Many new funders feel daunted by the prospect of launching a new philanthropic foundation or taking on the role of a new foundation leader or trustee. With a multitude of tasks to complete and knowledge to acquire, it is crucial to be aware of potential mistakes and challenges.
Drawing from my conversations with thousands of foundation leaders, spanning 23 years, here are seven prevalent missteps. By paying attention to these mistakes, you can avoid them and ensure your foundation’s success.
Mistake #1: Being stuck in overwhelm
Launching a new foundation or becoming a new foundation leader or trustee can feel overwhelming. The sheer number of problems facing the world, worthy nonprofits to support, and decisions to make could send anyone diving back under the covers. You might also find yourself in unchartered territory, navigating your new role and relationships as a philanthropist. While everyone can feel overwhelmed at times, you don’t want to be stuck there.
According to wellness writer Michelle Rees, “Overwhelm happens when the sheer volume of thoughts, feelings, tasks, and stimuli in our daily environment shifts our brain and nervous system into a reactive, stressed state.” The result? Easy things become hard, and hard things become impossible.
In addition to zapping our creativity and problem-solving skills, overwhelm creates a relentless cycle of inactivity. We stop in our tracks. We don’t know the right path forward, which step to take, or what direction to choose; Overwhelming funders cost money, drain time, and suffocate talent.
Mistake #2: Restricting your potential through a mindset of scarcity
Too many philanthropic foundations confuse thrift and austerity with stewardship and efficiency. While it may appear sensible to be frugal, this approach can impede the expansion, accomplishments, and influence of your foundation.
It is vital to allocate resources to foster growth and development within you, your foundation, and your nonprofit partners. This might include training, technology, creativity, capacity, relationship building, and professional development. Doing so will increase the efficiency and effectiveness of your philanthropy and increase your impact velocity.
Mistake #3: Letting it go to your head
Arrogance, bossiness, or condescension on the part of staff and trustees of new philanthropic foundations can have devastating effects on grantee relationships. While it’s wonderful to enjoy your new role as a philanthropy leader and the positive change you can create, don’t let it go to your head. It is essential not to assume that the foundation’s resources are your personal funds.
Avoid favoring causes or organizations that you are most passionate about. Do not create unnecessary obstacles for others to prove the worthiness of your time or attention. Recognizing your role as an equal partner to nonprofit leaders and the communities you aim to support will lead to a greater impact.
Mistake #4: Assuming you have all the answers
I get it, you are brilliant! But no matter how much expertise and know-how you bring to your foundation, there are people who know much more about the issues you are trying to address than you do. Especially those who have lived through it.
It is therefore critical to seek input and guidance from the people you want to help. Learn what they experience, what they desire most, and how you can be supportive. Create an environment where everyone feels comfortable speaking frankly about their views. Be ready to address their concerns in a timely manner to demonstrate that you appreciate their time and willingness to share.
Mistake #5: Operating without a strategy
If you don’t know what you want to accomplish as a philanthropic foundation, it will be hard to accomplish it! But that’s what happens when you operate without a strategy.
Developing your giving strategy does not need to be complicated or time-consuming. Ask yourself: “Who do we want to be as a foundation and what impact do we want to have a year from now?” “Where are we today (be honest)?” and “What should we focus on to move us from where to are today to where we want to be ideally as quickly as possible?”
This will provide you with a clear strategy and roadmap of actions to take.
Mistake #6: Failing to hold yourself accountable
Now that you have your strategy, it’s critical to hold yourself accountable for achieving it. This will help ensure that everyone is working towards the same goals and that decisions are made based on what’s best for the foundation and the communities you serve.
To do this, simply assign people to be accountable for achieving your top priorities. This could be you or your spouse, board members, or the executive team. These folks do not need to do everything, but they need to make sure their specific priority is achieved.
You need to “hold their feet to the fire.” Regularly (e.g., every month or quarter) ask them to report on progress – what’s working, what’s not working, and what course corrections could be made to our strategy, if any?
Mistake #7: Not seeking help
It’s hard to do this alone. No matter how fabulous and successful you are, you might need help.
Investing in people and resources to help you is an excellent use of your time and resources. After all, to have the greatest impact you need to be the greatest philanthropic foundation you can become. This could include joining peer groups sponsored by philanthropy associations, attending conferences and webinars about your funding interests (e.g., corporate philanthropy or early childhood education), investing in a needs assessment to better understand community needs, engaging a consultant to facilitate strategic planning or conduct an environmental scan, hiring someone to manage the foundation, or retaining a philanthropy advisor to help you navigate your philanthropic journey.
Your foundation’s success relies on your ability to recognize and avoid these common mistakes. If you ever find yourself in need of assistance or guidance, don’t hesitate to reach out for help. As a philanthropy advisor with over two decades of experience, I am here to support you on your journey. Schedule a call with me to discuss your concerns, and together, we can ensure your foundation thrives and creates a lasting impact on the communities you serve. Let’s work together to make a difference!