Step 1. Be Transparent to the Public 

Let people outside your foundation know what you do. For example, sharing the kind of programs you fund, and the nonprofits you award grants to, clearly makes life easier for grantseekers. We believe transparency correlates with excellence in foundations—the more open and accountable an organization is, the more responsive it is to criticism and vigilant it is about performance.

Step 2. Be Rigorous—But Remain Respectful of Your Applicants 

The IRS has specific requirements for grantmaking. Many foundations supplement them with practices to ensure fairness in their grantmaking. Unfortunately, foundations often end up requiring nonprofits to provide extensive information to fulfill these needs. We believe in due diligence, assessment, and grantee reporting, but we also believe there are ways to reduce the burden foundations place on nonprofits.

Step 3. Be Responsive to Your Constituents 

In addition to being transparent and accountable to the outside world, foundations must look to be responsive to their constituents, including staff and beneficiaries. Does your family foundation have staff? If so, what do they say about your mission, strategy, operations, and organizational culture? An employee perception survey can help you gather this information.

Read the full article about family philanthropy by Beth Suarez at National Center for Family Philanthropy

To read more by NCFP, check out their Family Philanthropy magazine on Giving Compass.