OCTOBER 05, 2020

After you create a plan for recruiting, training, and retaining strong members for your board of directors, what’s the next step? It is to establish powerful operational board policies to preserve your intent and foster loyalty to your philanthropic wishes.

Whatever approach you choose, your goal is to create a pervasive culture that honors donor intent. When staff and grantees see that your board takes seriously your philanthropic wishes, they better understand that the same is expected of them. 

Below are eight steps you may consider taking.

1. Regularly review your mission statement

Many foundations choose a regular time—such as once a year at annual board meetings—to read their mission statement. Instituting this sort of ritual reminds trustees of their founder’s original purpose and, through discussion, gives them a chance to evaluate how they’re measuring up in current grant decisions. 

“Our founder, James B. Duke, required his trustees to read the entire indenture, out loud, once a year,” says Eugene Cochrane, former president of the Duke Endowment. “They do this every February at their board meeting. It takes about 45 minutes, and it’s a wonderful way for the board and senior management to hear his voice and to focus on his wishes.”

2. Create a culture that honors donor intent

At the Daniels Fund, most of the directors have been recorded on video discussing their relationship with the founder, Bill Daniels, and their understanding of his donor intent. The fund’s bylaws require them to set aside time at each annual meeting to reflect on Daniels and his philosophy of giving, and each year a director is asked to prepare a presentation discussing Daniels’ intentions. Some foundations begin each board meeting by sharing a story, correspondence, or testimonial about a grant that is manifestly advancing the foundation’s mission.

Other foundations take such steps as:

  • Printing legacy statements at the top of their meeting agendas or in the front of their board books.
  • Scheduling a portion of meetings to review and discuss founding documents and reflect on what was most important to the donor.
  • Inviting past board chairs or senior family members to discuss grantmaking history and their recollections of the founding wealth creator.

    For family foundations, a powerful tool to bind future generations to donor intent is an oral history—or better, a video—of the founder speaking about his or her motivation for engaging in philanthropy.

3. Require board members to sign a statement

Some philanthropies require board members to sign a statement of donor intent. It might be part of a broader ethics and governance training session or stand on its own. For example, the Daniels Fund requires its board members to sign a Statement of Commitment and Understanding. After reviewing a detailed set of documents describing the founder’s life, values, character, and intentions, directors are asked to ratify the following:

Signing this document affirms your commitment to preserve Bill Daniels’ donor intent and his personal style of conducting business (as described in this document). You agree to set aside your personal views or preferences when acting on behalf of the Daniels Fund. It is the Board’s responsibility to ensure that the Daniels Fund most effectively fulfills Bill Daniels’ intentions and remains true to his ideals. You also acknowledge that you have read this document and understand its importance in guiding the efforts of the Daniels Fund.

As former Daniels Fund president Linda Childears points out, this document makes clear to new board members that foundation leaders view their appointments with keen seriousness. “We vet new board members like we’re giving them the keys to our house—because we’re giving them the keys to Bill’s house,” she says.

4. Create trustee apprenticeships

One idea for easing in new board members is by apprenticing them. The Samuel Roberts Noble Foundation in Ardmore, Oklahoma developed a practice of naming apprentices, called “advisory directors,” who attend and participate in all board meetings. A number of characteristics tend to define advisory directors. They: 

  • have no vote in actions of the board but otherwise exercise all privileges, powers, rights, and duties of directors;
  • keep up with all board activities and participate in board discussions; and
  • serve annual terms with no limit on the number of consecutive terms they might serve.

    Age limits applicable to directors also apply to advisory directors. Some of these “apprentices” may progress to board membership. If you plan to operate your foundation in perpetuity, implementing board apprenticeships might play an important role in your succession planning.

5. Require peer review among board members

Creating a review process to assess whether board members are actively respecting and honoring donor intent, when combined with appropriate follow-up by the board chair, can be a valuable tool for both evaluation and ongoing education. An assessment might also reveal whether each board member:

  • is knowledgeable concerning the foundation’s mission and has the necessary skills to see that it is carried out;
  • devotes enough time, thought, and resources to achieve the mission; and
  • has the necessary relationships with people and organizations to advance the foundation’s mission.

6. Establish board removal powers

Some foundations choose to give supermajorities of their boards the power to remove an individual member. Others vest that power in a single individual, such as a family member, family adviser, or outside entity (such as a public charity with whom you work closely).

For example, the Roe Foundation has given the Mont Pelerin Society and the Philadelphia Society—two organizations which founding benefactor Thomas Roe trusted because they shared his philosophical outlook—standing to sue the foundation’s board members if they depart from his intent. But be aware that such “watchdog” entities may also take a direction that veers from your intent.

7. Ensure that individual grants bolster your intent

Your goal should be to create a culture in your foundation that instinctively honors donor intent—from your board chair through your administrative staff. One of the best ways to do this is by ensuring that your grant awards honor your intent while you are around.

  • Develop grantmaking guidelines with donor intent in mind: Use your grantmaking guidelines as another way to communicate your intent to program officers, other staff members, and prospective grantees. Clearly articulated grantmaking guidelines remove pressure from your board members—who will likely be the frequent recipients of off-mission requests from outside parties—and enable them to decline such requests.
  • Evaluate proposed grants to ensure they align with donor intent: At the Arthur N. Rupe Foundation, grant evaluations written by the program officer include a section on how the grant advances the foundation’s mission. The board reviews these evaluations to ensure that the foundation’s grantmaking is in line with the founder’s intentions. The Templeton Foundation also requires that proposed grants demonstrably relate to the foundation’s original purposes as stated in its charter.
  • Give board members discretionary grants: Some foundations give their directors discretionary grantmaking authority over a predetermined amount. This is designed to recognize trustees and directors for their commitment and remove the temptation of proposing pet projects or other grants that do not align with the foundation’s mission. The John M. Olin Foundation, for example, gave its directors what are sometimes called “board” or “chairman” grants, as do many other foundations. The Olin Foundation allowed each board member to make grants of up to $25,000 (eventually the figure became $100,000). Some foundations restrict board discretionary grants to the mission of the foundation. Others leave them open-ended.

8. Scatter reminders of donor intent around your building

If you have a building or office devoted to your foundation, you should consider using this physical space to enshrine your donor intent. The Daniels Fund is one of the best examples of this—its headquarters in Denver is filled with memorabilia describing the life, mission, and values of Bill Daniels.

Similarly, at the Connelly Foundation in Philadelphia, artwork, pictures, and objects dot the office as visual cues of donor intent. “You can’t really look anywhere here without seeing visible reminders of the charity and values of John and Josephine Connelly,” says foundation president Tom Riley. “It’s a benefit for the staff, trustees, grantees, and anybody else who is here to make the Connellys’ presence more palpable and less abstract.”

Cheryl Taylor, former president and CEO of the Foellinger Foundation in Fort Wayne, Indiana, agrees with this approach. “We have a lot of visual cues to donor intent for people coming in from the outside—and equally important, if not more so, for our board,” she notes. Indeed, an enormous photo of founding wealth creators Helene and Esther Foellinger in the board room sets the tone for every meeting held there.