• Wealth Management

Sharpening Your Philanthropic Focus

How to magnify the impact of your philanthropic efforts by defining a clear mission and maintaining your focus, including advice on how to govern your family foundation to maintain alignment with your goals.

One of the predominant trends in philanthropy over the past 20 years has been the steadily increasing focus on accountability. Donors, particularly major donors, are placing ever-greater demands on nonprofits to clearly define their specific objectives and to quantify their progress with hard data.

When those philanthropists turn that same lens on their family foundations and other charitable vehicles, however, many find their own answers to be unacceptably vague. Even those families who set out with a clear direction often find that their grant-making has drifted away from their original intent. Others question what all of their giving has actually accomplished. As a result, many families are asking themselves very fundamental questions: “What is our goal, how do we know if we are succeeding, and how should we think about evolving as the next generation brings their own priorities to the table?”

According to Morgan Stanley's Head of Philanthropy Management, Melanie Schnoll Begun, these are the right questions to be asking and should become the basis for in-depth discussions about what you want to accomplish as a family. She suggests that these discussions should lead to the creation of a formal philanthropic mission statement, a document designed to guide future decisions about the kinds of philanthropic investments you want to make.

Defining Your Focus: How to Craft a Clear and Effective Mission Statement

Speaking at the recent Private Wealth Management Women’s Summit, Schnoll Begun reported that most of the mission statements she sees are lofty in their ambitions, but lack a clear focus. She recommends that mission-driven organizations need to identify the specific unmet need they hope to address and forcefully state their intent. She adds the following suggestions:

  • Use powerful verbs and precise language.  Jargon just gets in the way. Make your statement a call to action.

  • Be differentiating. Make it clear what sets you apart.

  • Keep it short. Ideally, your mission should be a single, declarative sentence. More than three sentences is almost always too long. 

  • Make it sound like you. When you finish writing your mission statement, read it out loud. If it doesn’t sound like something you would say, change it.

Keeping Your Focus: Best Practices in Family Foundation Governance

A clear, well-crafted mission statement can guide your foundation’s efforts. Effective governance is needed to make sure that you stay on track. This is a significant challenge for virtually every nonprofit organization, and particularly difficult for private foundations where complex family dynamics come into the mix. As family foundations evolve over the years and over generations, how do you keep the focus on the mission?

Schnoll Begun suggests that several questions are at the heart of this matter. The first is whether you structure your foundation to be perpetual or to “sunset” by distributing the foundation assets within your lifetime. While many prominent families view their foundation as a cornerstone of the legacy they wish to leave, a perpetual foundation also ensures that you will place your philanthropic mission in the hands of people you will never even meet. You need to consider the extent to which you are willing to let them redirect the work of your foundation to focus on issues that are more central to their lives’ missions.

The next is who should serve on your board. If you decide that only family members will serve, you need to determine whether children automatically take their place on the board when they reach adulthood, or should they have to prove that they have something valuable to contribute. Schnoll Begun suggests that family foundations should consider adding outside board members to serve as moderators for family discussions and bring distinct skill sets the family does not possess.

The third question is how to measure your performance as a board and the performance of any professional managers you have retained. It’s essential to establish transparent processes to set clear performance goals so hiring and firing decisions can be made objectively. It’s also important to set time aside to discuss whether the board is communicating effectively with each other and their senior staff, and to make sure that the decisions you are making remain true to your mission.

Serving as a Catalyst for Good

The most effective philanthropists have hearts of gold and wills of iron. Their generosity inspires them to improve the world around them, but they also understand that they can magnify their impact by sharpening their focus. Guided by a well-defined mission, these families can more effectively determine how to use their time, their connections and their financial resources to make the difference they want to make in the world.

For further insight, or to speak with a seasoned Morgan Stanley professional in philanthropy management, please consult your Financial Advisor or Private Wealth Advisor.