Who has the say in the foundation?

CENTER FOR PHILANTHROPY STUDIES (CEPS)

The direc­tor of an NPO recei­ves a rejec­tion from a grant-giving foun­da­tion. In her disap­point­ment, she calls the office. “Who is actually in charge at the foun­da­tion?” she asks. “I send out the e‑mails,” the clerk answers on the phone. “You could ask the programme manager!” 

“Oh, I really liked your project,” the programme mana­ger says in the next phone call. “But I only do the initial selec­tion. I will forward your request to the management.”

The direc­tor then recei­ves an e‑mail from the manage­ment: “Thank you for your message, but we only make decis­i­ons based on the requi­re­ments of the foun­da­tion board. The final decis­ion is made there.”

A week later, she acci­den­tally meets the presi­dent at a recep­tion. “You have to under­stand: the board of trus­tees can only make decis­i­ons in the inte­rests of the foun­der. He died ten years ago. We are preser­ving his legacy!”

In her dreams, the direc­tor meets the decea­sed foun­der. “My will!” he exclaims, “What the foun­da­tion is doing today goes far beyond that. But what can I do from up here?”

The direc­tor wakes up confu­sed. Appar­ently, a foun­da­tion can remain in a state of non-accoun­ta­bi­lity inde­fi­ni­tely! Endow­ment foun­da­ti­ons risk having their actors become spec­ta­tors, control­led by budgets and grant-making routi­nes. To prevent this, the board of trus­tees or the manage­ment must take respon­si­bi­lity for the stra­te­gic direc­tion. In this case, gover­nance requi­res a special commit­ment, as there is no exter­nal pres­sure. Active gover­nance along the lines of gover­nance prin­ci­ples provi­des an effec­tive foundation.

Ask your ques­ti­ons about Foun­da­tion Gover­nance to the digi­tal Swiss Foun­da­tion Code (free access) or visit our CAS in Nonpro­fit Gover­nance & Leader­ship.