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8 Elements of Success in a Family Business Foundation

Success in a Family BusinessThe past few decades have seen an increase in people starting a family business foundation. However, you don’t see too many firms lasting beyond the first generation. As people give back to their community, families join forces to maximize their impact. However, that can mean that the firm quickly came together without a sturdy foundation.

You have many considerations, from family governance duties to planning future goals. Without proper continuity planning, you can’t guarantee success for your brand. Some firms carefully planned for years, while others appeared out of necessity. Below are eight ways that Positively People can offer success with family business consulting.

   1. Clearly Define Missions

Whether your family operates a private firm or a non-profit, define your mission. That will help guide which direction your organization should take.

Do you intend to manage resources and investments to secure your family’s legacy? Or are you a private firm that makes goods from generational recipes? Some foundations exist to provide a service in educational or healthcare institutions. Others hope to improve the natural beauty of their community.

    2. Chart Your Foundation’s Lifespan

While some organizations last for decades, others have much shorter lifespans. One reason comes down to successful planning, which includes the ending. Nothing lasts forever, but some people expect their company to exist indefinitely. Although possible, it isn’t always a goal your group will pursue.

Instead, focus on annual and long-term goals, as well as solutions. For example, if it exists to make wealth, what types of gifts will be employed? You should carefully weigh decisions against the vision of the family. Make sure both sides align for the same goals.

     3. Outline the Structures of the Foundation

While it may be tedious, you should clearly define roles and responsibilities, including outside members. An external accountant keeps the organization legal, especially regarding gift amounts.

How many family members, if any, will be involved in funding? Who determines factors such as eligibility and which new causes to champion? Other discussions include how integrated extended family is to the brand. Will the business stand as one organization, or does it need separate entities? You have a lot to consider, and you may need answers from outside of the family. 

    4. Define Your Board of Directors

Getting people on the board is the simple part, but what about future generations? How will you choose which directors stay and which ones retire? Which candidates serve from the family and which come from the outside are also important. Determining term limits and acceptable director expenses should be discussed as well.

You can never plan family business succession too soon into the company’s life. Doing so can help you chart long-term goals with explicit transition mechanisms. Not every company knows how to shift its focus toward the future. When in doubt, rely on our experts for family business succession planning.

   5. Plan for Family Involvement Opportunities

A board needs to balance the influence of the family without preventing new ideas. Planning for how many family members serve at once keeps transitions running much smoother. Not only should you focus on who will join, but how. Will there be only one director or a revolving door of them?

Some foundations allow for the spouse of the director to take over. With this plan, you have a surprising number of details to iron out first. You’ll need to decide which members control philanthropy efforts and which will stay profit-driven. 

   6. Should Your Firm Partner with Other Organizations?

Have you noticed how many of the same brands meet for the same causes? Charitable partners not only improve gift amounts but they also enhance your clout. Some companies seem wary of allowing outside organizations to help, but they don’t see the value in teaming up with other family foundations.

Such partnerships can mean doubling investments to critical recipients. Others may offer assets and resources you had not had access to before. Although privacy and tradition are important, so is maximizing your efforts. When your foundation can’t manage everything, consider working with others.

    7. Invest in Your Vision and Not Distractions

One engaging presentation can change the mindset of your directors. However, not every opportunity is one worth your firm pursuing. Goals need to align with the objectives that have already been set. Deviating from that path can lead to a long and expensive realignment campaign.

You should also ask whether operations will reinvest in the foundation. Syncing money back into the company can help achieve sustainable growth. Long-term funding efforts ensure better longevity for your family’s brand. 

   8. Bring the Family Together Through Philanthropy

One of the best ways to see a family bond is through shared philanthropy efforts. Those that volunteer together see better results than those serving individually. Similarly, developing an organization together can feel incredibly satisfying when working towards specific solutions. Whether you tackle health concerns, poverty, or eliminating litter, it helps to have a group.

Continued efforts can secure a legacy that inspires newer generations to continue it. These members may introduce more efficient processes or secure long-term success. No matter what your family’s calling might be, we’re confident in helping you achieve your goals. 

Help Your Family Foundation Succeed Today

Multigenerational foundations are rare, but you can improve your odds of survival. Careful planning today can prevent surprises from derailing your vision. No matter your interests or passions, our advisors can provide practical solutions. Wherever you need your brand to improve, we know how to get you there.

Even if you haven’t started a foundation before, we can assist. Our advisors will clearly explain the process, no matter your status. Give your family the best options while pursuing sustained growth. Choose Positively People for experienced advisors and contact us today. Learn more about Positively People services.