Passing the Torch: Succession Planning for Family Foundations

July 10, 2025

“What will happen to our family foundation when our parents, aunts and uncles don’t want to lead it anymore? I am not sure I know how to govern our family foundation.” “Can my children properly steward our family foundation to lead it well into the future? They’re not ready yet; they need a roadmap to prepare them for their leadership roles.” These are common questions and comments we hear from philanthropic families as they wonder about the evolution and effectiveness of their family foundations.

What happens when those leaders, whether family members or long-tenured staff, eventually step down? The answer lies in robust succession planning – a proactive and essential process often overlooked until it’s too late. At its heart, a family foundation is a dynamic entity, continually evolving to meet new challenges and opportunities. To ensure this evolution is smooth and effective, rather than disruptive, deliberate thought must be given to leadership transitions.

Two fundamental shifts are taking place right now that underscore the importance and urgency of proper succession planning in family philanthropy. Overall, there is a significant change underway between the Baby Boomer generation to Gen X and Millennials in leadership roles. Likewise, the Great Wealth Transfer pushes the need for thoughtful succession planning within families that answers questions around governing roles, decision making, stewardship and mission impact and investment strategies.

What is Succession Planning?

Simply put, succession planning is the strategic process of identifying and developing future leaders within an organization. For family foundations, this encompasses both the family members who might take on governance roles and the professional staff who manage grantmaking programs and community relationships; financials and operations; and board governance. It’s not just about filling an empty seat; it’s about preparing individuals to step into critical roles, ensuring a seamless transfer of family values and donor intent, know-how, relationships, and institutional memory.

When to do Succession Planning?

The short answer is: always. Succession planning isn’t a one-time event or a task to be checked off a list when a leader is about to depart. Instead, it should be an ongoing, integrated part of a foundation’s strategic planning and governance.

Here are key moments and principles for when to engage in succession planning:

From Day One (or as soon as possible): Ideally, succession planning should be a consideration from the very inception of the foundation, especially for family leadership. As the foundation grows and matures, it should become a regular agenda item for the board. Succession planning can be detailed in early governance documents from the beginning, articulating plans for potential dissolution if needed.
During Strategic Planning Cycles: Integrating succession planning discussions into a regular strategic planning process is an essential component of strategic planning. As you set long-term goals and consider the foundation’s future direction, also consider the leadership needed to achieve those goals.
When Leadership is Stable: Counterintuitively, the best time to plan for transitions is when there isn’t an immediate need. When current leaders are engaged and stable, there’s ample time to thoughtfully identify, mentor, and develop potential successors without the pressure of an imminent departure. This allows for a more comprehensive and less reactive approach.
With Any Significant Organizational Change: If your foundation is undergoing significant shifts in its mission, scale, or operational model, it’s an opportune time to re-evaluate leadership needs and identify if current or future leaders possess the necessary skills for the evolving landscape, this includes staff and family leaders.
As Part of Annual Board and Staff Reviews: Incorporate discussions about leadership development and potential future roles into annual performance reviews for staff and self-assessments for board members. This keeps the conversation alive and helps identify emerging talent.
Proactively, Before Expected Departures: If a long-serving family leader or executive director indicates an intention to retire in the next 3-5 years, this is a clear signal to activate or intensify your succession planning efforts. This lead time is crucial for effective knowledge transfer and onboarding.
In Response to Unexpected Departures (and as preparation for them): While proactive planning is key, unexpected departures can and do happen. Having a basic succession framework in place—even if not fully developed—allows the foundation to respond more effectively during a crisis, rather than scrambling from scratch. This reinforces the “always” aspect of ongoing readiness.

Think of succession planning not as a discrete project, but as a continuous muscle that your foundation builds and flexes. Regular attention to leadership development and transition readiness will ensure the foundation’s resilience, longevity and longterm effectiveness.

Why is Succession Planning Important for Family Foundations?

The reasons to prioritize succession planning are compelling:

Preserving the Foundation’s Mission, Vision, and Values and the Founder’s Donor Intent: Family foundations are often deeply rooted in the founders’ values and their vision for making an impact through their philanthropy. Thoughtful succession planning helps ensure that the incoming leadership understands, embraces, and continues to uphold these core principles, preventing mission drift.
Maintaining Family Harmony: It’s easy to underestimate the potential for conflict within family-run foundations. Without clear guidance and planning, disagreements about the foundation’s direction can easily lead to deep family divisions. Family foundation succession planning helps prevent this by clarifying the founder’s intentions and creating a structured process for making decisions and transitioning leadership. This clear structure is key to preserving family unity and ensuring the foundation’s mission moves forward without becoming a source of arguments.
Cultivating Leadership Talent within the Family: As current family leaders look down the family line and consider the needs of the family foundation long term, they should find ways to cultivate and engage future family leaders. It is never too early to start engaging the rising generation of family in the work of the foundation. It gives family members a way to demonstrate their interest, build leadership skills and get to know the issues the foundation is addressing.
Developing Future Staff Leaders: Succession planning isn’t just about who leaves; it’s about who stays and grows. It encourages the identification of talent, provides opportunities for mentorship and professional development, and fosters a culture of growth within the foundation.
Attracting and Retaining Talent (for Staff Leadership): Prospective staff members are more likely to be drawn to and remain with an organization that demonstrates a commitment to professional growth and clear pathways for advancement.
Ensuring Operational Continuity: Abrupt departures can create significant disruption, impacting grantmaking cycles, grantee relationships, and overall organizational effectiveness. A well-planned transition minimizes these risks, allowing the foundation to continue its important work without interruption.

How to Approach Succession Planning?

While the specifics will vary for each family foundation, here’s a general framework for effective succession planning:

Start Early and Be Proactive: Don’t wait until someone announces their retirement. Begin the conversation well in advance, ideally years before a potential transition.
Identify Key Roles: Determine which leadership positions, both family and staff, are critical to the foundation’s operations and mission.
Assess Current Talent: Evaluate the skills, experience, and potential of existing family members and staff. Identify individuals who could potentially step into leadership roles.
Develop and Mentor: Create individualized development plans for potential successors. This might include formal training, mentorship by current leaders, participation in relevant committees, or exposure to different aspects of the foundation’s work.
Document Critical Knowledge: Ensure that vital institutional knowledge, relationships, and processes are thoroughly documented and easily accessible. This is crucial for a smooth handoff.
Communicate Openly: Be transparent with all stakeholders – family members, staff, and potentially even key grantees – about the succession planning process.
Formalize the Plan: Create a written succession plan that outlines responsibilities, timelines, and contingencies.
Review and Update Regularly: Succession plans are not static documents. Review and update them periodically to reflect changes in leadership, strategy, and the external environment.

Key Elements of a Family Foundation Succession Plan

A successful family foundation succession plan is far more than just a document outlining who takes over which role. It’s a comprehensive, living strategy that ensures the longevity, impact, and family values of the philanthropic endeavor. Here are the key elements:

1. Clear Vision and Defined Objectives:

Articulated Legacy and Purpose: The plan must clearly define the founding family’s philanthropic vision, values, and long-term goals for the foundation. What impact does the family want to have? What principles guide their giving? This provides a compass for future generations.
Specific Goals for Succession: What does success look like for the transition? Is it about maintaining family control, bringing in external expertise, fostering the rising generation’s engagement, or a combination? Clear objectives help measure the plan’s effectiveness.

2. Identification and Development of Future Leaders (Both Family and Staff):

Talent Assessment: A systematic process to identify individuals within the family and existing staff who have the potential, interest, and capacity for leadership roles. This goes beyond just looking at the eldest child; it considers skills, passion, and commitment.
Robust Development Programs: This is crucial. It includes:
- Mentorship: Pairing potential successors with current leaders (family or non-family) for guidance, knowledge transfer, and relationship building.
- Education and Training: Providing formal learning opportunities in philanthropy, governance, finance, and specific programmatic areas. This could involve courses, workshops, or even degrees. National Center for Family Philanthropy offers conferences and webinars geared to rising generation leaders.
- Experiential Learning: Giving rising generation family members meaningful roles, such as serving on committees, participating in site visits, conducting research, or managing smaller grant portfolios. Some family foundations stand up a junior board or a “next gen” grants committee to practice governing together and to learn how to make grants effectively.
- Exposure to Peer Networks: Connecting future leaders with other philanthropists and foundation professionals to broaden their perspective and build their own networks.
Clear Pathways and Timelines: Defining the steps and approximate timelines for individuals to progress into leadership roles. This provides clarity and manages expectations.

3. Strong Governance Structure and Documentation:

Well-Defined Roles and Responsibilities: Clearly outlining the roles, responsibilities, and decision-making authority for all leadership positions, both current and future. This prevents confusion and conflict.
Formal Governance Policies: Establishing clear policies for board membership (e.g., term limits, eligibility criteria, family vs. non-family composition), officer roles, and committee structures.
Comprehensive Documentation: Ensuring all critical information – historical context, mission evolution, grantmaking strategies, operational procedures, key relationships, and financial details – is thoroughly documented and accessible. This prevents loss of institutional memory during transitions.
Legal and Financial Review: Engaging legal and financial advisors to ensure the succession plan aligns with the foundation’s legal structure, tax obligations, and estate planning considerations. This often involves reviewing wills, trusts, and other foundational documents.

4. Open and Transparent Communication:

Early and Ongoing Dialogue: Initiating conversations about succession early and making it a regular topic of discussion among family members and staff.
Transparency (as appropriate): While certain details may be confidential, being as transparent as possible about the process, criteria, and expectations helps build trust and minimizes rumors or resentment.
Conflict Resolution Mechanisms: Establishing clear processes for addressing potential conflicts or disagreements that may arise during the succession process, especially within family dynamics.

5. Flexibility and Regular Review:

Dynamic Document: Recognizing that a succession plan is not static. It should be reviewed and updated regularly (e.g., annually or every few years) to reflect changes in family circumstances, foundation strategy, external philanthropic trends, and individual development.
Contingency Planning: Including provisions for unexpected departures or changes in circumstances, ensuring the foundation can adapt quickly and effectively.

Evaluation and Feedback: Regularly assessing the effectiveness of the succession plan and gathering feedback from all involved parties to make necessary adjustments.

By meticulously addressing these key elements, a family foundation can create a robust succession plan that not only ensures smooth leadership transitions but also strengthens its capacity for enduring impact and preserves its unique philanthropic legacy for generations to come.

Common Pitfalls to Avoid

Even with the best intentions, certain challenges can derail succession efforts:

Procrastination: The biggest pitfall is simply not starting.
Lack of Communication: Secrecy or unclear communication can breed anxiety and mistrust.
Failing to Identify and Develop Talent: Assuming that a successor will simply “emerge” is a recipe for trouble.
Over-reliance on One Individual: Building a plan around a single potential successor limits flexibility.
Ignoring Family Dynamics: For family foundations, overlooking inter-family relationships and potential conflicts can be detrimental.
Insufficient Documentation: Critical information walking out the door with a departing leader is a major setback.

Outcomes of a Thorough Succession Planning Process

Investing the time and resources in succession planning yields significant dividends:

Greater Stability and Resilience: The foundation becomes better equipped to navigate leadership transitions, expected or unexpected.
Stronger Leadership Bench: A pipeline of well-prepared leaders ensures the ongoing vitality of the foundation.
Increased Organizational Effectiveness: Seamless transitions mean less disruption and more focus on mission-driven work.
Preserved Legacy and Impact: The foundation’s original vision and values are more likely to endure and continue to make a meaningful difference.
Greater Confidence and Trust: Stakeholders, including grantees and the broader community, will have greater confidence in the foundation’s long-term viability.

Succession planning isn’t just a good idea; it’s a strategic imperative for family foundations. By proactively addressing who will lead your foundation in the future, you are not only safeguarding your legacy but also ensuring that your philanthropic impact continues to grow and thrive for generations to come.

About Grant Philanthropic Advisors:
We’re an independent, Charleston-based firm helping clients to focus and maximize their philanthropy—in turn, strengthening the fabric of our communities. Founded in 2019, we help donors move from responsive patterns of giving by assisting clients to identify values and become more strategic in their philanthropy. Our goal is to help donors to become more effective as change-makers.

We work with foundations (large and small staff teams), donor advised fund holders, multi generational families, individuals, philanthropy supporting organizations and corporations to design philanthropic strategies. We work with philanthropies that grant $1 million to $40 million annually.

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