It’s no secret that family foundations must navigate family dynamics. But while it may seem counterintuitive, opening up governance structures and decision-making processes to non-family members can actually make it easier to do so. Barr Foundation’s Jim Canales and Barbara Hostetter talked about their own experiences with sharing governance power in an earlier piece in this series. Here’s how it has worked for us at the Nathan Cummings Foundation.
When Nathan Cummings left his estate to the foundation with no donor intent in 1985—an unusual move at that time—it posed an enormous challenge for the Cummings family, which had never run a family business or otherwise worked together. Each had their own careers and passions. The new board came together to make business agreements for the first time, empowered by the donor to operate as an intergenerational philanthropy. Its members had to not only agree on the foundation’s mission, its grantmaking programs, and hiring professional staff, but also make thoughtful decisions about values, such as a commitment to democratic values and social justice, changing systems, and taking risks.
Filling In Expertise and Generational Gaps
Our first staff president, Charlie Halpern, and board chair, Nathan’s daughter Beatrice “Buddy” Cummings Mayer, decided to open up the board to non-family members, believing it would bring in governance and subject matter expertise, and help fill in important knowledge gaps. The addition of non-family trustees also helped reshape board dynamics. Board discussions became less emotional and more issue-oriented. Over the past 25 years, these “independent trustees,” as we now call them, have advised and helped resolve problems, mediating when necessary, and have pushed us to act for the greater public interest.
These experts and community leaders have also helped bridge the gaps between generations, sometimes serving as mentors to the younger generation as they have taken on more board leadership. For example, Jane M. Saks, president and artistic director of the arts and culture organization Project&, and chair of the Governance Committee, develops new leaders in the family who define their roles and vision as overlapping yet distinct from generations before. Independent trustees help the board integrate next-gen family members smoothly so that we can keep forward momentum.
Today, independent trustees share the same power and influence as family member trustees. In fact, they evaluate and recommend our family members for service as trustees, based on standard criteria and requirements.
Diversifying to Better Serve Mission
We wanted to ensure that we were aligning the foundation’s practice to its values of democracy, social justice, fairness, diversity, and community—all rooted in the Jewish tradition. So early on, we looked beyond the racial and ethnic profile that reflected our family make up when considering independent trustees. There was strong agreement among the family to intentionally seek out diverse perspectives and expand our network for board candidates, and we hired search firms to get results. Our board has since included women, people of color, Native Americans, people who identify as LGBTQ, and other under-represented perspectives in philanthropic boardrooms. These individuals offer deep knowledge of and experience with the communities and issues we focus on.
Many of these trustees have helped expand our imagination, offer up the risk capital the field needs, and ground the board’s decisions in real-life experience. Sharing power with those who understand, experience, and fight inequality is necessary to effectively achieve our mission. Like many other foundations across the United States, how to best support social movement organizations and individuals in these extraordinary times is an essential question in our boardroom. These trustees have influenced these discussions.
In the last few years, for example, we decided to increase payout from 5.75 to 6.75 percent and continue an elevated spending rate through 2021. Our board was clear that this was no time for business as usual, and made the unanimous decision to increase our giving and encourage other philanthropies to do the same. Independent trustee Tricia Rose, chancellor’s professor of Africana Studies and the director of the Center for the Study of Race and Ethnicity in America at Brown University, helped the board and staff consider the cycles of social movements. She outlined the potential for greater impact by continuing to give more during the upsurge of women and people-of-color-led activism in the United States.
Moving Beyond the Status Quo
In addition to independent trustees, we seek advisors to help push the boundaries of our work. A few years ago, for example, it was clear that members of the board and investment committee were not all on the same page about how we could make a more significant commitment to impact investing, or if we should do it at all. We started with a wide variety of views on the market. James Cummings, a third-generation trustee and grandson of Nathan Cummings, had been actively spurring foundation interest in impact investments. Others were skeptical and concerned about potential financial losses that could jeopardize the longevity of the foundation. Getting consensus meant learning together, challenging our assumptions about the business model of philanthropy, the role of our endowment in creating social change and the opportunities in the market.
Several advisors—including Lisa Green Hall, senior fellow at the Beeck Center, and independent trustee Rey Ramsey, CEO of Centri Capital—both offered extensive experience helping boards and staff learn, explore, and make decisions about impact investment. We also engaged John Levy, chairman of the Board at BioLite, as an independent advisor with deep experience in private equity and venture capital, and a track record of investing in and building companies that make a social and environmental impact. These experts helped us make the unanimous decision to commit 100 percent of our nearly half-billion dollar endowment to investing that aligns with our mission. They gave us confidence that we could have the social and environmental impact we wanted, as well as the necessary financial returns on our investments.
We’re extremely proud of this smart financial decision, made by an engaged board listening closely to our carefully chosen advisors about the risks and rewards of impact investing—and realizing that the greater risk was inaction.
Philanthropy, after all, is the risk capital in our society. As funders, we are called to act and provide resources that catalyze leaders and solutions to the most pressing problems of the day. Our family foundation is committed to taking risks and acting as an accountable, inclusive, and responsive grantmaker. Having voices from outside the family as independent trustees and advisors has proven a vital step toward sharing power, bringing us closer to the issues and communities we care about, and pushing us to have the most positive impact possible.