Half of Private Foundations Pay Board Members, Survey Finds

More than fifty percent of U.S.-based private foundations pay some or all of their board members, a new benchmarking report from the Center for Effective Philanthropy finds.

Based on a survey of sixty-four CEOs of foundations with annual grantmaking of at least $10 million, the report, Benchmarking Foundation Governance (17 pages, PDF), found that 46 percent of the responding foundations compensate all of their board members, while 7 percent compensate some board members. The survey also found that the average foundation board has ten members, six of them male; that 22 percent of the responding foundations have the original donors as board members, while 50 percent have a relative of the original donors on the board; and that 48 percent set no term limits for board members. In addition, while nearly all respondents said their boards have at least one member with expertise in the areas of investment (95 percent), accounting or finance (95 percent), and program-specific knowledge (95 percent), only 39 percent have at least one board member with technology expertise.

According to the survey, 59 percent of respondents said their boards delegate approval authority to staff for grants below a certain amount, with $125,000 being the median threshold under which grants do not require board approval. Supported in part by the S.D. Bechtel, Jr. Foundation, the survey also found that only 48 percent of foundation boards have conducted an assessment of their own performance during the past three years, while 77 percent have formally assessed the foundation CEO's performance during the past year.

"This strikes me as an important missed opportunity for boards to take stock of how they're doing — and to prompt discussions about how they might get better," CEP president Phil Buchanan wrote in a blog post. "Why aren't more foundations taking stock of their own effectiveness through a self-assessment process?"

"Four Questions About the Data on Foundation Boards." Center for Effective Philanthropy Blog Post 10/26/2015. "Benchmarking Foundation Governance." Center for Effective Philanthropy Report 10/26/2015.