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Seven Principles of Leadership for Family Foundations
Ronald Austin Wells
With the creation of grantmaking foundations in the late nineteenth and early twentieth centuries, American philanthropy became increasingly formalized and institutionalized. As a result, leaders like Andrew Carnegie, Abraham Flexner, Julius Rosenwald, Frederick Keppel, John D. Rockefeller and his advisor Frederick T. Gates all wrote thoughtfully about the work of giving money for charitable and philanthropic purposes. Gates, the Baptist minister to whom Rockefeller senior turned to for advice and counsel, was the first to articulate a clear and objective basis for making decisions on grants with his elegant definition: the first "principle of scientific giving" is to put all requests for funds to "the test of disinterested inquiry and comparative merit."
Another thoughtful commentator who set out to define operating principles for foundation philanthropy was Anson Phelps Stokes, who was the guiding moral and intellectual force of the Phelps-Stokes Fund from its inception in 1911 until his retirement in 1946, when he wrote an important retrospective report. From 1924 to 1946 the Reverend Stokes served as president of the Fund, more or less concurrent with his service as Secretary (i.e., provost) of Yale University. A legacy from his aunt Caroline Phelps Stokes (who died in 1909), supplemented by later contributions from her sister Olivia Phelps Stokes, established the first family foundation in the United States.
The intent of the donor is clearly established in the charter for the foundation. Its key passage establishes a perpetual endowment "for the education of Negroes, both in Africa and the United States, North American Indians, and needy and deserving white students." Although the term "Negro" rings anachronistically, this is a remarkably progressive and egalitarian mandate and mission for a foundation in these nascent years of American foundation philanthropy.
Writing in the Fund's Thirty-Five Year Report (1946), Anson Phelps Stokes drew upon his experience of 35 years of foundation leadership to outline areas that he believed essential for trustees to consider when setting foundation policy. His tenure covers the years between 1911 and World War II, a time when institutionalized American foundation philanthropy was finding its metier. In this environment of extraordinary social change, Stokes was one of the more foresighted leaders in American philanthropy, consulting regularly with others like John D. Rockefeller, Jr., Julius Rosenwald, and Frederick Keppel of the Carnegie Corporation. Although his focus in this report is directed primarily at small foundations, trustees and officers of philanthropic organizations of all sizes and missions will find that these principles for organizational leadership remain timely and relevant even in the twenty-first century. Stokes's analysis certainly offers occasion for reflection, and perhaps an operating model for family foundations wishing to take the leadership in their own field.
Foreseeing accurately that the number of small foundations is "likely to continue to increase in the near future," Stokes proceeds to offer "some opinions as to … general policies" for foundations to consider in doing their work. These may be distilled into seven desiderata, or operating principles, for foundations: specialization; imagination (with discretion); stimulation and initiation; investigation and research; cooperation; publication; and trust.