Understanding the Role of a Foundation Trustee

Topic: Foundations & Endowments

Geoffrey J. Gouinlock CFA

November 20, 2014


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Understanding the Role of a Foundation Trustee

Some of the most rewarding work any of us will ever do is volunteering for a cause we believe in. Whether it is raising funds for your alma mater, helping out at your church or coaching kids for your neighbourhood house league, serving the community has many benefits. Contributing to a cause in the public realm has social, psychic and yes, even sometimes networking benefits, that aren’t available to us through employment or as parents. But sometimes, it is not exactly what you expect.

It’s often through volunteering that one gets identified as a candidate and invited to join the board of a foundation or charity. And while it is always flattering to be recognized, board work is different by nature and by responsibility from that of an energetic volunteer. Having done some volunteering and some board work over the years, as well as having worked with a number of boards of foundations for which Nexus manages portfolios, I think it is worthwhile to discuss the role of a foundation trustee and some of the major issues one should consider when taking on board responsibilities.

Attachment issues

While there are different motivations for why people get involved, it seems that having some direct, personal attachment is essential for being a strong contributing member of a board.  There are two important aspects to this observation. Firstly, charitable boards often blend together people from different walks of life and with vastly different skills and abilities. If you are trying to develop a sense of cohesion and there isn’t an underlying shared passion for the purpose of the charity, this can make board work more frustrating than rewarding.

For example, if you are a medical clinician and have to listen to the “investment guy” drone on about the market, knowing you both are working for the same cause might be the only way you can stomach your board meetings. Secondly, despite our good intentions, we all have times in our lives where other commitments, such as work or family, take priority over our volunteer activities. The stronger your attachment to the cause the more likely you are to make the extra effort at times like this to pull your weight.

What to look for in a well governed board

Effective boards have good governance practices in place and adhere to them. Casualness about standards of practice in an environment filled with busy volunteers can be a recipe for disaster. If you are dedicated enough to be the Chair, set a high standard and demand the same of your fellow members and the staff.  Entire books have been written on governance, but simplistically one should want a board that has at least these attributes:

  • Term limits for board members,
  • Terms of reference for sub-committees,
  • A nominating committee that can be counted on to breathe new life into the board,
  • Regular, transparent financial reporting of expenses, spending and donations.
  • Try to be the committee or board member who has read and prepared for a meeting beforehand. Unfortunately, and surprisingly often, busy members arrive less well-prepared than they should be. The result is that either staff or a small subset of the board, overwhelmingly influence the decisions that are made.

Its not just about you, it’s also about your network

In this day and age, rare is the charity that does not expect to leverage both the skills of its board members and their network.  At a bare minimum you are expected to advocate for the cause you support and, almost always, it’s expected that you’ll help raise money. You can’t ask others for money without having donated yourself.  Sometimes the obligation is not really too onerous.  You might prevail upon your friends to attend a gala or support you in a walk-a-thon or other activity of similar ilk.  I have been known to do yoga for a certain cause, and there are photos to prove it!

A more serious commitment is required when foundations undertake a capital campaign. In such instances, you’ll be expected to delve into your rolodex and lever relationships to help raise larger sums of money. Not everybody is comfortable with this.  But these days, charities that want to make a meaningful contribution to the cause they support can’t be bashful about telling their story and asking for financial support. A skilled executive director and competent staff can make this a rewarding, rather than dreaded, responsibility of board work.

At Nexus, all of the partners engage in board or volunteer work of some kind. We feel it is our social responsibility to get involved in the community at large. Not only is it rewarding,  it can be a lot of fun too!

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