The following is a conversation between Nick Tedesco, President and CEO of the National Center for Family Philanthropy, and Denver Frederick, the Host of The Business of Giving.
Denver: The National Center for Family Philanthropy, NCFP, is a source of knowledge and expertise that advocates for the value of family philanthropy. The organization has helped define this burgeoning field and is assisting donors to navigate a whole new set of realities that have arisen from the events of this past year. And here to discuss those with us, it’s a pleasure to have Nick Tedesco, the president and CEO of the National Center for Family Philanthropy.
Welcome to The Business of Giving, Nick!
Nick: Thank you, Denver. It’s a pleasure to be here.
We are truly predicated on the idea that through community, you can learn, and you can grow, and you can continue to reflect on your practice as an individual and a family that is pursuing a social impact strategy, and continue to move towards what you hope to see and, ultimately, what is going to serve community.
Denver: Your organization’s been around for almost a quarter of a century now. Tell us how it got started and a little bit about its history.
Nick: It’s my pleasure. And again, really excited to be in conversation with you today. So, the National Center for Family Philanthropy was founded in 1997 to provide resources and community for philanthropic families. And it was born out of a desire for peers to connect with one another, to learn, to grow together. There had been some resources and communities for philanthropies, but they were largely targeted for staff at that time, and the principals were coming together and asking for a place where they can have conversations amongst one another around the decisions that needed to be made to be able to direct the philanthropy.
Our aim is that philanthropic families gain greater clarity of purpose and achieve more meaning and impact in their giving. And we embrace a three-pronged strategy in the organization: elevate, activate, and equip. We elevate a conversation on effective family philanthropy, and the word “effective” there is really critical. We believe that it’s important for us to introduce the practices that will ultimately carry forward a family’s philanthropy for those outcomes that are going to be meaningful, intentional, impactful. In addition to elevating the conversation, we are equipping philanthropic families with the tools, the resources, and the community to be intentional. And then lastly, we activate a community of generous families through ongoing learning and continuity of community.
And so, in many ways, we are truly predicated on the idea that through community, you can learn, and you can grow, and you can continue to reflect on your practice as an individual and a family that is pursuing a social impact strategy, and continue to move towards what you hope to see and, ultimately, what is going to serve community.
Denver: That’s a great framework. Nick, how big is this marketplace? How many family philanthropies/foundations are there, and what’s a typical size?
Nick: There are thousands of family philanthropies, and the size ranges are equally as plentiful. There are multi-billion-dollar family philanthropies such as the Bill and Melinda Gates Foundation, and the Walton Family Foundation, the Surdna Foundation, and many others.
And there are, of course, families that are doing this work across the wealth spectrum, and the shape of that is also changing quite dramatically. Whereas historically, it used to be a private foundation structure, we’re now starting to see in much more plentiful numbers donor-advised funds, limited liability corporations, advocacy efforts. The shape of this is quite different from what we would have seen when the National Center for Family Philanthropy began in 1997.
Denver: You’ve been at this for a long time, not only in your current role but at the aforementioned Bill and Melinda Gates Foundation, at JP Morgan Chase, and in advising people. What have you found to be the biggest challenges, the biggest obstacles for families when it comes to their philanthropy?
Nick: So, this is the exact question that led me to NCFP, and I’m really glad that you asked that question, Denver. I’ll give you a little bit of a reflection on my career and what led me here, and then I’ll answer the question.
So 10 years ago, I was invited into the Bill and Melinda Gates Foundation to help build and launch The Giving Pledge Campaign and served on the launch team of the Pledge in 2010. And throughout my time at the Gates Foundation, I was privileged to be in conversation with many philanthropic individuals and families. And something really stood out to me that ultimately set me in the direction that led me here, which is: There was no shortage of intent to do good however you define doing good. But this bridge between intent and action was huge. The gulf was wide. And I kept asking myself: Why is there such a gulf? What is the barrier here that is preventing philanthropic individuals and families from realizing their interests and their aspirations?
And so, I left the Bill and Melinda Gates Foundation after about five years of working on the Pledge and went to JP Morgan’s Private Bank and their Philanthropy Center to serve as a philanthropic advisor, to get closer to the individuals and families themselves, and to test this hypothesis that there is a gulf between intent to action and that it didn’t just exist at the billionaire subset. And I was affirmed across thousands of relationships. I was affirmed that this is ubiquitous.
And the way that I talk about this is that almost every philanthropic individual and family would affirmatively state that there is more they feel they can do. They can do more. They can do it smarter. They can do it differently. And that’s not a commentary on all the brilliant work that they have been doing or that the sector has been doing, but it’s a commentary on what is possible. And so, I came here to really kind of address that at a neutral, independent, non-profit organization.
And to more directly answer your question, I think that there are a number of factors that are playing into this gulf that exists between intent to action. But I would say time, expertise, and confidence are three of them, and I would also add community to that, that would reinforce all three of them. And the idea that philanthropic individuals and families are busy with their professional, their personal lives, and it really takes time to do this work well. And I think that a lot of times, philanthropy tends to be something that is in parallel to other pursuits, and there is no forcing mechanism. There is no urgency, or at least perceived urgency, on the part of the philanthropist to put these dollars to work unless there’s a payout or a distribution.
And so, what happens here is because there isn’t the time that the individual or family can commit to learning about this and feeling confident enough in the knowledge and the content to build an approach that they feel ready to carry forward, they ultimately punt — punt to a donor-advised fund or punt to a strategy that they feel may not be fully representative of them.
And so, the interesting element here that I think is truly missing is: How do you provide community and continuity of learning that will ultimately provide that feedback loop, the connectivity, the ongoing learning that will give people the confidence, the exposure, the expertise to be able to do this? And also, in many ways, streamline that learning so you, as an individual or a family, don’t have to knock on the door of hundreds of people to learn about this, but you can enter into a community and learn across many different approaches and families to then feel confident, to feel equipped, to be able to do this work?
But that’s my vantage point, and I think that is what I see as some of the barriers.
Denver: That’s a good point. Every problem and challenge you encounter as a family foundation, someone else has faced before. So instead of reinventing the wheel, find out who faced it and what they can do.
And you’re right. Another gulf that I always see is how so many of these founders and family foundations made their money, and the staffing and the support and the structure they have in generating it. And then you take a look at their foundation, and it’s kind of this threadbare, bare bones, and it’s just such a separation.
Well, that’s where NCFP really comes in because your organization provides the resources and the services to help close this gulf. Give us a couple of examples of the things that you can do for a family foundation.
Nick: Absolutely. Happy to. And one other thing that I’ll note here is… something that I have been reflecting on is this need to demystify what it means to do this work and to do it well. And so, one of the tools that we are going to be introducing in the coming weeks is the Family Giving Life Cycle.
And the Family Giving Life Cycle is a framework that introduces the points of inflection, seven of them, that every family and individual encounters along a commitment to social impact. And it really starts with philanthropic purpose, the idea of motivations, values, priorities, and works its way through governance by way of decision-making frameworks, touches on social impact strategy, looks at succession legacy and next-generation engagement. But the idea here is that everyone, first and foremost, benefits from understanding the totality of an effort, but it’s based on a premise that there are many points of inflection in family philanthropy, moments to either embrace proven solutions and advance momentum, or to stall out due to uncertainty and lack of clarity.
And what I have seen in my practice is that at these points of inflection, these seven points of inflection, you either feel resourced to do this work well, or you end up stalling out. And so, that is the premise of the Family Giving Life Cycle…is: Let’s name those points of inflection. Let’s put some questions to the individuals and families that are going to be leveraging this tool. And then let’s elevate some practices that others have employed to be able to work through these points of inflection. So that’s one of the tools that we provide.
So, we also host a number of programs and services in addition to the Family Giving Life Cycle. So I would reinforce here that first and foremost, we’re a community, so we connect peers to one another to promote learning. And we’ll do that in larger group settings through our programs. We also do that one-on-one. But we also offer a number of programs from monthly webinars, to peer networks, to workshops, trainings, retreats, and a bi-annual conference. And we recently introduced a program learning and action networks that are rooted in curriculum that allow for deeper extended learning and engagement. And these networks are led by experts, and truly they are communities of practice.
And this came out of our recent strategic plan where we recognized the need for learning to be done at the sub-community level and aligned with like-interest by peers, and over a period of time, that takes the arc of learning from exposure to application. Because the challenge here is, for most individuals and families, you get a lot of exposure to ideas and opportunities, but you’re not provided the space to apply that and apply it alongside peers in an open, honest, and trusted space and community. And so, those are some of the ways that we are thinking about it and the ways that we help advance tools and solutions for families.
…there is an emerging generation of philanthropists… whether they are wealth inheritors or wealth creators… that are going to have incredible influence in the way that we think about social issues.
It really does begin with a conversation on the importance of philanthropy and what that ethos means to the family, and why you’re doing this work.
Denver: And that’s where the confidence comes from. It never comes from the learning. It usually comes from the application. And you see it, and you get that feedback loop, and you get a sense of confidence, and you learn along the way in a much deeper way.
Nick, we hear about this incredible transfer of wealth, which is occurring and it’s going to continue to occur. How large is the estimate of that transfer, and how should families be preparing for this?
Nick: So, the number is quite staggering. It’s about $60 trillion, although nobody really knows. But I think it signals something that’s really worth considering here, which is: We’re at a tremendous moment of shift for the independent sector, for the social sector, and for the world, more broadly speaking. But there is an emerging generation of philanthropists… whether they are wealth inheritors or wealth creators… that are going to have incredible influence in the way that we think about social issues. And so, as we look at this moment, we need to think about how we are preparing those individuals, those stewards to do this work well.
And so, what we talk about with our families is: How to start to, in multi-generational constructs, provide some opportunities for exposure to those wealth inheritors? How do we think about, at the highest level, introducing them to the purpose of philanthropy? The idea that philanthropy is in partnership with community, informed by community, proximate to community? That you as a family and individual are the vessel to be able to provide the resources to community and do that work?
But how do you bring the opportunity to engage the next generation into the family construct? And that can be through volunteerism; that can be at the earliest of ages through the save-spend-give jar and the concept that part of wealth is an obligation to give back, and really building that ethos from the very beginning. And then as you start to think about the arc of maturity, it really is: Where are there moments for engagement? Whether it’s coming alongside on a site visit, whether it’s volunteering your time, whether it’s tithing in your church, or whether it’s sitting around the dinner table and talking about how you’re doing acts of kindness and why that’s important in your day-to-day life, absent your wealth.
And then I would say as that generation comes of age, thinking about: What is their formal role in the family philanthropy? Is that on a junior board that will lead into the formal role of being a director? And what are the roles and the responsibilities and the expectations to do that work? But there’s many ways to think about this, and we offer a lot of resources on it. But the one thing I will say is that it really does begin with a conversation on the importance of philanthropy, and what that ethos means to the family, and why you’re doing this work.
Without that philosophy of looking across the totality of our assets, including our time and our voice, change is not going to happen.
Denver: And I think the overarching point that you’re making right there is you can never start early enough. Just begin as soon as you can begin. With these next-gen donors, maybe a little bit older than children, how much focus are you seeing on impact investing, program-related investments, and things of that sort, that perhaps their elders had not headed and not embraced as fully?
Nick: There is a really distinct correlation between the next generation, which, let’s name, is a bit of a loaded word. But those who are coming into the practice, there is quite a significant correlation between these new entrants of philanthropy and new tools, practices, and approaches. So, impact investing is one of them, but so is advocacy – the notion that there is a recognition amongst these newer entrants of philanthropy that existing tools and solutions are just one of the ways that we need to tackle these problems to create sustaining and enduring change is really important.
And what I would say is there is a distinct difference cross-generation when you look at the tools and approaches and the understanding of what is needed to be done. Not to say that the elder generations aren’t aware of the problems or applying really practical and innovative solutions, but I think that there’s an appetite amongst these newer entrants to test some new methods and new approaches beyond traditional grantmaking.
And I also think that there has been a shift cross-generations over the last year around recognizing the need to move towards systems change, leveraging market-based solutions, cross-sector partnerships. And there’s a lot of awareness here on the fact that, again, grantmaking alone is not going to actually get us to a place that is going to solve some of these long-standing systemic challenges.
And let’s talk about the fact that our systems are racist and biased. Grantmaking can only get you so far. You now need to think about other tools like advocacy. And certainly, impact investing is one of the tools that is being introduced by those new entrants, again, to amplify the work and the efforts, and also to think about this notion of aligning all capital for good and thinking about how we can leverage the heft of all assets to create a momentum of social change that is going to produce more meaningful outcomes for all. And without that philosophy of looking across the totality of our assets, including our time and our voice, change is not going to happen.
Denver: Speaking of impact, what do you think the impact of MacKenzie Scott’s extraordinary donations are going to have on the field of family philanthropy?
Nick: So, MacKenzie Scott’s been a really interesting example of what’s possible, and it’s just really incredible. I think MacKenzie, in many ways, dispelled some of the myths that have been holding certain families and individuals back.
She showed that it’s indeed possible to move money very quickly in response to extraordinary need. She showed that it’s possible to do that with very lean infrastructure and during a donor’s lifetime. She really showed that you can do this efficiently, and you can do it by directing dollars to organizations that are well-positioned to advance support, and you can do it at scale, which I do believe in many ways was and is a call to action for her peers and for philanthropists at all size and scale. She, in many ways, threw the gauntlet down and said, “What are we going to do about this moment and all that come after?”
Denver: And she trusted these institutions, and she didn’t have a lot of strings attached. And she gave them the resources they needed and knew that in 99.99% of the cases, they were going to make the very, very most of them.
Nick, when we hear the word “governance,” people often associate that with compliance and doing things by the book, doing things properly. But you also say that it is very closely linked to effective grantmaking. Tell us what you mean by that.
Nick: Absolutely. We believe that governance is the underpinning of effective philanthropy, and I’ll share a little bit of how we think about governance and, ultimately, why we believe that this is such an essential part of effective philanthropic efforts.
So, governance at its core is about decision-making. It is a decision-making framework. And so, it is universal, and it needs to be adapted for each individual and family. The way that we think about governance is that it seeks to answer two questions: the “who” and the “how.” Who makes the decisions now and in the future? And how are those decisions made? And governance, when done right, establishes structure; it adds intentionality, and it gives a family an opportunity to understand, again, how those decisions are going to be made and who makes those decisions.
So when we think about philanthropy, what is essential here in order to carry forward an effort that is going to have some meaningful result is to be organized in your effort and to be clear in your effort. And that starts with the framework that is going to guide the family.
Most individuals and families jump right into the act of grantmaking because it’s the fun work; that’s what’s exciting. I want to start giving the dollars away. And what I have found in my practice time and time again is that those who jump right into that work, who’s the vast majority of people, get frustrated at some point because they haven’t thought through the totality of that effort, and they’re coming up against ultimately what is guiding their decisions and the absence of a framework to be able to do that.
And so, what we have asserted is kind of a three-pronged framework to guide families on this. So, to build an effective governance strategy, we talk about the three ‘P’s: principles, policies, and practices. And when we think about breaking this down, we think about: What are those principles, the fundamental truths from which everything else derives in your effort? And then how do you apply those to policies, which are rules and guidelines, and practices, which are established procedures? And then how do you knit those together to be able to build a decision-making framework that is going to root your family in a place of clarity, and in an effort that is going to ultimately support any shifts or changes throughout the life cycle of your philanthropy?
I’ll also say here that this framework has been developed and pioneered by a wonderful woman, Patricia Angus out of Columbia University, and many others in partnership. And we have a resource guide on our website around effective governance that Patricia wrote for us that is worth taking a look at.
…this moment of shift that I think in many ways has opened up the eyes of families that racial equity and racial justice is not only the right thing to do, but is the essential thing to do to be able to advance meaningful change and society.
Equity and justice is not an issue to fund. It’s a lens by which you view all of your work and apply all of your work.
Denver: And it makes so much sense if you’re setting up a family foundation to do that at the outset because it’s very hard to do midstream, so you’ve got to be thinking about it when you begin.
How has the increased attention on racial disparities in America impacted family foundations? And are there steps, Nick, that family foundations can take to address the topics of diversity, equity, and inclusion?
Nick: Yes, yes, and yes. So this is a topic that I am quite excited about. So, in many ways, this past year has started a conversation that is long overdue, and I’m not the first nor the last to say that. But it has been really inspiring to hear from families of all shapes and sizes that they are in fact recognizing the need to put equity at the center of their work.
And this moment, which is really a series of moments over the last 12 plus months, has been, again, this moment of shift that I think in many ways has opened up the eyes of families that racial equity and racial justice is not only the right thing to do, but is the essential thing to do to be able to advance meaningful change and society. The idea that whether you are supporting the environment, or education, or health, that there needs to be a racial equity and racial justice lens that is built into all of the work.
And I think there are a couple of observations from the last year that are worth noting. I think that in many ways, the events of the last year, the racial justice movement, have taken these conversations from the sidelines or the corners of conferences into the mainstream and onto the main stage. And it has eliminated any excuse that families and individuals may have had prior to dismiss this, and has said “It’s now essential that you reflect on this and pivot in your actions.” And it has also elevated the fact that equity and justice is not an issue to fund. It’s a lens by which you view all of your work and apply all of your work. And so, that leads individuals and families to ask the question of: How? Well, if I intellectually know this, I see this, What does that mean for my work? And how can we start to have that conversation and shift our thinking and our actions around this?
So, there are a couple of things that are certainly practices that we hope families will start to adopt and advance. The first is, as you think about proximity– and this is the most critical issue, and there’s a number of ways to get proximate– but certainly thinking about the role of community directors– independent directors that go beyond the family that have a diversity of experience– that can bring a perspective that is indeed outside the family into the conversation, and also bring some accountability, and takes the effort out of the family itself.
Let’s say another is deeper relationships with grantee partners. The idea of trust-based philanthropy, the idea of listening practices, the idea of proximity – How can we, as philanthropists, ask the questions that need to be asked and do it with humility in a way that truly is with open ears, open eyes, and open hearts? And how can we establish relationships with grantee partners that are predicated on trust and come from a place of listening?
I would also say the idea of going back to basics: How are families reflecting on motivations, values, and philanthropic purpose? Asking: why are you doing this work? What does it actually mean to be a steward? What does it mean to be doing this work? Because let’s talk about the fact that you are, in fact, as a philanthropist, you are stewarding capital that is in the public trust. And what does that mean? It means that there is a conversation that needs to happen around: Who is helping to direct those dollars and how those dollars are directed? And for what purpose that goes beyond the family? And so, the question around how you do that is really critically important.
Denver: As you mentioned earlier, you took on this job about 14 months ago, and it’s been some kind of first year for you, Nick.
So, Nick, what would you say has been the toughest challenge or maybe the most difficult decision that you have had to make since the start of the pandemic? And how did you go about doing it?
Nick: It’s a brilliant question and a difficult one. The word “change” comes to mind. Change, change, change. There has been no shortage of change external to us, and internal within the organization over the last 12- to 14 months. So I would say a couple of things here.
One is that it’s been incredibly hard for me as a new leader to come into an organization, and in essence, two months later, go completely virtual while trying to build trust with my team, trying to reflect on our history as an organization, and initiate and lead a strategic planning process, both with our board of directors and our staff in a way that allows us to be in deep conversation with one another, and one that needs to be predicated on trust.
And so, I would say that the kind of internal change management, and trust-building, and dynamics of being remote have been challenging. I would also say there’ve been a number of hard conversations at the board level around how we as an organization must pivot to be in furtherance of family philanthropy and our community, both today and looking forward.
And there were some hard truths that we needed to acknowledge around who we’ve historically been and how we needed to pivot to more effectively serve our constituency.
Doing this work in community is absolutely necessary to do it well. This notion of spending time with one another, building relationships, hearing about practices, reflecting on missteps is essential to carry this work forward and to move through the roadblocks of doing this well.
Denver: Well, you have to have that recognition and you have to have the courage to face that past if they’re going to be able to move forward.
Final question. You just had a CEO leadership retreat, and I must say it was a Who’s Who of people who were there. Give us one of the key issues that came up at that retreat that really captured people’s attention, if we haven’t already discussed it.
Nick: No. I’m so glad that you asked. It was a great retreat, and I’m just so inspired by the community.
I would say there are a couple of things that I’ll note here. It really affirmed for me that families are reflecting on the changing circumstances of the world and the sector, and they are actively working to shift their practices and evolve with the circumstances.
And the other thing I’ll note here is that it affirmed that doing this work in community is absolutely necessary to do it well. This notion of spending time with one another, building relationships, hearing about practices, reflecting on missteps is essential to carry this work forward and to move through the roadblocks of doing this well.
And so, I was really struck by how much value the attendees received from just simply spending time with their peers across three days virtually, and again, their willingness to be able to make the shifts necessary to do this work well.
Denver: For listeners, who want to learn more about the National Center for Family Philanthropy, tell us about your website and what they can expect to find there. And also tell us about Family Philanthropy Speaks.
On the website, you will find a wealth of resources. And in fact, we are re-launching the website in the next couple of months.
Nick: Yes. Again, change, change, change.
But you will find our knowledge center, which has a lot of articles, resources, not just from us, but from around the sector, that really bring to life these issues across the Family Giving Life Cycle.
You will also see webinars and many other recordings and interviews. And to your point, one of those is our Family Philanthropy Speaks video blog series, where we talk to inspiring leaders in family philanthropy around a number of issues and approaches and pathways. And we’ve talked to people like Valerie Rockefeller, and Jeff and Tricia Raikes, and Vasser Sydell, and Edgar Villanueva, and many others. So we invite you all to go to the website and look at the Family Philanthropy Speaks video blog series.
Denver: And I’ve listened to a couple, and they’re absolutely fabulous. Well, thanks, Nick, for being here today. It was such a pleasure to have you on the program.
Nick: Well, it was such a pleasure, Denver. I really appreciate it. And thank you.
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