June 1, 2007 Mark Hrywna
Technology has brought everyone closer together. It’s not just emails going across the globe anymore — that’s so 1990s. These days it’s more like posting videos, social networking, and pretty much almost anything.
Technology also is helping family foundations stay on mission, regardless of where their trustees might live. Many foundations were started in communities where trustees’ parents or grandparents put down roots. Trustees have since moved away, yet funding local organizations is still the organization’s mission.
Dana Marcus, executive director of the Frieda C. Fox Foundation in Studio City, Calif., essentially runs a paperless foundation, posting everything on the foundation’s Web site. The foundation funds agencies within California that provide direct services to children and youth in Santa Clara and Los Angeles counties. The eight members of the Fox Foundation’s board all live in California, but are separated by several hundred miles, with five residing in the Los Angeles area and three in the San Francisco area.
Marcus posts requests for board input on an Intranet site that board members have access to through the foundation’s public Web site (http://fcfox.org/). She tries to post in an informal manner, and trustees “probably become more engaged because the information is always there.” She also posts news articles on the intranet, and if something is urgent, she will use email, but sparingly.
While she’s been able to maintain the Web site in-house with programs like Dream Weaver, Front Page and Share Point, Marcus suggested that a foundation might need outside help with the password-protection required for the Intranet, for which a board member assisted her. She described the intranet as “an effective tool to change the culture” of the board, and suggested getting board members together through technology. If trustees are far away, Marcus recommended using links to Web sites for “virtual site visits,” or grabbing a video camera and posting on YouTube, although “nothing beats the real site visit.”
The Butler Family Fund, founded in 1992, is based in Washington, D.C. And while trustees have not moved as much, there has been turnover among them, said Executive Director Martha Toll. Second-generation board members began new three-year terms this year and the president is now based in Philadelphia. “There were members of the second generation who never met each other,” Toll said. The fund’s 10 board members are scattered between San Diego and London.
The Butler board meets for two full days, twice a year, Toll said, and does a lot of site visits. “We like to get them involved,” she said. The finance subcommittee meets by telephone a few times a year but the time difference between London and Los Angeles makes it difficult, Toll said.
The Fox Foundation has developed a junior board to encourage participation at an early age. Family members become eligible for the foundation board at age 18, but youngsters between 8 and 17 years old can serve on a junior board that was started this year. There are four members, with plans to expand to seven, Marcus said, along with an advisor, 21-year-old Ingrid Fox, the youngest member of the Fox Foundation’s board of directors and a student at Stanford University. In addition to family members, the junior board is open to stepchildren, children of staff and others who may be invited to participate by the Executive Committee.
The junior board plans to meet five or six times this year. Each board member has a $2,000 annual budget, which they can split into $1,000 grants or as one $2,000 grant. “They’ve taken technology to a whole new place,” Marcus said of the junior board, even instant-messaging about junior board business. Some in the 19- to 35-year-old age group don’t even go to foundation Web sites anymore, she said, instead using text messaging, Facebook or YouTube.
Like so many family foundations in multiple generational situations, the Woodard Family Foundation in Cottage Grove, Ore., faced the geographic and generational divide. “Certainly when my grandfather established this foundation in 1952, as so many in that generation, he did it for two reasons: one, to give back to the local community, and two, to have the family participate,” said Casey Woodard, executive director and a board member of the Woodard Family Foundation (www.woodardff.com).
But by the time the fourth generation comes along, the foundation doesn’t have the same affinity for a founder’s community, and the family doesn’t necessarily want to stay together, he said. In the case of the Woodard Foundation, its nine board members are scattered around the country, with two in Cottage Grove, four in nearby Eugene, but others in New York, California and Arizona.
“The divide becomes almost overwhelming,” Woodard said, adding that the family talked at one time about whether they should disband, give the foundation to the Oregon Community Foundation, and reassemble in a different form. That was about four years ago, he said. And while it was not a serious conversation, it was an option that was put on the table. Before possibly taking that extreme action, the board instead discussed how it could bridge the gap, also considering bringing in a non-family board member.
The foundation experimented with doing everything in regional work committees, that way they didn’t have to get together outside the one annual meeting that’s required. “The family found we really missed being together,” Woodard said, so now the family meets twice a year, and in between those meetings distribution committees review applications and make choices without having the entire board meet. “That’s been a good compromise,” he said.
Last year Woodard initiated another incentive, randomly drawing a board member at each meeting to award a $50,000 grant however they see fit. “It allows those who don’t live locally to have sense of buy-in, a sense of enthusiasm,” he said. “It’s worked very well.”
Discretionary grants are the number one way families have found their way through the geographic and generational divide, he said. “These things essentially brought relevancy to members who don’t have a real strong tie to Cottage Grove,” Woodard said.
Woodard cited a Council On Foundations study in 2004 that indicated just about half of family foundations allow discretionary grants, up from 37 percent three years earlier.
Making discretionary grants is definitely a trend, but in some cases “a disturbing trend,” Woodard said, because they can allow a family to faction. “I would rather have us find a compromise to stay together twice a year as opposed to becoming completely factionalized and disband,” he said.
Discretionary grants are not universally accepted and endorsed by the family foundation world, Woodard said, “but I have become a strong believer, and certainly half of my peers feel the same way. It’s a mechanism to reverse the divide that we all tend to face.”
Critics say discretionary grants erode the effectiveness of a board, dilute a foundation’s mission, or limit accountability, Woodard said. Discretionary grants might dilute the mission but they also create engagement among family members and provide “an escape valve” that reduces tension on the board, he said, while also finding a manageable and effective way to complement the mission. NPT