Connect with us

Life Transitions

5 Best Practices for Effectively Managing Foundations

Published

5 Best Practices for Effectively Managing Foundations

Written by: Sterling Foundation Management

Take your foundation to the next level this year.
 

Philanthropy and its challenges are not new. Aristotle, who lived 2,400 years ago, was aware that “to give away money is an easy matter and in any man’s power. But to decide to whom to give it, and how large, and when, and for what purpose and how, is neither in every man’s power nor an easy matter.” Today, the opportunities in the philanthropic sector are larger and more varied than ever.

Leading by Example 
 

James Lintott, chairman and founding principal of Sterling Foundation Management, has served on numerous nonprofit as well as private investment boards. His wife, May Liang, is also actively involved in philanthropic efforts through board membership and together they run their own private family foundation.

Unable to fall asleep one night, they pondered the benefits of having extra wealth. They had seen first-hand how wealth did not equate to happiness. One benefit they agreed upon was the sense of wellbeing from knowing they could get access to quality healthcare for their children. They decided that giving this same sense of security to other parents was a shared value for their philanthropic efforts. That began Jim’s involvement with the Children’s National Medical Center Foundation as the chairman of the board for four years, as well as chairman of the parent board for four-and-a-half years. Providing world class healthcare for at-risk children in the D.C. area has remained a special cause for him and his wife.

Leveraging his vast experience as a lawyer, CFO, and philanthropist, Jim has been on a quest to improve forprofit and non-profit corporate governance. He brings that same passion to Sterling where he helps clients achieve their philanthropic goals in an effective and efficient manner.

Effectively Managing Foundations 
 

Here, we highlight several best practices that offer foundations profound benefits and improve effectiveness.

1. Put Your Goals on Paper 
 

You probably have heard or seen news about the philanthropic efforts from the likes of Bill and Melinda Gates, Chuck Feeney, and Michael and Susan Dell. Similar to others with a passion to do good in the world, they leverage their foundations as a vehicle to meet their charitable goals. Unlike them, most foundations are not as closely followed by the public or reported on by the media. As such, founders should not take it for granted that their mission, goals, and values are well understood or well known, even among family and friends. As the founder or as a board, take the time to reflect and document your philanthropic goals to help guide priorities, activities, and decisions. Understanding your mission and its drivers are important for both limited life foundations and those planning for perpetuity.

2. Give Strategically
 

It’s the beginning of the year – do you have a giving strategy in place? Don’t just rely on what you did last year or put off your decisions until the end of the year. Having an intentional plan for giving helps ensure you are making the most of your funds. Consider a more focused plan by giving fewer, larger grants to have a greater impact on your social causes. In other words, go deep versus spreading your giving in small amounts to a large number of charities. Choosing to focus on a select few charities also encourages you to be more familiar with the organization, their programs, and how they operate. It helps you become more informed about how your foundation’s funds will be used and if there are better ways to maximize the use of those funds.

3. Give Wisdom in Addition to Wealth
 

Many private foundation founders are individuals who were highly successful in their businesses or careers, and have more to offer than just financial resources. Donor’s contemplating charitable donations often focus on what their money can do. However, many charities need not only money but also wisdom and experience. Donors can offer additional support by donating the skills and knowhow that got them where they are.

4. Know Your Charities
 

Vetting prospective grantees is essential to foundation management. You must have a process in place that helps ensure funds are given to reliable organizations that align with the foundation’s goals. Review rankings from reliable sources, such as financial and philanthropic publications. When available, seek out statistics and reports to determine if there has been mismanagement of funds or illegal activity. Public records, such as annual reports or tax statements, also provide a wealth of information. For large grants or long term commitments, call or visit to learn more about the organization first hand. Although most donors realize that overheard is part of every organization, understand how much of your grant goes to the desired program versus other operational costs.

5. Ask for Measures of Success
 

How do you know if your foundation’s goals are being achieved? Measuring success or impact is not always simple, particularly for nonprofits with lofty or abstract missions. Before providing funds, ask charities how they measure their program’s effectiveness. The best charities will have thoughtfully considered their measures of program success and be open to questions. Look for measures that go beyond typical quantitative measures such as the number of programs, activities, and people reached, and ask for evidence of how they’re impacting their social cause or mission.

Lasting Legacies
 

At Sterling, we have seen firsthand the impact of charitable giving, which inspires us to provide high quality and personalized care to our clients. Here’s just a few ways our clients’ philanthropy has made a difference:

Healthcare

  • Accelerated the development of new therapies in epilepsy to improve patient care
  • Established a professorship in dementia research at the Mayo Clinic
     

Disaster Relief 

  • Provided recovery aid for those impacted by natural disasters in Texas, Puerto Rico, Virgin Islands, and California
     

Youth 

  • Supported community programs aimed at helping disadvantaged youths
     

Environment and Animals 

  • Fought animal cruelty and conserved land for wildlife in Florida
     

Education 

  • Relieved education-related debt through scholarships and fellowships in Virginia
     

For more articles on legacy planning, click here to subscribe to Legacy Arts Magazine.

Continue Reading

Trending