Growing Up Too Fast?
posted on: Monday, November 23, 2009
By Kevin Laskowski
Philanthropy has exploded in the past two decades. There are more foundations, funds, ways to give, and dollars being given than ever before, but is the sector growing too fast?
A new survey of 185 family foundations from the National Center for Family Philanthropy reveals a “troubling” statistic:
Only about half of all responding foundations (53 percent) have [a conflict-of-interest policy]. Having such a policy indicates the board has discussed the issue and has awareness and explicit expectations of board members regarding potential conflicts of interest. Twenty-six percent reported having a written code of ethics, and only 18 percent have a formal process to review legal compliance issues. Forty-six percent of the foundations said they currently do not have any of these (see Figure 4). (emphasis added)
This finding is an important barometer for the sector as a whole. Family foundations comprise more than half of the foundation field at large. They account for roughly half of all giving, assets, and new gifts and bequests from donors among independent foundations. According to the Foundation Center, both the number and giving of family foundations has doubled since the 1990s.
The Association of Small Foundations discovered similar statistics among its members in its 2008-2009 Foundation Operations and Management Report. In that survey, 58 percent of respondents reported having a conflict of interest policy.
Looking at this new survey from NCFP, it seems that a significant number of family foundations take their obligations to the public trust seriously. One way that foundations and other charitable organizations can signal that they take seriously the need for accountability and transparency in their operations is to adopt and implement policies that support ethical behavior. These include policies on conflict of interest, whistleblowers, and executive compensation. However, the number of foundations that haven’t adopted these hallmarks of well-governed organizations is of concern, especially when conflict of interest policies and codes of ethics are so readily available.
Despite the best efforts of the field’s grantmaker associations, it would seem that many philanthropies just don’t know that this information is available or how important these policies are. NCFP surveyed a random sample of family foundations—not its members or the more accessible members of regional or national associations. Eighty-four percent of respondents were members of the donor family, and few respondents reported board members attending conferences and making use of association events and resources.
NCFP President Virginia Esposito contends that, since family members volunteered this information, it’s unlikely that the lack of certain policies is an intentional oversight.
“Given how many families took the time to fill this out with care and candor, we don’t believe that this is anything other than a lack of awareness about what these policies are and how they can enhance grantmaking process,” she says. “It’s more the product of a field that has grown so fast it has outpaced our ability to regulate or socialize it.”
Read more about ways that foundations can be more accountable and transparent in Chapter 3 of Criteria for Philanthropy at Its Best.
What do you think? Given how the field of family philanthropy has grown so large, so quickly in recent years, what can be done to spread the word regarding the need to adopt policies and practices that promote ethical behavior within organizations?
Kevin Laskowski is a Field Associate with the National Committee for Responsive Philanthropy. Kevin previously served as Program Coordinator at the National Center for Family Philanthropy and assisted in developing the survey mentioned here.
Labels: Best Practices, ethics, Philanthropy at Its Best
Philanthropy has exploded in the past two decades. There are more foundations, funds, ways to give, and dollars being given than ever before, but is the sector growing too fast?
A new survey of 185 family foundations from the National Center for Family Philanthropy reveals a “troubling” statistic:
Only about half of all responding foundations (53 percent) have [a conflict-of-interest policy]. Having such a policy indicates the board has discussed the issue and has awareness and explicit expectations of board members regarding potential conflicts of interest. Twenty-six percent reported having a written code of ethics, and only 18 percent have a formal process to review legal compliance issues. Forty-six percent of the foundations said they currently do not have any of these (see Figure 4). (emphasis added)
This finding is an important barometer for the sector as a whole. Family foundations comprise more than half of the foundation field at large. They account for roughly half of all giving, assets, and new gifts and bequests from donors among independent foundations. According to the Foundation Center, both the number and giving of family foundations has doubled since the 1990s.
The Association of Small Foundations discovered similar statistics among its members in its 2008-2009 Foundation Operations and Management Report. In that survey, 58 percent of respondents reported having a conflict of interest policy.
Looking at this new survey from NCFP, it seems that a significant number of family foundations take their obligations to the public trust seriously. One way that foundations and other charitable organizations can signal that they take seriously the need for accountability and transparency in their operations is to adopt and implement policies that support ethical behavior. These include policies on conflict of interest, whistleblowers, and executive compensation. However, the number of foundations that haven’t adopted these hallmarks of well-governed organizations is of concern, especially when conflict of interest policies and codes of ethics are so readily available.
Despite the best efforts of the field’s grantmaker associations, it would seem that many philanthropies just don’t know that this information is available or how important these policies are. NCFP surveyed a random sample of family foundations—not its members or the more accessible members of regional or national associations. Eighty-four percent of respondents were members of the donor family, and few respondents reported board members attending conferences and making use of association events and resources.
NCFP President Virginia Esposito contends that, since family members volunteered this information, it’s unlikely that the lack of certain policies is an intentional oversight.
“Given how many families took the time to fill this out with care and candor, we don’t believe that this is anything other than a lack of awareness about what these policies are and how they can enhance grantmaking process,” she says. “It’s more the product of a field that has grown so fast it has outpaced our ability to regulate or socialize it.”
Read more about ways that foundations can be more accountable and transparent in Chapter 3 of Criteria for Philanthropy at Its Best.
What do you think? Given how the field of family philanthropy has grown so large, so quickly in recent years, what can be done to spread the word regarding the need to adopt policies and practices that promote ethical behavior within organizations?
Kevin Laskowski is a Field Associate with the National Committee for Responsive Philanthropy. Kevin previously served as Program Coordinator at the National Center for Family Philanthropy and assisted in developing the survey mentioned here.
Labels: Best Practices, ethics, Philanthropy at Its Best
posted by Kevin Laskowski at
8:30 AM
1 Comments:
I certainly was surprised - I would think that family foundations would be quick to adopt ethics policies to ensure their credibility to the IRS, public, donees, etc.
By
Archana, at 11:36 AM
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