May 31st, 2010
Sometimes even the philanthropy professor is in a quandary. By coincidence, I recently received 2 almost identical inquiries – about the propriety of one funder sitting on the board of another foundation.
Most of us have an understanding of and even policies about the potential conflicts of interest when a funder sits on the board of a potential recipient organization or if a leader of a potential recipient organization sits on the board of a foundation. While the field is far from unanimous about these questions, there are some useful parameters to frame foundation policies. [I deal with this question in some depth in my NYU courses, and if there is interest, I would be happy to share some thoughts on this question in a future posting.]
However, the question at hand is if there is any conflict of interest issue if a board member or staff of one foundation sits on the board of another foundation. I am aware of a few examples of this, but it is far from the norm. And I have never seen any conflict of interest policy which addresses this question [although, of course, there may be some.]
My first instinctive response was to downplay the question. After all, most of us who are in the funding world regularly check with other funders as part of our due diligence. In fact, in retrospect, I would say that some of the least successful grants I was responsible for over the years were those where I hadn’t done that. We all know that such discussions yield a better perspective of what the other funder’s experience with a grantee actually was, what their intention may be about future funding, and, sadly, on occasion discovering that the grantseeker clearly “overstated” the commitment of the fellow foundation.
Never, in my experience, did the fellow foundation resent the inquiry, although some limited the shared information – especially if there were still open questions about future funding decisions.
But I was not sitting in the room when they made those decisions, nor were they sitting in our room. The question of sharing information is not quite the same as sharing decision-making. As I suggest above, my instinct is that this is not really a conflict of interest since there is no potential benefit to either side.
But is that true? If we are honest, we know that the funding world is much more competitive than it lets on. It is not only stylist differences which too often work against successful funding partnerships; often it is the desire to be the funder most identified with a project or an initiative. How many funders look for the “unpopulated beach” to establish a visibility in an area before other funders get there? How many will refrain from funding a worthy project because “it has been done”?
If this were the case, why would you want a “competitor” at the table? That is where the non-objective based decisions are made and addressed. So it would hardly surprise to hear that many foundations would resist the presence of a “colleague” on their boards.
In recent years, there has been much discussion about the need for greater collaboration among funders – some advocate for more joint decision-making; many more argue for more transparency of useful information. Some believe that such a proprietary mentality works against the ability of funders and foundations to make good, healthy, and informed decisions. Others believe that it deprives the world of knowledge which can advance the espoused interests of the field being funded. If that attitude were to become the norm, we could imagine many more foundations inviting their colleagues to join them.
Likely? I doubt it. But I welcome your thoughts.