learning doesn’t have to be a complex undertaking. It can be as simple as making time for discussions during staff or board meetings, regularly conducting and studying external evaluations of your work or producing reports about what your foundation has done to share with other funders and feed ongoing conversation. The most important thing to remember is to be consistent and intentional about learning so that you can constantly use your new knowledge to improve your effectiveness.
4. Who do we need in our network? No foundation can change the world by itself. You’ll need partners and allies, not only to help make the changes you want to see but also to make them last. Create networks of advisors, other funders, trusted grantees, community leaders and others in your area who can enrich and leverage your philanthropic investments with their own financial, intellectual or social assets. Your network relationships can remain informal, or you could form an advisory committee or other more formal structure to support your work.
Never forget that while you may be new to the party, others around you have likely spent years addressing the issues you care about. Learn from them. Partner with them. Support them. Ask them to help you find the ways in which you can deliver the most value to your shared goals.
5. How will we invest in our own success? Foundations can get so wrapped up in the concept of getting money into the community that they often forgo any investment in their own operations. I call this having a “poverty mentality” of philanthropy. Foundations that constantly strive to do more with less are well intentioned, but they also are hampering their own effectiveness.
This isn’t to say your foundation should give itself carte blanche for excessive expenses. But prudent management doesn’t mean starving yourself of capacity. Don’t go overboard, but do think about what you’ll need to do your work well. Invest in the right equipment, hire the right people and find the right advisors to enhance your effectiveness. Responsible investments in your own operation are nothing to be afraid of or ashamed of.
Of course, there are many other considerations that go into making a new foundation run well. You’ll need to define grantmaking strategies, create a sensible grantmaking process and time line, develop an investment policy for your corpus and much more. But those steps will be more effective if you’ve first taken the time to consider the questions above.
This article was originally written for and published by Forbes.com.
Kris Putnam-Walkerly, MSW, has helped to transform the impact of top global philanthropies for over 18 years. A member of the Million Dollar Consultant Hall of Fame and named one of America’s Top 25 Philanthropy Speakers. Author of the award-winning book Confident Giving: Sage Advice for Funders, which was named one of “The 10 Best Corporate Social Responsibility Books.” For more ways to improve your giving, visit Putnam Consulting Group.
“Improving lives through philanthropy is a complex business, but the Putnam team provided us with a clear, compelling story of our work with local partners and the real-world impact that’s had the communities we serve. These are stories we’ll use and share with peers and grantee partners for years to come.”
~ Paul DiLorenzo, Senior Director, Casey Family Programs
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Whether you’re a first-time CEO, a new CEO at an established foundation, or a board member who’s made a new CEO hire, you’ve got high expectations. New leadership means a chance to strengthen practices and implement change. It’s an opportunity to build a solid foundation for generations of philanthropic impact.
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Kris Putnam-Walkerly will provide confidential strategic assessment, advising and coaching to help new CEOs navigate all aspects of starting a new foundation or leading an established one. Because no two foundations – and no two CEOs – are alike, Kris tailors her approach specifically to the needs of the individual and foundation in question. All activities are designed with the foundation’s ultimate purpose and goals at the forefront.
June 28, 2017 – Community Foundations of Florida 2017 Annual Meeting, Florida Philanthropic Network, Naples
This provocative keynote will explore how community foundations can fall prey to “delusional altruism” – unintentionally getting in the way of their own impact and that of grantees – and how simple changes in common processes can instead create practices that are more productive and relevant for all.
July 18, 2017 – Forum of Regional Association of Grantmakers Annual Conference (San Francisco, CA)
Before we begin to support our members work in racial equity, diversity and inclusion, we must first do the work in our own organizations and with ourselves. Join this workshop to explore the ways and tools used by members of the Forum to do the work at home before they are in community working. Kris Putnam-Walkerly will share findings of her recent her recent field scan, “The Road to Achieving Equity,” conducted on behalf of the Robert Wood Johnson Foundation.
September 7, 2017 – Association of Baltimore Area Grantmakers
In this session, you’ll hear what foundations are doing broadly to incorporate equity internally, as well as ways ABAG funders are making equity a part of their day-to-day operations. Kris will present findings from her recent field scan, “The Road to Achieving Equity,” conducted on behalf of the Robert Wood Johnson Foundation and share how institutions are making operational changes in order to incorporate equity in ways that encourage staff, better support grantees and partners, and achieve their missions
September 19, 2017 – National Center for Family Philanthropy webinar
Part three of a three-part webinar series on how family foundations are embracing equity.
September 27, 2017 – Philanthropy West Virginia Annual Conference
Kris will be giving the opening keynote on the topic of “Delusional Altruism.”
October 19, 2017 – National Forum on Family Philanthropy
Kris Putnam-Walkerly, global philanthropy advisor, will present findings from her recent field scan, “The Road to Achieving Equity.” Participants will hear what foundations are doing broadly to incorporate equity internally, as well as ways specific family foundations are making equity a part of their day-to-day operations.
October 19, 2017 – National Forum on Family Philanthropy
Description: One thing holds most philanthropists back from achieving the dramatic success and deep impact that they seek. They have a poverty mentality rather than an abundance mentality. Participants will how most philanthropists and grantmaking foundations operate with a poverty mentality that hinders talent, stalls creativity, and hijacks opportunity for systemic change. Participants will learn a 5-step abundance approach to charitable giving allows them to give confidently for maximum impact on the issues and communities they care about.