A Family’s Guide to Board Evaluations

A recent Council on Foundations’ survey—from the twelfth edition of Foundation Governing Boards and Administrative Expenses in Private Foundations—found that of the 144 family foundation trustees polled about activities related to their board service, only 21—14.6%—reported participating in board self-assessments in 2004. By comparison, 74.6% of those surveyed reported attending conferences or seminars to increase their capacity as board members, and 75% made program-related site visits as part of their board duties. Certainly, the effectiveness of a family foundation’s board is inextricably linked to the success of the philanthropy as a whole. Why, then, do so few families undertake self-assessments?

Families become philanthropic in hopes of making positive changes in their communities, carefully choosing to invest in only those charities that they feel will have the greatest impact. Before giving a grant or writing a check, families do their homework—reading proposals, making site visits, and seeking references from current funders—to ensure that their money will be well-spent and will make a difference. No philanthropist wants to invest in a project he or she knows will have limited effect due to internal conflict or an unclear understanding of its purpose. Using the same rationale, why would family philanthropists forgo the opportunity to review their own practices and seek ways to improve their work and maximize their capacity for change?

Families sometimes fear that turning an objective eye on the activities of the board or board members will cause conflict or discourage family members from participating in their philanthropy. If your foundation or fund is small, still predominantly family-run, or strives to retain an intimate “kitchen table” atmosphere, you may also feel that having a formalized evaluation process is unnecessary or will clash with your family culture. Viewing board evaluation as a punitive process, in which individuals are scrutinized by their peers, can create an atmosphere of unnecessary apprehension, trepidation, or tension. However, evaluating board performance is an important component in maximizing your capacity to create change in your community, and it is important to regard these measures as a positive and integral part of a family’s philanthropy.

Consider board evaluation as you would a site visit to any organization you would think of funding. You certainly don’t go on a site visit looking for, or hoping to find, flaws in a project that has caught your interest, but you do keep your eyes and ears open. You are optimistic about the charity’s potential, but are mindful in your observation of areas of concern. Approach the board evaluation process in the same way: be as open and aware of what your board does well as you are of those areas in which you could improve. Below you’ll find some questions that may help you think about your board’s performance, and discover how to make your philanthropy run more smoothly.

Do You Have Established Guidelines or Expectations for Board Participation?

Before you can evaluate how well your board fulfills its duties, you will need to share a common understanding of those duties. Whether you choose to commit these guidelines to paper, or simply have a roundtable discussion during which members of your board discuss how they see their roles in the philanthropy and come to a consensus about rules and expectations, these guidelines can help. They might include information or discussions about:

• requirements for board service
• board meeting preparation requirements
• board meeting attendance policies
• assignment of grantmaking duties
• expected outcomes of your grantmaking

You may consider drafting a more formalized board member or trustee position description, which will help not only your current board to understand its responsibilities, but future generations as well. A set of written guidelines can help insure some measure of continuity and can serve as a benchmark among different iterations of your board. Guidelines needn’t be restrictive or limiting and can also be used as a starting point for future generations of your family as they define what board service means to them.

Is Your Board Mission-Minded?

Because many of the decisions that are made by your board are governed by, or at the very least influenced by the organization’s mission, it is important that your philanthropy’s mission be clearly understood by its board. If disagreements regarding your mission arise, encourage open conversation about differences of opinion. A strong desire to avoid open discussion of topics of disagreement or fear of perceived conflict could result in a lot of wrangling and indirect communication that could hamper the board’s work.

Chances are your mission is already outlined somewhere, either within your foundation’s by-laws, in a family legacy statement, or somewhere in your family’s collective memory. However, taking the time to discuss mission and how it affects your family’s giving process can be a great way to get board members excited and invested in their work as trustees. Each member of your board probably has a slightly different vision of your philanthropy’s mission and their role in it.

For family foundations, more so than with any other type independent foundation, the ability of their philanthropy to fulfill its founding purpose, legacy, or mission, is intricately tied to its sense of its effectiveness. By being ever mindful of your mission, you create a sense of shared commitment, and you increase the likelihood that your board will work efficiently and that your board members will feel proud of and gratified by their work. Proud and gratified participating family members make for great advocates and recruiters, who can help ensure continued philanthropic engagement in their own as well as future generations.

Do You Ignore the Nitty-Gritty?

It’s true: certain facets of board service are more exciting, more challenging, and more interesting than others. In evaluating your board’s performance consider how well-educated you are as a group regarding your fiscal and legal responsibilities.

In order for your board to work effectively and efficiently, members of your board need to be aware of the fiduciary and legal responsibilities as nonprofit trustees. For example, become familiar with your foundation’s tax return. Don’t assume that a trusted advisor or another board member has the situation under control; even well-intentioned boards have been known to run afoul of the IRS because they entrusted these matters solely to one person. Also, make sure your board members understand the legal rules surrounding foundation management and fiscal oversight, such as those related to disqualified persons, payout requirements, and organizational income restrictions.

While this may seem like an overwhelming amount of information to gather and absorb, you can begin educating your board by doing a few simple things. First try establishing a simple orientation program for new trustees, or having future trustees attend a few board meetings before becoming full-fledged members. Additionally, by encouraging trustees to attend external seminars, conferences, and workshops regarding the principles of philanthropic leadership, you can ensure that your trustees not only have a basic understanding of their responsibilities, but also have the opportunity to network with others in the field.

How Open Are Your Avenues of Communication?

As a part of the National Center’s Pursuit of Excellence program, which helps family foundations to assess the effectiveness of their philanthropy, we have developed a questionnaire to help families think strategically about the practices of their philanthropies. A significant portion of the questionnaire is concerned with how well families—and specifically those on the board of trustees—communicate. A key component to the success of any board, and therefore any philanthropy, is the extent to which members feel committed to its work. Board members who feel like they have a voice, and their thoughts and ideas are heard and appreciated, if not always adopted, feel invested in the philanthropy’s success.

Consider carefully how your board communicates, and how the modes of communication affect the way you conducted your charitable business.

• Do members of your board feel that their communication is working?
• Are you communicating or simply talking at one another?
• If necessary, how can you encourage fair and open exchanges between board members?
• If your discussions are hampered by personality conflicts, emotional baggage, or “ancient history,” could drawing up guidelines for communication be helpful?

If you are interested in learning more about these and other assessment criteria from the Pursuit of Excellence family foundation evaluation program. Please email Research Associate Kevin Laskowski. We are currently assembling the POE “class” of 2007, and are soon to embark of an important information-gathering project related to family foundation governance and effectiveness.

More Information on Board Assessments

FP Online users—including our Partner Subscribers, their community members, and eligibleFriends of the Family—can find many useful sample policies, trustee job descriptions, and tips on planning trustee education events by searching by category under Advisory Boards and Governance.

Among the content, you’ll find:

• Bringing Personal Accountability on Board from Foundation News & Commentary.
• Board of Trustees Charter, Position Descriptions, and Code of Ethics, courtesy of the Homer A. and Mildred S. Scott Foundation.
• Family Governance: A Primer for Philanthropic Families, by Patricia Angus from our Passages series.
• An Introduction to Trustee Education for Family Foundations by Katherine Tyler Scott from Living the Legacy.