The term “family foundation” is fairly common today, but it is rarely thought about in terms of what it means in contrast to other types of foundations – personal, corporate or institutional. No doubt there are many types of family foundations. This family has struggled to find and give meaning to the concept of family and recently engaged in a generational transfer which was complicated but interesting. We think that process may be helpful to others.
Family in this context means a group of relatives seeking to collaborate. Personal means what it says; it represents the interests primarily of one person. And, Institutional means professional managers acting for an independent board.
The Norman Foundation began as an act of testamentary generosity by Aaron E. Norman at the end of his seventy-six-year life of success and concern for people who lacked economic and/or political control over their lives.
Norman’s two children began with what amounted to two personal foundations, combined as one, through which they supported for about twenty years their quite different interests both with their own funds and the funds of the original foundation funded with Norman’s bequest.
By the 1950s Norman’s five grandchildren succeeded early in their lives – at twenty to thirty years old – to their parents’ responsibilities growing out of Norman’s bequest. That is the time when the Norman Foundation really began to be a “family” foundation. Each of those grandchildren, of whom this writer is one, had both personal interests and shared common interests particularly in the area of civil rights and liberties. To help distinguish and separate personal from general philanthropy that generation created in the 1960s, with starting contributions from the Norman Foundation, five new smaller foundations to enable and allow each member of that generation to pursue their personal interests independently and at the same time to preserve and build the core of the Norman Foundation on a collective family-wide basis.
Over the forty-plus years following the grandchildren’s (third generation) assumption of leadership their total of sixteen children (fourth generation) were brought onto the Norman Foundation Board as they became adults. That fourth generation now ranges in age from mid-thirties to early fifties.
Naturally, over time the collective, family-wide decision making process became much more cumbersome and complicated. There were naturally a lot of new agenda based on geography, education and dispersal of personal interests. And, there was, of course, a normal urge by the coming generation to become more actively involved. The third generation by chance, as it were, came “to power” very young. The fourth generation was destined to wait longer and be much older than the third generation by the time the older generation was gone. And, there were a lot more of them which made the process of acting together much more complicated.
As the new century was about to arrive the family had a major meeting to consider various ideas of how to manage the devolution of the family’s philanthropic assets in such a way as to:
- Enable the fourth generation to become more involved before the third generation died off;
- Preserve a substantial central core of fourth generation-wide involvement in the decision making process;
- Give the remaining third generation members an opportunity to deploy some of Norman’s assets according to their differing interests and wishes, as they began to focus more on their testamentary objectives, since by 2001 the four remaining members of the third generation were seventy years or older;
- Insure that the individuals (sixteen in all) of the fourth generation could have some flexibility to pursue their own personal interests in addition to being part of Norman’s collective goals.
That was a tall order to achieve in a fair and balanced way. It wasn’t easy but it was largely accomplished. And, it is now already showing signs of becoming effective.
What was done was as follows:
- On December 31, 1999 all of the third generation members stepped down from the Norman Foundation Board and all involvement in grant making activities;
- One third of Norman’s assets were transferred in equal shares to the five smaller foundations that had been created in the 1960s and have been and are the sub-family foundations of the five family groups in the third generation;
- The balance of Norman’s assets continue to be dedicated to an agenda being determined entirely by the fourth generation according to their rules and wishes. It appears they will retain a lot of the earlier Norman interests and surely will develop some new ones;
- To provide a sense of independence and democratic flexibility each member of the fourth generation has and will have an opportunity to pursue their own interests according to rules they are developing as they proceed.
Thus, this family foundation is seeking to extend and enhance the relevance of the true meaning of the word family in the context of how a foundation can work. In many ways a family foundation exists primarily to give expression to that family’s philanthropic interests. But, as those interests inevitably will be many and diverse, a process to make that expression work in a politically manageable and acceptable way had to be found. We hope and believe that what we have wrought will work for us. And, we hope that by explaining how and why we went about this process might be a little bit instructive and helpful to others as they may encounter similar challenges in the years and generations that lie ahead for the growing number of family foundations in the United States that we believe fill an important need in meeting our pluralistic society’s needs.