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The philanthropic sector has seen steady growth over the past decade, and while some new foundation boards may be made up of veteran philanthropists, I’ll wager that many of those entrusted are taking on the job for the first time. It’s a big responsibility, and many of the early choices made by a new board can determine whether the new foundation will move forward smoothly and effectively or become mired in a culture or in policies that stifle effectiveness. I was recently invited to speak with a new health legacy foundation board and shared with them 10 mistakes that new foundation boards often make, and how to avoid them.
1. Making the simple complex - We should all strive to make the complex simple, but too often in philanthropy we make the simple complex.
2. Managing instead of governing - Remember, the role of a board is governance: clarifying mission and vision, setting strategic direction, setting policy, and providing financial stewardship.
3. Failing to manage and support the CEO - Although you have a governance role for the organization, the board – usually the board chair – does manage the CEO.
4. Operating with a poverty mentality - One of the worst things a board can do is confuse thrift with stewardship, or mistake austerity for efficiency.
5. Misunderstanding fiduciary and legal obligations - It is the fiduciary responsibility of the board to ensure that the foundation follows the laws and regulations that govern private foundations.
6. Failing to learn - The opportunity to expand your knowledge doesn’t stop with what you have to know.
7. Misunderstanding the power dynamic - A very real power dynamic exists between a foundation and the nonprofit community it serves.
8. Letting it go to your head - Arrogance, bossiness, or condescension on the part of a board member can have devastating effects on relationships between the foundation and nonprofits.
9. Failing to seek community input - No matter where your board comes from, there are always people in your community who will know more about the subject than you will.
10. Failing to hold one another accountable - By design, a board is meant to ensure that the will of one does not outweigh the overall judgment of the group.
Read the full article on mistakes made by new foundation boards by Kris Putnam-Walkerly at National Center for Family Philanthropy.