Governance Benchmarks Released

November 6th, 2015

Foundations exhibit great diversity in their board composition and missions, so it isn’t surprising that the internal structures and practices of boards are just as diverse. Phil Buchanan, President of the Center for Effective Philanthropy (CEP), observes that it is often difficult to find basic information on the practices of boards.

To attempt to fill this vacuum of information, CEP recently released a report on the practices of 64 U.S.-based private foundations making $10 million or more in grants annually. The “Benchmarking Foundation Governance” report itself only offers hard findings, with no effort to impress the efficacy of specific methods over others, in order to provide foundations and board members with a starting point for awareness and discussion.

The board composition section explores items such as voting, relationships to the original donor, and a diversity of expertise. The structure and practices section offers a cursory look at committee structure, compensation, orientation, discretionary grantmaking, the role of staff in grant approval, and term limits. The section on board meetings looks at distribution of board materials, agendas, and the number and duration of meetings. The final section examines board involvement across a range of areas from developing program strategies, to representing the foundation to the public and assessing the foundation’s social impact, to name a few.

In the blog post “Four Questions about the Data on Foundation Boards,” Buchanan asks boards to consider questions the informational data invokes around board perks (compensation and/or discretionary grant dollars), staff’s role in grantmaking (authority to approve grants), board self-assessments (how many boards do this) and how much time boards meet (whether it is enough).  Anne Wallestad, CEO of BoardSource, writes in “Who Cares About How Nonprofit Foundation Boards Govern Themselves? I Do, and You Should To” that the report is significant in its signaling of transparency, in providing opportunities for board reflection, and in showing where boards are leading and where they are not.  

This report provides many benchmarks against which a foundation board could examine its own practices and levels of board involvement. In doing so, boards should also reflect on which individualized practices, structures, and levels of involvement propel carrying out the mission of the foundation. It is with that intentionality boards can serve their intended purpose and have the greatest impact.

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