The Challenge Of Change Rethinking Association Foundation Boards

Emerging trends in governance call for change in the way non profit boards approach their leadership responsibilities. Strategically thinking boards must be constantly ahead of the game, meeting today’s organizational needs, creating new opportunities and anticipating future trends. Active boards must move beyond basic oversight and fiduciary responsibilities and develop agendas that facilitate thoughtful and strategic engagement.

Association foundations face unique challenges -- the “less talked about” issues of board governance:

• The founding mission and purpose.

Unlike charitable organizations formed to address social and economic needs many association foundations were created to fund programs perceived as less urgent and in need of philanthropic support. Often created by a single

visionary founder, or a few association members, their missions are frequently less defined. Many foundations are successfully redefining their strategic priorities, and as a result their rationale for existence is more compelling and urgent.

What does the mission and cultural history have to do with board governance? Everything! The urgency of the case for support is what demands, actually attracts, board members inspired by the opportunity to serve the cause and make

a difference. Above all else, foundation boards must be comprised of members who are personally compelled by the mission. The motivations and philanthropic attitudes of a foundation trustee may be different than the interests of an association trustee.

• Legacyleadership.

Because of the close ties between the governance structures of associations and foundations, association board members often complete their terms of service and are recruited to serve on the foundation board – and vice-versa. Association officers sometimes serve as ex officio directors to the foundation’s board.

This close relationship can ensure expertise and engagement of respected and networked association leaders. It can also limit foundations from seeking less well-known, potentially highly-talented trustees who could offer fresh perspectives and new approaches.

Association Foundation Group6277 Franconia Rd., Alexandria, VA 22310

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Above all else, foundation boards must be comprised of members who are personally compelled by the mission. The motivations and philanthropic attitudes of a foundation trustee may be different from the interests of an association trustee.

INSIDE THIS ISSUE ______________________

• Message from the 2008-09 President .......................................... p. 2

• The Natural Products Foundation “Tweets”

For a Good Cause ................................................................................. p. 3

• Highlights from the AFG 2009 Conference ................................. p. 3

• Giving USA Data Reveals 2008 Giving Down, But Not Out ... p. 4

• AFG 2009-10 Monthly Program Schedule ................................... p. 6

The Challenge of Change:Rethinking Association Foundation Boards

AFG QuarterlyS U M M E R 2 0 0 9

Kathy Kraas, CFREPresident, K2 Consulting

GroupAFG Board,

Chair Chicago programs

2009 AFG Quarterly Sponsored by GRC Direct

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Profound changes are taking place in non profit board rooms. Faced with limited resources, a demand for growth and creative agendas, are association foundation boards up to the challenge?

Monthly programs with the best view in DC11:30 a.m. to 1:30 p.m.Bank of America Building,10th floor730 15th Street, NW, Washington DCNearest Metros: Metro Center,Farragut West

It all begins September 2009. Mark your calendar NOW:

SEPT 10“Securing Major Gifts for an Association Foundation: A Realistic Goal or A Fantasy?” Bruce Silver, President & CEO, National Housing Endowment, and Rick LaRue, Development Director, Solar Electric Light Fund.

OCT 8“When in doubt, it’s back to basics: Making sure your program is as effective as possible.”Jim Gelatt, Ph.D., Professor and Program Director, Graduate School, University of Maryland.

NOV 12

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2010 Timely Topics to be Announced

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AFG 2008-2009 Board of DirectorsPresident Jeanne G. Jacob CAE, CFRE Goodwin House Foundation [email protected]

President-Elect Director, Corporate Sponsorships Jennifer Macotto The Sheridan Group [email protected]

Treasurer Keith M. Hume American Society of Plastic Surgeons [email protected]

Secretary & Newsletter Editor Linda A. Wilson Society of Industrial and Office Realtors (SIOR) Foundation [email protected]

Vice President, Membership Mark W. Chambers Heart Rhythm Society [email protected]

Vice President, Programs Sandra Renner MSW, CFRE Renner Consulting [email protected]

Immediate Past President Mary Bet Dobson American Chemical Society [email protected]

Director, Governance Eileen Morgan Johnson Whiteford, Taylor & Preston LLP [email protected]

Director, Research Kathleen Lewis-Workman Veris Consulting LLC [email protected]

Director, Chicago Programs Kathy A. Kraas CFRE K2 Consulting Group [email protected]

Director, Conference Program Ann Suydam American Council for an Energy-Efficient Economy [email protected]

AFG AdministratorJack Pitzer

AFG Associate AdministratorJim McCracken

AFG Headquarters6277 Franconia RoadAlexandria, VA 22310P: 877-234-2359 or 703-971-4011F: 703-971-7772 | [email protected].

AFG Quarterly is published four times each year for members of the Association Foundation Group. AFG is a professional network for those involved with leading, managing, and raising funds for foundations related to membership organizations. To submit articles, contact Linda Wilson: [email protected] Copyright © 2009 by AFG

2009 AFG Quarterly Sponsored by GRC Direct

The Challenge of Change: Rethinking Association Foundation Boards Continued from page 1

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Its All About Connections!

For those who were able to attend the 7th Annual AFG Conference on May 21st, you learned that foundation work is all about connections. Whether you are recruiting new board members, raising funds, or hiring professional staff, everything hinges on making connections with the right people.

Knowing people who believe in the mission and work of your organization or foundation can lead you to new board members ready and willing from day one to work for your organization. Staying in touch with your colleagues can help you identify professionals to fill staff vacancies. And, identifying the right person to solicit gifts for your Foundation can greatly increase the size of the gifts you will receive. It’s all about knowing the right persons and making the connections.

So, what does this have to do with AFG? Well, AFG is the place where you can make these vital connections. Whether you attend the monthly AFG luncheons to gain new knowledge from the topical speakers, use the AFG list serve to find

answers to questions puzzling you at work, take advantage of the research reported in the most recent AFG Survey, read the AFG Quarterly to stay abreast of issues in the field, or just join AFG to connect with your colleagues, AFG is the only national organization that has everything a foundation professional needs. AFG has it all!

No other organization has the combination of what you need for fundraising, Board and volunteer management and selection, topical research on foundation issues, and leadership development. AFG listens to you and hears what you want and need. Then, we act to provide you with the latest in research, networking, and education. It is all here at AFG, waiting for you take advantage of it.

As I close my Presidential year, I thank the very talented AFG Board members who put together such a fabulous year of programming for AFG. For more than 20 years, AFG has been here for my professional growth, development, and professional connections. I am honored to have been able to give back to AFG this past year.

Message From the 2008-09 AFG President...

Jeanne G. Jacob, CAE, CFREAFG President

Executive DirectorGoodwin House Foundation

Alexandria, [email protected]

In addition, new board recruits may encounter an insular “clubby” group with long-established relationships that inhibit dissent and questioning of priorities and practices. New recruits might defer to what they perceive as the knowledge and wisdom of trustees with more stature, tenure and experience. New thinking and new ideas may surface only after a level of comfort is established.

Foundation boards should not be viewed and/or presented as the next --or the first-- phase of association leadership. Members of the board must be recruited for their high level of commitment to the foundation’s mission and goals and optimally, a compelling call to serve.

• NominatingCommittees

This critically important committee should be comprised of members who bring diverse perspectives to the process. Before nomination of any new trustee, potential recruits should be informed about the foundation’s challenges and opportunities. Expectations of trustees must be explicit and thorough. Not-for-profits often shy away from full disclosure for fear of being turned down. Paradoxically, the right trustee match for the board will gravitate to the challenge. Business leaders thrive on problem solving and accomplishing lofty goals. Trustee education and engagement in the work at hand should begin before the first meeting.

Can a board culture change? Absolutely. No board is fixed, and cultures and governing styles can change. A board evaluation by outside professional counsel is an excellent way to begin the process. A professional evaluation entails private conversations with the CEO and trustees. This process uncovers a variety of issues and obstacles ranging from easily-addressed operational concerns such as meeting length or board agendas to larger, more prickly concerns about the board’s input in strategic decision-making or gaps in their knowledge about the foundation’s operations. Counsel might recommend alterations to board agendas, enhancements to board orientation and specific expectations of board members.

The results of these evaluations are always positive. Boards work better and are more engaged. Such an evaluation uncovers issues that would not surface in a written questionnaire and only arise in an interactive process.

Boards are always willing to do and give more than the Executive is asking of them.

• Creatingchange.

Altering a board’s behavior is easier than changing attitudes and personalities. It takes a group of change agents comprised of the board chair, CEO and optimally, one to two other trustees who can envision a new order and inspire others to embrace a new way of governing.

A new order might mean encouraging robust dialogue in which dissent is welcome. This is often misunderstood by foundation executives who are less comfortable with controversy and opposing view points. The unintended consequence is support of the tried and true, “the way we have always done it,” which restricts inquiry and hinders growth.

Strong executives are open to the risk and reward of a powerful board, and stimulate vigorous conversations that result in creative thinking and highly engaged board members. Less time is spent on reporting and more time is devoted to candid and dynamic deliberation.

Imagine for a minute that your board does not exist, and you have the opportunity to recruit a board from scratch.

• How would you design your board anew?

• Would you run meetings the same way?

• Would you recruit the same trustees and for the same reasons?

• How would you alter your own leadership style and would your expectations be different of the board?

Trustees must be recruited not just for their passion but for their business skills as well. The most common criticisms of non profit boards are lengthy meetings, too many reports, and not enough dialogue or ability to make a meaningful contribution. Governance should be a priority regularly evaluated by association foundation leaders. The results will pay off commensurately!

A new (board) order might mean encouraging robust dialogue in which dissent is welcome.

Key questions for board evaluation:• Howdopowerdynamicsaffectboard effectiveness? • Howcanyouimprovemeaningful conversations at the board table? • Towhatextentdotrusteesfeelcomfortablein offering opposing viewpoints to other trustees and staff?• Isthereacultureofdysfunctionalpoliteness that stifles inquiry and debate?• Howdoyoucreateanenvironmentof accountability and ownership?

The Challenge Of Change Rethinking Association Foundation Boards

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