CONSULTING:
Creating Good Governance Policies
A family foundation based in New York came to Philanthropy Advisors with only a skeletal governing structure. It lacked two policies needed to help manage the philanthropic commitments of family members in the context of the Foundation: a conflict of interest policy and a duration of funding policy. Without these policies, each grant was a potential minefield for family dynamics, and continuous grant renewals threatened the Foundation’s goal to support innovative projects.
Conflict of Interest Policy
Many members of the several generations who served on the Foundation’s board were involved with nonprofits locally, nationally, and internationally, serving on boards or as volunteers. The family viewed this service as beneficial and informative to the Foundation’s work and as a training ground for participation in the work of the Foundation. Nonetheless, the relationships between individuals and particular nonprofits raised concerns about possible conflicts of interest when the family reviewed grant proposals from organizations with which its members were involved.
Philanthropy Advisors researched the kinds of policies employed by other foundations to address these issues. In close collaboration with the Foundation’s lawyer, staff crafted a conflict of interest policy that enabled the board to benefit from what it saw as valuable insights from family members involved with recipient organizations while also ensuring that this involvement did not unduly influence board decisions. Adoption of this policy helped the family successfully navigate the challenges of members continuing their active involvement in the nonprofit sector and serving on the Foundation board.
Duration of Funding Guidelines
The Foundation, like many, received far more proposals than it could fund. The board struggled with the question of how to maintain relationships with long-term grantees, recognizing the value of long-term funding to organizational effectiveness, while also supporting innovation and developing new relationships with other organizations working towards its goals.
Drawing on its experience advising other foundations, as well as discussions with other grantmakers, Philanthropy Advisors developed guidelines that set the presumptive duration of funding at a maximum of five years. At the five-year point, the board could determine to continue its support of a given organization, but only on a case-by-case basis. Adoption of this policy enabled the Foundation to maintain respectful and productive relationships with its grantees and diminished conflict within the family.
Conflict of Interest Policy
Many members of the several generations who served on the Foundation’s board were involved with nonprofits locally, nationally, and internationally, serving on boards or as volunteers. The family viewed this service as beneficial and informative to the Foundation’s work and as a training ground for participation in the work of the Foundation. Nonetheless, the relationships between individuals and particular nonprofits raised concerns about possible conflicts of interest when the family reviewed grant proposals from organizations with which its members were involved.
Philanthropy Advisors researched the kinds of policies employed by other foundations to address these issues. In close collaboration with the Foundation’s lawyer, staff crafted a conflict of interest policy that enabled the board to benefit from what it saw as valuable insights from family members involved with recipient organizations while also ensuring that this involvement did not unduly influence board decisions. Adoption of this policy helped the family successfully navigate the challenges of members continuing their active involvement in the nonprofit sector and serving on the Foundation board.
Duration of Funding Guidelines
The Foundation, like many, received far more proposals than it could fund. The board struggled with the question of how to maintain relationships with long-term grantees, recognizing the value of long-term funding to organizational effectiveness, while also supporting innovation and developing new relationships with other organizations working towards its goals.
Drawing on its experience advising other foundations, as well as discussions with other grantmakers, Philanthropy Advisors developed guidelines that set the presumptive duration of funding at a maximum of five years. At the five-year point, the board could determine to continue its support of a given organization, but only on a case-by-case basis. Adoption of this policy enabled the Foundation to maintain respectful and productive relationships with its grantees and diminished conflict within the family.
