What is a family council and when should a family consider establishing one?
By Patricia M. Angus – Originally published by National Center for Family Philanthropy, October 15, 2012
Many families with multiple branches may elect to set up a Family Council. While the particular roles and responsibilities of Family Councils vary across families, they typically function as an oversight committee that consists of a small group of family members elected or selected out of the larger family. For example, in a family with five branches totaling more than 100 members, the Family Council might include a representative of each branch, along with one or more members chosen by the group at large. In a small family, the Family Council might consist of all adult family members (with “adult” defined by the family itself).
Family Councils can serve an important role for a family when their philanthropy is sup- ported by a Family Office. The Family Council may be assigned responsibility for leading the process of discovering and articulating the family’s goals and the principles that guide the family’s work together. As an oversight body, the Family Council may work to ensure that the Family Office supports activities that enhance the positive development of individual family members, and can help ensure that family members do not become adversely dependent on family resources. On the philanthropy front, the Family Council can serve as a catalyst for an exploration of the family’s values and vision, which can then be implemented through the family’s philanthropy.
While the Family Office is tasked with the day-to-day responsibility of supporting the family’s needs, the Family Council has the privilege (and burden) of focusing on long-term objectives and the unique challenges of implementing the family’s mission and vision. In some families, members of the Family Council may also serve on the Board of Directors of the Family Office, which requires those individuals to carefully distinguish between the two roles. The Board of Directors serve in a legal capacity, with all that entails, while the Family Council is generally more akin to an advisory board. Ideally, the Family Council’s lack of legal authority should not diminish the Council’s potential for influence and impact in the family. For example, if the Family Council sees that there is a disconnect between the family’s philanthropy and the values of individual family members, or the family as a whole, it can initiate an exploration of whether and how greater alignment might be achieved.
In all cases, despite the unique characteristics of a particular family’s Family Council, it must function as a “live” entity comprised of family members who are actively engaged in guiding family activities in a way that is informed by—and responsive to—the larger family’s principles and goals.