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Keywords: Family foundations, organizational life cycle, foundation life cycle
Introduction
For family foundations, a highly personal vision can be a great asset when setting a course for philanthropic impact. The realization of that vision, though, rarely stays in the family. Family foundations rely on professional consultants to help navigate èverything f rom critical issues of strategy to ongoing administration.
Numerous studies have been conducted of the role of consultants in business, government and nonprofit organizations, but little attention has been paid to the role of consultants in foundations and, more specifically, their role in family foundations. Why do family foundations hire consultants? Are there common experiences that lead them to hire external help? What might family foundations learn f rom the experiences of their peers?
In order to address these and related issues, we conducted a pilot study with family-foundation leaders to understand when, why, and how these foundations engage with consultants. We used the observations f rom this group, along with our experience as family-foundation consultants and researchers, to provide foundations with considerations and recommendations that may inform their own process for selecting consultants and increase the likelihood of successful engagements. We hope that this will have immediate practical applications and will also generate interest in broader study of this topic.
Family Dynamics: Contributions and Characteristics of Family Foundations
Family foundations make up 63 percent of all giving by private foundations, representing approximately $279.5 billion in foundation holdings and about $20.6 billion in grants in 2010 alone (Foundation Center, 2012). With this amount of capital, family foundations - assisted by their consultants - have the potential to influence significant social action and change.
While the impetus for establishing a family foundation may vary widely, most family foundations maintain a set of core values that represent a family's philanthropic legacy. A recent study found that 67 percent of family foundations review donor values annually and 15 percent review them biannually; 60 percent of family foundations had a written statement of the family's philanthropic values and the same percentage had completed a report or brief on the life and values of the donor (Price & Buhl, 2010). This dedication to preserving a legacy and to sharing decision-making among family members is often a significant...