NATIONAL CENTER FOR FAMILY PHILANTHROPY Igniting the Spark: Creating E!ective Next Generation Boards By Kevin Laskowski, Annie Hernandez, and Katie Marcus Reker or family foundations and a growing number of donor-advised funds, preparing the next generation F for involvement brings special concerns—and exciting opportunities. Succession is reported to be the single most important issue facing family foundations, according to nearly half (48%) of respondents to the Association for Small Foundations 2011 Foundation Operations and Management Report. At the same time, there is a broad range of experience in families with regard to how next generation family members are involved in family philanthropy. According to the National PASSAGES ISSUE BRIEF Center for Family Philanthropy’s 2011 study, Current Practices in Family Foundations, a near equal number of June 2013 respondents “strongly agreed” (34%) or “strongly disagreed” (33%) with the statement “next generation members are EXPLORING KEY ISSUES IN FAMILY GIVING playing a significant role in the foundation.” In This Issue: The volume of funds, foundations, and parents as their model of philanthropy. 3 What is a Next other giving among young Americans This research, as well as previous research Gen Board? from high-net-worth families is expanding conducted by US Trust and the Indiana 5 Preparing for Next to unprecedented levels. “The next gen- University Lilly Family School of Philan- Gen Involvement erations of major philanthropists will have thropy, has shown that the more—and 7 How Do Next Gen Boards Work? tremendous in"uence on the direction of earlier—parents engage their children in 9 How to Create a and support for e!orts to improve local philanthropy, the more their legacy of Next Gen Board communities and solve global problems giving will be passed along. Millennials 13 Beyond over the next several decades,” write the are a generation that cares and wants to Grantmaking: New Innovations authors of the 2012 #NextGenDonors work with their peers—siblings, cousins, 19 Sample Junior study conducted by the Johnson Center friends, or schoolmates—to produce Board Policy for Philanthropy and 21/64, a non-pro#t measurable change. Since next generation 21 Things to Remember consulting group specializing in multi- members are crafting their philanthropic 23 Summary of generational engagement. identity at a young age, families need to Advice and Tips For many families, it is important that help #nd unique ways to help shape this 24 Additional the next generation not only gives but at younger ages. Resources gives as part of the family—that it not only This Passages Issue Brief introduces an carries on a philanthropic tradition but that it increasingly popular method for preparing does so together. For those with this goal, it the next generation for philanthropic ser- is heartening that 90% of the #NextGen- vice: the next generation or junior board. The Donors research respondents cited their paper covers the variety of purposes for P ASSAGES ISSUE BRIEF 2 NATIONAL CENTER FOR FAMILY PHILANTHROPY establishing next generation boards and how they the actual voices of next generation board mem- are typically structured, explores how foundations bers themselves regarding why and how they have use next generation boards as a tool for engaging become engaged in their family’s philanthropy. younger family members, and describes options for “I feel prepared to take on a bigger role in the preparing younger family members for governance foundation because of my early involvement,” com- and grantmaking. It also describes steps for creat- ments Zach Whitten, a college student who has been ing a next generation board and highlights points involved in The Lumpkin Family Foundation’s next to remember as this new board begins its work. generation programming since the age of 10. “I doubt Perhaps most importantly, this Issue Brief highlights I’d even be interested without this experience.” THE VOICES OF YOUTH PHILANTHROPISTS To learn more from your youth, ask them what could spark their interest in your foundation. Throughout this Issue Brief, we are pleased to share the perspectives from members of Youth Philanthropy Connect, a special project of the Frieda C. Fox Family Foundation, which connects youth involved in grantmaking and philanthropy with their peers and colleagues. Individuals quoted in the paper include: Sahar Afrakhan, Positive Miranda Roehrick, Impulse, The Gaines-Jones Positive Impulse, Education Foundation The Gaines-Jones (junior in high school) Education Foundation (senior in high school) Sarina Dayal, Tarsadia Jamie Semel, Frieda C. Foundation (senior in Fox Family Foundation high school) (senior in high school) Katie Marcus Reker, Zach Whitten, Frieda C. Fox Family The Lumpkin Family Foundation (#rst year Foundation (second year of college) of college) P ASSAGES ISSUE BRIEF 3 NATIONAL CENTER FOR FAMILY PHILANTHROPY WHAT IS A NEXT GENERATION BOARD? A NOTE ON TERMS A next generation board is a sort of foundation-within- Just as each family determines how its next a-foundation or a grantmaking committee within the generation board operates, families also refer foundation. Very often, these boards consist of a pool to these entities in a variety of ways. Common of money set aside for next-generation family members examples include Next Generation Boards, to distribute. By law, these grants must be made Junior Boards, the 3rd (or 4th) Generation with the formal board’s approval. The intended Fund, the Next Generation Adjunct Board, result is to develop a new generation of skilled phi- the Junior Advisory Committee, and oth- lanthropists ready to join the family’s existing board or ers. In this paper, we use the phrases Next create their own approach to meaningful service. Generation Board or Junior Board and refer Next generation boards allow younger family to these vehicles as essentially serving one members to participate in the family’s philan- and the same purpose: to prepare and engage thropy by involving them in current grantmaking younger family members for a potential role practice. In smaller families, next generation in the grantmaking and governance roles of boards may be set up for a de#ned period of the organization. time—i.e., until the next generation is ready for board service. While next generation boards may “One bene#t for all of us was learning about be a limited version of a family’s philanthropy— the decisions and the jargon that comes with board with younger members distributing only a small service,” says Lisa Parker, Shirley’s daughter and allotment of funds—next generation board mem- founding member of the foundation’s next gen bers can experience everything that their existing board. “It prepared us for board service in other board counterparts experience, including strategy areas of our lives as we became adults.” development, site visits, proposal review, debate and discussion, and evaluation. WHY DO FAMILIES USE NEXT GEN One of the nation’s #rst next generation boards BOARDS AS A TOOL FOR INVOLVING was established in 1983 by the Lawrence Welk THE NEXT GENERATION? Family Foundation to engage the full family in Family foundation board members frequently men- philanthropy. Initially ranging in age from 14-24, tion next generation boards as one of the most the third-generation Welk family members were e!ective ways to encourage younger members to included in the family board meetings and site vis- become philanthropic and to prepare them for its but were not given voting power. They could their prospective roles as trustees of the founda- review proposals and participate in discussions but tion. “A next generation board replicates the tough could not participate in the #nal vote. decision-making, the compromise-striking, and the Then, third-generation family members would consensus-building that characterizes new members’ meet in their own breakout sessions to distribute eventual service on the foundation’s board,” says 10 percent of the foundation’s grantmaking budget. long-time foundation advisor and former National They could vote to further fund the senior board’s Center Vice President Karen Green. choices, fund some organizations the board had not, In the National Center for Family Philanthropy’s or present their own proposals. “They had to lobby seminal 2002 Passages Issue Brief, “Opportunity of a each other and decide together how the money Lifetime: Young Adults in Family Philanthropy,” would be distributed,” says Shirley Fredricks, author Alison Goldberg, herself a next generation daughter of the founders and long-time president family board member, outlined a variety of rea- of the foundation. sons for involving young adults and younger family P ASSAGES ISSUE BRIEF 4 NATIONAL CENTER FOR FAMILY PHILANTHROPY members in family philanthropy. Key among these for families thinking about establishing a next gen- YOUTH PERSPECTIVES: eration board are: Why should you involve us? r5PQSPWJEFZPVOHFSGBNJMZNFNCFSTXJUIBWBSJ- ety of skills that will help them in other aspects Katie Marcus Reker As a current board of their lives. Junior Board Member at the age of 12, I can r5PFYQBOEUIFJOWPMWFNFOUPGZPVOHFSGBNJMZ more interested, and more engaged having members in contemporary issues. come from a Junior Board background. Zach Whitten r5P MFBSO UPHFUIFS UISPVHI JOUFSHFOFSBUJPOBM dialogue. r5P FODPVSBHF DSFBUJWJUZ BOE GSFTI UIJOLJOH among all family members Sarina Dayal The foundation had been around r5PIBWFBDDFTTUPUIFFYQFSJFODFT RVFTUJPOT BOE context