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Setting up Shop Ways to Manage Your Family Foundation

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Setting up Shop Ways to Manage Your Family Foundation Managing in Support of the Charitable Mission ..........................117 CONTENTS Assessing What Work Must Be Done ..........................................117 Deciding How the Work Can Be Done ........................................118 Recruiting Family Volunteer Staff ........................................119 Deciding to Hire Paid Staff..................................................121 Should the Foundation Pay Compensation or Reimbursement?................................................................122 What the Law Says ............................................................122 What the Law Means ..........................................................123 Questions for the Board........................................................123 Family Participation ............................................................124 Developing a Compensation and Reimbursement Policy ....124 Finding an Alternative to Compensation ............................125 On the Outside Looking In ................................................126 Sharing Staff ........................................................................126 Using Consultants................................................................128 Moving to a Full-Time Paid Executive Director ................129 Determining Where the Work Will Be Done ................................129 Using a Home Office ..........................................................129 Using the Family Office ......................................................130 Relying on the Family Business ..........................................130 Sharing Space ......................................................................131 Establishing a Foundation Office ........................................131 FIGURES Identifying and Securing the Tools You Will Need........................131 1. Help Is On the Way ..............................................................118 Should You Have a Website? ................................................132 2. Hands On: The Mario Morino Story ......................................119 Choosing Technology for Grants Management ....................132 3. Staffing Your Family Foundation ..........................................120 How to Handle Accounting and Recordkeeping ..................133 4. Management and Marriage ..................................................120 Considering Administrative Expenses ........................................134 5. Using a Search Firm ............................................................122 Realizing Your Great Expectations..............................................135 6. Family as Staff: The Greenlee Story ......................................123 7. Can the Foundation Pay for Spousal Travel? For the Travel of Other Family Members?..............................125 8. Family Foundation Staffing Models ......................................127 9. Ways to Share Space ..........................................................131 10. The Paperless Office............................................................132 11. Technology Help for Your Foundation ..................................133 12. What Records Should My Foundation Keep? ........................134 SETTING UP SHOP Ways to Manage Your Family Foundation FOUNDATION FAMILY YOUR MANAGE TO SETTING UP SHOP: WAYS by Deborah A. Brody 115 ou are at the beginning of one of the most challenging and rewarding endeavors a family can undertake. Sound management is key to success in this endeavor. Y Establishing good management processes and procedures for your family foundation at the outset supports the program goals and content of your philanthropy. Like many founders, your experience in managing ventures — perhaps you have run a family business,chaired a civic organization,or reared a family,for that matter — will put you in good stead for managing a family foundation. Experienced family grantmakers advo- I Considering administrative expenses; By starting and running a family cate an integrated approach to man- and, most importantly, foundation, you have chosen to place agement, an approach that links the I Realizing your great expectations. your personal funds in a public trust. seemingly mundane activities of daily That decision gives you the potential operations directly to charitable mission, Office management and operations are to have a tremendous influence in legal requirements,and the founder and tools to allow you and your family to your community — to affect the lives other board and family members. accomplish something important.The and livelihoods of people on the front late Paul Ylvisaker — a family founda- lines of nonprofit agencies and the A way to look at management as you tion trustee — once said: constituents they serve. As a founda- launch your family foundation might tion founder, your job is to make the include: Foundations are a remarkable human fundraising process a productive I Managing in support of the charita- invention.They provide private persons experience for grantees. Even if ble mission; a freewheeling opportunity to be socially grantee proposals do not result in I Assessing what work must be done; and publicly influential.Without having immediate funding, they can lead to I Deciding how the work can be done; to meet the tests either of the market or acquiring new information, meeting I Determining where the work will be the ballot box, private persons can inde- new people, and establishing a colle- done; pendently determine what the needs of gial relationship with your founda- I Identifying and securing the tools society are and how best to go about tion. Strong management can support III. A ESTABLISHING STRUCTURE you will need; meeting them. this entire enterprise. 116 Managing in For example: Assessing What I If you want your foundation and fam- Work Must Be Done Support of the ily to be visible in the community, Charitable Mission consider renting an office with a con- Work, and thou wilt bless the day ference room in the downtown area of Ere the toil be done. This above all: to thine own self be true, your city and hire a friendly,outgoing — JOHN SULLIVAN DWIGHT (1813-1893) And it must follow, as the night the day, staff person to manage that office. Thou canst not then be false to any man. I If you want family members to con- Setting up the foundation office and — HAMLET. ACT I. SC. 3. duct meetings or do work at the foun- putting management systems in place dation,you will need extra office space will take a fair amount of time initially. A mission statement represents a family for their use. Once set up,however,the office should foundation’s values, goals, and purpose. I If your family prefers to remain run smoothly, freeing you and your In addition to defining the foundation’s behind-the-scenes and give as family to focus on foundation mission. overarching goals,it can provide a frame- much as possible of the foundation’s Questions to consider include: work for managing the foundation. assets to charity,you may be able to I How will we manage the board? According to management guru Peter set up shop in a family member’s I Will we accept unsolicited proposals? Drucker,“Understanding one’s mission home or business. I If so, how and when will we accept is the essence of effective strategy,for the I If your foundation’s mission is to and review proposals? small nonprofit enterprise or the protect the environment, you might I How many grants and what types of Fortune 500.” Drucker recommends want to have your foundation’s office grants will the foundation make? asking, “What is our business/mission? in an environmentally sound build- I What kinds of follow up will the Who is our customer? What does the ing, print foundation documents on foundation undertake after a grant customer value?”Your customers are recycled paper,and use other recycled is awarded? your grantees, your community, and, in office materials. I What records should we keep? the broadest sense, society. I If your foundation funds the arts,you I How should bookkeeping and might want to support local artists by accounting be handled? If you are not already deeply involved in hanging their artwork in your offices I How will we let people know about your area’s nonprofit community, you or by providing them with free or the foundation? will want to learn as much as possible low-cost studio space. about it.You might want to set up indi- Some of the day-to-day tasks involved in vidual meetings with local government, These are just a few examples of how managing a family foundation include: business, and nonprofit leaders. Invite a family structure and foundation mission I Answering mail,email,and telephone group of them to lunch,or even conduct might affect management and opera- calls; formal focus groups.This will help guide tional decisions.There are as many per- I Writing materials for the foundation,if and inform you as you rise to the chal- mutations of these as there are families needed,such as a brochure,a web page, lenge of setting up an efficient manage- and organizations. a fact sheet,grant summaries,and board ment structure that takes the foundation’s and committee minutes; mission, family dynamics, and grantees I Coordinating meetings, distributing into account. minutes, and preparing briefing FOUNDATION FAMILY YOUR MANAGE TO SETTING UP SHOP: WAYS 117 materials for the board; ing their questions, monitoring grant bility generally influences many man- I Soliciting and screening grant pro- expenditures, and managing grant
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