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Corporate Succession Planning

kathleensaycekathleensayce Posts: 16 ✭✭✭
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edited December 2022 in Crisis Response

Greetings all! We live in an earthquake/tsunami hazard zone on the south coast of Washington (state), and are updating our emergency planning for major events.

And looking at corporate succession plans--what if our community vanishes, most of us die, and all that is left is the CS database and cloud based records? Anyone tackled this combination yet?

I'd sure like to know what might be available to help us plan for bad, worse and worst.

Thanks,

Kathleen Sayce, Pacific Community Foundation

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    LaurelShulmanLaurelShulman Posts: 72 ✭✭✭
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    Great question! We've been thinking about this for our corporate fund too. Years ago we managed a corporate fund and the company was bought out and it was nearly impossible to find someone at the new company to direct grants. We don't have a cleary policy for this situation yet however our fund activity policy states that if a fund does not make a grant in 3+ years, we will make a grant in alignment with their charitable history. I.e. if the fund most often supports mental health causes, we would continue to support mental health with that fund. I suspect for corporate funds without a succession plan, we'd likely land in the same boat.

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    kathleensaycekathleensayce Posts: 16 ✭✭✭
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    We had already tackled the question of fund managers for individual funds by making the board the default decider if/when a business or family or community group lets go of the grantmaking decisions. It's in our DAF agreements. You can go back and add such a clause if the entity is still in existence.

    But we are now tackling a more serious issue--what happens if our community ceases to exist, the board is gone, and only the money and agreements survive.

    It is making us take a hard look at what the worst natural disasters may deliver to the Pacific Northwest region, and which locations are likely to emerge either intact or recover quickly, to help us decide where to have the residue of our foundation go.

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    LaurelShulmanLaurelShulman Posts: 72 ✭✭✭
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    Ahh got it, I misunderstood the question. Appreciate that clarification. I wonder if the Center for Disaster Philanthropy would have any recommendations for you.

    Best of luck!

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    kathleensaycekathleensayce Posts: 16 ✭✭✭
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    CDP is focused on named disasters and providing relief/recovery. Thanks for the reminder, however, I may see if they have any suggestions for organizations within said areas.

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    KentWeimerKentWeimer Posts: 121 ✭✭✭
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    Wow, what in interesting scenario you present. Let's hope you never have to face that @kathleensayce , but better to be prepared for the what if. I'll be intrigued to follow this to see what suggestions pop up.

    If your town and board are all gone, the legal entity of your organization still exists. it strikes me that your bylaws could be amended to have a procedure for having a successor board put in place. Perhaps in the case of such a natural disaster there might be another foundation that it would be logical to merge with.

    Assuming your town was gone, the purposes of a lot of your funds might also be gone.

    Our agreements have a variance clause that states we may modify the purposes of the gift if those purposes become obsolete, impractical or inconsistent with the mission. Lacking that, whatever successor organization came in to play, assuming you cease to exist would likely appeal a court for cy pres. The cy pres doctrine is a legal doctrine which allows a court to amend a legal document to enforce it "as near as possible" to the original intent of the instrument, in situations where it becomes impossible, impracticable, or illegal to enforce it under its original terms.

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    kathleensaycekathleensayce Posts: 16 ✭✭✭
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    edited August 2022

    Thanks for your comments, @KentWeimer. We are looking now at likely foundations nearby that will probably be damaged by the estimated worst case event, but whose communities will recover. Our intent is that this be a transition host until coastal communities rebuild--in whatever form that might take. Lots to think about!

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    KentWeimerKentWeimer Posts: 121 ✭✭✭
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    That is indeed a lot to think about @kathleensayce . Perhaps we should all be thinking along those lines.

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