The philanthropic sector has seen steady growth over the past decade, and while some new foundation boards may be made up of veteran philanthropists, I’ll wager that many of those entrusted are taking on the job for the first time. It’s a big responsibility, and many of the early choices made by a new board can determine whether the new foundation will move forward smoothly and effectively or become mired in a culture or in policies that stifle effectiveness. I was recently invited to speak with a new health legacy foundation board and shared with them 10 mistakes that new foundation boards often make, and how to avoid them.
1. Making the simple complex
We should all strive to make the complex simple, but too often in philanthropy we make the simple complex. It’s easy to assume that complexity is a means to ensure stewardship, or fairness, or inclusion. But what complexity often does is create chaos and frustration. For any foundation practice or process – from how you make grants to how staff prepare for a board meeting – ask yourself, “Is this approach really going to provide benefit for our operation? What is the simplest way we can accomplish our objectives?” Just because another foundation is doing something in a complex way doesn’t mean you have to. Let common sense be your guide and do what is most useful to you!
2. Managing instead of governing
Remember, the role of a board is governance: clarifying mission and vision, setting strategic direction, setting policy, and providing financial stewardship. Avoid the temptation to manage staff or micromanage your CEO or other staff leadership. On the flip side, do make sure your services, wisdom, or expertise are available when staff requests it. And also, recognize that there may be times when your board may need to roll up its sleeves and be a “working board” in addition to a “governing board."
3. Failing to manage and support the CEO
Although you have a governance role for the organization, the board – usually the board chair – does manage the CEO. Upholding your responsibility for managing the CEO can be a delicate dance; you want your CEO to bring her specific expertise and creativity to the job, but at the same time you want to feel confident that things are moving in the direction and pace you desire. Open and honest communication with the CEO is critical to maintaining that balance. You must be receptive to the CEO’s ideas and instincts and put measures in place to support his or her work within a framework that you both consider appropriate. Conducting annual evaluations, regularly scheduling “check ins” and providing professional development or networking opportunities are all ways to provide CEO support. And when you do provide assistance, and make it clear that asking for help is not an admission of failure or weakness. Of course, if you feel she is consistently not meeting your expectations, you need to take action.
4. Operating with a poverty mentality
In my opinion, one of the worst things a board can do is confuse thrift with stewardship, or mistake austerity for efficiency. Saving money is not the same as growing it. (If it were, we wouldn’t have the stock market.) A poverty mentality means not investing in your foundation’s own internal resources for growth and development, and consequently stunting the growth and abilities of your organization. Foundations with an abundance mentality understand that dollars and time invested in training, technology, creativity, capacity, relationship building, and professional development make their operations more efficient, intelligent, and effective for the communities they serve.
5. Misunderstanding fiduciary and legal obligations
It is the fiduciary responsibility of the board to ensure that the foundation follows the laws and regulations that govern private foundations. An experienced CEO may bring substantial knowledge about issues such as self-dealing, the 5% payout requirement, and conflicts of interest, but his knowledge is no substitution for your own. Penalties can be stiff, and problems can be complicated and expensive to resolve. Better to find seasoned, professional legal advisors to help your board fully understand its obligations and responsibilities. You can also learn a great deal from foundation membership associations, such as your regional association of grantmakers, Exponent Philanthropy, the Council on Foundations, or the National Center for Family Philanthropy.
6. Failing to learn
The opportunity to expand your knowledge doesn’t stop with what you have to know. Instead, consider all of the aspects of governance, visioning, planning, collaborating, and grantmaking that you could learn because you want to know. If your foundation focuses on a particular interest area, such as education or health or social justice, consider engaging in conferences, trainings, reading, conversations, and consultations with experts to increase your knowledge. In addition, recognize the value of reflecting and learning from your own experiences. When you try something new, debrief what worked, what didn’t, and what can be improved.
7. Misunderstanding the power dynamic
A very real power dynamic exists between a foundation and the nonprofit community it serves. For board members, that position of power means that people are inclined to be more deferential to your opinion, even if they disagree. As a board, you must be your own critical thought partner and examine ideas – especially your own – from every angle. Strive to create an environment where those who know more about your community needs and opportunities – namely, your grantees – feel absolutely safe and comfortable in sharing their honest and candid opinions and ideas with you. Be the first to admit when your board is unsure of an idea it has surfaced, when you feel you need someone else to be the expert, or when you’ve made a mistake. This type of humility and candor will help rebalance the power for change and collaboration in your community and move everyone further, faster.
8. Letting it go to your head
Arrogance, bossiness, or condescension on the part of a board member can have devastating effects on relationships between the foundation and nonprofits. Never make the mistake of assuming (or acting as if) the foundation’s assets are your money. Avoid the temptation to play favorites with the causes or organizations you believe in most passionately. And don’t ever invent hoops through which others need to jump to prove themselves worthy if your time or attention.
9. Failing to seek community input
No matter where your board comes from, there are always people in your community who will know a heck of a lot more about teen pregnancy, substance abuse, mental health, violence, arts education, or any topic than you will. There are also those who truly know what it means to live in a certain neighborhood, or attend a certain school, or spend time behind bars. Seek input from the people you are trying to help about what they experience, what they desire most, and what you might be able to do.
Gathering community feedback can be as simple as having informal conversations or as formal as hosting focus groups or task forces that include community members. Just make sure that you create an environment where they feel comfortable speaking frankly about their views, and be ready to follow up quickly in a meaningful way to let them know you appreciated their time and their willingness to share.
10. Failing to hold one another accountable
By design, a board is meant to ensure that the will of one does not outweigh the overall judgment of the group. However, politeness and decorum often prevent board members from addressing conflict in constructive ways. As a result, boards can become divided, schisms can disrupt the proceedings, and vision and goals can get seriously sidetracked. To avoid situations like these, create a policy for airing differences respectfully and thoughtfully, preferably as they arise and within the confines of a board meeting, so that feelings of distrust or resentment have no opportunity to grow. Agree at the outset that you will not always agree. Understand that you don’t have to be best friends, but you do have to work together as a cohesive unit.
A new foundation board – unlike corporate boards or government officials – has very little enforced accountability. Success or failure depends a great deal on how seriously board members take their role as a governing body and as a community asset and partner. It can seem intimidating, but with the right advice, training, and attitude, you can create a lasting legacy for the community you serve.
© 2016 Kris Putnam-Walkerly. All rights reserved. Permission granted to excerpt or reprint with attribution.