Next weekend, more than 200 people representing family foundations, family businesses, and other philanthropic investors from Austin and beyond will gather to talk about how they can be more strategic in their grantmaking and collaborations.
Organized by a local family foundation, the Intergen Philanthropy Summit is the first gathering of its kind in Central Texas to target the next generation of family foundation leaders whose ambitions for giving often outsize their knowledge of how to do so.
When it comes to running a family foundation, “there’s a lack of education and preparation of the next generation,” said Chelsea Toler-Hoffmann, president of the Keep Families Giving Foundation, which is producing the summit. “If they’re not doing the work to understand how to give effectively, how their family has given traditionally, or how to manage their investment, that’s a huge problem.”
According to the 2018 Giving USA report, family foundations make up about 18 percent of all charitable giving in the United States. Typically, family foundations, like the Topfer Family Foundation or Webber Family Foundation in Austin, are funded by donations from a single family, and that foundation in turn makes charitable grants to nonprofits that address the causes family members care about. But because family foundations mix philanthropic giving with family dynamics, the results are not always effective.
“The most common issue I see family foundations grapple with is how to effectively approach engaging their next gen in creating a philanthropic legacy,” said Erica V. Ekwurzel of CivicAIM, a philanthropic advisory company. “There can be false assumptions such as thinking the next gen has a firm understanding of their family’s giving history, or that the next generation will want to approach giving exactly like the previous generations did.”
For the nonprofit sector, which relies on family foundation funding, the stakes are high. A much-cited study by Accenture in 2015 reported that over the next 30 to 40 years, there will be a transfer of wealth from Baby Boomers to their heirs of more than $30 trillion in assets. Toler-Hoffmann believes it’s critical that the next generation of family foundation leaders understands their role and how to get it right.
The usual approach to bridge this gap has been to educate the older generation on how to communicate their values to the younger generation. But Toler-Hoffmann says that’s only part of the solution. With the summit, she and her team of advisers will invite the older generation of mentors and the younger generation to share their knowledge with each other. And summit participants will also identify ways to collaborate and hear from speakers on topics such as impact investing and technology in philanthropy.
Toler-Hoffmann says using her recently inherited family foundation as a tool for preparing other new foundation leaders is “disruptive.” “We wanted to not only operate as a foundation, but also help other family foundations be sustainable as a whole.”
In her experience advising families, Ekwurzel says the next generation’s approach can be healthy for philanthropy. “I honestly believe this presents an opportunity for philanthropy,” she said. “The world is changing and so are the means to create positive change.”
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