Workshop for Board Professional Staff

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Workshop for Board Professional Staff

• Getting the Governing and
• Foundation Boards on the
• Same Page
• James L. Lanier
• Senior Fellow for Board Education
• Association of Governing Boards
• jiml_at_agb.org
• March 4, 2007

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Governing Boards

• Fulfill constitutional and fiduciary
  obligations
• Establish mission and direction for the
  institution
• Hire and assess the president
• Appointed or elected through a political process

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Foundations Boards

• Boards run a private corporation outside the
  walls of the university
• Foundations exist to raise, manage and
  steward private resources in
• support of the mission and priorities
• of public institutions
• Boards are self-perpetuating and elect their own
  members based on qualifications

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USA Today
Phil Knight , who gave 105 million to Stanford's
business school David Rockefeller, who gave away
225 million, mostly to the Rockefeller family
foundation oilman T. Boone Pickens, who gave
away 172 million, including 160 million to set
up his own foundation and New York City Mayor
Michael Bloomberg, who gave 165 million to 1,000
groups but would name only five, which combat
smoking. In addition to the amount of money
available to be given away, philanthropy experts
and the givers themselves say there is a greater
consciousness that those who have should give.
"It's sort of gotten out there that it's the
right thing to do to be generous," says Stanley
Katz, Princeton University professor of public
policy and a scholar of philanthropy. "For the
moment, that's more of the ethos of wealthy
people." A gift the size of Buffett's does
have an influence, one of the top givers says.
"When people see substantial gifts, and they're
in the same league, if they haven't given to that
level, they start to think about giving," Pickens
says.
people with deep pockets.
"It's a sign that wealth is growing and
people are just raising their sights in terms of
philanthropy," says Stacy Palmer, editor of The
Chronicle. Universities and other fundraising
institutions ask for more and larger
contributions, too. Stanford University, for
example, is in the midst of a 4 billion
campaign, the largest ever for a university.
Among those swimming in the deep end of the
donor pool Nike co-founder
The rich share wealth 50 billion in
2006 By Martha T. Moore, USA TODAY
As the rich get richer, they get more generous.
Much more generous. The number of
individual donations of 100 million or more hit
a record in 2006, according to The Chronicle of
Philanthropy, which compiles a yearly list of the
biggest givers Last year, there were 21 donations
of 100 million or more by individuals to
universities, hospitals and charities, compared
with 11 in 2005. The biggest gift by
far was Warren Buffett's pledge to donate stock
in his investment firm Berkshire Hathaway, now
worth 43.5 billion, to several groups, including
the Bill and Melinda Gates Foundation. Even
without this huge donation, the philanthropy of
the country's 60 most generous givers hit a
record 7 billion in 2006, up from 4.3 billion
the year before. The reason for the
increase in mega-gifts is simple There are more
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What Exactly Are Foundations?

• College or University Foundations are separate
  entities, incorporated under IRS statutes as 501
  (c) (3) organizations related to a specific
  public college, university or system.
• They are chartered as supporting institutions

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• What Value
• Do Foundation Boards
• Add to a University?

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What Value Do Foundation Boards Add to the
University?

• Raise Money (private dollars)
• Build Credibility
• Enlist and Involve More Significant Advocates
• Manage Resources
• Promote Institutional Flexibility
• Protect Donor Rights
• Steward Gifts

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Types of Foundations

• Dependent
• Interdependent
• Autonomous

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Getting Boards on the Same Page - I

• Maintain a current MOU
• Leadership connection
• Board Chair and President - U
• Board Chair and President - F
• Meet 2 to 4 times annually
• Institution Chair and President ex-officio
  members of Foundation Board

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Same Page II

• Invite Foundation Chair to Trustee meeting and
  include in social events
• Engage Trustees in conversations on philanthropy
  and role of Foundation
• treat as partner
• Share plans and reports

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Same Page III

• Recognize the work of each others Board
• Engage Foundation Board in state wide political
  advocacy
• Joint functions
• Invite leadership representatives to the others
  planning retreats

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Future Trends

• Greater Accountability
• Fiduciary
• Transparency
• Communications
• Conflict of Interest

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Future Trends

• Greater reliance upon private gifts to maintain
  quality and to support new campus initiatives
• Increasing pressure to support institutional
  operating fund
• Increasing pressure to underwrite portions of
  salaries for presidents and other key leaders

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Future Trends Presidential
Compensation

• Issues
• 1. AGB opposes the practice
• 2. Who hires, fires, assesses performance and
  sets salaries
• 3. To whom is the president accountable
• 4. Perception problem

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Future Trends

• Greater pressure on presidents to depend upon
  foundation board members to raise increasing
  levels of private support, without usurping the
  authority of the campus or system trustees.

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Future Trends

• Increasing pressure to fund the total cost of
  operations for the foundation and fund-raising
• A New Generation of Donors who want to be
  more actively engaged in oversight of their
  gifts

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Responsibilities Board Trustees

• Fulfill Constitutional Duties
• Create an Environment that Encourages
  Philanthropy
• Insist upon a Strategic Plan and Approve
• Priorities
• Lead by Example as Donors and Advocates
• Understand and Support the Role of the
• Foundations
• Encourage or Require a Current Memorandum of
  Understanding (MOU) Between Campus and Its
  Foundation (s)

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Responsibilities Institutional President

• Clearly and Constantly Describe Vision and
  Priorities
• Commit Time For Foundation Board Activities
• and Fund Raising
• Appoint Strong Staff Leadership for
• Fund Raising and Hold Accountable
• Serve as Ex-officio member of the Foundation
  Board
• Engage Foundation Board in Appropriate
• Campus Advocacy and Planning Roles

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Responsibilities Foundation Board

• Approve the Mission Statement
• Support Strategic Plan and Priorities
• of the University, and Promote a
• Healthy Relationship
• Require Adequate Funding, Structure and
  Execution of Fund Raising Strategy
• Identify and Recruit Excellent Members
• Insist Upon Accountability of Members as
  Donors, Advocates and Fund Raisers
• Manage Resources

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Responsibilities Institutional VPIA/Foundation
Executive

• Focus on Institution Mission and Priorities
• Staff the President and Lead the Foundation
  Board
• Plan and Lead Fund Raising Process
• (Player Coach)
• Organize Staff and Volunteers to Execute the
  Fund-Raising Plan
• Ensure Infrastructure and Systems that
  Build Donor Confidence and Assure Stewardship

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Committee on Directors

• .

• Board Composition
• Criteria for membership
• The Watch List
• New members
• and orientation
• Assessment
• Future leadership
• Motivation and Recognition

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Responsibilities Foundation Boards

• Approve (and periodically review) the
  foundations statement of mission and purposes
• Promote strong and healthy relationships between
  the foundation and its host institution, and
  between the public and the foundation
• Appoint and support the foundation chief
  executive (the appointment process may be a
  responsibility shared with others)
• Monitor and assess the performance of the
  foundation chief executive (may also be a shared
  responsibility)
• Periodically and comprehensively assess the
  boards performance, preferably with competent
  third party help (ideally every three to four
  years)
• Regularly review the performance of individual
  board members who are eligible for renewal of
  their terms
• Ensure that all fiduciary responsibilities are
  met, including effective management of assets
• Insist on good planning for the foundation,
  consistent and complementary with the host
  institutions plan and priorities
• Ensure adequate resources through active
  fund-raising, asset management, and advocacy
  programs
• Protect donor rights and honor gift instructions

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Responsibilities Foundation Board Members

• Articulate and support the foundations mission,
  purpose, and responsibilities
• Understand and support the host institutions
  mission, goals, and priorities
• Understand your fiduciary responsibilities
• Prepare for and participate conscientiously in
  board and committee meetings and other foundation
  activities
• Ask good questions and willingly share time and
  expertise
• Actively participate in the fund-raising process
• Set an example through personal giving (annual
  giving and periodic campaigns)
• Encourage donor participation and ensure donor
  confidence
• Identify and cultivate prospects (help open
  doors)
• Solicit gifts
• Encourage that gifts and donors be properly
  acknowledged
• Advocate for the foundation and the host
  institution at every opportunity
• Scrupulously avoid even the appearance of
  conflict of interest and adhere to foundation
  policy
• Be alert to prospective and influential
  candidates to fill vacancies on the board (always
  with care and through the appropriate board
  committee)

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ResponsibilitiesGoverning Boards

• Approve the mission and purpose of the
  institution.
• Recruit, appoint, support and evaluate the chief
  executive officer.
• Guard the fiscal integrity of the institution
• Consider and approve the institutions budget.
• Monitor the resources and productivity of the
  institution.
• Manage the institutions endowment (in many
  public institutions and systems, this
  responsibility is delegated to an affiliated
  foundation).
• Participate in fund-raising, both through
  personal philanthropy and advocacy.
• Ensure that annual independent audits are
  conducted.
• Meet the expectations of board accountability and
  transparency in the conduct of board affairs.
• Oversee and participate in periodic strategic
  planning and monitor progress on its outcomes.
• Be aware of educational, research, and service
  programs and demand evidence that the
  institutions academic priorities are being met.
• In concert with the senior administration, engage
  with the institutions major constituencies on a
  regular basis.

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ResponsibilitiesGoverning Boards continued

• Preserve institutional independence to protect
  the pursuit of truth, the generation of new
  knowledge, and intellectual inquiry so that they
  remain unencumbered by direct government control
  or special interest.
• Remain informed about institutional issues and
  the challenges confronting higher education.
• Serve, as necessary, as a final court of appeals
  on matters relating to governance and on
  institutional policies and practices in
  accordance with campus grievance procedures.