FOUNDATIONS' GOVERNANCE FOR STRATEGIC PHILANTHROPY: AN EMPIRICAL STUDY

Should non-profit organizations' leaders rely on enhanced governance and a more proactive role of board members to optimize the social outcomes of the philanthropic strategies their organizations implement? The recent... [ view full abstract ]

Should non-profit organizations' leaders rely on enhanced governance and a more proactive role of board members to optimize the social outcomes of the philanthropic strategies their organizations implement? The recent literature on the nonprofit sector has investigated the composition, role, responsibilities, and characteristics of nonprofits' boards. However, there is a lack of research on the causal link between governance practices and philanthropic strategy preferences. This gap should be filled because nonprofit organizations are increasingly pivotal elements of the “private welfare state” that exists in Europe and the OCSE. While other kinds of organizations that are involved in philanthropy and public welfare face competition (i.e., corporations), budget constraints (i.e., governments), or fundraising imperatives (i.e., NGOs) that limit their ability to address social welfare, private endowed foundations feel less such pressure, so they can tackle social issues that other organizations or individual donors may not. The purpose of this paper is to present the result of a survey conducted among 144 decision makers belonging the largest Italian foundations (presidents, board members, managers). The exploratory results show significant associations between selected governance items (decision makers’ satisfaction; grant-making planning and monitoring effectiveness; board members’ activism) and the classic pillars of strategic philanthropy. The results of the study should reveal whether and when foundations’ decision makers believe that well governed private foundations can spend money more effectively and efficiently than individual donors and poorly governed foundations can.
RESEARCH PROPOSITION
The survey proposed in this paper has been designed in order to test the following propositions: which governance activities better support and enhance strategic philanthropy and social value generation? And if so, which selected nonprofit governance’s items (decision makers’ satisfaction; grant-making planning and monitoring effectiveness; board members’ activism) contribute to a shift from occasional charitable grant-giving to a more strategic approach?
In order to collect information about foundations’ governance and philanthropic action, the authors contacted the main Italian association of grant-making foundations and acquired access to the board members of all its affiliated institutions (88 foundations of banking origin and more than 1.000 decision makers). After sending three reminders to those who had not responded, the survey achieved a 39.7 percent response rate among foundations (35 out of 88 at December 2016), including most of the largest Italian grant-making foundations, for a final sample of 144 top decision makers (presidents, general directors, board members, managers).
RESULTS
The leaders of the largest Italian foundations declare to support strategic philanthropy with appropriate decision making practices. For example, respondents who participated to positive ex post evaluations of social projects were also able to formulate recommendations to policy makers for influencing the governmental social agenda as well as for supporting such agenda with the delivery of private welfare state services. These positive synergies are welcome and suitable if we want to operationalize strategic philanthropy and this paper provides better understanding on how foundations’ governance can play a proactive and deterministic role without losing its solidarist vocation.

The authors acknowledge the financial support Project No. CPDA158434.