Your governance structure determines who makes decisions, how these decisions are made, and how you and your board will act as stewards of your philanthropy’s assets. This structure also determines how those who do not serve on the board—family members, outside experts, nonprofit practitioners and the constituencies you serve—can play an important role in the life of the foundation. Clear policies regarding qualifications for board membership, board member job descriptions and nomination and removal procedures should govern family expectations and ensure that the board has access to the talent and resources it needs to succeed.
That’s why it’s so important not to under-invest in governance—the National Center’s Generations of Giving research project found that many philanthropic families make this mistake. Whether due to an intense focus on grantmaking or a desire to keep perceived “overhead” costs low, families often neglect governance issues to the detriment of their effectiveness. Whether choosing board members or training future trustees, be sure to spend sufficient time thinking about your options for effective governance structures. NCFP Senior Fellow Alice Buhl recommends creating a governance committee to monitor the structure, leadership and practice of your foundation that is similar to the one used to monitor investments.