The Unique Challenges of Leading Family Foundations: What I Learned from Executive Directors
📷 credit: Direct Media
I recently facilitated a coaching group for family foundation executive directors, and their stories highlighted challenges that resonated from my own six years leading the Julian Grace Foundation (a limited lifespan, two-generation family foundation in Chicagoland). If you're in this role – or considering it – here's what you need to know.
The Isolation of Leadership
One of the most striking patterns was the profound isolation many executive directors experience. This is true for foundation and nonprofit leaders alike! Unlike other staff, executive directors (EDs) find themselves without internal peers. This structural reality creates a unique burden: making critical decisions without the benefit of collaborative input from colleagues at similar levels.
This isolation isn't just uncomfortable – it's detrimental to the quality of decisions. The best decisions come from collaboration, but when you're the only voice in the room with your perspective, decision fatigue becomes real, fast. While EDs have board members and sometimes staff, the nature of family foundations means that board members often lack operational experience, and staff members may not have the institutional perspective necessary for high-level strategic decisions. This isolation can lead to decision fatigue and the weight of carrying institutional knowledge alone.
You're Not Just Running a Foundation
While it may seem obvious that family foundations involve working with families, the reality of this dynamic is far more complex than many realize. Executive directors find themselves wearing multiple hats: philanthropic strategist, family therapist, and organizational diplomat. The boundaries between family dynamics and foundation business are often porous, requiring EDs to develop skills that extend far beyond traditional nonprofit management.One week, you might be mediating between siblings who fundamentally disagree about which causes to fund. The next, you're helping a founding generation understand why their adult children want to completely change the foundation's direction.
Board meetings can quickly become family meetings. Strategic planning sessions can feel like group therapy. And you're the one trying to keep everyone focused on the mission while navigating all of this emotional complexity.
The Challenge of Cohesive Strategy
Bringing families together to create a unified strategic direction represents one of the most demanding aspects of family foundation leadership. Traditional nonprofits recruit board members based on expertise and mission alignment. Family foundations? Your board is whoever happens to be born into or marry into the family.
This means you might have a board where one person is passionate about education, another about environmental issues, and a third about healthcare, and they're all equally convinced their priority should be the foundation's main focus.
Creating a unified strategic direction requires skills they don't teach in nonprofit management programs: family diplomacy, generational bridge-building, and the ability to help people see how their values can align with effective giving – all while trying to keep the community's actual needs at the center.
Generational Transitions: A Constant Undercurrent
Generational shifts present ongoing challenges that require constant attention and strategic planning. As founding generations age and next-generation family members assume greater roles, executive directors must navigate changing expectations, values, and approaches to philanthropy. What worked for the founder may not resonate with their children or grandchildren, who may have different perspectives on social issues, giving strategies, and governance structures.
These transitions aren't just about changing leadership; they're about evolving organizational culture, updating processes, and sometimes fundamentally reimagining the foundation's role and approach. Executive directors often serve as institutional memory during these transitions, helping to preserve important elements while enabling necessary changes.
When the World Needs Help Now, But Decisions Take Time
A particularly challenging dynamic that emerged from our coaching group was the disconnect between the urgency many EDs feel about current world events and their boards' capacity to respond quickly. Executive directors, who are often in direct contact with grantee partners and community organizations, hear firsthand about pressing needs and emerging crises. However, family foundation boards may operate on different timelines, with decision-making processes that don't always align with the rapid response needed for crises.
This disconnect creates stress for EDs who feel caught between their understanding of urgent community needs and their board's approach to decision-making. You're caught in the middle, feeling the weight of community needs while respecting your board's approach to careful philanthropy.
Strategies That Make a Difference
Despite all these challenges, the EDs I worked with found ways not just to survive, but to thrive. Here's what makes the biggest difference:
Find Your People: The isolation is real, but it doesn't have to be permanent. Other family foundation EDs get it in ways that nobody else can. Whether it's through formal networks, coffee meet-ups, or coaching groups, finding peer connections is essential, not optional. NCFP has a number of peer networks, for example.
If you have staff, consider shifting away from traditional hierarchy. Your team can become genuine partners in navigating these complex dynamics.
Master the Soft Skills: The interpersonal nature of family foundation work requires exceptional soft skills. Active listening, in particular, emerged as a critical competency. When family members feel truly heard and understood, they're more likely to engage constructively in foundation discussions. Other essential skills include conflict resolution, emotional intelligence, and the ability to facilitate difficult conversations with grace and neutrality.
I became a certified executive coach primarily because of the nature of the role and the need to develop these soft skills. That might not be the answer for everyone, but there are a few places to brush up on soft skills, from conflict resolution to behavioral science.
Get Crystal Clear on Your Role: Getting clear about the executive director's role and establishing reasonable expectations is essential for both effectiveness and sustainability. Have the awkward conversations upfront. What exactly is your job? What decisions are yours to make? Where does your authority end and the family dynamics begin?
Setting these boundaries isn't just about protecting yourself – it's about being maximally effective for the foundation and the communities you serve. My favorite boundary book is Set Boundaries, Find Peace by Nedra Glover Tawab.
The Bottom Line
Leading a family foundation is genuinely one of the most challenging roles in philanthropy. If you're doing this work, the struggles you face are real, complex, and shared by more people than you might realize.
The key is acknowledging that this work requires a unique skill set, ongoing support, and clear boundaries. You're not just running a foundation – you're stewarding family relationships, preserving legacies, and building bridges between generations, all while trying to center community needs and voices to invest in the crucial work happening in communities.
That's not easy work. But it's important work. And recognizing these challenges is the first step toward addressing them.
Alison facilitates a coaching group for family foundation executive directors and continues to work with family foundations on governance, strategy, and leadership development. If you’re interested in joining a future group or learning more, email her [email protected].