 New
analyses of 46 interviews conducted as part of CEP's Foundation
Governance Project suggest that CEOs struggle with how best to engage
their boards in strategy development. They seek board involvement
but fear that trustees lack the programmatic knowledge to contribute.
Trustees, for their part, want to get their "hands and feet
wet" so they can heighten their understanding and ability to
add to strategy discussions, but they are concerned about blurring
the boundaries between staff and trustee roles – and about
the time involved.
New Analyses Shed New Light on Beyond Compliance
Findings
This qualitative research effort follows on a quantitative
analysis of survey responses from 550 trustees of 53 foundations,
and all of the CEOs of those foundations, described in the 2005
report Beyond
Compliance: The Trustee Viewpoint on Effective Foundation Governance.
That report, based on the largest-scale research ever conducted
regarding private and community foundation boards, revealed that
the two strongest predictors of board member perceptions of board
effectiveness are appropriate mix of trustee capabilities and utilization
of those skills – a composite based on three questions in
CEP's trustee survey, including one on clarity of the trustee role;
and engagement in strategy development and impact assessment –
also a composite based on three highly correlated questions in the
survey.
The latest qualitative analyses shed new light
on the findings discussed in Beyond Compliance and, in
particular, the relationship between definition of the board role
and engagement in strategy development. Our analyses suggest that
CEOs want trustees to be more involved in what one describes as
"big picture" thinking – but they want that thinking
to be informed by field-based experiential knowledge. As one CEO
put it:
"What's hard is… figuring out how we're
going to serve a bunch of different communities and how we're going
to build ourselves an organization. And I'm not sure that they [trustees]
have skills that specifically meet that need. I'm sure they've got
experience in components that would be helpful. I don't find my
board all that interested in it. I think they're interested in the
big picture of it but not the blood and guts of doing it."
Another CEO finds it can be difficult to convince
trustees that more "ground-level" work would be beneficial:
"We're still struggling to find ways in which
our board would feel it useful to be involved in site visits or
actual interface with the foundation's work."
Trustees Seek Deeper Understandings
But trustees say they do want more experiential
understanding of grantees and the programs their foundations support.
Several expressed a desire to participate in more site visits, sit
on program committees, and get to "know grantees better."
They are interested, they say, not to be more involved in operational
activities of the foundation, but rather to be better able to make
the kind of connections between the "macro and micro levels"
that will allow them to contribute more fully to strategy discussions.
Trustees want to understand the impact of the work they fund as
well as the larger challenges, including relevant policy debates.
Said one trustee:
"You know, certainly if you had more time,
you would like to get… your hands and feet wet in these different
projects, and … see how it's really working…."
Another trustee put it this way:
"There is the macro
and the micro level of involvement, and I think we struggle with
how to balance that. … I guess as one person I would like
to see the board get stronger in its being able to connect those
two."
These findings speak to the "hands on –
noses out" challenge that trustees often face when they try
to be actively and responsibly involved in the work of the board
but not get too close to the work of the foundation staff. Conventional
wisdom suggests that clear lines should be drawn between board and
staff roles, but both CEOs and trustees are frustrated by strategy
discussions that are not rooted in experiential knowledge. The challenge
comes in finding the right balance. One trustee described the balance
between staff and trustees as "always a moving line."
"You want to empower the staff so they can
be partners with you. At the same time, the staff may be narrowly
focused on one program area, whereas the board has to be much more
general or, you know, at 30,000 feet. There's a little tension between
board and staff when the board doesn't see some programs as important
as that individual staff member."
While CEOs do not want trustees "meddling"
in the operations of the foundation, they do value the knowledge
and expertise they bring to the table and want to use their expertise
in the development of foundation strategy. However, given that boards
meet infrequently – and that when they do meet they are often
narrowly focused on grantmaking – it can be very difficult
to engage trustees in strategy conversations effectively. One CEO
had this to say about the dilemma:
"I mean, the intelligence quotient is very
high. The capacity to connect ideas at high speed is generally very
high. And so the capacity to learn is there, but the time and the
desire to learn about everything that the staff is engaged in...
there is the rub."
CEOs and Staff Can Sometimes Undermine
Board Involvement in Strategy
 Sometimes
CEOs and staff interfere with their own efforts to better and more
fully engage their trustees by overmanaging their boards, or by
filling the
agenda with less important items, precluding deeper
strategy discussions.
- Most CEOs and trustees describe strategy development as a process
driven by the staff and reacted to by the board. This positions
the trustees not as "generators" of strategy, but as
"responders." This can limit the utilization of trustees'
capacity and expertise. It can also circumscribe board discussions
in ways that limit board understanding of strategic issues.
- Many CEOs and staff continue to structure the board agenda
such that individual grant discussions dominate, sometimes to the
exclusion of larger strategy discussions about how the individual
grant decisions fit together into a coherent whole. As one CEO put
it:
"Well, I think we've got to get more strategic…. We
have very, very complete board materials in advance, but they're
grant by grant by grant, and…there's a fair amount of discussion
about most grants. So I think, if anything, we've [gone] a little
bit overboard on getting into the individual grants at the board
level, but we probably have not been strategic enough."
New Questions
This analysis of the CEO and trustee interviews
raises new questions about how best to define roles so trustees
gain the knowledge necessary to be significant contributors to strategy
development. How can this be achieved in a way that is not too burdensome
or time consuming for trustees? How should trustees and staff define
their roles in ways that are respectful of the appropriate differences
– but not so rigid as to marginalize trustees or leave them
as mere "responders" to staff recommendations? What is
distinct about boards in which trustees and CEOs are more satisfied
with the trustee role in strategy development?
CEP plans to continue to explore these and other
questions and release a new report on foundation governance in 2007.
To download a pdf of this article, click
here. For more information on CEP's Foundation Governance Project,
contact Associate Director Lisa
R. Jackson, PhD.
 The
media turned to CEP as a source for data and insight in the wake
of the announcement of Warren Buffett's historic gift to the Bill
& Melinda Gates Foundation this summer. CEP was cited in newspaper
articles in the Wall Street Journal and Canada's Globe
and Mail.
In an appearance on PBS's Nightly Business
Report and in comments printed in the Chronicle of Philanthropy,
CEP Executive Director Phil Buchanan noted three significant challenges
facing the Gates Foundation in the wake of the Buffett announcement.
(The Gates Foundation, it should be noted, provides grant support
to CEP.)
"The first is maintaining
focus," said Buchanan in the Chronicle. "The
Gates Foundation will face enormous pressure to broaden its scope
… [but] the risk is that as resources become diffused across
more issues, the ability to really move the needle on any one challenge
is reduced."
The second challenge is "the difficulty of
assessing performance in the short term." Noting that Buffett
and Gates come from environments in which performance measures are
readily available, Buchanan pointed out that the "challenge
of assessing foundation performance is a much more complicated and
difficult one [than in business]. … Foundations need to put
in place indicators that are connected to their end goals but more
easily assessed on a short-term basis."
Finally, Buchanan noted a third challenge of "avoiding
creating a cumbersome bureaucracy that can't react to a changing
environment, doesn't listen to its grantees or other key stakeholders,
or becomes isolated, arrogant, or complacent."
He suggested that these challenges are "in
many ways the same ones facing all the country's large foundations.
But for Gates, the stakes are especially high, the opportunity for
impact particularly large, and the spotlight unusually intense.
We should all hope the Foundation succeeds."
To read the full text of Buchanan's comments in
the Chronicle, or a transcript of his appearance on PBS,
click here.
 Research
analysts are the engine of CEP's data collection and analysis activities.
As a result, CEP takes recruitment of research
analysts very seriously, typically screening more than 100 candidates
for a single analyst position.
Who are the research analysts of CEP? The six current
research analysts include two graduates each from three institutions:
Dartmouth College; Stanford University; and UC Berkeley. Most were
hired straight out of their undergraduate institutions, but one
spent two years before joining CEP at Investor Group Services, a
Boston-based market-diligence consulting firm serving private equity
investors and corporate clients.
Research analysts each work on assessment tool
reports for individual clients, while also contributing to CEP's
research studies. All analysts participate in intensive training,
including sessions on statistical methods conducted by Ellie Buteau
PhD, CEP's Senior Research Officer, and sessions on presentation
creation and delivery. Research analysts report to CEP's associate
directors.
Successful experienced analysts take on increasing
responsibility in the execution and delivery of assessment tools
and research projects. For example, Senior Research Analyst Romero
Hayman manages CEP foundation board survey processes and Senior
Research Analyst John Davidson, who started as an intern at CEP
three years ago, now manages all internal processes associated with
CEP's grantee surveys.
"I'm motivated by our work with foundations
and the positive changes they make as a result, and I'm inspired
by my dedicated and thoughtful colleagues," said Davidson.
In addition to Davidson and Hayman, CEP's research
analysts are Kelly Chang, Greg Laughlin, Ivana Park, and Ron Ragin.
 John
D. and Catherine T. MacArthur Foundation President Jonathan Fanton
and Spelman College President Beverly Tatum are among the latest
speakers confirmed for CEP's March 8-9, 2007, conference in Chicago.
The theme of the conference is Assessment to Action: Creating
Change.
Fanton, a longtime member of CEP's Advisory Board,
will discuss challenges to foundations' effectiveness from his perspective
as CEO of one of the largest foundations in the country. Tatum will
moderate a panel discussion on race in the foundation boardroom,
drawing on findings discussed in CEP's 2005 report Beyond
Compliance: The Trustee Viewpoint on Effective Foundation Governance.
She is a nationally recognized expert on race relations and the
development of racial identity and is the author of the award-winning
book, Why Are All the Black Kids Sitting Together in the Cafeteria?
Additional speakers will include leadership expert
Rosabeth Moss Kanter, who holds the Ernest L. Arbuckle Professorship
at Harvard Business School, and CEP Executive Director Phil Buchanan.
Plenary sessions and breakouts will address issues
of importance to the leadership of staffed foundations with at least
$50 million in assets. Sessions will include presentations of new
research in areas such as foundation and program strategy development,
foundation governance, and choices about type of support.
Registration for the conference will open in October.
An invitation-only, one day seminar for users of
CEP assessment tools will be held March 7.
CEP Senior Research Officer Ellie Buteau, PhD will
present results of new research at the American Evaluation Association
and the ARNOVA conferences this November.
Other upcoming CEP speaking engagements include
Associate Director Judy Huang at the Indiana Grantmakers Fall Conference
on November 9 and Executive Director Phil Buchanan at the New England
Funders Conference on November 29. For more information, click
here.
Effective Matters
is a quarterly newsletter published by the Center
for Effective Philanthropy (CEP), a nonprofit organization focused
on the development of comparative data to enable higher-performing
foundation based in Cambridge, Massachusetts. CEP's mission is to
provide management and governance tools to define, assess, and improve
overall foundation performance.
If you have questions about this newsletter or
would like general information about CEP and its activities, please
contact Alyse
d'Amico at 617-492-0800 ext. 206.
Permission to use, copy, and/or distribute this
document in whole or in part for noncommercial purposes without
fee is hereby granted provided that this notice and appropriate
credit to the Center for Effective Philanthropy is included in all
copies. |
