Navigating the challenges of founder charities

Founder Charities are distinguished by their founders' profound influence and philanthropy, often embodying the charity's mission and vision. However, as not many charities will survive to see their mission totally fulfilled, long term strategy is as necessary as founding enthusiasm. The strengths embodied by a founder can also present challenges, sometimes referred to using the concept of Founder Syndrome.

We explore these challenges and suggest strategies to navigate them effectively. We will also often use the term development phase to refer to challenges which often feature in a charity's launch stage, rather than founder syndrome, which tends to have negative connotations.

Understanding founder charities

At their core, founder charities are characterised by their entrepreneurial spirit and generosity: the founder's vision and personal commitment lay the foundation for the charity's objectives and approach during its development phase. This connection is a source of strength, though it also calls for a delicate balance to ensure the founder's enthusiasm complements rather than overshadows the charity's governance and strategic direction. The qualities and strengths that launch a charity are not the same as those needed to govern it and devise its long term strategy.

The challenges of the development phase

During the development phase, the strengths which a founder brings to the charity's work can also present challenges if a long term strategy is not created. Founder Syndrome issues can arise when the founder's central role becomes an obstacle to the charity's evolution and governance. Key danger signs include a concentration of decision-making powers, challenges in embracing leadership transitions, over-reliance on the founder for fundraising and profile building, and a trustee board that functions more as an audience for the founder than a governing body. We should recognise that these issues are not only present with some founders: a strong chair, CEO or other leader can equally present such challenges and this can happen at any time in a charity's life-cycle, not just in the development phase. This syndrome can stifle the organisation's flexibility and growth, leading to operational inefficiencies and, in severe cases, jeopardising its sustainability.

One effective solution to counterbalance Founder Syndrome is the introduction of a Protector role within the charity's governance framework. This role is designed to safeguard the charity's mission and governance integrity without delving into daily operations. Protectors ensure that the charity remains true to its founding principles while fostering a professional management approach. Nesta, one of the UK's major innovation charities, illustrates the successful implementation of the Protector role, showcasing how it can enhance governance without compromising the founder's visionary impact. Other cases, like the demise of Kids Company, serve as cautionary tales of allowing challenges to overcome a charity which is otherwise trying to do good work.

Another effective strategy can be to incorporate the role of patron within the charity. This role can be developed for a founder but can also be fulfilled by a successor. A patron is a concept which carries gravitas but is undefined and very open, so there is the opportunity to give respect and weight to a founder but also to craft a role description which steers away from risks of any negative issues. A patron is a role distinct from that of a trustee, so it offers a pathway for founders to continue contributing to the charity without impinging on governance. This approach allows founders to leverage their influence and network in a manner that supports the charity's goals without entangling them in operational governance issues.

Solutions for sustainable founder charities

Every charity has its own set of challenges and its own context. However, the following tend to be common themes of those which succeed in navigating the challenges of their development phase.

• Establish a clear governance framework: implementing robust governance practices, creating clear roles and responsibilities (including any role for a founder), term limits for trustees, and regular reviews of the board's effectiveness, can mitigate the risks associated with a charity's development phase. This governance framework supports a balance between honouring the founder's vision and ensuring the charity's adaptability and growth.
• Create a comprehensive succession plan: succession planning should be treated as a proactive strategy rather than a reactive solution. This should apply to trustees, the founder/patron, and senior leadership / executive team. The plan should involve identifying potential future leaders early and preparing them through mentoring and involvement in key decision-making processes. The plan should be flexible enough to adapt to changes within the charity and robust enough to ensure continuity in leadership. This foresight helps in minimizing disruptions and ensures the charity's longevity.
• Enrich the board with diversity: a diverse board brings a wealth of perspectives, experiences, and skills that can significantly enhance the charity's governance and strategic direction. This diversity goes beyond professional backgrounds to include demographic, cultural, geographical, and sectoral diversity, enriching the board's deliberations and decisions. This is important for the board selection process to prioritize independence and objectivity, ensuring that trustees can make decisions in the best interest of the charity, free from undue influence.
• Foster openness: encouraging open discussions about the charity's direction, challenges, and the founder's role should help align everybody's expectations. This openness should extend to the wider charity community, including beneficiaries, employees and volunteers, fostering a culture of transparency and inclusivity. Regularly scheduled forums for feedback and dialogue can help identify potential issues and solutions early, ensuring that the charity remains responsive to the needs of those it serves.

Founder charities embody the innovation and drive that fuel the UK's charity sector. By addressing the unique challenges often arising in the development phase through thoughtful governance structures and strategic planning, these charities can flourish.

The roles of protector or patron, alongside a commitment to diversity and transparency, will help provide a robust framework for balancing the founder's vision with the charity's evolving needs. Embracing these strategies ensures that founder charities can achieve their mission and amplify their impact, setting a precedent for resilience and adaptability in the sector.

For more information please contact Chris Knight in our Charities team on 01923 919 307, or complete the form below.