Governance systems of grant-making foundations

Abstract

This article aims at filling an important gap in governance literature. Most governance studies are board-focused and hardly differentiate between different types of non-profit organisations. Surveys on governance structures of independent grant-making foundations are almost non-existent in the current literature. Due to the heavy focus on boards, the roles of executive directors in governance are somewhat neglected. This article presents the results of a multiple case study research project with 12 grant-making foundations in Germany and Switzerland with chief executives as interview partners. Findings show that the roles of the board and the executive director in governance functions vary. Different patterns of foundation governance are evident. Based on a model developed by Saidel and Harlan (1998), we showcase four governance structures in grant-making foundations and use ideal-typical organisational charts for illustration. The results of this study shed light on the black boxes of foundations and inform practice and research alike.

Searching for the North Star or how to navigate a boat with a fixed rudder through turbulent times

“…The traceability of results through written documentation and standardised processes is necessary to build a constant and reliable working environment. Especially for foundation boards, access to information is important as they usually are not involved in the daily foundation's activities (Bethmann, 2019). However, transparency is a means to an end, and the extent and content of the information shared should be suited to the purpose (Mayrhofer & Meyer, 2020).…”

A study on corporate foundation and philanthropy: Does governance matter for organizational performance?

“…Indeed, foundation boards are often comprised of senior executives (or the CEO) of the company (Renz et al, 2020), which implies that corporate leadership is strongly connected to the governance of the corporate foundation. Previous research has shown that business interests significantly impact the nature of the relationship between a company and its corporate foundation, which, in turn, impacts the foundation's governance structure, the direction of operations, and organizational outcomes (Bethmann & Von Schnurbein, 2015; Pedrini & Minciullo, 2011).…”

“…However, corporate foundations may encounter challenges in acting independently when they are not able to employ their own staff. Employees seconded or reassigned from the corporation often have limited professional charitable experience and knowledge of nonprofit management (Bethmann & Von Schnurbein, 2015; Westhues & Einwiller, 2006). It may also be the case that CEOs or corporate employees working at the firm's foundation might experience a blurring of identity and allegiance to the foundation (Renz et al, 2020).…”

“…Therefore, there can be potential tensions and even conflicts of interest when the parent company pursues business-oriented goals by having a "strategic" approach toward CP that collides with the social mission of the foundation (Renz et al, 2020). Bethmann and Von Schnurbein (2015) noted that the exploitation of a foundation by a firm for commercial purposes might hinder or limit a foundation's independence and focus on its charitable mission.…”

The State of Research on Philanthropy in Europe in 2022

“…Two members mentioned impact measurement (e.g., Bekkers & Verkaik, 2015;Von Schnurbein, 2016). Foundation governance was also mentioned twice (e.g., Bethmann, Von Schnurbein & Studer, 2014). Endowment management, grantmaking, fiscal sponsorship, relations between staff and boards were all mentioned once (e.g., Lideikyte Huber & Peter, 2020).…”