When your family foundation grows beyond a single administrator, you're hiring expertise you might not evaluate again for years—making hiring mistakes costly. Staff competence directly affects grant distribution, regulatory compliance, tax efficiency, and board relations, yet many foundation leaders don't know what credentials to verify. Here's what actually matters when building (or assessing) your foundation's team.
Start with Credentials That Match Foundation Size
A $5 million foundation has different needs than a $50 million one. For smaller family foundations, you want generalists who understand grant administration, IRS compliance (particularly Form 990-PF filing), and investment basics. Look for candidates with:
- CFP® or CPA credentials if managing investments or handling complex distributions
- Certified nonprofit professional (CNP) or grant administration certification for operations roles
- Juris Doctor with nonprofit experience if your foundation does donor-advised fund work or complex charitable structures
For larger foundations, specialization matters more. Executive directors should have 5+ years in foundation management or nonprofit leadership. Investment staff should have formal credentials in portfolio management or have worked directly with foundation assets (not just general wealth management).
Ask for resumes showing foundation-specific experience, not just nonprofit work. There's a real difference between running a $10 million budget at a health nonprofit and managing a foundation's endowment and grantmaking operations.
Verify Compliance and Regulatory Knowledge
This is non-negotiable. Your team must understand:
Form 990-PF requirements and deadlines. Foundation staff should know the difference between a 990-PF and a 990-N, filing deadlines (typically May 15th for tax year-end foundations), and common audit triggers. Ask them directly: what's the minimum investment return required? (Answer: 5% excise tax on net investment income if your foundation doesn't distribute enough.) If they hesitate, keep looking.
Grant approval documentation. Your foundation needs systems showing how grants were evaluated, approved, and documented for IRS records. Staff should explain your due diligence process without hedging. Can they describe your conflicts-of-interest policy? Your grantee vetting process?
State charitable registration. If your foundation operates across multiple states or makes grants to out-of-state nonprofits, staff should know which states require registration and which Form 990 schedules apply. This is tedious but legally required.
Request references who can confirm they've never had compliance issues under that person's tenure. One missed filing or poorly documented grant in five years is workable; patterns indicate a problem.
Evaluate Investment Management Alignment
If your foundation holds investments (and most do), your staff's investment philosophy matters enormously. This is about both competence and values fit.
Clarify whether your team has internal investment oversight or works with external advisors. For foundations under $20 million, external advisors are typical; your staff should understand the relationship deeply enough to spot conflicts or underperformance. For larger foundations, an in-house CIO or investment officer is common.
Ask directly: How has the foundation's endowment performed against benchmarks over the last three and five years? What's the investment policy statement, and when was it last reviewed? Someone who manages foundation investments should reference specific allocation decisions tied to your return requirements and payout obligations.
Request performance comparisons to peer foundations of similar size. Salary benchmarks for foundation investment staff typically range $80,000–$150,000+ depending on foundation size and location; don't assume higher salary equals better performance, but significantly underpaid investment staff often signal turnover risk.
Board Relations and Communication
Foundation staff serve the board and donors. Assess whether your candidate has demonstrated ability to educate boards and communicate with family members who aren't involved day-to-day.
Ask for samples of reports they've prepared—grant summaries, impact updates, financial statements, or board meeting materials. Can they explain complex topics (tax law, endowment performance, grantee evaluation) in plain language? A strong candidate shows evidence of presenting to boards, not just executing their own tasks.
References from board chairs or executive directors matter more than references from peers.
Frequently Asked Questions
Q: Should our foundation hire staff if we're only $3 million in assets? A: Typically, foundations under $5 million operate with part-time staff or external administrators; hiring full-time dedicated staff often doesn't make financial sense until you hit $10–15 million in assets or plan significant annual grantmaking.
Q: What's the red flag for grant administration experience? A: Anyone who can't clearly explain your foundation's grantee evaluation process or who describes approving grants without documentation. This creates audit risk and IRS liability.
Q: How do we compare staff recommendations from different providers? A: Request résumés, run background checks specific to nonprofit compliance history, conduct a test conversation about your foundation's specific situation, and always verify references from boards they've served.
Compare foundation management providers and staff expertise in one place on Mercoly to make staffing decisions confidently.