A family foundation based in Louisville, KY retained The Kavelman Group (TKG) to advise them on how the foundation could grow to its next level by clarifying its mission; developing a more focused and strategic grantmaking program; and solidifying its staffing, governance and board practices. The family was moved to action due to an impending sale of a significant family business that would greatly increase the foundation’s assets and also a strong desire on the part of the parents to prepare their daughter for her eventual leadership role in the expanded foundation.
The foundation had started in 2002 on a modest level and had grown slowly over the years as the family made periodic contributions. As much as the family enjoyed working informally together, writing checks in the living room once a year when they allocated grants, a somewhat more formalized grantmaking approach and structure would be needed to support expanded giving, to help the foundation run more smoothly and to ensure their legacy. The foundation’s future was a key concern, and the family wanted to ensure that governance structure would support the next generation—and beyond—in preserving the family’s values and legacy.
Identifying Philanthropic Mission and Goals
The family turned to The Kavelman Group as a consultant and partner, with leadership from Buff Kavelman and Ken Goody.
A family foundation is a deeply personal enterprise, and TKG believes that developing a thorough understanding of a family’s values and goals is key to helping a foundation succeed. That often includes helping build consensus among individual family members who bring different experiences, skills and expectations to the table.
We considered how this family’s own beliefs, skills and relationships could translate into a mission statement and how that mission could take shape in a specific grantmaking plan, rather than trying to impose a formulaic approach. Our goal with this family—as with all private foundation clients—was to help the family identify, clarity and create family consensus around their own philanthropic vision and goals.
Before recommending strategies for a grantmaking plan, The Kavelman Group’s process always begins by exploring a series of basic open-ended questions with our clients about their philanthropic history, goals, motivations, experience and values. Among the questions Buff Kavelman and Ken Goody explored with the family were:
Who had influenced them most in developing your philanthropic values?
What were their major motivations for being philanthropic?
What issues in society concern them that might be addressed through their giving?
What changes and impact did they want to make in the world?
In past giving experiences, what was most meaningful and satisfying? Were there any disappointments?
How much time did they want to devote to their grantmaking, and what help (if any) have they already realized they might need to identify grantees?
Buff and Ken encouraged the family to evaluate their own core values and also what they wanted to get out of the grantmaking process. Through several facilitated discussion, we helped the family to identify and openly discuss which grantmaking interests everyone shared and where they had different interests. This helped the family to build consensus on top priorities and make allowances for individual interests that might be funded with discretionary money.
How will funding decisions be made?
After the family came to an agreement on their philanthropic goals and the type of grantmaking program they felt most comfortable with, we were able to work alongside them to create their first grantmaking and administrative plan.
The family desired to keep administrative costs low, which helped guide decisions regarding what additional staff and operations might be needed now or in the future. TKG provided relevant benchmarking data on how similar foundations are structured, governed and staffed, and what typical grantmaking/administrative spending ratios look like.
All of this happened over a number of intimate working sessions with the family in New York and Louisville. As partners with the family, The Kavelman Group did not just present this raw data, but helped the family consider the implications for how they would prefer to craft and implement a plan to build the capacity of their foundation.
Buff and Ken also provided counsel to the family on additional considerations that would shape their new grantmaking. These included:
Geographical focus areas
Fields or interest areas to be funded
The number and size of grants
The types of organizations to receive the grants, whether established organizations, grassroots organizations with a track record, startups testing untried methods, or some combination thereof
How to find grantees that best fit the foundation’s mission? Would there be an “invitation only” approach, open application, or another model?
What resources did the foundation already have in place, and what additional resources would be needed to realize the grantmaking plan?
What should the timetable be for implementing the new plan?
Building a board
A critical component of any effective and impactful foundation is its board. When TKG was retained, the board was made up only of the three family members. While this worked for the family initially, it posed problems for the enduring operation and legacy of the foundation. When the parents of the family could no longer participate in governance, or passed away, the daughter would need additional board members to maintain foundation operations. It was essential to consider how new board members would help support and enhance the foundation’s ability to carry out the original donors’ intent over time.
Buff and Ken led governance working sessions with the family that:
Analyzed present governance needs, and planned for needs that may arise in the future
Evaluated what skills and expertise the family members had, what they enjoyed doing, and what they’d rather delegate if they could
Considered what expertise and volunteer time the family might need from a board to support the foundation’s expanded grantmaking activities
Developed board roles and responsibilities
Determined what board officer positions would be needed
Helped the family identify potential board members they trusted and respected, and who would bring on new skills and perspectives they might not otherwise have
The family was concerned about including new people in their decision-making process but realized that it would be essential for the foundation’s long-term sustainability. With this in mind, TKG recommended testing candidates in advisory roles prior to electing them to board service. We also advised the family on how they could create a legal structure to protect their interests as new directors are added, changes they’ve since implemented.
Conclusion
Identifying and outlining goals and implementing a professionalized grantmaking structure is a critical step for a foundation with a rapidly growing asset base and going from writing checks in a living room to having a new board, employees, and decision-making process is not an instant process.
TKG worked with the family over an eight-month period to implement changes incrementally so they could be tested and refined as needed. Through this process, the foundation was transformed, and the family is now not only prepared to lead their expanded giving, but to enjoy it. Now there is a clear process in place to support the foundation’s growing portfolio of a greater number of more strategic grants, and the family is far more secure about their legacy and future contributions to the world. Two years into the plan, the daughter has successfully taken on the role of Board President, and the foundation continues to grow and adapt with a phased plan in place shaped by the family’s vision.